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Pension and Other Postretirement Benefit Plans | 12 Months Ended
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Sep. 30, 2023
Retirement Benefits [Abstract] |
Compensation and Employee Benefit Plans | PENSIONS AND OTHER POSTRETIREMENT BENEFITS We have four defined benefit pension plans consisting of one frozen and noncontributory funded qualified plan and three frozen unfunded non-qualified plans. The benefits provided under these plans are based on a formula using years of service and either a specified benefit rate or compensation level. The non-qualified defined benefit plans are for certain officers and use a formula based on years of service and final average salary. We also have other postretirement benefit plans for which substantially all of our team members may receive benefits if they satisfy applicable eligibility criteria. The postretirement healthcare plans are contributory with participants’ contributions adjusted when deemed necessary. We have defined contribution retirement programs for various groups of team members. We recognized expenses of $113 million, $114 million and $106 million in fiscal 2023, 2022 and 2021, respectively. We use a fiscal year end measurement date for our defined benefit plans and other postretirement plans. We recognize the effect of actuarial gains and losses into earnings immediately for other postretirement plans rather than amortizing the effect over future periods. Other postretirement benefits include postretirement medical costs and life insurance. During fiscal 2021, we amended one of the Company’s other postretirement benefit plans, which resulted in the recognition of a gain of $34 million, recorded in Other, net in our Consolidated Statements of Income. Benefit Obligations and Funded Status The following table provides a reconciliation of the changes in the plans’ benefit obligations, assets and funded status as of September 30, 2023 and October 1, 2022 (in millions):
| Pension Benefits |  | Other Postretirement
| Qualified |  | Non-Qualified |  | Benefits
| 2023 |  | 2022 |  | 2023 |  | 2022 |  | 2023 |  | 2022
Change in benefit obligation |  |  |  |  |  |  |  |  |  |  |
Benefit obligation at beginning of year | $ | 17 |  |  | $ | 28 |  |  | $ | 166 |  |  | $ | 220 |  |  | $ | 55 |  |  | $ | 65 |
Service cost | — |  |  | — |  |  | — |  |  | — |  |  | 2 |  |  | 1 |
Interest cost | 1 |  |  | 1 |  |  | 8 |  |  | 6 |  |  | 1 |  |  | 1 |
Actuarial (gain)/loss | 1 |  |  | (11) |  |  | (3) |  |  | (47) |  |  | (5) |  |  | (8) |
Benefits paid | (1) |  |  | (1) |  |  | (13) |  |  | (13) |  |  | (3) |  |  | (4) |
Benefit obligation at end of year | 18 |  |  | 17 |  |  | 158 |  |  | 166 |  |  | 50 |  |  | 55 |
Change in plan assets |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | 24 |  |  | 33 |  |  | — |  |  | — |  |  | — |  |  | — |
Actual return on plan assets | 4 |  |  | (9) |  |  | — |  |  | — |  |  | — |  |  | — |
Employer contributions | — |  |  | 1 |  |  | 13 |  |  | 13 |  |  | 3 |  |  | 4 |
Benefits paid | (1) |  |  | (1) |  |  | (13) |  |  | (13) |  |  | (3) |  |  | (4) |
Fair value of plan assets at end of year | 27 |  |  | 24 |  |  | — |  |  | — |  |  | — |  |  | — |
Funded status | $ | 9 |  |  | $ | 7 |  |  | $ | (158) |  |  | $ | (166) |  |  | $ | (50) |  |  | $ | (55) |
Amounts recognized in the Consolidated Balance Sheets as of September 30, 2023 and October 1, 2022 consist of (in millions):
| Pension Benefits |  | Other Postretirement
| Qualified |  | Non-Qualified |  | Benefits
| 2023 |  | 2022 |  | 2023 |  | 2022 |  | 2023 |  | 2022
Other assets | $ | 9 |  |  | $ | 7 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Other current liabilities | — |  |  | — |  |  | (13) |  |  | (13) |  |  | (2) |  |  | (3) |
Other liabilities | — |  |  | — |  |  | (145) |  |  | (153) |  |  | (48) |  |  | (52) |
Total assets (liabilities) | $ | 9 |  |  | $ | 7 |  |  | $ | (158) |  |  | $ | (166) |  |  | $ | (50) |  |  | $ | (55) |
Pre-tax amounts recognized in Accumulated Other Comprehensive Income as of September 30, 2023 and October 1, 2022 consist of (in millions):
| Pension Benefits |  | Other Postretirement
| Qualified |  | Non-Qualified |  | Benefits
| 2023 |  | 2022 |  | 2023 |  | 2022 |  | 2023 |  | 2022
Accumulated other comprehensive (income)/loss: |  |  |  |  |  |  |  |  |  |  |
Actuarial (gain) loss | $ | 1 |  |  | $ | 2 |  |  | $ | (15) |  |  | $ | (15) |  |  | $ | 9 |  |  | $ | 13 |
Prior service (credit) cost | — |  |  | — |  |  | 1 |  |  | 2 |  |  | (5) |  |  | (5) |
Total accumulated other comprehensive (income)/loss: | $ | 1 |  |  | $ | 2 |  |  | $ | (14) |  |  | $ | (13) |  |  | $ | 4 |  |  | $ | 8 |
We had three pension plans as of September 30, 2023 and October 1, 2022, that had an accumulated benefit obligation in excess of plan assets. Plans with accumulated benefit obligations in excess of plan assets are as follows (in millions):
| Pension Benefits
| Qualified |  | Non-Qualified
| 2023 |  | 2022 |  | 2023 |  | 2022
Projected benefit obligation | $ | — |  |  | $ | — |  |  | $ | 158 |  |  | $ | 166 |
Accumulated benefit obligation | — |  |  | — |  |  | 158 |  |  | 166 |
Fair value of plan assets | — |  |  | — |  |  | — |  |  | — |
The accumulated benefit obligation for all qualified pension plans was $18 million and $17 million at September 30, 2023, and October 1, 2022, respectively. Net Periodic Benefit Cost (Credit) Components of net periodic benefit cost (credit) for pension and postretirement benefit plans recognized in the Consolidated Statements of Income are as follows for fiscal years ended 2023, 2022 and 2021 (in millions):
| Pension Benefits |  | Other Postretirement
| Qualified |  | Non-Qualified |  | Benefits
| 2023 |  | 2022 |  | 2021 |  | 2023 |  | 2022 |  | 2021 |  | 2023 |  | 2022 |  | 2021
Service cost | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2 |  |  | $ | 1 |  |  | $ | 2 |
Interest cost | 1 |  |  | 1 |  |  | — |  |  | 8 |  |  | 6 |  |  | 6 |  |  | 1 |  |  | 1 |  |  | 1 |
Expected return on plan assets | (1) |  |  | (1) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Amortization of prior service cost | — |  |  | — |  |  | — |  |  | 1 |  |  | 1 |  |  | 1 |  |  | 5 |  |  | 4 |  |  | (2) |
Recognized actuarial loss (gain), net | — |  |  | — |  |  | — |  |  | (3) |  |  | 3 |  |  | 4 |  |  | (5) |  |  | (8) |  |  | — |
Recognized settlement gain | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (34) |
Net periodic benefit cost (credit) | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6 |  |  | $ | 10 |  |  | $ | 11 |  |  | $ | 3 |  |  | $ | (2) |  |  | $ | (33) |
Each of the components other than the service cost component were recorded in the Consolidated Statements of Income in Other, net. As of September 30, 2023, we expect no amounts to be reclassified into earnings within the next 12 months related to net periodic benefit cost (credit) for the qualified pension plans. As of September 30, 2023, the amounts expected to be reclassified into earnings within the next 12 months related to net periodic benefit cost (credit) for the non-qualified pension plans and the other postretirement benefit plans are not significant. Assumptions Weighted average assumptions are as follows for fiscal years ended 2023, 2022 and 2021:
| Pension Benefits |  | Other Postretirement
| Qualified |  | Non-Qualified |  | Benefits
| 2023 |  | 2022 |  | 2021 |  | 2023 |  | 2022 |  | 2021 |  | 2023 |  | 2022 |  | 2021
Discount rate to determine net periodic benefit cost | 5.20 | % |  | 2.00 | % |  | 1.70 | % |  | 5.42 | % |  | 2.83 | % |  | 2.63 | % |  | 4.59 | % |  | 2.07 | % |  | 1.95 | %
Discount rate to determine benefit obligations | 5.70 | % |  | 5.20 | % |  | 2.00 | % |  | 5.79 | % |  | 5.42 | % |  | 2.83 | % |  | 4.92 | % |  | 4.59 | % |  | 2.07 | %
Rate of compensation increase | n/a |  | n/a |  | n/a |  | n/a |  | n/a |  | n/a |  | n/a |  | n/a |  | n/a
Expected return on plan assets | 5.20 | % |  | 2.00 | % |  | 1.70 | % |  | n/a |  | n/a |  | n/a |  | n/a |  | n/a |  | n/a
To determine the expected return on plan assets assumption, we first examined historical rates of return for the various asset classes within the plans. We then determined a long-term projected rate-of-return based on expected returns. Our discount rate assumptions used to account for pension and other postretirement benefit plans reflect the rates at which the benefit obligations could be effectively settled. The discount rates for our plans were determined using a cash flow matching technique whereby the rates of a yield curve, developed from high-quality debt securities, were applied to the benefit obligations to determine the appropriate discount rate. We have eight other postretirement benefit plans, of which five are healthcare and life insurance related. Two of these plans, with benefit obligations totaling $9 million at September 30, 2023, were not impacted by healthcare cost trend rates as one consists of fixed annual payments and one is life insurance related. One of the healthcare plans, with benefit obligations less than $1 million at September 30, 2023, was not impacted by healthcare cost trend rates due to previous plan amendments. The remaining two plans, with benefit obligations less than $1 million and $3 million, at September 30, 2023, utilized assumed healthcare cost trend rates of 7.1% and 7.0%, respectively. The healthcare cost trend rates for the two plans will be grading down to an ultimate rate of 4.5% in 2032 and 2031, respectively. Contributions Our policy is to fund at least the minimum contribution required to meet applicable federal employee benefit and local tax laws. In our sole discretion, we may from time to time fund additional amounts. Expected contributions to pension plans for fiscal 2024 are approximately $15 million. For fiscal 2023, 2022 and 2021, we funded $13 million, $13 million and $15 million, respectively, to pension plans. Estimated Future Benefit Payments The following benefit payments are expected to be paid (in millions):
| Pension Benefits |  | Other Postretirement
| Qualified |  | Non-Qualified |  | Benefits
2024 | $ | 1 |  |  | $ | 14 |  |  | $ | 2 |
2025 | 1 |  |  | 14 |  |  | 2 |
2026 | — |  |  | 14 |  |  | 3 |
2027 | — |  |  | 13 |  |  | 2 |
2028 | — |  |  | 13 |  |  | 2 |
2029-2033 | 5 |  |  | 62 |  |  | 7 |
The above benefit payments for other postretirement benefit plans are not expected to be offset by Medicare Part D subsidies in fiscal 2024. Multi-Employer Plan Additionally, we participate in one multi-employer plan that provides defined benefits to certain team members covered by collective bargaining agreements. Such plans are usually administered by a board of trustees composed of the management of the participating companies and labor representatives. The risks of participating in multi-employer plans are different from single-employer plans. Assets contributed to the multi-employer plan by one employer may be used to provide benefits to team members of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligation of the plan may be borne by the remaining participating employers. If we stop participating in a plan, we may be required to pay that plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The net pension cost of the plan is equal to the annual contributions determined in accordance with the provisions of negotiated labor contracts. Contributions to the plan were $2 million in fiscal 2023 and fiscal 2022. Assets contributed to such plans are not segregated or otherwise restricted to provide benefits only to our team members. The future cost of the plans is dependent on a number of factors including the funded status of the plans and the ability of the other participating companies to meet ongoing funding obligations. Our participation in the multi-employer plan for fiscal 2023 is outlined below. The EIN/Pension Plan Number column provides the Employer Identification Number (“EIN”) and the three-digit plan number. The most recent Pension Protection Act (“PPA”) zone status available in fiscal 2023 and fiscal 2022 is for the plan’s year beginning January 1, 2023, and 2022, respectively. The zone status is based on information that we have received from the plan and is certified by the plan’s actuaries. Among other factors, plans in the red zone are generally less than 65 percent funded. Plans that are critical and declining status are projected to have an accumulated funding deficiency. The FIP/RP Status column indicates plans for which a financial improvement plan (“FIP”) or rehabilitation plan (“RP”) is either pending or has been implemented. The last column lists the expiration date of the collective-bargaining agreement to which the plan is subject. In addition to regular contributions, we could be obligated to pay additional contributions (known as complete or partial withdrawal liabilities) if it has unfunded vested benefits.
|  |  | PPA Zone Status |  | FIP/RP Status |  | Contributions (in millions) |  | Surcharge Imposed |  |
Pension Fund Plan Name | EIN/Pension Plan Number |  | 2023 |  | 2022 |  | Implemented | 2023 | 2022 | 2021 |  | 2023 |  | Expiration Date of Collective Bargaining Agreement
Bakery and Confectionery Union and Industry International Pension Fund | 52-6118572/001 |  | Red |  | Red |  | Nov 2012 |  | $2 | $2 | $1 |  | 5% |  | 2024-08-02

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 710 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//710/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 712 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//712/tableOfContent Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 715 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//715/tableOfContent Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//718/tableOfContent + Details
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