XML 40 R27.htm IDEA: XBRL DOCUMENT v3.25.1
Retirement Plans
 12 Months Ended
Mar. 28, 2025
Retirement Benefits [Abstract]  
Retirement Plans
15.
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. 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 (loss) 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., has a defined benefit pension plan, which is a noncontributory plan that covers substantially all employees of this subsidiary. The plan’s assets are invested in government securities, 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 28,
2025

 

 

March 29,
2024

 

 

March 31,
2023

 

Service cost

 

$

1,456

 

 

$

1,345

 

 

$

1,358

 

Interest cost

 

 

939

 

 

 

907

 

 

 

763

 

Expected return on plan assets

 

 

(446

)

 

 

(468

)

 

 

(301

)

Amortization of prior service cost

 

 

(8

)

 

 

(8

)

 

 

(8

)

Actuarial loss

 

 

71

 

 

 

33

 

 

 

77

 

Net periodic pension expense

 

$

2,012

 

 

$

1,809

 

 

$

1,889

 

 

Changes in the benefit obligations and plan assets for the non-U.S. defined benefit plan were as follows:

 

Fiscal Year Ended

 

 

March 28,
2025

 

 

March 29,
2024

 

Obligation and funded status of plan:

 

 

 

 

 

 

Benefit obligation at beginning of year

 

$

16,194

 

 

$

14,730

 

Service cost

 

 

1,456

 

 

 

1,345

 

Interest cost

 

 

939

 

 

 

907

 

Prior service cost

 

 

—

 

 

 

62

 

Benefits paid

 

 

(892

)

 

 

(1,022

)

Actuarial loss

 

 

11

 

 

 

683

 

Foreign currency exchange rate changes

 

 

(409

)

 

 

(511

)

Benefit obligation at end of year

 

$

17,299

 

 

$

16,194

 

Change in plan assets:

 

 

 

 

 

 

Fair value of plan assets at beginning of year

 

$

7,665

 

 

$

7,168

 

Actual return on plan assets

 

 

597

 

 

 

452

 

Employer contributions

 

 

1,122

 

 

 

1,230

 

Benefits paid

 

 

(758

)

 

 

(937

)

Foreign currency exchange rate changes

 

 

(194

)

 

 

(248

)

Fair value of plan assets at end of year

 

$

8,432

 

 

$

7,665

 

Underfunded status at end of year

 

$

(8,867

)

 

$

(8,529

)

 

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 28,
2025

 

 

March 29,
2024

 

Projected benefit obligations

 

$

17,299

 

 

$

16,194

 

Plan assets

 

 

8,432

 

 

 

7,665

 

Accumulated benefit obligations

 

 

10,509

 

 

 

9,666

 

 

The amounts recorded in AOCI for the non-U.S. defined benefit plan for the fiscal years ended March 28, 2025 and March 29, 2024 are further detailed below:

 

Net Transition
Obligation
(Asset)

 

 

Net
Actuarial
Loss

 

 

Prior
Service
Costs

 

 

Total

 

Balance, March 31, 2023, net of tax

 

$

129

 

 

$

1,449

 

 

$

(68

)

 

$

1,510

 

2024 change in AOCI for non-U.S. defined benefit plan

 

 

14

 

 

 

1,079

 

 

 

(11

)

 

 

1,082

 

Amounts in AOCI before tax

 

 

143

 

 

 

2,528

 

 

 

(79

)

 

 

2,592

 

Less tax expense

 

 

36

 

 

 

632

 

 

 

(20

)

 

 

648

 

Balance, March 29, 2024, net of tax

 

$

107

 

 

$

1,896

 

 

$

(59

)

 

$

1,944

 

2025 change in AOCI for non-U.S. defined benefit plan

 

 

(102

)

 

 

426

 

 

 

(12

)

 

 

312

 

Amounts in AOCI before tax

 

 

5

 

 

 

2,322

 

 

 

(71

)

 

 

2,256

 

Less tax expense

 

 

1

 

 

 

581

 

 

 

(18

)

 

 

564

 

Balance, March 28, 2025, net of tax

 

$

4

 

 

$

1,741

 

 

$

(53

)

 

$

1,692

 

 

There is no significant actuarial net gain or loss included in AOCI as of March 28, 2025 that is expected to be amortized into net periodic benefit cost over the next fiscal year.

As of March 28, 2025, the Company does not expect a significant return of plan assets during the next 12 months.

Assumptions and Investment Policies

The actuarial assumptions and methodologies used in determining the projected benefit obligation and net periodic benefit cost are reviewed on an annual basis. The primary assumptions include the Non-U.S. assumed discount rates, the Non-U.S. expected long-term returns on plan assets, and the Non-U.S. rate of compensation increases.

Weighted-Average Assumptions Used to Determine Projected Benefit Obligation

 

 

March 28,
2025

 

 

March 29,
2024

 

Non-U.S. assumed discount rate

 

 

6.33

%

 

 

6.21

%

Non-U.S. rate of compensation increases

 

 

5.50

%

 

 

5.50

%

 

Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost

 

 

March 28,
2025

 

 

March 29,
2024

 

 

March 31,
2023

 

Non-U.S. assumed discount rate

 

 

6.33

%

 

 

6.21

%

 

 

6.63

%

Non-U.S. expected long-term return on plan assets

 

 

5.45

%

 

 

5.54

%

 

 

6.40

%

Non-U.S. rate of compensation increases

 

 

5.50

%

 

 

5.50

%

 

 

5.50

%

 

Information on Plan Assets

The table below sets forth the fair value of the entity’s plan assets using the same three-level hierarchy of fair value inputs described in Note 2, “Summary of Significant Accounting Policies”:

 

 

Fair Value at March 28,
2025

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Assets of non-U.S. defined benefit plan:

 

 

 

 

 

 

 

 

 

 

 

 

Government securities

 

$

3,023

 

 

$

3,023

 

 

$

—

 

 

$

—

 

Unit investment trust fund

 

 

1,719

 

 

 

—

 

 

 

1,719

 

 

 

—

 

Loans

 

 

654

 

 

 

—

 

 

 

—

 

 

 

654

 

Bonds

 

 

341

 

 

 

—

 

 

 

341

 

 

 

—

 

Stocks and other investments

 

 

2,695

 

 

 

1,845

 

 

 

3

 

 

 

847

 

Total

 

$

8,432

 

 

$

4,868

 

 

$

2,063

 

 

$

1,501

 

 

 

Fair Value at
March 29,
2024

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Assets of non-U.S. defined benefit plan:

 

 

 

 

 

 

 

 

 

 

 

 

Government securities

 

$

2,629

 

 

$

2,629

 

 

$

—

 

 

$

—

 

Unit investment trust fund

 

 

1,307

 

 

 

—

 

 

 

1,307

 

 

 

—

 

Loans

 

 

574

 

 

 

—

 

 

 

—

 

 

 

574

 

Bonds

 

 

607

 

 

 

—

 

 

 

607

 

 

 

—

 

Stocks and other investments

 

 

2,548

 

 

 

1,635

 

 

 

4

 

 

 

909

 

Total

 

$

7,665

 

 

$

4,264

 

 

$

1,918

 

 

$

1,483

 

 

The following table shows the change in fair value of Level 3 plan assets:

 

 

Level 3 Non-U.S. Defined
Plan Assets

 

 

Loans

 

 

Stocks

 

Balance at March 25, 2022

 

$

553

 

 

$

1,065

 

Additions

 

 

328

 

 

 

—

 

Redemptions

 

 

(280

)

 

 

—

 

Revaluation of debt and equity securities

 

 

4

 

 

 

75

 

Change in foreign currency exchange rates

 

 

(19

)

 

 

(38

)

Balance at March 31, 2023

 

$

586

 

 

$

1,102

 

Additions

 

 

303

 

 

 

—

 

Redemptions

 

 

(295

)

 

 

—

 

Revaluation of debt and equity securities

 

 

(1

)

 

 

(154

)

Change in foreign currency exchange rates

 

 

(19

)

 

 

(39

)

Balance at March 29, 2024

 

$

574

 

 

$

909

 

Additions

 

 

475

 

 

 

—

 

Redemptions

 

 

(381

)

 

 

—

 

Revaluation of debt and equity securities

 

 

—

 

 

 

(39

)

Change in foreign currency exchange rates

 

 

(14

)

 

 

(23

)

Balance at March 28, 2025

 

$

654

 

 

$

847

 

 

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. 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 has added a greater proportion of fixed income securities to the non-U.S. defined benefit plan 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 28, 2025, March 29, 2024 and March 31, 2023, the Company contributed approximately $1,122, $1,230 and $1,489 to its non-U.S. defined benefit plan, respectively. The Company expects to contribute approximately $2,676 to its non-U.S. defined benefit plan in fiscal year 2026.

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 Company assets.

 

 

Pension
Benefits

 

2026

 

$

1,440

 

2027

 

 

1,225

 

2028

 

 

1,529

 

2029

 

 

1,428

 

2030

 

 

1,410

 

Total 5 years thereafter

 

 

11,004

 

Total

 

$

18,036

 

 

Defined Contribution Plan

The Company maintains a 401(k) retirement savings plan (the “401(k) Plan”) for U.S.-based employees who satisfy certain eligibility requirements. Eligible employees may defer a portion of their eligible compensation, within prescribed limits, through contributions to the 401(k) Plan. The Company matches participants’ contributions, up to a maximum of 5% of a participant’s eligible compensation, up to the statutory compensation limit, and these matching contributions are fully vested as of the date they are made. Matching contributions totaled $5,910, $5,956 and $4,708 for the fiscal years ended March 28, 2025, March 29, 2024 and March 31, 2023, respectively.

The Company also has a defined contribution plan covering substantially all of its European employees. Contributions to this plan totaled approximately $1,957, $1,549 and $1,248 for the fiscal years ended March 28, 2025, March 29, 2024 and March 31, 2023, respectively.