XML 29 R18.htm IDEA: XBRL DOCUMENT v3.21.2
Employee Benefit Plans
 6 Months Ended
Jul. 04, 2021
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefit Plans
Retirement Plans and Retiree Health and Life Insurance Plans
The Company provides non-contributory defined benefit pension plans to certain of its employees in the United States, Mexico and Belgium. The Company also sponsors contributory defined benefit pension plans covering the majority of its employees in the United Kingdom, Canada, and the Netherlands. In addition, the Company provides postretirement healthcare and life insurance benefits to a limited number of its retirees and their dependents in the United States and Canada, based on certain age and/or service eligibility requirements.
The Company froze participation in its U.S. qualified defined benefit pension plan for newly hired salaried and non-union hourly employees effective December 31, 2003. To replace this benefit, non-union U.S. employees hired on or after January 1, 2004, are provided an annual contribution, called the Sonoco Retirement Contribution (SRC), to their participant accounts in the Sonoco Retirement and Savings Plan. The SRC is equal to 4% of the participant's eligible pay plus 4% of eligible pay in excess of the social security wage base. On February 4, 2009, the U.S. qualified defined benefit pension plan was further amended to freeze plan benefits for all active, non-union participants effective December 31, 2018. Remaining active participants in the U.S. qualified plan became eligible for SRC contributions effective January 1, 2019.
The components of net periodic benefit cost include the following:
Three Months EndedSix Months Ended
July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Retirement Plans
Service cost$1,020 $1,003 $1,981 $2,085 
Interest cost9,657 12,549 19,764 25,230 
Expected return on plan assets(8,650)(12,227)(18,311)(24,807)
Amortization of prior service cost235 247 461 497 
Amortization of net actuarial loss6,378 7,258 13,249 14,134 
Effect of curtailment loss— 31 — 31 
Effect of settlement loss547,631 38 547,631 661 
Net periodic benefit cost$556,271 $8,899 $564,775 $17,831 
Retiree Health and Life Insurance Plans
Service cost$95 $93 $189 $176 
Interest cost50 81 100 165 
Expected return on plan assets(111)(93)(224)(183)
Amortization of prior service credit— (69)— (137)
Amortization of net actuarial gain(181)(215)(377)(412)
Net periodic benefit income$(147)$(203)$(312)$(391)

The Company made aggregate contributions of $139,687 and $8,602 to its defined benefit retirement and retiree health and life insurance plans during the six months ended July 4, 2021 and June 28, 2020, respectively. The Company expects to make additional aggregate contributions of approximately $7,000 to its defined benefit retirement and retiree health and life insurance plans over the remainder of 2021.
Plan Termination and Settlement
As disclosed in previous filings, the Company terminated the Sonoco Pension Plan for Inactive Participants (the "Inactive Plan"), a tax-qualified defined benefit plan, effective September 30, 2019. The Company settled the liabilities of the Inactive Plan in the second quarter of 2021 through a combination of lump-sum payments and the purchase of group annuity contracts. In order for the Inactive Plan to be fully funded upon final settlement, the Company made contributions totaling $133,000 during the second quarter of 2021. Non-cash, pre-tax settlement charges totaling $547,291 were recognized in the second quarter of 2021 as the lump sum payouts and annuity purchases were made.
Other Settlements
The Company recognized additional settlement charges of $340 and $661 during the six months ended July 4, 2021 and June 28, 2020, respectively. These charges resulted from payments made to certain participants in the Company's non-union Canadian pension plan who elected a lump sum distribution option upon retirement. Additional settlement charges related to the Canadian pension plans may be recognized over the remainder of 2021 as a result of ongoing lump-sum distributions and restructuring actions.
Sonoco Retirement Contribution (SRC)
SRC contributions, which are funded annually in the first quarter, totaled $22,665 during the six months ended July 4, 2021, and $22,503 during the six months ended June 28, 2020. No additional SRC contributions are expected during the remainder of 2021. The Company recognized expense related to the SRC of $5,499 and $5,716 for the three months ended July 4, 2021 and June 28, 2020, respectively, and $11,834 and $11,694 for the six months ended July 4, 2021 and June 28, 2020, respectively.