XML 99 R15.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Employee Benefit Plans
 12 Months Ended
Nov. 24, 2019
Retirement Benefits [Abstract]  
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS
Pension plans.  The Company has several non-contributory defined benefit retirement plans covering eligible employees. Plan assets are invested in a diversified portfolio of securities including stocks, bonds, cash equivalents and other alternative investments including real estate investment trust funds. Benefits payable under the plans are based on years of service, final average compensation, or both. The Company retains the right to amend, curtail or discontinue any aspect of the plans, subject to local regulations.
Postretirement plans.  The Company maintains plans that provide postretirement benefits to eligible employees, principally health care, to substantially all U.S. retirees and their qualified dependents. These plans were established with the intention that they would continue indefinitely. However, the Company retains the right to amend, curtail or discontinue any aspect of the plans at any time. The plans are contributory and contain certain cost-sharing features, such as deductibles and coinsurance. The Company's policy is to fund postretirement benefits as claims and premiums are paid.
The following tables summarize activity of the Company's defined benefit pension plans and postretirement benefit plans:
 
Pension Benefits
 
Postretirement Benefits
 
2019
 
2018
 
2019
 
2018
 
(Dollars in thousands)
Change in benefit obligation:
 
 
 
 
 
 
 
Benefit obligation at beginning of year
$
1,136,720

 
$
1,243,852

 
$
82,907

 
$
98,675

Service cost
3,377

 
3,602

 
65

 
113

Interest cost
41,341

 
36,070

 
3,042

 
2,718

Plan participants' contribution
665

 
570

 
4,256

 
4,105

Actuarial loss (gain)(1)
146,562

 
(69,602
)
 
(2,903
)
 
(6,353
)
Net curtailment loss
64

 
113

 
—

 
—

Impact of foreign currency changes
(2,210
)
 
(6,983
)
 
—

 
—

Plan settlements
(436
)
 
(63
)
 
—

 
—

Net benefits paid
(64,320
)
 
(70,839
)
 
(15,232
)
 
(16,351
)
Benefit obligation at end of year
$
1,261,763

 
$
1,136,720

 
$
72,135

 
$
82,907

 
 
 
 
 
 
 
 
Change in plan assets:
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
958,576

 
948,706

 
—

 
—

Actual return (loss) on plan assets(2)
182,309

 
(36,468
)
 
—

 
—

Employer contribution(3)
15,062

 
122,492

 
10,976

 
12,246

Plan participants' contributions
665

 
570

 
4,256

 
4,105

Plan settlements
(436
)
 
(63
)
 
—

 
—

Impact of foreign currency changes
(694
)
 
(5,822
)
 
—

 
—

Net benefits paid
(64,320
)
 
(70,839
)
 
(15,232
)
 
(16,351
)
Fair value of plan assets at end of year
1,091,162

 
958,576

 
—

 
—

Unfunded status at end of year
$
(170,601
)
 
$
(178,144
)
 
$
(72,135
)
 
$
(82,907
)
_____________
(1)
2019 actuarial losses and 2018 actuarial gains in the Company's pension benefit plans resulted from changes in discount rate assumptions. Changes in financial markets during 2019 including a decrease in corporate bond yield indices, resulted in an increase in benefit obligations. Changes in financial markets during 2018 including an increase in corporate bond yield indices, resulted in a decrease in benefit obligations.
(2)
The increase in return on plan assets in the Company's pension benefit plans in 2019 was primarily due to better-than-expected asset performance of U.S. and international equity securities.
(3)
The decrease in employer contributions to the Company's pension benefit plans in 2019 is due to additional planned contributions for the U.S. plan made during the prior year.
Amounts recognized in the Company's consolidated balance sheets as of November 24, 2019 and November 25, 2018, consist of the following:
 
Pension Benefits
 
Postretirement Benefits
 
2019
 
2018
 
2019
 
2018
 
(Dollars in thousands)
Unfunded status recognized on the balance sheet:
 
 
 
 
 
 
 
Prepaid benefit cost
$
27,704

 
$
22,738

 
$
—

 
$
—

Accrued benefit liability – current portion
(9,480
)
 
(9,390
)
 
(8,129
)
 
(8,725
)
Accrued benefit liability – long-term portion
(188,825
)
 
(191,491
)
 
(64,006
)
 
(74,182
)
 
$
(170,601
)
 
$
(178,143
)
 
$
(72,135
)
 
$
(82,907
)
 
 
 
 
 
 
 
 
Accumulated other comprehensive loss:
 
 
 
 
 
 
 
Net actuarial loss
$
(358,484
)
 
$
(365,424
)
 
$
(11,284
)
 
$
(14,652
)
Net prior service benefit
291

 
351

 
—

 
—

 
$
(358,193
)
 
$
(365,073
)
 
$
(11,284
)
 
$
(14,652
)

The accumulated benefit obligation for all defined benefit plans was $1.2 billion and $1.1 billion at November 24, 2019 and November 25, 2018. Information for the Company's defined benefit plans with an accumulated or projected benefit obligation in excess of plan assets is as follows:
 
Pension Benefits
 
2019
 
2018
 
(Dollars in thousands)
Accumulated benefit obligations in excess of plan assets:
 
 
 
Aggregate accumulated benefit obligation
$
1,093,503

 
$
986,084

Aggregate fair value of plan assets
903,556

 
792,427

 
 
 
 
Projected benefit obligations in excess of plan assets:
 
 
 
Aggregate projected benefit obligation
$
1,142,114

 
$
1,028,074

Aggregate fair value of plan assets
943,810

 
827,193


The components of the Company's net periodic benefit cost were as follows:
 
Pension Benefits
 
Postretirement Benefits
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
 
(Dollars in thousands)
Net periodic benefit cost:
 
 
 
 
 
 
 
 
 
 
 
Service cost(1)
$
3,377

 
$
3,602

 
$
3,427

 
$
65

 
$
113

 
$
172

Interest cost
41,341

 
36,070

 
36,853

 
3,042

 
2,718

 
3,148

Expected return on plan assets(1)
(42,098
)
 
(48,830
)
 
(42,033
)
 
—

 
—

 
—

Amortization of prior service benefit
(61
)
 
(65
)
 
(62
)
 
—

 
—

 
—

Amortization of actuarial loss
13,306

 
12,650

 
13,489

 
465

 
872

 
1,271

Curtailment loss
13

 
38

 
106

 
—

 
—

 
—

Net settlement (gain) loss
(56
)
 
(102
)
 
126

 
—

 
—

 
—

Net periodic benefit cost
15,822

 
3,363

 
11,906

 
3,572

 
3,703

 
4,591

Changes in accumulated other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
Actuarial loss (gain)
6,309

 
15,373

 
(9,785
)
 
(2,903
)
 
(6,354
)
 
(5,516
)
Amortization of prior service benefit
61

 
65

 
62

 
—

 
—

 
—

Amortization of actuarial loss
(13,306
)
 
(12,650
)
 
(13,489
)
 
(465
)
 
(872
)
 
(1,271
)
Net settlement gain (loss)
56

 
102

 
(126
)
 
—

 
—

 
—

Total recognized in accumulated other comprehensive loss
(6,880
)
 
2,890

 
(23,338
)
 
(3,368
)
 
(7,226
)
 
(6,787
)
Total recognized in net periodic benefit cost and accumulated other comprehensive loss
$
8,942

 
$
6,253

 
$
(11,432
)
 
$
204

 
$
(3,523
)
 
$
(2,196
)
_____________
(1)
Classification of service cost and expected return on plan assets related to U.S. and U.K. pension plans for 2017 have been conformed to reflect the adoption of ASU 2017-07, "Compensation-Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Cost and Net Periodic Postretirement Benefit Cost" to the 2018 and 2019 presentation requirements.
The amounts that will be amortized from "Accumulated other comprehensive loss" into net periodic benefit cost in 2020 for the Company's defined benefit pension and postretirement benefit plans are expected to be $13.4 million and $0.3 million, respectively.
Assumptions used in accounting for the Company's benefit plans were as follows:
 
Pension Benefits
 
Postretirement Benefits
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Weighted-average assumptions used to determine net periodic benefit cost:
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.1%
 
3.4%
 
3.8%
 
4.2%
 
3.4%
 
3.7%
Expected long-term rate of return on plan assets
4.6%
 
5.4%
 
5.8%
 
 
 
 
 
 
Rate of compensation increase
3.4%
 
3.4%
 
3.4%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average assumptions used to determine benefit obligations:
 
 
 
 
 
 
 
 
 
 
 
Discount rate
2.8%
 
4.1%
 
3.4%
 
2.8%
 
4.2%
 
3.4%
Rate of compensation increase
3.3%
 
3.4%
 
3.4%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assumed health care cost trend rates were as follows:
 
 
 
 
 
 
 
 
 
 
 
Health care trend rate assumed for next year
 
 
 
 
 
 
5.7%
 
5.9%
 
6.3%
Rate trend to which the cost trend is assumed to decline
 
 
 
 
 
 
4.4%
 
4.4%
 
4.4%
Year that rate reaches the ultimate trend rate
 
 
 
 
 
 
2037
 
2037
 
2037

For the Company's U.S. benefit plans, the discount rate used to determine the present value of the future pension and postretirement plan obligations was based on a yield curve constructed from a portfolio of high quality corporate bonds with various maturities. Each year's expected future benefit payments are discounted to their present value at the appropriate yield curve rate, thereby generating the overall discount rate. The Company utilized a variety of country-specific third-party bond indices to determine the appropriate discount rates to use for the benefit plans of its foreign subsidiaries.
The Company bases the overall expected long-term rate of return on assets on anticipated long-term returns of individual asset classes and each pension plans' target asset allocation strategy based on current economic conditions. For the U.S. pension plan, the expected long-term returns for each asset class are determined through a mean-variance model to estimate 20-year returns for the plan. 
Health care cost trend rate assumptions are not a significant input in the calculation of the amounts reported for the Company's postretirement benefits plans. A one percentage-point change in assumed health care cost trend rates would have no significant effect on the total service and interest cost components or on the postretirement benefit obligation.
Consolidated pension plan assets relate primarily to the U.S. pension plan. The Company utilizes the services of independent third-party investment managers to oversee the management of U.S. pension plan assets.
 The Company's investment strategy is to invest plan assets in a diversified portfolio of domestic and international equity securities, fixed income securities and real estate and other alternative investments with the objective to provide a regular and reliable source of assets to meet the benefit obligation of the pension plans. Prohibited investments for the U.S. pension plan include certain privately placed or other non-marketable debt instruments, letter stock, commodities or commodity contracts and derivatives of mortgage-backed securities, such as interest-only, principal-only or inverse floaters. The current target allocation percentages for the Company's U.S. pension plan assets are 25% for equity securities and real estate with an allowable deviation of plus or minus 4% and 75% for fixed income securities with an allowable deviation of plus or minus 4%.
The fair value of the Company's pension plan assets by asset class are as follows:
 
Year Ended November 24, 2019
Asset Class
Total
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
(Dollars in thousands)
Cash and cash equivalents
$
4,427

 
$
4,427

 
$
—

 
$
—

Equity securities(1)
 
 

 

 

U.S. large cap
93,019

 
—

 
93,019

 
—

U.S. small cap
13,307

 
—

 
13,307

 
—

International
115,607

 
—

 
115,607

 
—

Fixed income securities(2)
808,546

 
—

 
808,546

 
—

Other alternative investments


 


 

 

Real estate(3)
38,076

 
—

 
38,076

 
—

Private equity(4)
289

 
—

 
—

 
289

Hedge fund(5)
13,328

 
—

 
13,328

 
—

Other(6)
4,564

 
—

 
4,564

 
—

Total investments at fair value
$
1,091,163

 
$
4,427

 
$
1,086,447

 
$
289

 
Year Ended November 25, 2018
Asset Class
Total
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
(Dollars in thousands)
Cash and cash equivalents
$
3,818

 
$
3,818

 
$
—

 
$
—

Equity securities(1)
 
 
 
 
 
 
 
U.S. large cap
91,663

 
—

 
91,663

 
—

U.S. small cap
10,871

 
—

 
10,871

 
—

International
86,974

 
—

 
86,974

 
—

Fixed income securities(2)
714,034

 
—

 
714,034

 
—

Other alternative investments
 
 
 
 
 
 
 
Real estate(3)
35,265

 
—

 
35,265

 
—

Private equity(4)
383

 
—

 
—

 
383

Hedge fund(5)
11,389

 
—

 
11,389

 
—

Other(6)
4,179

 
—

 
4,179

 
—

Total investments at fair value
$
958,576

 
$
3,818

 
$
954,375

 
$
383

_____________
(1)
Primarily comprised of equity index funds that track various market indices.
(2)
Predominantly includes bond index funds that invest in long-term U.S. government and investment grade corporate bonds.
(3)
Primarily comprised of investments in U.S. Real Estate Investment Trusts.
(4)
Represents holdings in a diversified portfolio of private equity funds and direct investments in companies located primarily in North America. Fair values are determined by investment fund managers using primarily unobservable market data.
(5)
Primarily invested in a diversified portfolio of equities, bonds, alternatives and cash with a low tolerance for capital loss.
(6)
Primarily relates to accounts held and managed by a third-party insurance company for employee-participants in Belgium. Fair values are based on accumulated plan contributions plus a contractually-guaranteed return plus a share of any incremental investment fund profits.
The fair value of plan assets are composed of U.S. plan assets of $903.6 million and non-U.S. plan assets of $187.6 million. The fair values of the substantial majority of the equity, fixed income and real estate investments are based on the net asset value of commingled trust funds that passively track various market indices.
The Company's estimated future benefit payments to participants, which reflect expected future service, as appropriate are anticipated to be paid as follows:
 
Pension Benefits
 
Postretirement Benefits
 
Total
 
(Dollars in thousands)
2020
$
68,838

 
$
9,272

 
$
78,110

2021
69,039

 
8,570

 
77,609

2022
69,622

 
8,131

 
77,753

2023
69,379

 
7,612

 
76,991

2024
70,185

 
6,966

 
77,151

2025-2028
350,538

 
26,067

 
376,605


At November 24, 2019, the Company's contributions to its pension plans in 2020 are estimated to be $44 million.