Note 16—Retirement Plans

The Company maintains certain defined contribution (“DC”) retirement plans covering qualifying employees. The total expense with respect to these DC plans was $2.0 million for the year ended December 30, 2017 (2016—$4.7 million; 2015—$4.5 million).

The Company also maintains several defined benefit (“DB”) plans acquired as a part of acquisitions covering certain U.S. and non-U.S. employees, referred to as the U.S. and International Plans, respectively. Retirement benefits are based on years of service multiplied by a monthly benefit factor. Pension costs are funded in accordance with the provisions of the applicable law. Our U.S. Plan is closed to new participants and frozen. The Company uses a December 30, 2017 measurement date for all DB plans. Any variation differences based on one day of trading are deemed immaterial.

In the third quarter of 2017, our Eden business relocated its corporate headquarters from Switzerland to Spain, which resulted in the dismissal or relocation of certain non-U.S. employees of the International Plans. As a result of the dismissal or relocation of the certain non-U.S.employees, we recorded a gain on pension curtailment of approximately $4.5 million to SG&A expenses, in the Consolidated Statement of Operations for the year ended December 30, 2017.

Obligations and Funded Status

The following table summarizes the change in the projected benefit obligation, change in plan assets and unfunded status of the DB plans as of December 30, 2017 and December 31, 2016:


	December 30, 2017
(in millions of U.S. dollars)	U.S.			International			Total
Change in Projected Benefit Obligation
Projected benefit obligation at beginning of year	$	8.3		$	30.5		$	38.8
Business combinations		—			—			—
Service cost		—			1.9			1.9
Interest cost		0.3			0.3			0.6
Benefit payments		(0.4	)		(3.0	)		(3.4	)
Actuarial losses		0.2			(0.1	)		0.1
Settlement gains		—			—			—
Curtailment gains		—			(18.2	)		(18.2	)
Translation gains		—			1.4			1.4

Projected benefit obligation at end of year	$	8.4		$	12.8		$	21.2

Change in Plan Assets
Plan assets beginning of year	$	6.3		$	20.4		$	26.7
Business combinations		—			—			—
Employer contributions		0.3			0.9			1.2
Plan participant contributions		—			0.4			0.4
Benefit payments		(0.4	)		(2.5	)		(2.9	)
Curtailment losses		—			(14.2	)		(14.2	)
Actual return on plan assets		0.9			0.6			1.5
Translation losses		—			1.0			1.0

Fair value at end of year	$	7.1		$	6.6		$	13.7

Funded Status of Plan
Projected benefit obligation	$	(8.4	)	$	(12.8	)	$	(21.2	)
Fair value of plan assets		7.1			6.6			13.7

Unfunded status	$	(1.3	)	$	(6.2	)	$	(7.5	)


	December 31, 2016
(in millions of U.S. dollars)	U.S.			International			Total
Change in Projected Benefit Obligation
Projected benefit obligation at beginning of year	$	10.3		$	—		$	10.3
Business combinations		—			29.3			29.3
Service cost		—			2.1			2.1
Interest cost		0.4			0.3			0.7
Benefit payments		(2.3	)		(0.5	)		(2.8	)
Actuarial losses		—			0.4			0.4
Settlement gains		(0.1	)		—			(0.1	)
Translation gains		—			(1.1	)		(1.1	)

Projected benefit obligation at end of year	$	8.3		$	30.5		$	38.8

Change in Plan Assets
Plan assets beginning of year	$	7.7		$	—		$	7.7
Business combinations		—			19.5			19.5
Employer contributions		0.4			0.6			1.0
Plan participant contributions		—			0.2			0.2
Benefit payments		(2.3	)		(0.2	)		(2.5	)
Actual return on plan assets		0.4			0.9			1.3
Translation losses		—			(0.6	)		(0.6	)

Fair value at end of year	$	6.2		$	20.4		$	26.6

Funded Status of Plan
Projected benefit obligation	$	(8.3	)	$	(30.5	)	$	(38.8	)
Fair value of plan assets		6.2			20.4			26.6

Unfunded status	$	(2.1	)	$	(10.1	)	$	(12.2	)

The accumulated benefit obligation for the U.S. Plans equaled $8.4 million and $8.3 million at the end of 2017 and 2016, respectively. The accumulated benefit obligation for the International Plans equaled $12.8 million and $30.5 million at the end of 2017 and 2016, respectively.

Periodic Pension Costs

The components of net periodic pension cost were as follows:

December 30, 2017

(in millions of U.S. dollars)

U.S.

International

Total

Service cost

—

1.9

Interest cost

(0.3

)

0.3

—

Expected return on plan assets

0.4

(0.3

)

0.1

Amortization of prior service costs

—

Recognized net loss due to settlement

—

Amortization of net actuarial loss

—

Curtailment gain

—

(4.5

)

(4.5

)

Employees contribution

—

(0.4

)

(0.4

)

Net periodic pension cost

0.1

(3.0

)

(2.9

)


	December 31, 2016
(in millions of U.S. dollars)	U.S.			International			Total
Service cost	$	—		$	2.1		$	2.1
Interest cost		(0.4	)		0.2			(0.2	)
Expected return on plan assets		0.6			(0.2	)		0.4
Amortization of prior service costs		—			—			—
Recognized net loss due to settlement		(0.1	)		—			(0.1	)
Amortization of net actuarial loss		—			—			—
Employees contribution		—			(0.2	)		(0.2	)

Net periodic pension cost	$	0.1		$	1.9		$	2.0


	January 2, 2016
(in millions of U.S. dollars)	U.S.			International		Total
Interest cost		0.4			—		0.4
Expected return on plan assets		(0.5	)		—		(0.5	)

Net periodic pension cost	$	(0.1	)	$	—	$	(0.1	)

Accumulated Other Comprehensive Loss

Amounts included in accumulated other comprehensive loss, net of tax, at year-end which have not yet been recognized in net periodic benefit cost were as follows:


	December 30, 2017
(in millions of U.S. dollars)	U.S.			International			Total
Unrecognized net actuarial loss		(0.6	)		(16.2	)		(16.8	)

Total accumulated other comprehensive loss	$	(0.6	)	$	(16.2	)	$	(16.8	)


	December 31, 2016
(in millions of U.S. dollars)	U.S.			International			Total
Unrecognized net actuarial loss		(1.2	)		(13.2	)		(14.4	)

Total accumulated other comprehensive loss	$	(1.2	)	$	(13.2	)	$	(14.4	)


	January 2, 2016
(in millions of U.S. dollars)	U.S.			International			Total
Unamortized prior service cost	$	(0.1	)	$	—		$	(0.1	)
Unrecognized net actuarial loss		(1.4	)		(8.6	)		(10.0	)

Total accumulated other comprehensive loss	$	(1.5	)	$	(8.6	)	$	(10.1	)

Actuarial Assumptions

The following table summarizes the weighted average actuarial assumptions used to determine the projected benefit obligation:


	For the Year Ended
	December 30, 2017			December 31, 2016			January 2, 2016
U.S. Plans
Discount rate		3.5	%		3.8	%		4.0	%
Expected long-term rate of return on plan assets		7.0	%		7.0	%		7.3	%
International Plans
Discount rate		2.0	%		1.7	%		—	%
Expected long-term rate of return on plan assets		3.1	%		2.6	%		—	%
Rate of compensation increase		1.4	%		1.0	%		—	%
CPI Inflation factor		0.3	%		0.3	%		—	%

The following table summarizes the weighted average actuarial assumptions used to determine net periodic benefit cost:


	For the Year Ended
	December 30, 2017			December 31, 2016			January 2, 2016
U.S. Plans
Discount rate		3.8	%		4.0	%		4.1	%
Expected long-term rate of return on plan assets		7.0	%		7.0	%		7.3	%
International Plans
Discount rate		2.0	%		1.7	%		—	%
Expected long-term rate of return on plan assets		3.1	%		1.0	%		—	%
Inflation factor		0.3	%		0.3	%		—	%

The Company utilizes a yield curve analysis to determine the discount rates for its DB plan obligations. The yield curve considers pricing and yield information for high quality corporate bonds with maturities matched to estimated payouts of future pension benefits. The Company evaluates its assumption regarding the estimated long-term rate of return on plan assets based on historical experience, future expectations of investment returns, asset allocations, and its investment strategy. The Company’s long-term rate of return on plan assets reflect expectations of projected weighted average market returns of plan assets. Changes in expected returns on plan assets also reflect any adjustments to the Company’s targeted asset allocation.

Asset Mix

Our DB plans weighted-average asset allocations by asset category were as follows:


	December 30, 2017			December 31, 2016
U.S. Plans
Equity securities		61.4	%		60.7	%
Fixed income investments		38.6	%		39.3	%
International Plans
Cash and cash equivalents		0.3	%		2.4	%
Equity securities		64.2	%		76.1	%
Fixed income investments		29.2	%		8.8	%
Real estate		6.3	%		12.7	%

Plan Assets

Our investment policy is that plan assets will be managed utilizing an investment philosophy and approach characterized by all of the following, listed in priority order: (1) emphasis on total return, (2) emphasis on high-quality securities, (3) sufficient income and stability of income, (4) safety of principal with limited volatility of capital through proper diversification and (5) sufficient liquidity. The target allocation percentages for the U.S. Plans’ assets range between 55% to 65% in equity securities and 35% to 45% in fixed income investments. The target allocation percentages for the International Plans’ assets range between 50% to 80% in equity securities, 20% to 50% in fixed income investments, 0% to 30% in real estate and 0% to 15% in alternative investments. None of our equity or debt securities are included in plan assets.

Cash Flows

We expect to contribute $0.8 million to the DB plans during the 2018 fiscal year.

The following benefit payments are expected to be paid in the periods indicated below:


(in millions of U.S. dollars)	U.S.		International		Total
Expected benefit payments
FY 2018	$	0.4	$	1.1	$	1.5
FY 2019		0.4		0.7		1.1
FY 2020		0.4		0.6		1.0
FY 2021		0.5		0.5		1.0
FY 2022		0.5		0.4		0.9
FY 2023 through FY 2027		2.5		1.8		4.3

The fair values of the Company’s U.S. plan assets are measured daily at their net asset value and valued at $7.1 million and $6.2 million at December 30, 2017 and December 31, 2016, respectively.

The fair values of the Company’s International plan assets at December 30, 2017 and December 31, 2016 were as follows:

December 30, 2017

(in millions of U.S. dollars)

Level 1

Level 2

Level 3

Mutual funds:

Non-U.S. equity securities

1.6

—

Other

—

0.4

—

Fixed income:

Non-U.S. bonds

2.3

—

Insurance contract

—

1.9

—

Real estate:

Real estate

—

0.4

—

Total

3.9

2.7

—


	December 31, 2016
(in millions of U.S. dollars)	Level 1		Level 2		Level 3
Cash and cash equivalents:
Cash and cash equivalents	$	0.5	$	—	$	—
Mutual funds:
Non-U.S. equity securities		2.5		—		—
Other		—		1.3		—
Fixed income:
Non-U.S. bonds		11.7		—
Insurance contract		—		1.8		—
Real estate:
Real estate		—		2.6

Total	$	14.7	$	5.7	$	—