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Retirement Plans | 12 Months Ended
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Mar. 26, 2021
Retirement Benefits [Abstract] |
Retirement Plans | Retirement Plans The Company recognizes the funded status (i.e., the difference between the fair value of plan assets and the benefit obligations) of its defined benefit pension plans in its consolidated balance sheets with a corresponding adjustment to accumulated other comprehensive income (“AOCI”), net of tax. These amounts will continue to be recognized as a component of future net periodic benefit costs consistent with the Company’s past practice. Further, actuarial gains and losses and prior service costs that arise in future periods and are not recognized as net periodic benefit costs in the same periods will be recognized as a component of other comprehensive income. Those amounts will also be recognized as a component of future net periodic benefit costs consistent with the Company’s past practice. The Company uses a measurement date for its defined benefit pension plans and other postretirement benefit plans that is equivalent to its fiscal year-end. Plan Descriptions Non-U.S. Defined Benefit Plan The Company, through its wholly owned subsidiary, Allegro MicroSystems Philippines, Inc. (“AMPI”), has a defined benefit pension plan, which is a noncontributory plan that covers substantially all employees of the respective subsidiary. The plan’s assets are invested in common trust funds, bonds and other debt instruments and stocks. Effect on the consolidated statements of operations Expense related to the non-U.S. defined benefit plan was as follows:
|  |  | Fiscal Year Ended
|  |  |  |  | March 26, 2021 |  | March 27, 2020 |  |
Service cost |  |  |  |  | $ | 1,454 |  |  | $ | 961 |  |  |
Interest cost |  |  |  |  | 628 |  |  | 674 |  |  |
Expected return on plan assets |  |  |  |  | (299) |  |  | (331) |  |  |
Amortization of net transition asset |  |  |  |  | (1) |  |  | (14) |  |  |
Amortization of prior service cost |  |  |  |  | 8 |  |  | 8 |  |  |
Actuarial loss |  |  |  |  | 179 |  |  | 96 |  |  |
Net periodic pension expense |  |  |  |  | $ | 1,969 |  |  | $ | 1,394 |  |  |
Changes in the benefit obligations and plan assets for the non-U.S. defined benefit plan were as follows:
|  | Fiscal Year Ended
|  | March 26, 2021 |  | March 27, 2020
Obligation and funded status of plan: |  |  |  |
Benefit obligation at beginning of year |  | $ | 12,595 |  |  | $ | 10,840 |
Service cost |  | 1,454 |  |  | 961 |
Interest cost |  | 628 |  |  | 674 |
Benefits paid |  | (633) |  |  | (938) |
Actuarial loss |  | 2,502 |  |  | 690 |
Foreign currency exchange rate changes |  | 634 |  |  | 368 |
Benefit obligation at end of year |  | $ | 17,180 |  |  | $ | 12,595 |
Change in plan assets: |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 5,579 |  |  | $ | 5,171 |
Actual return on plan assets |  | 1,421 |  |  | 434 |
Employer contributions |  | 981 |  |  | 932 |
Benefits paid |  | (595) |  |  | (1,130) |
Foreign currency exchange rate changes |  | 258 |  |  | 172 |
Fair value of plan assets at end of year |  | $ | 7,644 |  |  | $ | 5,579 |
Underfunded status at end of year |  | $ | (9,536) |  |  | $ | (7,016) |
The underfunded plan amounts are recognized as a component of other long-term liabilities in the consolidated balance sheets. The following table presents the obligations and asset information for the non-U.S. defined benefit plan that has a projected benefit obligation in excess of plan assets:
|  | Fiscal Year Ended
|  | March 26, 2021 |  | March 27, 2020 |  |
Projected benefit obligations |  | $ | 17,180 |  |  | $ | 12,595 |  |  |
Plan assets |  | 7,644 |  |  | 5,579 |  |  |
Accumulated benefit obligations |  | 10,353 |  |  | 7,818 |  |  |
The amounts recorded in AOCI for the non-U.S. defined benefit plan for the fiscal years ended March 26, 2021 and March 27, 2020 are further detailed below:
|  | Net Transition Obligation (Asset) |  | Net Actuarial Loss |  | Prior Service Costs |  | Total
Balance, March 29, 2019, net of tax |  | $ | 75 |  |  | $ | 1,617 |  |  | 11 |  |  | $ | 1,703 |
2020 change in AOCI for non-U.S. defined benefit plan |  | 244 |  |  | 1,264 |  |  | (3) |  |  | 1,505 |
Amounts in AOCI before tax |  | 319 |  |  | 2,881 |  |  | 8 |  |  | 3,208 |
Less tax expense |  | 95 |  |  | 864 |  |  | 3 |  |  | 962 |
Balance, March 27, 2020, net of tax |  | 224 |  |  | 2,017 |  |  | 5 |  |  | 2,246 |
2021 change in AOCI for non-U.S. defined benefit plan |  | 74 |  |  | 2,242 |  |  | (4) |  |  | 2,312 |
Amounts in AOCI before tax |  | 298 |  |  | 4,259 |  |  | 1 |  |  | 4,558 |
Less tax expense |  | 74 |  |  | 1,066 |  |  | — |  |  | 1,140 |
Balance, March 26, 2021, net of tax |  | $ | 224 |  |  | $ | 3,193 |  |  | $ | 1 |  |  | $ | 3,418 |
There is no actuarial net gain or loss included in AOCI as of March 26, 2021 that is expected to be amortized into net periodic benefit cost over the next fiscal year. As of March 26, 2021, the Company does not expect a return of plan assets during the next 12 months. Assumptions and Investment Policies Weighted-Average Assumptions Used to Determine Projected Benefit Obligation
|  | March 26, 2021 |  | March 27, 2020
Non-U.S. assumed discount rate |  | 4.00 | % |  | 4.98 | %
Non-U.S. rate of compensation increase |  | 5.00 | % |  | 5.00 | %
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost
|  | March 26, 2021 |  | March 27, 2020 |  |
Non-U.S. assumed discount rate |  | 4.00 | % |  | 4.98 | % |  |
Non-U.S. expected long-term return on plan assets |  | 4.20 | % |  | 5.20 | % |  |
Non-U.S. rate of compensation increase |  | 5.00 | % |  | 5.00 | % |  |
Information on Plan Assets The table below sets forth the fair value of the entity’s plan assets as of March 26, 2021 and March 27, 2020, using the same three-level hierarchy of fair value inputs described in Note 2, “Summary of Significant Accounting Policies”:
| Fair Value at March 26, 2021 |  | Level 1 |  | Level 2 |  | Level 3
Assets of non-U.S. defined benefit plan: |  |  |  |  |  |  |
Government securities | $ | 1,646 |  |  | $ | 1,646 |  |  | $ | — |  |  | $ | — |
Unit investment trust fund | 1,221 |  |  | — |  |  | 1,221 |  |  | — |
Loans | 584 |  |  | — |  |  | — |  |  | 584 |
Bonds | 1,112 |  |  | — |  |  | 1,112 |  |  | — |
Stocks and other investments | 3,081 |  |  | 1,947 |  |  | 1 |  |  | 1,133 |
Total | $ | 7,644 |  |  | $ | 3,593 |  |  | $ | 2,334 |  |  | $ | 1,717 |
| Fair Value at March 27, 2020 |  | Level 1 |  | Level 2 |  | Level 3
Assets of non-U.S. defined benefit plan: |  |  |  |  |  |  |
Government securities | $ | 1,260 |  |  | $ | 1,260 |  |  | $ | — |  |  | $ | — |
Unit investment trust fund | 897 |  |  | — |  |  | 897 |  |  | — |
Loans | 756 |  |  | — |  |  | — |  |  | 756 |
Bonds | 1,094 |  |  | — |  |  | 1,094 |  |  | — |
Stocks and other investments | 1,572 |  |  | 1,207 |  |  | 1 |  |  | 364 |
Total | $ | 5,579 |  |  | $ | 2,467 |  |  | $ | 1,992 |  |  | $ | 1,120 |
The following table shows the change in fair value of Level 3 plan assets for the fiscal years ended March 26, 2021 and March 27, 2020:
| Level 3 Non-U.S. Defined Plan Assets
| Loans |  | Stocks
Balance at March 29, 2019 | $ | 760 |  |  | $ | 353 |
Additions during the year | 271 |  |  | — |
Redemptions during the year | (300) |  |  | — |
Change in foreign currency exchange rates | 25 |  |  | 11 |
Balance at March 27, 2020 | $ | 756 |  |  | $ | 364 |
Additions during the year | 325 |  |  | — |
Redemptions during the year | (531) |  |  | — |
Revaluation of equity securities | — |  |  | 753 |
Change in foreign currency exchange rates | 34 |  |  | 16 |
Balance at March 26, 2021 | $ | 584 |  |  | $ | 1,133 |
The investments in the Company’s major benefit plans largely consist of low-cost, broad-market index funds to mitigate risks of concentration within the market sectors. In recent years, the Company’s investment policy has shifted toward a closer matching of the interest-rate sensitivity of the plan assets and liabilities. The appropriate mix of equity and bond investments is determined primarily through the use of detailed asset-liability modeling studies that look to balance the impact of changes in the discount rate against the need to provide asset growth to cover future service cost. The Company, through its wholly-owned subsidiary, Allegro MicroSystems, LLC’s (“AML”), non-U.S. defined benefit plan, has added a greater proportion of fixed income securities with return characteristics that are more closely aligned with changes in liabilities caused by discount rate volatility. There are no significant restrictions on the amount or nature of the investments that may be acquired or held by the plans. Cash Flows During the fiscal years ended March 26, 2021 and March 27, 2020, the Company contributed approximately $986 and $943 to its non-U.S. pension plan, respectively. The Company expects to contribute approximately $943 to its non-U.S. pension plan in fiscal year 2022. Estimated Future Benefit Payments The following table projects the benefits expected to be paid to participants from the plans in each of the following fiscal years. The majority of the payments will be paid from plan assets, not company assets.
|  | Pension Benefits
2022 |  | $ | 1,436 |
2023 |  | 1,575 |
2024 |  | 927 |
2025 |  | 995 |
2026 |  | 980 |
Thereafter |  | 7,786 |
Total |  | $ | 13,699 |
Other Defined Benefit Plan In December 1993, the Company commenced with a rollover pension promise agreement (“Pension Promise”) to offer a then European employee an insured annuity upon their retirement at age 65. The employee was the only eligible participant of the Pension Promise. The impact associated with the expense and related other income with the Pension Promise was insignificant in fiscal years 2021 and 2020, respectively. The total values of the Pension Promise in the amounts o f 928 an d 903 British Pounds Sterling at March 26, 2021 and March 27, 2020, respectively (approximate ly $1,272 and $978 at March 26, 2021 and March 27, 2020, respectively), were classified with other in other assets, net and accrued retirement in other long-term liabilities in the Company’s consolidated balance sheets. Defined Contribution Plan Eligible AML U.S. employees may contribute up to 50% of their pretax compensation to a defined contribution plan, subject to certain limitations, and AML may match, at its discretion, 100% of the participants’ pretax contributions, up to a maximum of 5% of their eligible compensation. Matching contributions by AML totaled $3,687 and $3,792 for the fiscal years ended March 26, 2021 and March 27, 2020, respectively. The Company, through its AML subsidiary, Allegro MicroSystems Europe, Ltd. (“Allegro Europe”), also has a defined contribution plan (the “AME Plan”) covering substantially all employees of Allegro Europe. Contributions to the AME Plan by the Company totaled approximatel y $507 and $372 for the fiscal years ended March 26, 2021 and March 27, 2020, respectively. The Company has a 401(k) plan that covers all employees meeting certain service and age requirements. Employees are eligible to participate in the plan upon hire when the service and age requirements are met. Employees may contribute up to 35% of their compensation, subject to the maximum contribution allowed by the Internal Revenue Service (“IRS”). All employees are 100% vested in their contributions at the time of plan entry. As of January 1, 2008, and until January 1, 2015, the Company’s former wholly-owned subsidiary, PSL, adopted and used a Safe Harbor provision, whereby PSL contributed 3% of compensation each pay period for all eligible employees meeting the Safe Harbor criteria. As of January 1, 2015, PSL may match, at its discretion, 100% of the employee’s contribution, up to a maximum of 5% of their eligible compensation. PSL’s matching contributions were $1,828 for the fiscal year ended March 27, 2020.

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