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Retirement Plans (Tables)

12 Months Ended

Oct. 03, 2021

Reconciliation of Changes in Benefit Obligations, Plan Assets and Funded Status of Retirement Plans

The following table provides a reconciliation of the changes in benefit obligations, plan assets, and funded status of our retirement plans for each fiscal year (in thousands):


	Qualified Plan				SERP				Postretirement Health Plans
	2021		2020		2021		2020		2021		2020
Change in benefit obligation:
Obligation at beginning of year	$	412,573	$	521,931	$	78,971	$	79,893	$	20,965	$	25,632
Interest cost	12,558		13,377		2,169		2,499		563		807
Participant contributions	—		—		—		—		112		106
Actuarial (gain) loss	(785)		14,498		(672)		1,739		(3,525)		(4,391)
Benefits paid	(14,293)		(12,980)		(5,243)		(5,160)		(1,044)		(1,246)
Settlements	—		(124,253)		—		—		—		—
Other	—		—		—		—		91		57
Obligation at end of year	$	410,053	$	412,573	$	75,225	$	78,971	$	17,162	$	20,965
Change in plan assets:
Fair value at beginning of year	$	365,510	$	476,194	$	—	$	—	$	—	$	—
Actual return on plan assets	58,491		26,549		—		—		—		—
Participant contributions	—		—		—		—		112		106
Employer contributions	—		—		5,243		5,160		841		1,083
Benefits paid	(14,293)		(12,980)		(5,243)		(5,160)		(1,044)		(1,246)
Settlements	—		(124,253)		—		—		—		—
Other	—		—		—		—		91		57
Fair value at end of year	$	409,708	$	365,510	$	—	$	—	$	—	$	—
Unfunded status at end of year	$	(345)	$	(47,063)	$	(75,225)	$	(78,971)	$	(17,162)	$	(20,965)
Amounts recognized on the balance sheet:
Current liabilities	$	—	$	—	$	(5,216)	$	(5,223)	$	(1,115)	$	(1,243)
Noncurrent liabilities	(345)		(47,063)		(70,009)		(73,748)		(16,047)		(19,722)
Total liability recognized	$	(345)	$	(47,063)	$	(75,225)	$	(78,971)	$	(17,162)	$	(20,965)
Amounts in AOCI not yet reflected in net periodic benefit cost:
Unamortized actuarial loss (gain), net	$	108,922	$	152,370	$	32,475	$	34,890	$	(7,359)	$	(4,174)
Unamortized prior service cost	—		—		53		72		—		—
Total	$	108,922	$	152,370	$	32,528	$	34,962	$	(7,359)	$	(4,174)
Other changes in plan assets and benefit obligations recognized in OCI:
Net actuarial (gain) loss	$	(39,936)	$	7,527	$	(672)	$	1,739	$	(3,526)	$	(4,391)
Pension settlement costs	—		(39,218)		—		—		—		—
Amortization of actuarial (loss) gain	(3,510)		(3,644)		(1,743)		(1,652)		341		(18)
Amortization of prior service cost	—		—		(19)		(85)		—		—
Total recognized in OCI	(43,446)		(35,335)		(2,434)		2		(3,185)		(4,409)
Net periodic benefit (credit) cost and other losses	(3,272)		36,661		3,931		4,236		222		825
Total recognized in comprehensive income	$	(46,718)	$	1,326	$	1,497	$	4,238	$	(2,963)	$	(3,584)
Amounts in AOCI expected to be amortized in fiscal 2022 net periodic benefit cost:
Net actuarial loss (gain)	$	2,193			$	1,666			$	(640)
Prior service cost	—				19				—
Total	$	2,193			$	1,685			$	(640)

The fair values of the Qualified Plan’s assets by asset category are as follows (in thousands):


		Total		Quoted Prices in Active Markets for Identical (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Items Measured at Fair Value at September 30, 2021:
Asset Category:
Cash and cash equivalents	(1)	$	1,969	$	—	$	1,969	$	—
Equity:
U.S.	(2)	66,921		66,921		—		—
International	(3),(4)	63,087		31,128		—		—
Fixed income:
Investment grade	(5)	219,295		20,701		198,594		—
High yield	(6)	10,156		10,156		—		—
Alternatives	(4),(7)	26,519		—		—		—
Real estate	(4),(8)	21,761		—		—		—
		$	409,708	$	128,906	$	200,563	$	—
Items Measured at Fair Value at September 30, 2020:
Asset Category:
Cash and cash equivalents	(1)	$	3,665	$	—	$	3,665	$	—
Equity:
U.S.	(2)	83,676		83,676		—		—
International	(3),(4)	81,228		40,319		—		—
Fixed income:
Investment grade	(5)	126,630		3,006		123,624		—
High yield	(6)	9,270		9,270		—		—
Alternatives	(4),(7)	29,375		—		—		—
Real estate	(4),(8)	31,666		—		—		—
		$	365,510	$	136,271	$	127,289	$	—

________________________

(1)Cash and cash equivalents are comprised of commercial paper, short-term bills and notes, and short-term investment funds, which are valued at quoted prices in active markets for similar securities.

(2)U.S. equity securities are comprised of investments in common stock of U.S. companies for total return purposes. These investments are valued by the trustee at closing prices from national exchanges on the valuation date.

(3)International equity securities are comprised of investments in common stock of companies located outside of the U.S. for total return purposes. These investments are valued by the trustee at closing prices from national exchanges on the valuation date, or the values are adjusted as a result of market movements following the close of local trading using inputs to models that are observable either directly or indirectly. The portion of these investments that are measured at fair value using the net asset value per share practical expedient (see note 4 below) can be redeemed on a monthly basis.

(4)Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

(5)Investment grade fixed income consists of debt obligations either issued by the U.S. government or have a rating of BBB- / Baa or higher assigned by a major credit rating agency. These investments are valued based on unadjusted quoted market prices (Level 1), or based on quoted prices in inactive markets, or whose values are based on models, but the inputs to those models are observable either directly or indirectly (Level 2).

(6)High yield fixed income consists primarily of debt obligations that have a rating of below BBB- / Baa or lower assigned by a major credit rating agency. These investments are valued based on unadjusted quoted market prices.

(7)Alternative investments consist primarily of an investment in asset classes other than stocks, bonds, and cash. Alternative investments can include commodities, hedge funds, private equity, managed futures, and derivatives. These investments are valued based on unadjusted quoted market prices and can be redeemed on a bi-monthly basis.

(8)Real estate is investments in a real estate collective trust for purposes of total return. These investments are valued based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These investments can be redeemed on a quarterly basis.

Fair Value of Plan Assets of Pension Plans

The following sets forth the PBO, ABO, and fair value of plan assets of our pension plans as of the measurement date in each fiscal year (in thousands):


	2021		2020
Qualified Plan:
Projected benefit obligation	$	410,053	$	412,573
Accumulated benefit obligation	$	410,053	$	412,573
Fair value of plan assets	$	409,708	$	365,510
SERP:
Projected benefit obligation	$	75,225	$	78,971
Accumulated benefit obligation	$	75,225	$	78,971
Fair value of plan assets	$	—	$	—

Components of Net Periodic Benefit Cost

The components of the fiscal year net periodic benefit cost were as follows (in thousands):


	2021		2020		2019
Qualified Plan:
Interest cost	$	12,558	$	13,377	$	19,825
Expected return on plan assets	(19,340)		(19,578)		(26,334)
Pension settlements	—		39,218		—
Actuarial loss	3,510		3,644		2,754
Net periodic benefit (credit) cost	$	(3,272)	$	36,661	$	(3,755)
SERP:
Interest cost	$	2,169	$	2,499	$	3,080
Actuarial loss	1,743		1,652		1,207
Amortization of unrecognized prior service cost	19		85		115
Net periodic benefit cost	$	3,931	$	4,236	$	4,402
Postretirement health plans:
Interest cost	$	563	$	807	$	997
Actuarial (gain) loss	(341)		18		(159)
Net periodic benefit cost	$	222	$	825	$	838

Determining the Present Values of Benefit Obligations and net Periodic Benefit Costs

In determining the present values of our benefit obligations and net periodic benefit costs as of and for the fiscal years ended October 3, 2021, September 27, 2020, and September 29, 2019, we used the following weighted-average assumptions:


	2021	2020	2019
Assumptions used to determine benefit obligations (1):
Qualified Plan:
Discount rate	3.11%	3.10%	3.36%
SERP:
Discount rate	2.99%	2.84%	3.24%
Rate of future pay increases (2)	N/A	N/A	3.50%
Postretirement health plans:
Discount rate	2.95%	2.77%	3.24%
Assumptions used to determine net periodic benefit cost (3):
Qualified Plan:
Discount rate (4)	3.10%	3.36%	4.40%
Long-term rate of return on assets (5)	5.40%	5.80%	5.85%
SERP:
Discount rate	2.84%	3.24%	4.37%
Rate of future pay increases (2)	N/A	3.50%	3.50%
Postretirement health plans:
Discount rate	2.77%	3.24%	4.38%

________________________

(1)Determined as of end of year.

(2)Rate is not applicable as there are no active employees as of fiscal year end 2020 and 2021.

(3)Determined as of beginning of year.

(4)Remeasurements were performed in the first, second, and third quarters of fiscal 2020 using 3.61%, 3.38%, and 3.13% respectively.

(5)Remeasurements were performed in the first, second, and third quarters of fiscal 2020 using 5.9%, 5.2%, and 5.4% respectively.

Health Care Cost Trend Rates for Postretirement Health Plans

For measurement purposes, the weighted-average assumed health care cost trend rates for our postretirement health plans were as follows for each fiscal year:


	2021	2020	2019
Healthcare cost trend rate for next year:
Participants under age 65	6.50%	6.75%	7.00%
Participants age 65 or older	6.00%	6.25%	6.50%
Rate to which the cost trend rate is assumed to decline:
Participants under age 65	4.50%	4.50%	4.50%
Participants age 65 or older	4.50%	4.50%	4.50%
Year the rate reaches the ultimate trend rate:
Participants under age 65	2030	2030	2030
Participants age 65 or older	2028	2028	2028

Effect of Change in Assumed Health Care Cost Trend Rate

For example, a 1.0% change in the assumed healthcare cost trend rate would have the following effect on the fiscal 2021 net periodic benefit cost and end of year PBO (in thousands):


	1% Point Increase		1% Point Decrease
Total interest and service cost	$	53	$	(46)
Postretirement benefit obligation	$	1,604	$	(1,405)

Fair Values of Qualified Plan's Assets

Our plan asset allocation at the end of fiscal 2021 and target allocations were as follows:


	2021	Target	Minimum	Maximum
Cash & cash equivalents	1%	1%	—%	—%
Domestic equities	16%	16%	8%	24%
International equities	15%	16%	8%	24%
Core fixed funds	49%	48%	43%	53%
High yield	2%	3%	—%	6%
Alternative investments	7%	6%	—%	12%
Real estate	5%	5%	—%	10%
Real return bonds	5%	5%	—%	12%
	100%	100%

Contributions Expected to be Paid in Next Fiscal Year and Projected Benefit Payments

Contributions expected to be paid in the next fiscal year, the projected benefit payments for each of the next five fiscal years, and the total aggregate amount for the subsequent five fiscal years are as follows (in thousands):


	Defined Benefit Plans		Postretirement Health Plans
Estimated net contributions during fiscal 2022	$	5,216	$	1,132
Estimated future year benefit payments during fiscal years:
2022	$	20,051	$	1,132
2023	$	20,092	$	1,152
2024	$	20,302	$	1,168
2025	$	20,746	$	1,179
2026	$	21,295	$	1,182
2027-2031	$	114,002	$	5,708