Pension and Retiree Medical Benefits (Notes)

6 Months Ended

Jun. 11, 2022

Pension and Retiree Medical Benefits [Abstract]

Retirement Benefits [Text Block]

Pension and Retiree Medical Benefits

In the 12 and 24 weeks ended June 11, 2022, we recognized a pre-tax settlement charge of $131 million ($101 million after-tax or $0.07 per share) in a U.S. qualified defined benefit pension plan due to lump sum distributions to retired or terminated employees. The settlement charge was triggered when the cumulative lump sum distributions exceeded the total annual service and interest cost in 2022. As a result, related plan assets and benefit obligations were remeasured using assumptions as of June 11, 2022, the remeasurement date. The weighted-average discount rate for the U.S. defined benefit plans’ projected benefit obligations increased from 2.9% to 3.4% as a result of the remeasurement. In addition, the U.S. defined benefit pension plans’ weighted-average interest cost discount rate and expected return on plan assets used to determine 2022 net periodic benefit cost/(income) increased from 2.4% and 6.3% to 3.1% and 6.7%, respectively.

For further information on our policies for pension, retiree-medical and savings plans, refer to Note 7 to our consolidated financial statements in our 2021 Form 10-K.

In the 24 weeks ended June 11, 2022, we transferred pension and retiree medical obligations of $145 million and related assets to the Tropicana JV in connection with the Juice Transaction. See Note 11 for further information.

The components of net periodic benefit cost/(income) for pension and retiree medical plans are as follows:

	12 Weeks Ended
	Pension								Retiree Medical
	U.S.				International
	6/11/2022		6/12/2021		6/11/2022		6/12/2021		6/11/2022		6/12/2021
Service cost	$	115	$	120	$	17	$	25	$	9	$	7
Other pension and retiree medical benefits expense/(income):
Interest cost	87		74		23		19		4		4
Expected return on plan assets	(216)		(224)		(56)		(57)		(4)		(3)
Amortization of prior service credits	(7)		(7)		—		(1)		(2)		(3)
Amortization of net losses/(gains)	35		52		7		19		(3)		(3)
Settlement/curtailment losses	131		—		—		5		—		—
Special termination benefits	3		(1)		—		—		—		—
Total other pension and retiree medical benefits expense/(income)	33		(106)		(26)		(15)		(5)		(5)
Total	$	148	$	14	$	(9)	$	10	$	4	$	2

	24 Weeks Ended
	Pension								Retiree Medical
	U.S.				International
	6/11/2022		6/12/2021		6/11/2022		6/12/2021		6/11/2022		6/12/2021
Service cost	$	229	$	240	$	34	$	44	$	17	$	15
Other pension and retiree medical benefits income:
Interest cost	175		149		40		32		8		7
Expected return on plan assets	(431)		(448)		(98)		(98)		(7)		(7)
Amortization of prior service credits	(13)		(14)		—		(1)		(4)		(5)
Amortization of net losses/(gains)	68		103		12		32		(6)		(6)
Settlement/curtailment losses/(gains)	131		—		—		5		(16)		—
Special termination benefits	9		5		—		—		—		—
Total other pension and retiree medical benefits income	(61)		(205)		(46)		(30)		(25)		(11)
Total	$	168	$	35	$	(12)	$	14	$	(8)	$	4

We regularly evaluate opportunities to reduce risk and volatility associated with our pension and retiree medical plans.

During the 24 weeks ended June 11, 2022 and June 12, 2021, we made discretionary contributions of $75 million and $300 million, respectively, to our U.S. qualified defined benefit plans, and $10 million and $25 million, respectively, to our international defined benefit plans. We expect to make an additional discretionary contribution of $75 million to our U.S. qualified defined benefit plans in the third quarter of 2022.