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NONPENSION POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS | 12 Months Ended
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Dec. 28, 2024
Nonpension Postretirement And Postemployment Benefits [Abstract] |
Nonpension Postretirement And Postemployment Benefits [Text Block] | NONPENSION POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS Postretirement The Company sponsors a number of plans to provide health care and other welfare benefits to retired employees in the United States and Canada, who have met certain age and service requirements. The majority of these plans are funded or unfunded defined benefit plans, although the Company does participate in a limited number of multiemployer or other defined contribution plans for certain employee groups. The Company uses a December 31 measurement date for these plans and, when necessary, adjusts for plan contributions and significant events between December 31 and its fiscal year-end. The Company contributes to voluntary employee benefit association (VEBA) trusts to fund certain U.S. retiree health and welfare benefit obligations. During the first quarter of 2024, the Company amended the plan to create a sub-trust to permit the payment of certain benefits for active union employees using a surplus totaling $175 million from the retiree plan, which represents a portion of the plan's total surplus. This amount was converted to cash and treated as a one-time transfer to a sub-trust that was then invested in marketable securities and will be used to pay for these active union employee benefits. As a result of its designation for this purpose, the transferred amount is no longer considered an asset of the retiree plan and the Company's investment in marketable securities is included in Other current assets and Other assets dependent on the expected holding period on the Consolidated Balance Sheet as of December 28, 2024. The one-time transfer of cash from the VEBA trust to the sub-trust was treated as a distribution from the plan in operating activities on the Consolidated Statement of Cash Flows and the investment in marketable securities to fund the active union employee benefits was treated as an investing activity in the Consolidated Statement of Cash Flows. Obligations and funded status The aggregate change in accumulated postretirement benefit obligation, plan assets, and funded status is presented in the following tables.
(millions) |  | 2024 |  | 2023
Change in accumulated benefit obligation |  |  |  |
Beginning of year |  | $ | 299 |  |  | $ | 321 |
Service cost |  | 2 |  |  | 3 |
Interest cost |  | 15 |  |  | 21 |
Actuarial (gain) loss |  | (15) |  |  | (5) |
Benefits paid |  | (19) |  |  | (17) |
Amendments |  | — |  |  | (26) |
Other |  | — |  |  | 2 |
Foreign currency adjustments |  | (2) |  |  | — |
End of year |  | $ | 280 |  |  | $ | 299 |
Change in plan assets |  |  |  |
Fair value beginning of year |  | $ | 587 |  |  | $ | 529 |
Actual return on plan assets |  | 42 |  |  | 81 |
Employer contributions |  | 3 |  |  | 10 |
Benefits paid |  | (9) |  |  | (29) |
Benefit plan distributions |  | (175) |  |  | — |
Other |  | — |  |  | (4) |
Fair value end of year |  | $ | 448 |  |  | $ | 587 |
Funded status |  | $ | 168 |  |  | $ | 288 |
Amounts recognized in the Consolidated Balance Sheet consist of |  |  |  |
Other assets |  | $ | 192 |  |  | $ | 311 |
Other current liabilities |  | (2) |  |  | (1) |
Other liabilities |  | (22) |  |  | (22) |
Net amount recognized |  | $ | 168 |  |  | $ | 288 |
Amounts recognized in accumulated other comprehensive income consist of |  |  |  |
Prior service credit |  | (24) |  |  | (30) |
Net amount recognized |  | $ | (24) |  |  | $ | (30) |
Information for postretirement benefit plans with accumulated benefit obligations in excess of plan assets were:
(millions) |  | 2024 |  | 2023
Accumulated benefit obligation |  | $ | 23 |  |  | $ | 23 |
Fair value of plan assets |  | $ | — |  |  | $ | — |
Expense The components of nonpension postretirement expense are presented in the following table. Service cost is recorded in COGS and SGA expense. All other components of net periodic benefit cost are included in OIE. Components of postretirement benefit expense (income) were:
(millions) |  | 2024 |  | 2023 |  | 2022
Service cost |  | $ | 2 |  |  | $ | 3 |  |  | $ | 4 |
Interest cost |  | 15 |  |  | 21 |  |  | 10 |
Expected return on plan assets |  | (36) |  |  | (51) |  |  | (42) |
Amortization of unrecognized prior service credit |  | (5) |  |  | (4) |  |  | (4) |
Recognized net (gain) loss |  | (21) |  |  | (29) |  |  | 76 |
Net periodic benefit expense (income) |  | (45) |  |  | (60) |  |  | 44 |
Postretirement benefit expense (income): |  |  |  |  |  |
Defined benefit plans |  | (45) |  |  | (60) |  |  | 44 |
Defined contribution plans |  | 16 |  |  | 15 |  |  | 13 |
Total |  | $ | (29) |  |  | $ | (45) |  |  | $ | 57 |
Assumptions The weighted-average actuarial assumptions used to determine benefit obligations were:
|  | 2024 |  | 2023 |  | 2022
Discount rate |  | 5.5 | % |  | 5.1 | % |  | 5.5 | %
The weighted-average actuarial assumptions used to determine annual net periodic benefit cost were:
|  | 2024 |  | 2023 |  | 2022
Discount rate |  | 5.1 | % |  | 5.5 | % |  | 2.8 | %
Discount rate - interest |  | 5.0 | % |  | 5.3 | % |  | 2.3 | %
Long-term rate of return on plan assets |  | 8.0 | % |  | 8.0 | % |  | 7.0 | %
The Company determines the overall discount rate and expected long-term rate of return on VEBA trust obligations and assets in the same manner as that described for pension trusts in Note 12. The assumed U.S. health care cost trend rate is 7.00% for 2025, remaining at this rate until 2026, then decreasing 0.25% annually to 4.5% and remaining at that level thereafter. These trend rates reflect the Company’s historical experience and management’s expectations regarding future trends. The Company may experience material actuarial gains or losses due to differences between assumed and actual experience and due to changing economic conditions. During 2024, the Company recognized a net actuarial gain of approximately $21 million driven by higher than expected asset returns and the net impact of other assumption changes. During 2023, the Company recognized a net actuarial gain of approximately $29 million driven by higher than expected asset returns, partially offset by the impact of higher discount rates and the impact of other assumption changes. Plan assets The fair value of Plan assets as of December 28, 2024 and December 30, 2023 are summarized within fair value hierarchy described in Note 12, are as follows:
(millions) |  | Fair Value Hierarchy Level |  | 2024 |  | 2023 |  |  |  |
Cash and cash equivalents |  | 1 |  | $ | 1 |  |  | $ | 1 |  |  |  |  |
Mutual funds: |  |  |  |  |  |  |  |  |  |
Equity |  | 2 |  | 6 |  |  | 7 |  |  |  |  |
Bonds, corporate |  | 2 |  | 48 |  |  | 64 |  |  |  |  |
Bonds, government |  | 2 |  | 4 |  |  | 16 |  |  |  |  |
Bonds, other |  | 2 |  | 1 |  |  | 4 |  |  |  |  |
Sub-total |  |  |  | $ | 60 |  |  | $ | 92 |  |  |  |  |
Investments measured at net asset value (NAV) practical expedient (a) |  |  |  | 388 |  |  | 495 |  |  |  |  |
Total plan assets |  |  |  | $ | 448 |  |  | $ | 587 |  |  |  |  |
(a) Certain Assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. These assets consist primarily of funds holding equity securities. The Company’s asset investment strategy for its VEBA trusts is consistent with that described for its pension trusts in Note 12. The current target asset allocation is 76% equity securities, 20% debt securities, and 4% real estate and other. The Company currently expects to contribute approximately $4 million to its VEBA trusts during 2025. There were no Level 3 assets during 2024 and 2023. Postemployment Under certain conditions, the Company provides benefits to former or inactive employees, including salary continuance, severance, and long-term disability, in the United States and several foreign locations. The Company’s postemployment benefit plans are unfunded. Actuarial assumptions used are generally consistent with those presented for pension benefits in Note 12. The aggregate change in accumulated postemployment benefit obligation and the net amount recognized were:
(millions) |  | 2024 |  | 2023
Change in accumulated benefit obligation |  |  |  |
Beginning of year |  | $ | 30 |  |  | $ | 29 |
Service cost |  | 2 |  |  | 2 |
Interest cost |  | 2 |  |  | 1 |
Actuarial (gain)loss |  | 5 |  |  | — |
Benefits paid |  | (4) |  |  | (2) |
End of year |  | $ | 35 |  |  | $ | 30 |
Funded status |  | $ | (35) |  |  | $ | (30) |
Amounts recognized in the Consolidated Balance Sheet consist of |  |  |  |
Other current liabilities |  | $ | (5) |  |  | $ | (5) |
Other liabilities |  | (30) |  |  | (25) |
Net amount recognized |  | $ | (35) |  |  | $ | (30) |
Amounts recognized in accumulated other comprehensive income consist of |  |  |  |
Net prior service cost |  | $ | — |  |  | $ | — |
Net experience gain |  | (3) |  |  | (11) |
Net amount recognized |  | $ | (3) |  |  | $ | (11) |
The components of postemployment benefit expense are presented in the following table. Service cost is recorded in COGS and SGA expense. All other components of net periodic benefit cost are included in OIE.
(millions) |  | 2024 |  | 2023 |  | 2022
Service cost |  | $ | 2 |  |  | $ | 2 |  |  | $ | 2 |
Interest cost |  | 2 |  |  | 1 |  |  | 1 |
Amortization of unrecognized prior service cost |  | — |  |  | 1 |  |  | 1 |
Recognized net loss |  | (1) |  |  | (2) |  |  | (1) |
Net periodic benefit cost |  | $ | 3 |  |  | $ | 2 |  |  | $ | 3 |
Settlement cost |  | (1) |  |  | — |  |  | (2) |
Postemployment benefit expense |  | $ | 2 |  |  | $ | 2 |  |  | $ | 1 |
Benefit payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
(millions) |  | Postretirement |  | Postemployment
2025 |  | $ | 27 |  |  | $ | 5 |
2026 |  | 24 |  |  | 5 |
2027 |  | 24 |  |  | 5 |
2028 |  | 24 |  |  | 4 |
2029 |  | 23 |  |  | 4 |
2030-2034 |  | 109 |  |  | 17 |

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