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Employee Benefits | 12 Months Ended
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Dec. 30, 2023
Postemployment Benefits [Abstract] |
Employee Benefits | 21. Employee Benefits Defined Contribution Plans In the U.S., the Company sponsors one qualified defined contribution plan or 401(k) plan, the Masimo Retirement Savings Plan (MRSP), covering the Company’s full-time U.S. employees who meet certain eligibility requirements. On April 11, 2022, in connection with the Sound United acquisition, the MRSP was amended to allow for participation by eligible Sound United employees. The MRSP matches 100% of a participant’s salary deferral, up to 3% of each participant’s compensation for the pay period, subject to a maximum amount. The Company may also contribute to the MRSP on a discretionary basis. The Company contributed $4.9 million, $4.5 million and $3.4 million to the MRSP for the years ended December 30, 2023, December 31, 2022 and January 1, 2022, respectively, all in the form of matching contributions. In addition, some of the Company’s international subsidiaries also have defined contribution plans to which both the employee and employers are eligible to make contributions. The Company contributed $5.5 million and $4.3 million for the year ended December 30, 2023 and December 31, 2022, respectively. The Company contributed immaterial amounts to these plans for the year ended January 1, 2022. Defined Benefit Plans The Company sponsors several international noncontributory defined benefit plans. In connection with the Sound United acquisition, the Company assumed sponsorship of several international defined benefit plans and post-retirement benefit plans. All defined benefit plans and post-retirement benefit plans assumed by the Company were closed to new participants prior to the Sound United acquisition. The service cost component for the defined benefit plans are recorded in operating expenses in the consolidated statement of operations. All other cost components are recorded in non-operating loss, net in the consolidated statement of operations. The following table sets forth the funded status and amounts recognized in the consolidated balance sheet for the Company’s defined benefit plans.
(in millions) |  | December 30, 2023 |  | December 31, 2022 |  |  |  |
Plan Assets |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 22.2 |  |  | $ | 21.7 |  |  |  |  |
Realized net gains (losses) on plan assets |  | 1.1 |  |  | (2.5) |  |  |  |  |
Employer contributions |  | 0.4 |  |  | 1.5 |  |  |  |  |
Participant contributions |  | 0.6 |  |  | 0.5 |  |  |  |  |
Benefits paid |  | 0.8 |  |  | 2.8 |  |  |  |  |
Foreign currency revaluation and translation gains and (losses) |  | (2.0) |  |  | (1.8) |  |  |  |  |
Fair value of plan assets at end of year |  | $ | 23.1 |  |  | $ | 22.2 |  |  |  |  |
Projected Benefit Obligation |  |  |  |  |  |  |  |
Projected benefit obligation at beginning of year |  | $ | 32.3 |  |  | $ | 32.3 |  |  |  |  |
Service cost |  | 1.2 |  |  | 1.1 |  |  |  |  |
Interest cost |  | 0.5 |  |  | 0.1 |  |  |  |  |
Participant contributions |  | 0.6 |  |  | 0.5 |  |  |  |  |
Actuarial gains (losses) |  | 2.3 |  |  | (1.9) |  |  |  |  |
Benefits paid |  | (0.5) |  | (1) | 2.0 |  |  |  |  |
Foreign currency revaluation and translation gains and (losses) |  | (3.8) |  |  | (1.8) |  |  |  |  |
Projected benefit obligation at end of year |  | $ | 32.6 |  |  | $ | 32.3 |  |  |  |  |
Funded status |  | $ | (9.5) |  |  | $ | (10.1) |  |  |  |  |
______________ (1) Due to the timing of a cash transfer, there was a payable as of December 30, 2023, resulting in a negative allocation as of year end. The net decrease in the fair value of the Company’s plan assets for the year ended December 30, 2023 was principally driven by $4.3 million of foreign currency revaluation on the plan assets, partially offset by $1.1 million of realized gains on assets, and $0.8 million of benefits paid. The net decrease in the Company’s projected benefit obligation for the year ended December 30, 2023 was primarily driven by $6.1 million of foreign currency revaluation on the project benefit obligation, offset by change in the discount rate from the prior year and $2.3 million of actuarial gains. The underfunded balance of $9.5 million and $10.1 million was included in the long-term other liabilities on the consolidated balance sheets as of December 30, 2023 and December 31, 2022, respectively. The Company’s consolidated statement of operations reflect the following components of net periodic defined benefit costs:
(in millions) |  | Year Ended December 30, 2023 |  | Year Ended December 31, 2022 |
Components of net periodic benefit cost |  | $ | — |  |  | $ | — |  |
Service cost |  | 1.2 |  |  | 1.1 |  |
Interest cost |  | 0.5 |  |  | 0.1 |  |
Expected (gains) on plan assets |  | (0.7) |  |  | (0.6) |  |
Amortization of net losses |  | — |  |  | 0.1 |  |
Recognized net actuarial loss |  | — |  |  | 0.3 |  |
Net periodic defined benefit plan cost |  | $ | 1.0 |  |  | $ | 1.0 |
The amounts provided above for amortization of prior service costs (credits) and amortization of net losses represent the reclassifications of prior service cost (credits) and net actuarial gain (losses) that were recognized in accumulated other comprehensive (loss) income in prior periods. Classification of amounts recognized in the consolidated balance sheets are as follows:
(in millions) |  | December 30, 2023 |  | December 31, 2022
Non-current assets |  | $ | — |  |  | $ | — |
Current liability |  | — |  |  | — |
Non-current liability |  | 9.5 |  |  | 10.1 |
International defined benefit plans with accumulated benefit obligations in excess of fair value of plan assets consist of the following:
(in millions) |  | December 30, 2023 |  | December 31, 2022
Projected benefit obligation |  | $ | 32.6 |  |  | $ | 32.3 |
Accumulated benefit obligation |  | 28.3 |  |  | 31.0 |
Fair value of plan assets |  | $ | 23.1 |  |  | $ | 22.2 |
Plan Assumptions The Company determines actuarial assumptions on an annual basis. The actuarial assumptions used for the Company’s defined benefit plans for international participants will vary depending on the applicable country. On a weighted-average basis, the following assumptions were used to determine benefit obligations and to determine net periodic benefit cost:
|  | Year Ended December 30, 2023 |  | Year Ended December 31, 2022
Assumptions - benefit obligations: |  |  |  |
Discount rate |  | 1.35 | % |  | 1.61 | %
Rate of compensation increase |  | 1.04 |  |  | 0.96 |
Assumptions - net periodic benefit costs: |  |  |  |
Discount rate |  | 1.91 | % |  | 0.49 | %
Rate of compensation increase |  | 1.43 |  |  | 0.09 |
Expected long-term return on plan assets(1) |  | 3.53 |  |  | 1.70 |
Interest credit rate |  | 1.98 |  |  | 2.34 |
______________ (1) The pension expected return on assets assumption is derived primarily from underlying investment allocations and historical risk premiums per each plan, adjusted for current and future expectations, such as easing of global inflationary pressure. Plan Assets The weighted-average asset allocations at year end by asset category were as follows:
|  |  |  | Actual Allocation
Asset category |  |  |  | December 30, 2023 |  | December 31, 2022
Cash and cash equivalents |  |  |  | (5.0) | % | (1) | 3.0 | %
Equity securities |  |  |  | 35.0 |  |  | 30.0 |
Debt securities |  |  |  | 47.0 |  |  | 36.0 |
Other |  |  |  | 24.0 |  |  | 31.0 |
______________ (1) Due to the timing of a cash transfer , there was a payable as of December 30, 2023, resulting in a negative allocation as of year end. The Plan invests in a diversified portfolio of assets intended to minimize risk of poor returns while maximizing expected portfolio returns. The actual portfolio investment mix may, from time to time, deviate from the established target mix due to various factors such as normal market fluctuations, the reliance on estimates in connection with the determination of allocations and normal portfolio activity such as additions and withdrawals. The target allocations are subject to periodic review, including a review of the asset portfolio’s performance, by the named fiduciary of the plans. Such plans have local independent fiduciary advisors with responsibility for the development and oversight of the investment policy, including asset allocation decisions. In making such decisions, consideration is given to local regulations, investment practices and funding rules. The fair value of investments is included in the fair value hierarchy, see Note 2, “Summary of Significant Accounting Policies”. While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Plan Contributions The Company determines expected funding needs of its defined benefit pension plans based on legal funding requirements, plus any additional amounts that may be appropriate considering the funded status of the plans, tax consequences, the cash flow generated by the Company and other factors. The Company made $0.4 million and $1.5 million contributions to its defined benefit plans for the years ended December 30, 2023 and December 31, 2022, respectively. The Company expects to contribute $1.8 million for the fiscal year 2024. Estimated Future Benefit Payments The estimated future benefit payments, based upon the same assumptions used to measure the benefit obligations and expected future employee service, were as follows:
(in millions) |  | Year Ended December 30, 2023
2024 |  | $ | 0.4 |
2025 |  | 2.5 |
2026 |  | 2.4 |
2027 |  | 2.5 |
2028 |  | 2.2 |
Thereafter |  | 4.2 |
Total |  | $ | 14.2 |

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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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