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Benefit Plans | 12 Months Ended
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Dec. 28, 2024
Retirement Benefits [Abstract] |
Benefit Plans | Benefit Plans Pension and Other Postretirement Plans The Company sponsors several qualified and nonqualified pension plans and other postretirement benefit plans for certain employees. The information disclosed below does not include the pension plan in South Korea, as it is immaterial to the Company’s Consolidated Financial Statements. The following tables provide a reconciliation of the changes in the most significant plans’ benefit obligations and the fair value of the plans’ assets for 2024 and 2023, and a statement of the plans’ aggregate funded status:
|  | Pension Benefits |  | Other Benefits
(In thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Change in benefit obligation: |  |  |  |  |  |  |  |
Obligation at beginning of year |  | $ | 54,435 |  |  | $ | 50,761 |  |  | $ | 9,557 |  |  | $ | 9,240 |
Service cost |  | — |  |  | — |  |  | 202 |  |  | 183 |
Interest cost |  | 2,337 |  |  | 2,454 |  |  | 497 |  |  | 439 |
Actuarial (gain) loss |  | (5,245) |  |  | 1,508 |  |  | (604) |  |  | (105) |
Plan amendments/transference |  | — |  |  | — |  |  | — |  |  | 101 |
Benefit payments |  | (3,263) |  |  | (3,582) |  |  | (664) |  |  | (686) |
Foreign currency translation adjustment |  | (487) |  |  | 3,294 |  |  | (671) |  |  | 385 |
Obligation at end of year |  | 47,777 |  |  | 54,435 |  |  | 8,317 |  |  | 9,557 |
Change in fair value of plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | 62,871 |  |  | 62,298 |  |  | — |  |  | — |
Actual return on plan assets |  | (7,788) |  |  | 410 |  |  | — |  |  | — |
Employer contributions |  | — |  |  | — |  |  | 664 |  |  | 686 |
Benefit payments |  | (3,263) |  |  | (3,582) |  |  | (664) |  |  | (686) |
Foreign currency translation adjustment |  | (780) |  |  | 3,745 |  |  | — |  |  | — |
Fair value of plan assets at end of year |  | 51,040 |  |  | 62,871 |  |  | — |  |  | — |
Funded (underfunded) status at end of year |  | $ | 3,263 |  |  | $ | 8,436 |  |  | $ | (8,317) |  |  | $ | (9,557) |
The following represents amounts recognized in AOCI (before the effect of income taxes):
|  | Pension Benefits |  | Other Benefits
(In thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Unrecognized net actuarial loss (gain) |  | $ | 12,617 |  |  | $ | 7,728 |  |  | $ | (3,863) |  |  | $ | (3,863) |
Unrecognized prior service credit |  | — |  |  | — |  |  | (6) |  |  | (5) |
As of December 28, 2024, $0.3 million of the actuarial net loss and the prior service credit will, through amortization, be recognized as components of net periodic benefit cost in 2025. The aggregate status of all overfunded plans is recognized as an asset and the aggregate status of all underfunded plans is recognized as a liability in the Consolidated Balance Sheets. The amounts recognized as a liability are classified as current or long-term on a plan-by-plan basis. Liabilities are classified as current to the extent the actuarial present value of benefits payable within the next 12 months exceeds the fair value of plan assets, with all remaining amounts classified as long-term. As of December 28, 2024 and December 30, 2023, the total funded status of the plans recognized in the Consolidated Balance Sheets was as follows:
|  | Pension Benefits |  | Other Benefits
(In thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Long-term asset |  | $ | 3,263 |  |  | $ | 8,436 |  |  | $ | — |  |  | $ | — |
Current liability |  | $ | — |  |  | $ | — |  |  | $ | (926) |  |  | $ | (1,041) |
Long-term liability |  | — |  |  | — |  |  | (7,391) |  |  | (8,516) |
Total funded (underfunded) status |  | $ | 3,263 |  |  | $ | 8,436 |  |  | $ | (8,317) |  |  | $ | (9,557) |
The components of net periodic benefit cost (income) are as follows:
(In thousands) |  | 2024 |  | 2023 |  | 2022
Pension benefits: |  |  |  |  |  |
Interest cost |  | $ | 2,337 |  |  | $ | 2,454 |  |  | $ | 1,272 |
Expected return on plan assets |  | (2,357) |  |  | (3,260) |  |  | (3,568) |
Amortization of net loss |  | 132 |  |  | — |  |  | 897 |
Net periodic benefit cost (income) |  | $ | 112 |  |  | $ | (806) |  |  | $ | (1,399) |
Other benefits: |  |  |  |  |  |
Service cost |  | $ | 202 |  |  | $ | 183 |  |  | $ | 291 |
Interest cost |  | 497 |  |  | 439 |  |  | 346 |
Amortization of prior service credit |  | (1) |  |  | (2) |  |  | (198) |
Amortization of net gain |  | (391) |  |  | (449) |  |  | (220) |
Curtailment gain |  | — |  |  | — |  |  | (1,756) |
Net periodic benefit cost (income) |  | $ | 307 |  |  | $ | 171 |  |  | $ | (1,537) |
The components of net periodic benefit cost (income) other than the service cost component are included in other income, net in the Consolidated Statements of Income. The weighted average assumptions used in the measurement of the Company’s benefit obligations are as follows:
|  | Pension Benefits |  | Other Benefits
|  | 2024 |  | 2023 |  | 2024 |  | 2023
Discount rate |  | 5.30 | % |  | 4.40 | % |  | 6.51 | % |  | 5.96 | %
Expected long-term return on plan assets |  | 5.30 | % |  | 4.30 | % |  | N/A |  | N/A
Rate of compensation increases |  | N/A |  | N/A |  | 5.00 | % |  | 5.00 | %
Rate of inflation |  | 3.30 | % |  | 3.20 | % |  | N/A |  | N/A
The weighted average assumptions used in the measurement of the Company’s net periodic benefit cost are as follows:
|  | Pension Benefits |  | Other Benefits
|  | 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Discount rate |  | 4.40 | % |  | 4.80 | % |  | 1.90 | % |  | 5.96 | % |  | 6.08 | % |  | 3.73 | %
Expected long-term return on plan assets |  | 4.30 | % |  | 5.51 | % |  | 4.96 | % |  | N/A |  | N/A |  | N/A
Rate of compensation increases |  | N/A |  | N/A |  | N/A |  | 5.00 | % |  | 5.00 | % |  | 5.00 | %
Rate of inflation |  | 3.20 | % |  | 3.30 | % |  | 3.70 | % |  | N/A |  | N/A |  | N/A
The Company’s Mexican postretirement plans use the rate of compensation increase in the benefit formulas. Past service in the Wednesbury Pension Scheme (U.K. pension plan) will be adjusted for the effects of inflation. All other pension and postretirement plans use benefit formulas based on length of service. The annual assumed rate of increase in the per capita cost of covered benefits (i.e., health care cost trend rate) is assumed to range from 5.1 to 9.7 percent for 2025, gradually decrease to 4.1 percent through 2040, and remain at that level thereafter. The health care cost trend rate assumption does not have a significant effect on the amounts reported. Pension Assets In October 2024, the Trustees of the U.K. pension plan entered into an agreement with Just Retirement Limited to acquire an insurance policy that operates as an investment asset, with the intent of matching the remaining uninsured part of the U.K. pension plan’s future cash outflow arising from the accrued pension liabilities of members. Such an arrangement is commonly termed as a “buy-in.” The benefit obligation was not transferred to the insurer, and the Company remains responsible for paying pension benefits. The initial value of the asset associated with this contract was equal to the premium paid to secure the contract and is adjusted each reporting period to reflect the estimated fair value of the premium that would be paid for such a contract at that time. The buy-in reduces the U.K. pension plan’s value at risk in relation to key risks associated with improved longevity, inflation, and interest rate movements while improving the security to the U.K. pension plan and its members. The Company consequently benefits from the buy-in as it reduces the U.K. pension plan’s potential reliance on the Company for future cash funding requirements. Following the buy-in, the U.K. pension plan does not need to follow an investment strategy. The discount rate used represents the annualized yield based on a cash flow matched methodology with reference to an AA corporate bond spot curve and having regard to the duration of the U.K. pension plan’s liabilities. The weighted average asset allocation of the Company’s pension fund assets are as follows:
|  | Pension Plan Assets
Asset category |  | 2024 |  | 2023
Pooled liability investments |  | 5 | % |  | 99 | %
Buy-in contract |  | 94 |  |  | — |
Cash and equivalents (includes money market funds) |  | 1 |  |  | 1 |
Total |  | 100 | % |  | 100 | %
The Company’s investments for its pension plans are reported at fair value. The following methods and assumptions were used to estimate the fair value of the Company’s plan asset investments: Cash and money market funds – Valued at cost, which approximates fair value. Pooled liability investments – These funds are primarily invested in U.K. government bonds and highly rated corporate bonds. The level 2 fair value is determined utilizing observable inputs of the underlying assets. Buy-in contract – This consists of a U.K. buy-in insurance contract set to equal an actuarially calculated present value of the underlying liabilities. Its fair value is classified as level 3. The following table sets forth by level, within the fair value hierarchy, the assets of the plans at fair value:
|  | Fair Value Measurements at December 28, 2024
(In thousands) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Cash and money market funds |  | $ | 682 |  |  | $ | — |  |  | $ | — |  |  | $ | 682 |
Pooled liability investments |  | — |  |  | 2,581 |  |  | — |  |  | 2,581 |
Buy-in contract |  | — |  |  | — |  |  | 47,777 |  |  | 47,777 |
Total |  | $ | 682 |  |  | $ | 2,581 |  |  | $ | 47,777 |  |  | $ | 51,040 |
|  | Fair Value Measurements at December 30, 2023
(In thousands) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Cash and money market funds |  | $ | 502 |  |  | $ | — |  |  | $ | — |  |  | $ | 502 |
Pooled liability investments |  | — |  |  | 62,369 |  |  | — |  |  | 62,369 |
Total |  | $ | 502 |  |  | $ | 62,369 |  |  | $ | — |  |  | $ | 62,871 |
The table below reflects the changes in the assets of the plan measured at fair value on a recurring basis using significant unobservable inputs (level 3 of fair value hierarchy) during the year ended December 28, 2024:
(In thousands) |  | Buy-In Contract
Balance, December 30, 2023 |  | $ | — |
Purchases |  | 47,777 |
Balance, December 28, 2024 |  | $ | 47,777 |
Contributions and Benefit Payments The Company does not expect to contribute to the U.K. pension plan, other than to reimburse expenses, and expects to contribute $0.9 million to its other postretirement benefit plans in 2025. The Company expects future benefits to be paid from the plans as follows:
(In thousands) |  | Pension Benefits |  | Other Benefits
2025 |  | $ | 3,612 |  |  | $ | 926 |
2026 |  | 3,742 |  |  | 951 |
2027 |  | 3,875 |  |  | 772 |
2028 |  | 4,015 |  |  | 833 |
2029 |  | 4,159 |  |  | 760 |
2030-2034 |  | 23,135 |  |  | 3,876 |
Total |  | $ | 42,538 |  |  | $ | 8,118 |
401(k) Plans The Company sponsors voluntary employee savings plans that qualify under Section 401(k) of the Internal Revenue Code of 1986. Compensation expense for the Company’s matching contribution to the 401(k) plans was $5.0 million in 2024, $4.9 million in 2023, and $4.9 million in 2022. The Company match is a cash contribution. Participants direct the investment of their account balances by allocating among a range of asset classes including mutual funds (equity, fixed income, and balanced funds) and money market funds. The plans do not allow direct investment in securities issued by the Company. Multiemployer Plan On August 2, 2024 the Company entered into an equity purchase agreement to acquire all of the outstanding shares of Elkhart. Elkhart contributes to the IAM National Pension Fund (IAM Plan). The Employer Identification Number for this plan is 51-6031295. The risks of participating in multiemployer plans are different from single-employer plans in the following aspects: (i) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers; (ii) if a participating employer stops contributing to the plan, the underfunded obligations of the plan may be borne by the remaining participating employers; (iii) if the Company chooses to stop participating in the plan, the Company may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The Company makes contributions to the IAM Plan trusts that cover certain union employees; contributions by employees are not permitted. Contributions to the IAM Plan were approximately $0.2 million in 2024. The Company’s contributions are less than five percent of total employer contributions made to the IAM Plan indicated in the most recently filed Form 5500. Under the Pension Protection Act of 2006, the IAM Plan’s actuary must certify the plan’s zone status annually. Plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. If a plan is determined to be in endangered status, red zone or yellow zone, the plan’s trustees must develop a formal plan of corrective action, a Financial Improvement Plan and/or a Rehabilitation Plan. For 2024, the IAM Plan remained in the red zone due to the trustees’ election to voluntarily place the fund in critical status in 2019 to strengthen its funding position. The fund has remained in critical status since that election and is not projected to emerge from critical status in the upcoming year.

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