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v3.23.2

Employee Benefits | 6 Months Ended
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Jul. 01, 2023
Retirement Benefits [Abstract] |
Employee Benefits | Employee benefitsThe Company sponsors a number of U.S. and foreign pension plans as well as other nonpension postretirement and postemployment plans to provide various benefits for its employees. These plans are described within the footnotes to the Consolidated Financial Statements included in the Company’s 2022 Annual Report on Form 10-K. Components of Company benefit plan (income) expense for the periods presented are included in the tables below. Excluding the service cost component, these amounts are included within Other income (expense) in the Consolidated Statement of Income. Pension
| Quarter ended |  | Year-to-date period ended
(millions) | July 1, 2023 | July 2, 2022 |  | July 1, 2023 | July 2, 2022
Service cost | $ | 6 |  | $ | 8 |  |  | $ | 12 |  | $ | 17 |
Interest cost | 44 |  | 28 |  |  | 88 |  | 57 |
Expected return on plan assets | (54) |  | (72) |  |  | (107) |  | (143) |
Amortization of unrecognized prior service cost | 3 |  | 3 |  |  | 5 |  | 5 |
Recognized net gain | — |  | (10) |  |  | — |  | (31) |
Total pension income | $ | (1) |  | $ | (43) |  |  | $ | (2) |  | $ | (95) |
Other nonpension postretirement
| Quarter ended |  | Year-to-date period ended
(millions) | July 1, 2023 | July 2, 2022 |  | July 1, 2023 | July 2, 2022
Service cost | $ | 1 |  | $ | 3 |  |  | $ | 3 |  | $ | 6 |
Interest cost | 10 |  | 6 |  |  | 20 |  | 12 |
Expected return on plan assets | (24) |  | (27) |  |  | (48) |  | (55) |
Amortization of unrecognized prior service cost | (3) |  | (3) |  |  | (5) |  | (5) |
Total postretirement benefit income | $ | (16) |  | $ | (21) |  |  | $ | (30) |  | $ | (42) |
Postemployment
| Quarter ended |  | Year-to-date period ended
(millions) | July 1, 2023 | July 2, 2022 |  | July 1, 2023 | July 2, 2022
Service cost | $ | — |  | $ | 1 |  |  | $ | 1 |  | $ | 2 |
Interest cost | 1 |  | — |  |  | 1 |  | — |
Recognized net experience gain | — |  | (1) |  |  | (1) |  | (2) |
Total postemployment expense | $ | 1 |  | $ | — |  |  | $ | 1 |  | $ | — |
For the quarter and year-to-date periods ended July 2, 2022, the Company recognized a gain of $10 million and $31 million, respectively, related to the remeasurement of two U.S. pension plans. These remeasurements were the result of distributions that exceeded service and interest costs resulting in settlement accounting for those specific plans. The remeasurements recognized were due primarily to an increase in the discount rate relative to the previous remeasurement date partially offset by lower than expected return on plan assets. In May 2023, the Company purchased a group annuity to cover pension benefit obligations of certain participants of the United Kingdom defined benefit pension plan for approximately $590 million. This transaction represents an annuity buy-in, under which the Company retains both the fair value of the annuity contract (within plan assets) and the pension benefit obligation related to these participants. Company contributions to employee benefit plans are summarized as follows:
(millions) | Pension | Nonpension postretirement | Total
Quarter ended: |  |  |
July 1, 2023 | $ | — |  | $ | 6 |  | $ | 6 |
July 2, 2022 | $ | — |  | $ | 5 |  | $ | 5 |
Year-to-date period ended: |  |  |
July 1, 2023 | $ | — |  | $ | 11 |  | $ | 11 |
July 2, 2022 | $ | 1 |  | $ | 11 |  | $ | 12 |
Full year: |  |  |
Fiscal year 2023 (projected) | $ | 5 |  | $ | 21 |  | $ | 26 |
Fiscal year 2022 (actual) | $ | 3 |  | $ | 20 |  | $ | 23 |
Plan funding strategies may be modified in response to management's evaluation of tax deductibility, market conditions, and competing investment alternatives.

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