Defined Benefit and Defined Contribution Plans

12 Months Ended

Mar. 25, 2023

Defined Benefit and Defined Contribution Plans [Abstract]

Defined Benefit and Defined Contribution Plans

Note 13 – Defined Benefit and Defined Contribution Plans

Defined Benefit Plan

We have a defined benefit pension plan covering employees who met eligibility requirements. This plan is closed to new participants. Eligibility and the level of benefits under the plan were primarily dependent on date of hire, age, length of service and compensation. The funding policy for our plan is consistent with the funding requirements of U.S. federal law and regulations. The measurement date used to determine the pension plan measurements disclosed herein is March 31 for both 2023 and 2022.

The funded/(underfunded) status of Monro’s defined benefit plan is recognized as an Other non-current asset/Other long-term liability in the Consolidated Balance Sheets as of March 25, 2023 and March 26, 2022, respectively.

Funded (Underfunded) Status
(thousands)		2023		2022
Projected benefit obligations	$	17,104	$	20,826
Fair value of plan assets		17,176		20,464
Funded (Underfunded) status	$	72	$	(362)

Contributions and Estimated Future Benefit Payment

Our obligations to plan participants can be met over time through a combination of Company contributions to these plans and earnings on plan assets. There are no required or expected contributions in our fiscal year ending March 30, 2024 (“fiscal 2024”) to the plan. However, depending on investment performance and plan funded status, we may elect to make a contribution.

Estimated Future Benefit Payments
(thousands)		Pension Benefits
2024	$	1,102
2025		1,123
2026		1,169
2027		1,197
2028		1,214
2029 - 2033		6,297

Cost of Plans

Net Pension Benefits Expense
(thousands)		2023		2022		2021
Interest cost on projected benefit obligation	$	683	$	638	$	692
Expected return on plan assets		(982)		(1,041)		(1,162)
Amortization of unrecognized actuarial loss		378		501		892
Total	$	79	$	98	$	422

Assumptions

Benefit Obligation Weighted Average Assumption	2023		2022
Discount rate	4.94	%	3.58	%

Net Periodic Benefit Expense Weighted Average Assumptions	2023		2022		2021
Discount rate	3.58	%	3.01	%	3.34	%
Expected long-term rate of return on plan assets	5.00	%	5.00	%	6.50	%

Our expected long-term rate of return on plan assets assumption is based upon historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio.

Benefit Obligation

Change in Projected Benefit Obligation
(thousands)		2023		2022
Benefit obligation at beginning of year	$	20,826	$	22,096
Interest cost		683		638
Actuarial gain		(3,290)		(1,211)
Benefits paid		(1,115)		(697)
Benefit obligation at end of year (a)	$	17,104	$	20,826

(a) Accumulated benefit obligation-the present value of benefits earned to date assuming no future salary growth-is materially consistent with the projected benefit obligation in each period presented.

Plan Assets

Change in Plan Assets
(thousands)		2023		2022
Fair value of plan assets at beginning of year	$	20,464	$	21,666
Actual loss on plan assets		(2,173)		(505)
Benefits paid		(1,115)		(697)
Fair value of plan assets at end of year	$	17,176	$	20,464

Our asset allocation strategy is to conservatively manage the assets to meet the plan’s long-term obligations while maintaining sufficient liquidity to pay current benefits. This is achieved by holding equity investments while investing a portion of assets in long duration bonds to match the long-term nature of the liabilities.

Asset Category	Current Targeted		Actual Allocation
	Allocation		2023		2022
Cash and cash equivalents			0.7	%	0.8	%
Fixed income	60.0	%	62.7	%	62.6	%
Equity securities	40.0	%	36.6	%	36.6	%
Total	100.0	%	100.0	%	100.0	%

Fair Value Measurements		Fair Value at
(thousands)	Pricing Category (a)		March 25, 2023		March 26, 2022
Assets in the fair value hierarchy
Shares of registered investment companies	Level 1	$	11,200	$	7,642
Corporate bonds	Level 2		—		12,822
Total assets in the fair value hierarchy			11,200		20,464
Common collective trusts (b)			5,855		—
Pooled separate accounts (b)			121		—
Total plan assets		$	17,176	$	20,464

(a) Fair value measurements are reported in one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). The fair value amounts presented in this table are intended to permit reconciliation of the assets in the fair value hierarchy to total plan assets at end of year.

(b) Certain investments measured at net asset value as a practical expedient have not been classified in the fair value hierarchy. The fair values presented are intended to permit reconciliation of the total assets in the fair value hierarchy to the total plan assets.

Amounts included in Shareholders’ Equity

Amounts in Accumulated Other Comprehensive Loss
(thousands)		2023		2022
Unamortized net actuarial loss	$	5,467	$	5,981
Amounts in Accumulated Other Comprehensive Loss (a)	$	5,467	$	5,981

(a) $4,115 and $4,494, net of tax, at the end of 2023 and 2022, respectively.

Amounts included in Comprehensive Income

Amounts in Other Comprehensive Income
(thousands)		2023		2022		2021
Net actuarial income	$	513	$	166	$	3,027
Amounts in Other Comprehensive Income (a)	$	513	$	166	$	3,027

(a) $379, $125, and $2,270, net of tax, during 2022, 2021, and 2020, respectively.

Defined Contribution Plan

Our employees are eligible to participate in a defined contribution 401(k) plan that covers full-time employees who meet the age and service requirements of the plan. The plan is funded by employee and employer contributions. We match 50 percent of the first 6 percent of employee contributions. Employer contributions totaled approximately $1.7 million, $2.0 million, and $1.6 million for 2023, 2022, and 2021, respectively. We may also make annual profit-sharing contributions to the plan at the discretion of Monro’s Compensation Committee of the Board of Directors.

In addition, we maintain an executive deferred compensation plan (the “Executive Deferred Compensation Plan”) for a broad management group whose participation in our 401(k) plan is limited by statute or regulation. The Executive Deferred Compensation Plan permits participants to defer all or any portion of the compensation that would otherwise be payable to them for the calendar year. We credit to the participants’ accounts such amounts as would have been contributed to Monro’s 401(k) plan but for the limitations that are imposed by statute or regulation. The Executive Deferred Compensation Plan is an unfunded arrangement and the participants or their beneficiaries have an unsecured claim against the general assets of Monro to the extent of their Executive Deferred Compensation Plan benefits. We maintain accounts to reflect the amounts owed to each participant. At least annually, the accounts are credited with earnings or losses calculated based on an interest rate or other formula as determined by Monro’s Compensation Committee. The total liability recorded in our financial statements at March 25, 2023 and March 26, 2022 related to the Executive Deferred Compensation Plan was approximately $2.0 million and $1.8 million, respectively.