Pensions and Other Postretirement Benefits

12 Months Ended

Apr. 30, 2023

Retirement Benefits [Abstract]

Pensions and Other Postretirement Benefits

Note 8: Pensions and Other Postretirement Benefits

We have defined benefit pension plans covering certain U.S. and Canadian employees. Pension benefits are based on the employee’s years of service and compensation levels. Our plans are funded in conformity with the funding requirements of applicable government regulations.

In addition to providing pension benefits, we sponsor several unfunded postretirement plans that provide health care and life insurance benefits to certain retired U.S. and Canadian employees. These plans are contributory, with retiree contributions adjusted periodically, and contain other cost-sharing features, such as deductibles and coinsurance. Covered employees generally are eligible for these benefits when they reach age 55 and have attained 10 years of credited service.

The following table summarizes the components of net periodic benefit cost and the change in accumulated other comprehensive income (loss) related to the defined benefit pension and other postretirement plans.

	Defined Benefit Pension Plans						Other Postretirement Benefits
	Year Ended April 30,						Year Ended April 30,
	2023		2022		2021		2023		2022		2021
Service cost	$	1.2	$	1.7	$	1.8	$	1.0	$	1.2	$	1.8
Interest cost	17.8		12.4		14.4		2.3		1.3		1.8
Expected return on plan assets	(15.4)		(15.9)		(19.3)		—		—		—
Amortization of prior service cost (credit)	0.7		0.9		0.9		(0.6)		(0.6)		(1.0)
Amortization of net actuarial loss (gain)	4.0		6.9		10.9		(1.2)		(0.4)		—
Settlement loss (gain)	7.4		10.8		35.5		—		—		—
Net periodic benefit cost	$	15.7	$	16.8	$	44.2	$	1.5	$	1.5	$	2.6

Other changes in plan assets and benefit liabilities recognized in accumulated other comprehensive income (loss) before income taxes:
Prior service credit (cost) arising during the year	$	—	$	(0.4)	$	—	$	—	$	—	$	—
Net actuarial gain (loss) arising during the year	(11.5)		30.4		14.3		3.8		8.2		5.9
Amortization of prior service cost (credit)	0.7		0.9		0.9		(0.6)		(0.6)		(1.0)
Amortization of net actuarial loss (gain)	4.0		6.9		10.9		(1.2)		(0.4)		—
Settlement loss (gain)	7.4		10.8		35.5		—		—		—
Foreign currency translation	—		—		(1.5)		(0.2)		(0.1)		0.2
Net change for year	$	0.6	$	48.6	$	60.1	$	1.8	$	7.1	$	5.1

Weighted-average assumptions used in determining net periodic benefit costs:
U.S. plans:
Discount rate used to determine benefit obligation	4.59	%	3.13	%	3.05	%	4.52	%	2.97	%	2.98	%
Discount rate used to determine service cost	4.77		3.53		3.34		4.64		3.20		3.18
Discount rate used to determine interest cost	4.26		2.40		2.54		4.11		2.07		2.42
Expected return on plan assets	4.51		4.59		4.96		—		—		—
Rate of compensation increase	3.55		3.55		3.58		—		—		—
Canadian plans:
Discount rate used to determine benefit obligation	2.41	%	2.15	%	2.95	%	4.50	%	3.03	%	2.93	%
Discount rate used to determine service cost	—		—		3.06		4.69		3.52		3.19
Discount rate used to determine interest cost	2.33		1.95		2.47		4.18		2.32		2.46
Expected return on plan assets	1.60		1.70		3.00		—		—		—
Rate of compensation increase	—		—		3.00		—		—		—

We amortize gains and losses for our postretirement plans over the average expected future period of vested service. For plans that consist of less than 5 percent of participants that are active, average life expectancy is used instead of the average expected future service period.

We use a measurement date of April 30 to determine defined benefit pension and other postretirement benefit plans’ assets and benefit obligations. The following table sets forth the combined status of the plans as recognized in the Consolidated Balance Sheets.

	Defined Benefit Pension Plans				Other Postretirement Benefits
	Year Ended April 30,				Year Ended April 30,
	2023		2022		2023		2022
Change in benefit obligation:
Benefit obligation at beginning of year	$	429.4	$	546.8	$	59.7	$	69.6
Service cost	1.2		1.7		1.0		1.2
Interest cost	17.8		12.4		2.3		1.3
Amendments	—		0.4		—		—
Actuarial loss (gain) (A)	(14.9)		(62.4)		(3.8)		(8.2)
Benefits paid	(17.7)		(25.4)		(4.3)		(4.1)
Settlement	(36.1)		(44.1)		—		—
Foreign currency translation adjustments	—		—		(0.2)		(0.1)
Benefit obligation at end of year	$	379.7	$	429.4	$	54.7	$	59.7
Change in plan assets:
Fair value of plan assets at beginning of year	$	317.1	$	397.8	$	—	$	—
Actual return on plan assets	(11.1)		(16.1)		—		—
Company contributions	74.1		5.3		4.3		4.1
Benefits paid	(17.7)		(25.4)		(4.3)		(4.1)
Settlement	(36.1)		(44.1)		—		—
Foreign currency translation adjustments	(0.4)		(0.4)		—		—
Fair value of plan assets at end of year	$	325.9	$	317.1	$	—	$	—
Funded status of the plans	$	(53.8)	$	(112.3)	$	(54.7)	$	(59.7)
Defined benefit pensions	$	(62.1)	$	(114.9)	$	—	$	—
Other noncurrent assets	12.3		6.6		—		—
Accrued compensation	(4.0)		(4.0)		(5.6)		(5.5)
Other postretirement benefits	—		—		(49.1)		(54.2)
Net benefit liability	$	(53.8)	$	(112.3)	$	(54.7)	$	(59.7)

(A) The actuarial losses and gains for our defined benefit pension plans and other postretirement benefits were primarily due to changes in the discount rates used in determining the plan obligations.

The following table summarizes amounts recognized in accumulated other comprehensive income (loss) in the Consolidated Balance Sheets, before income taxes.

	Defined Benefit Pension Plans				Other Postretirement Benefits
	Year Ended April 30,				Year Ended April 30,
	2023		2022		2023		2022
Net actuarial gain (loss)	$	(92.5)	$	(92.4)	$	21.7	$	19.3
Prior service credit (cost)	(0.5)		(1.2)		2.5		3.1
Total recognized in accumulated other comprehensive income (loss)	$	(93.0)	$	(93.6)	$	24.2	$	22.4

The following table sets forth the weighted-average assumptions used in determining the benefit obligations.

	Defined Benefit Pension Plans				Other Postretirement Benefits
	Year Ended April 30,				Year Ended April 30,
	2023		2022		2023		2022
U.S. plans:
Discount rate	5.19	%	4.59	%	5.15	%	4.52	%
Rate of compensation increase	3.66		3.55		—		—
Interest crediting rate	5.75		4.50		—		—
Canadian plans:
Discount rate	4.59	%	2.41	%	4.62	%	4.50	%

For 2024, the assumed health care trend rates are 6.4 percent and 4.5 percent for the U.S. and Canadian plans, respectively. The rate for participants under age 65 is assumed to decrease to 5.0 percent in 2032 for the U.S. plan and remain at 4.5 percent for the Canadian plan. The health care cost trend rate assumption impacts the amount of the other postretirement benefits obligation and periodic other postretirement benefits cost reported.

The following table sets forth selective information pertaining to our Canadian pension and other postretirement benefit plans, which is included in the consolidated information presented on pages 68 and 69.

	Defined Benefit Pension Plans				Other Postretirement Benefits
	Year Ended April 30,				Year Ended April 30,
	2023		2022		2023		2022
Benefit obligation at end of year	$	0.4	$	2.0	$	3.9	$	4.9
Fair value of plan assets at end of year	6.5		8.1		—		—
Funded status of the plans	$	6.1	$	6.1	$	(3.9)	$	(4.9)
Components of net periodic benefit cost:
Interest cost	$	0.1	$	0.1	$	0.2	$	0.1
Expected return on plan assets	(0.1)		0.1		—		—
Amortization of net actuarial loss (gain)	—		—		(0.2)		(0.1)
Settlement loss (gain)	0.7		—		—		—
Net periodic benefit cost (credit)	$	0.7	$	0.2	$	—	$	—
Changes in plan assets:
Actual return on plan assets	$	0.1	$	0.3	$	—	$	—
Company contributions	0.1		(0.4)		0.3		0.4
Benefits paid	7.1		(0.3)		(0.3)		(0.4)
Settlement	(8.4)		—		—		—
Foreign currency translation	(0.4)		(0.4)		—		—

During 2021, we transferred $82.6 of our Canadian defined benefit pension plan obligations to an insurance company through the purchase of an irrevocable group annuity contract (the “Canadian buy-out contract”). The group annuity contract was purchased using assets from the pension trust. As a result of this transaction, during 2021, we recognized a noncash pre-tax settlement charge of $29.6 to accelerate the unrecognized losses within accumulated other comprehensive income (loss) that would have otherwise been recognized in subsequent periods. This settlement charge was included within other income (expense) – net in the Statement of Consolidated Income. We did not recognize any additional charges related to the Canadian buy-out contract during 2023 and 2022. We expect to finalize the wind-up of the Canadian pension plan impacted by the buy-out in 2024, upon Board approval for payout of the surplus.

The following table sets forth additional information related to our defined benefit pension plans.

	April 30,
	2023		2022
Accumulated benefit obligation for all pension plans	$	374.6	$	423.9
Plans with an accumulated benefit obligation in excess of plan assets:
Accumulated benefit obligation (A)	$	194.6	$	422.4
Fair value of plan assets	133.1		309.0
Plans with a projected benefit obligation in excess of plan assets:
Projected benefit obligation (A)	$	198.9	$	427.8
Fair value of plan assets	133.1		309.0

(A)    The decrease in our defined benefit pension plan obligations for plans in excess of plan assets, as compared to 2022, is primarily driven by the fact that we made contributions during 2023, which significantly improved the funded status of the majority of our defined benefit pension plans.

We employ a total return on investment approach for the defined benefit pension plans’ assets. A mix of equity, fixed-income, and alternative investments is used to maximize the long-term rate of return on assets for the level of risk. In determining the expected long-term rate of return on the defined benefit pension plans’ assets, we consider the historical rates of return, the nature of investments, the asset allocation, and expectations of future investment strategies.

Based on our improved funded status, our current investment policy includes a mix of investments that consist of approximately 80 percent fixed-income securities and 20 percent equity securities.

The following tables summarize the major asset classes for the U.S. and Canadian defined benefit pension plans and the levels within the fair value hierarchy for those assets measured at fair value.

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant  Observable  Inputs  (Level 2)		Significant  Unobservable  Inputs  (Level 3)		Plan Assets at April 30, 2023
Cash and cash equivalents (A)	$	30.1	$	—	$	—	$	30.1
Equity securities:
U.S. (B)	2.6		—		—		2.6
International (C)	6.7		—		—		6.7
Fixed-income securities:
Bonds (D)	259.6		—		—		259.6
Other types of investments (F)	—		26.9		—		26.9
Total financial assets measured at fair value	$	299.0	$	26.9	$	—	$	325.9
Total financial assets measured at net asset value (G)							—
Total plan assets							$	325.9

	Quoted Prices in  Active Markets for Identical Assets  (Level 1)		Significant  Observable  Inputs  (Level 2)		Significant  Unobservable  Inputs  (Level 3)		Plan Assets at April 30, 2022
Cash and cash equivalents (A)	$	8.1	$	—	$	—	$	8.1
Equity securities:
U.S. (B)	29.8		—		—		29.8
International (C)	33.3		—		—		33.3
Fixed-income securities:
Bonds (D)	187.3		—		—		187.3
Fixed income (E)	6.6		—		—		6.6
Other types of investments (F)	—		50.9		—		50.9
Total financial assets measured at fair value	$	265.1	$	50.9	$	—	$	316.0
Total financial assets measured at net asset value (G)							1.1
Total plan assets							$	317.1

(A)    This category includes money market holdings with maturities of three months or less and are classified as Level 1 assets. Based on the short-term nature of these assets, carrying value approximates fair value.

(B)    This category is invested in a diversified portfolio of common stocks and index funds that primarily invest in U.S. stocks with broad market capitalization ranges similar to those found in the S&P 500 Index and/or the various Russell Indices, and are traded on active exchanges. The Level 1 assets are valued using quoted market prices for identical securities in active markets.

(C)    This category is invested primarily in common stocks and other equity securities traded on active exchanges of foreign issuers located outside the U.S. The fund invests primarily in developed countries, but may also invest in emerging markets. The Level 1 assets are valued using quoted market prices for identical securities in active markets.

(D)    This category is primarily composed of bond funds, which seek to duplicate the return characteristics of high-quality U.S. and foreign corporate bonds with a duration range of 10 to 13 years, as well as various U.S. Treasury Separate Trading of Registered Interest and Principal holdings, with wide-ranging maturity dates. These assets are valued using quoted market prices for identical securities in active markets and are classified as Level 1 assets.

(E)    This category was composed of fixed-income funds that were invested primarily in government-related bonds of non-U.S. issuers and included investments in the Canadian, as well as emerging markets. These assets were valued using quoted market prices for identical securities in active markets and were classified as Level 1 assets.

(F)    This category is composed of a real estate fund whereby the underlying investments are contained in the Canadian market and a common collective trust fund investing in direct commercial property funds. The real estate fund and the collective trust fund investing in direct commercial property are classified as Level 2 assets, whereby the underlying securities are valued utilizing quoted market prices for identical securities in active markets and based on the quoted market prices of the underlying investments in the common collective trust, respectively.

(G)    This category was composed of a private equity fund that consisted primarily of limited partnership interests in corporate finance and venture capital funds, as well as a private limited investment partnership. The fair value estimates of the private equity fund and private limited investment partnership were based on the underlying funds’ net asset values. Furthermore, as a practical expedient equivalent to our defined benefit plan’s ownership interest in the partners’ capital, a proportionate share of the net assets was attributed and further corroborated by our review. The private equity fund and private limited investment partnership were non-redeemable, and the return of principal was based on the liquidation of the underlying assets. In accordance with ASU 2015-07, the private equity fund and private limited investment partnership were removed from the total financial assets measured at fair value and disclosed separately.

In 2024, we do not expect to make any contributions to our U.S. qualified defined benefit pension plans; however, we do expect to make direct benefit payments of approximately $9.8 in 2024. Further, we expect the following payments to be made from the defined benefit pension and other postretirement benefit plans: $40.4 in 2024, $41.1 in 2025, $35.0 in 2026, $34.2 in 2027, $33.5 in 2028, and $165.5 in 2029 through 2033.

Multi-Employer Pension Plan: We participate in one multi-employer pension plan, the Bakery and Confectionery Union and Industry International Pension Fund (“Bakery and Confectionery Union Fund”) (52-6118572), which provides defined benefits to certain union employees. During 2023 and 2022, a total of $2.0 and $2.6 was contributed to the plan, respectively, and we anticipate contributions of $2.8 in 2024.

The risks of participating in multi-employer pension plans are different from the risks of participating in single-employer pension plans. For instance, the assets contributed to the multi-employer plan by one employer may be used to provide

benefits to employees of other participating employers, and if a participating employer stops contributing to the plan, the unfunded obligations of the plan allocable to the withdrawing employer may be the responsibility of the remaining participating employers. Additionally, if we stop participating in the multi-employer pension plan, we may be required to pay the plan an amount based on our allocable share of the underfunded status of the plan, referred to as a withdrawal liability.

The Pension Protection Act of 2006 ranks the funded status of multi-employer pension plans depending upon a plan’s current and projected funding. A plan is in the Red Zone (Critical) if it has a current funded percentage less than 65 percent. A plan is in the Yellow Zone (Endangered) if it has a current funded percentage of less than 80 percent or projects a credit balance deficit within seven years. A plan is in the Green Zone (Healthy) if it has a current funded percentage greater than 80 percent and does not have a projected credit balance deficit within seven years. The zone status is based on the plan’s year-end, not our fiscal year-end. The zone status is based on information that we received from the plan and is certified by the plan’s actuary. During calendar year 2022, the Bakery and Confectionery Union Fund was in Red Zone status, as the current funding status was 49.4 percent. A funding improvement plan, or rehabilitation plan, has been implemented.

The American Rescue Plan Act (the “ARPA”), signed into law on March 11, 2021, established a special financial assistance program for financially troubled multi-employer pension plans. Under the ARPA, eligible multi-employer plans can apply to receive a cash payment in an amount projected by the Pension Benefit Guaranty Corporation to pay pension benefits through the plan year ending 2051. On March 1, 2023, the Bakery and Confectionery Union Fund applied for assistance under the ARPA program.