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Benefit Plans | 12 Months Ended
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Dec. 30, 2023
Retirement Benefits [Abstract] |
Benefit Plans | Benefit Plans The Company has Company-sponsored and mandatory defined benefit pension plans covering employees in the United Kingdom ("U.K."), Germany, the Philippines, China, Japan, Mexico, Italy and France. The amount of the retirement benefits provided under the plans is generally based on years of service and final average pay. On April 7, 2020, the Company entered into a definitive agreement to purchase a group annuity contract, under which an insurance company is required to directly pay and administer pension payments to certain of the Company’s U.K. pension plan participants, or their designated beneficiaries. The Company completed the buy-out of this U.K. pension plan during the fourth quarter of 2021 and as a result recorded a non-cash pension settlement charge of $19.9 million (£14.9 million), inclusive of the accelerated recognition of prior service cost of $0.5 million (£0.4 million). Benefit plan related information is as follows for the years 2023 and 2022:
(in thousands) | 2023 |  | 2022
Change in benefit obligation: |  |  |
Benefit obligation at beginning of year | $ | 64,526 |  |  | $ | 86,570 |
Service cost | 2,774 |  |  | 3,072 |
Interest cost | 3,795 |  |  | 2,529 |
Net actuarial loss (gain) | 4,312 |  |  | (19,327) |
Benefits paid from the plan assets | (1,933) |  |  | (1,474) |
Benefits paid directly by the Company | (2,035) |  |  | (1,853) |
Settlements | (1,687) |  |  | (1,565) |
Acquisitions | — |  |  | 3,812 |
Effect of exchange rate movements | 3,769 |  |  | (5,839) |
Plan amendment and other | — |  |  | (1,399) |
Benefit obligation at end of year | $ | 73,521 |  |  | $ | 64,526 |
Change in plan assets at fair value: |  |  |
Fair value of plan assets at beginning of year | $ | 35,433 |  |  | $ | 48,325 |
Actual gain (loss) on plan assets | 1,358 |  |  | (9,217) |
Employer contributions | 1,821 |  |  | 2,288 |
Benefits paid from the plan assets | (1,933) |  |  | (1,474) |
Settlements | (463) |  |  | — |
Acquisitions | — |  |  | — |
Effect of exchange rate movements | 1,480 |  |  | (4,489) |
Fair value of plan assets at end of year | 37,696 |  |  | 35,433 |
Net amount unfunded status | $ | (35,825) |  |  | $ | (29,093) |
Amounts recognized in the Consolidated Balance Sheets as of December 30, 2023 and December 31, 2022 consist of the following:
(in thousands) | 2023 |  | 2022
Amounts recognized in the Consolidated Balance Sheets consist of: |  |  |
Noncurrent assets | $ | 79 |  |  | $ | 262 |
Current benefit liability | (1,482) |  |  | (1,318) |
Noncurrent benefit liability | (34,422) |  |  | (28,037) |
Net liability recognized | $ | (35,825) |  |  | $ | (29,093) |
The amounts included in accumulated other comprehensive loss in the Consolidated Balance Sheets, excluding tax effects, that have not yet been recognized as components of net periodic benefit costs as of December 30, 2023 and December 31, 2022 were as follows:
(in thousands) | 2023 |  | 2022
Net actuarial loss (gain) | $ | 4,182 |  |  | $ | (631) |
Prior service cost | 1,440 |  |  | 1,496 |
Total | $ | 5,622 |  |  | $ | 865 |
The pre-tax amounts recognized in other comprehensive (loss) income in 2023 and 2022 were as follows:
| 2023 |  | 2022
(in thousands) |  |  |
Amortization of: |  |  |
Prior service cost | $ | 94 |  |  | $ | 150 |
Net actuarial (gain) loss | (49) |  |  | 228 |
Amount arising during the period: |  |  |
Prior service cost | — |  |  | 1,399 |
Net actuarial (loss) gain | (4,202) |  |  | 9,899 |
Net curtailment and settlement gain | (266) |  |  | (820) |
Foreign currency adjustments | (334) |  |  | 840 |
Total | $ | (4,757) |  |  | $ | 11,696 |
The net actuarial (loss) gain during 2023 as compared to 2022 were impacted by higher discount rates in 2023 as compared to 2022. The components of net periodic benefit costs for the fiscal years 2023, 2022, and 2021 are as follows:
(in thousands) | 2023 |  | 2022 |  | 2021
Components of net periodic benefit cost: |  |  |  |  |
Service cost | $ | 2,774 |  |  | $ | 3,072 |  |  | $ | 2,785 |
Interest cost | 3,795 |  |  | 2,529 |  |  | 1,761 |
Expected return on plan assets | (1,879) |  |  | (1,507) |  |  | (1,458) |
Amortization of prior service and net actuarial loss | 45 |  |  | 378 |  |  | 1,315 |
Net periodic benefit cost | 4,735 |  |  | 4,472 |  |  | 4,403 |
Net settlement (gain) loss | (266) |  |  | (820) |  |  | 19,855 |
Total expense for the year | $ | 4,469 |  |  | $ | 3,652 |  |  | $ | 24,258 |
The Company completed the buy-out of this U.K. pension plan during the fourth quarter of 2021 and as a result in the fourth quarter of 2021, the Company recorded a non-cash pension settlement charge of $19.9 million (£14.9 million), inclusive of the accelerated recognition of prior service cost of $0.5 million (£0.4 million). Weighted average assumptions used to determine net periodic benefit cost for the fiscal years 2023, 2022, and 2021 are as follows:
| 2023 |  | 2022 |  | 2021
Discount rate | 5.8 | % |  | 3.1 | % |  | 1.2 | %
Expected return on plan assets | 5.2 | % |  | 3.3 | % |  | 1.4 | %
Compensation increase rate | 4.7 | % |  | 4.8 | % |  | 4.9 | %
The accumulated benefit obligation for the plans was $60.6 million and $53.9 million as of December 30, 2023 and December 31, 2022, respectively. The following table provides a summary of under-funded or unfunded pension benefit plans with projected benefit obligations in excess of plan assets as of December 30, 2023 and December 31, 2022:
(in thousands) | 2023 |  | 2022
Projected benefit obligation | $ | 73,029 |  |  | $ | 42,676 |
Fair value of plan assets | 37,124 |  |  | 13,650 |
The following table provides a summary of under-funded or unfunded pension benefit plans with accumulated benefit obligations in excess of plan assets as of December 30, 2023 and December 31, 2022:
(in thousands) | 2023 |  | 2022
Accumulated benefit obligation | $ | 53,400 |  |  | $ | 26,540 |
Fair value of plan assets | 28,032 |  |  | 4,948 |
Weighted average assumptions used to determine benefit obligations as of December 30, 2023, December 31, 2022 and January 1, 2022 are as follows:
| 2023 |  | 2022 |  | 2021
Discount rate | 5.6 | % |  | 5.8 | % |  | 3.1 | %
Compensation increase rate | 4.8 | % |  | 4.7 | % |  | 4.8 | %
Expected benefit payments to be paid to participants for the fiscal year ending are as follows:
(in thousands) | Expected Benefit Payments
2024 | $ | 3,678 |
2025 | 4,359 |
2026 | 4,303 |
2027 | 4,399 |
2028 | 5,291 |
2029-2032 and thereafter | 34,525 |
The Company expects to make approximately $2.2 million of contributions to the plans and pay $2.1 million of benefits directly in 2024. The Company also sponsors certain post-employment plans in foreign countries and other statutory benefit plans. For the fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022, the Company recorded $1.5 million, $1.9 million, $2.1 million expense, respectively, in Cost of Sales and Other (income) expense, net within the Consolidated Statements of Net Income. As of December 30, 2023 and December 31, 2022, the Company reported benefit liabilities of $4.8 million and $4.0 million for these plans, of which $1.7 million and $1.5 million was recorded in Accrued liabilities and $3.1 million a nd $2.5 million w as recorded in Other long-term liabilities on the Consolidated Balance Sheets, respectively. For the fiscal years ended December 30, 2023 and December 31, 2022, the pre-tax amounts recognized in other comprehensive income (loss) as components of net periodic benefit costs for these plans were $1.3 million and $0.5 million, respectively. For the fiscal year ended December 30, 2023, the expense reclassified from accumulated other comprehensive loss to earnings was $0.4 million, including $0.5 million net settlement loss. For the fiscal year ended December 31, 2022, the expense reclassified from accumulated other comprehensive loss to earnings was $1.7 million, including $1.3 million net settlement loss. Defined Benefit Plan Assets Based upon analysis of the target asset allocation and historical returns by type of investment, the Company has assumed that the expected long-term rate of return will be 5.2% on plan assets. Assets are invested to maximize long-term return taking into consideration timing of settlement of the retirement liabilities and liquidity needs for benefits payments. Pension plan assets were invested as follows, and were not materially different from the target asset allocation:
| Asset Allocation
| 2023 |  | 2022
Cash and cash equivalents, and other | 3 | % |  | 13 | %
Equity securities | 7 | % |  | 14 | %
Fixed income securities | 90 | % |  | 73 | %
| 100 | % |  | 100 | %
The Company segregated its plan assets by the following major categories and level for determining their fair value as of December 30, 2023 and December 31, 2022. All plan assets that are valued using the net asset value per share (“NAV”) practical expedient have not been included within the fair value hierarchy but are separately disclosed. Cash and cash equivalents – Carrying value approximates fair value. As such, these assets were classified as Level 1. The Company also invests in certain short-term investments which are valued using the amortized cost method. Lastly, the Company has certain pooled pension funds that have short-term investments with third party mutual funds that are valued at unit value per share at measurement date. As such, these assets were classified as Level 2. Equity – The values of individual equity securities were based on quoted prices in active markets. As such, these assets are classified as Level 1. The Company has certain pooled pension funds which have mutual funds with underlying investments in certain equity securities that are not quoted on active markets; therefore, they were classified as Level 2. Fixed income – Fixed income securities are typically priced based on a last trade basis and are exchange-traded. Accordingly, the Company classified fixed income securities as Level 1. The Company has certain pooled pension funds which have mutual funds with underlying investments in fixed income securities and funds priced based on a valuation model rather than a last trade basis and are not exchange-traded. As such, they were classified as Level 2. The Company also invests in certain fixed income funds which are valued at NAV. Insurance Contracts and other – This category includes pooled pension funds which have mutual funds with underlying investments in other assets and liabilities including alternatives priced based on a valuation model and are not exchange-traded. These were classified as Level 2. This category includes also insurance contracts that are valued by the re-insurer with the valuation inputs being not highly observable or traded on an open market. Accordingly, insurance contracts were categorized as Level 3. Lastly, this category includes other assets and liabilities including futures or swaps. For any Level 2 and Level 3 plan assets, management reviews significant investments on a periodic basis including investigation of unusual fluctuations in price or returns and obtaining an understanding of the pricing methodology to assess the reliability of third-party pricing estimates. The valuation methodologies described above may generate a fair value calculation that may not be indicative of net realizable value or future fair values. While the Company believes the valuation methodologies used are appropriate, the use of different methodologies or assumptions in calculating fair value could result in different amounts. The Company invests in assets in which valuation is determined by NAV. The Company believes that the NAV is representative of fair value at the reporting date, as there are no significant restrictions on redemption of these investments or other reasons to indicate that the investment would be redeemed at an amount different than the NAV. The following table presents the Company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of December 30, 2023:
| Fair Value Measurements Using |  |  |  |
(in thousands) | Level 1 |  | Level 2 |  | Level 3 |  | NAV |  | Total
Insurance contracts and other | $ | — |  |  | $ | — |  |  | $ | 133 |  |  | $ | — |  |  | $ | 133 |
Cash and cash equivalents | 310 |  |  | 933 |  |  | — |  |  | — |  |  | 1,243 |
Equities | 2,609 |  |  | — |  |  | — |  |  | — |  |  | 2,609 |
Fixed income | 6,425 |  |  | 21,909 |  |  | — |  |  | 5,377 |  |  | 33,711 |
Total pension plan assets | $ | 9,344 |  |  | $ | 22,842 |  |  | $ | 133 |  |  | $ | 5,377 |  |  | $ | 37,696 |
The following table presents the Company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of December 31, 2022:
| Fair Value Measurements Using |  |  |  |
(in thousands) | Level 1 |  | Level 2 |  | Level 3 |  | NAV |  | Total
Insurance contracts and other | $ | — |  |  | $ | 1,153 |  |  | $ | 328 |  |  | $ | — |  |  | $ | 1,481 |
Cash and cash equivalents | 594 |  |  | 2,475 |  |  | — |  |  | — |  |  | 3,069 |
Equities | 2,425 |  |  | 2,435 |  |  | — |  |  | — |  |  | 4,860 |
Fixed income | 5,930 |  |  | 14,940 |  |  | — |  |  | 5,153 |  |  | 26,023 |
Total pension plan assets | $ | 8,949 |  |  | $ | 21,003 |  |  | $ | 328 |  |  | $ | 5,153 |  |  | $ | 35,433 |
The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2023 and 2022 due to the following:
(in thousands) | Level 3
Balance at January 1, 2022 | $ | 343 |
Level 3 assets transferred in from Level 1 and 2 assets valued at NAV: |
Settlements | 2 |
Actual loss on plan assets | 3 |
Foreign currency adjustments | (20) |
Balance at December 31, 2022 | $ | 328 |
Level 3 assets transferred in from Level 1 and 2 assets valued at NAV: |
Employer contribution | 2 |
Actual return on assets | 15 |
Benefits paid from the plan assets | (221) |
Foreign currency adjustments | 9 |
Balance at December 30, 2023 | $ | 133 |
Defined Contribution Plan The Company also maintains a 401(k) savings plan covering substantially all U.S. employees. The Company matches 100% of the employee’s annual contributions for the first 4% of the employee’s eligible compensation. The Company may provide an additional discretionary match to participants and made discretionary matches of 2% of the employee’s eligible compensation for each of the fiscal year ended December 30, 2023, December 31, 2022 and January 1, 2022. Employees are immediately vested in their contributi ons plus actual earnings thereon, as well as the Company contributions. Company matching contributions amounted to $7.7 million, $5.5 million, and $5.0 million in 2023, 2022, and 2021, respectively. Non-qualified Supplemental Retirement and Savings Plan The Company has a non-qualified Supplemental Retirement and Savings Plan which provides additional retirement benefits for certain management employees and named executive officers by allowing participants to defer a portion of their annual compensation. The Company maintains accounts for participants through which participants make investment elections. The investments are subject to the claims of the Company’s creditors and the Company is responsible for the payment of all benefits under the plan from its general assets. As of December 30, 2023, there was $20.1 million of marketable securities related to the plan included in Other assets and $20.1 million of accrued compensation benefits included in Other long-term liabilities. The marketable securities are classified as Level 1 under the fair value hierarchy as they are maintained in mutual funds with readily determinable fair value. The Company made matching contributions to the plan of $0.6 million, $0.2 million, and $0.2 million in 2023, 2022, and 2021, respectively.

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