RETIREMENT AND BENEFIT PLANS

The Company, as of August 5, 2018, has five noncontributory qualified defined benefit pension plans covering substantially all employees resident in the United States who meet certain age and service requirements. The plans provide monthly benefits upon retirement generally based on career average compensation and years of credited service. Vesting in plan benefits generally occurs after five years of service. The Company refers to these five plans as its “Pension Plans.”

The Company also has for certain members of Tommy Hilfiger’s domestic senior management a supplemental executive retirement plan, which is an unfunded non-qualified supplemental defined benefit pension plan. Such plan is frozen and, as a result, participants do not accrue additional benefits. In addition, the Company has a capital accumulation program, which is an unfunded non-qualified supplemental defined benefit plan. Under the individual participants’ agreements, the participants in the program will receive a predetermined amount during the ten years following the attainment of age 65, provided that prior to the termination of employment with the Company, the participant has been in the plan for at least ten years and has attained age 55. The Company also has for certain employees resident in the United States who meet certain age and service requirements an unfunded non-qualified supplemental defined benefit pension plan that provides benefits for compensation in excess of Internal Revenue Service earnings limits and requires payments to vested employees upon, or shortly after, employment termination or retirement. The Company refers to these three noncontributory plans as its “SERP Plans.”

The Company also provides certain postretirement health care and life insurance benefits to certain retirees resident in the United States. As a result of the Company’s acquisition of The Warnaco Group, Inc. (“Warnaco”), the Company also provides certain postretirement health care and life insurance benefits to certain Warnaco retirees resident in the United States. Retirees contribute to the cost of the applicable plan, both of which are unfunded and frozen. The Company refers to these two plans as its “Postretirement Plans.”

The components of net benefit cost were as follows:



	Pension Plans						Pension Plans
	Thirteen Weeks Ended						Twenty-Six Weeks Ended
(In millions)	8/5/18			7/30/17			8/5/18			7/30/17

Service cost, including plan expenses	$	8.6		$	6.7		$	16.9		$	13.6
Interest cost	6.5			6.5			13.0			12.9
Expected return on plan assets	(10.1		)	(9.6		)	(20.1		)	(19.3		)
Settlement loss	—			—			—			9.4
Curtailment gain	—			(0.3		)	—			(0.3		)
Total	$	5.0		$	3.3		$	9.8		$	16.3



	SERP Plans				SERP Plans
	Thirteen Weeks Ended				Twenty-Six Weeks Ended
(In millions)	8/5/18		7/30/17		8/5/18		7/30/17

Service cost, including plan expenses	$	1.6	$	1.1	$	2.9	$	2.3
Interest cost	1.0		0.9		2.0		1.9
Total	$	2.6	$	2.0	$	4.9	$	4.2

Net benefit cost related to the Postretirement Plans was immaterial for the thirteen and twenty-six weeks ended August 5, 2018 and July 30, 2017.

The service cost component of net benefit cost is recorded in SG&A expenses and the other components of net benefit cost are recorded in non-service related pension and postretirement (income) cost in the Company’s Consolidated Income Statements. Please see Note 20, “Recent Accounting Guidance,” for further discussion of the updated guidance related to the presentation of net benefit cost.

During the first quarter of 2017, the Company completed the purchase of a group annuity using assets from the Pension Plans. Under the group annuity, the accrued pension obligations for approximately 4,000 retiree participants who had deferred vested benefits under the Pension Plans were transferred to an insurer. As a result, the Company recognized a loss of $9.4 million, which was recorded in non-service related pension and postretirement cost in the Company’s Consolidated Income Statement for the twenty-six weeks ended July 30, 2017. The amount of the pension benefit obligation settled was $65.3 million.

Currently, the Company is evaluating whether it will make a voluntary contribution to the Pension Plans but is not required to make any material contributions in 2018. The Company’s actual contributions may differ from planned contributions due to many factors, including changes in tax and other laws, as well as significant differences between expected and actual pension asset performance or interest rates.