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Benefit Plans | 12 Months Ended
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Oct. 02, 2021
Retirement Benefits [Abstract] |
Benefit Plans | 16. Benefit Plans Defined Benefit Pension Plan The Company has a defined benefit pension plan (“Defined Benefit Plan”) covering U.S. hourly and salaried personnel. On May 13, 2002, the Defined Benefit Plan was amended to freeze new participation as of May 15, 2002, and therefore, any new employees who started on or after May 15, 2002 were not permitted to participate in the Defined Benefit Plan. Effective January 1, 2006, the benefit plan was frozen to all participants. No accrual of future benefits is calculated beyond this date. The Company contributed $4.9 million and $0.5 million to the Defined Benefit Plan during fiscal 2021 and fiscal 2020, respectively. For fiscal 2021 and fiscal 2020, benefits paid were $7.3 million and $8.2 million, respectively. The projected benefit obligation (“PBO”) for the Defined Benefit Plan was $160.1 million and $169.7 million at October 2, 2021 and October 3, 2020, respectively. The reconciliation of the beginning and ending balances of the PBO for the Defined Benefit Plan for the fiscal years indicated is presented in the following table:
| Benefit Obligation
(in thousands) | 2021 |  | 2020
Projected benefit obligation balance, beginning of year | $ | 169,741 |  |  | $ | 163,572 |
Interest cost | 4,227 |  |  | 4,947 |
Assumption changes (1) | (6,580) |  |  | 9,750 |
Actuarial gain | (47) |  |  | (315) |
Benefits paid | (7,253) |  |  | (8,213) |
Projected benefit obligations balance, end of year | $ | 160,088 |  |  | $ | 169,741 |
(1) The assumption changes referenced in the table above result from (i) changes in the utilized discount rate to value the future obligations, and (ii) updates to the mortality table projections used in the calculation of the benefit obligations. Plan Assets: The summary and reconciliation of the beginning and ending balances of the fair value of the Defined Benefit Plan assets are as follows:
| Plan Assets
(in thousands) | 2021 |  | 2020
Fair value of plan assets, beginning of year | $ | 122,482 |  |  | $ | 118,048 |
Actual return on plan assets | 17,188 |  |  | 12,147 |
Employer contribution | 4,920 |  |  | 500 |
Benefits paid | (7,253) |  |  | (8,213) |
Fair value of plan assets, end of year | $ | 137,337 |  |  | $ | 122,482 |
Funded Status: The following table reconciles the benefit obligations, plan assets, funded status and net liability information of the Defined Benefit Plan at the dates indicated. The net pension liability is reflected in long-term liabilities on the Consolidated Balance Sheets.
|  | Funded Status
(in thousands) |  | October 2, 2021 |  | October 3, 2020
Benefit obligation |  | $ | 160,088 |  |  | $ | 169,741 |
Fair value of plan assets |  | 137,337 |  |  | 122,482 |
Funded status |  | (22,751) |  |  | (47,259) |
Net pension liability recognized |  | $ | (22,751) |  |  | $ | (47,259) |
Fair Value of Plan Assets: The Company determines the fair value of its financial instruments in accordance with the Fair Value Measurements and Disclosures Topic of the ASC. Fair value represents the price to hypothetically sell an asset or transfer a liability in an orderly manner in the principal market for that asset or liability. This topic provides a hierarchy that gives highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities. This topic requires that financial assets and liabilities are classified into one of the following three categories:
Level 1 |  | Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2 |  | Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability
Level 3 |  | Unobservable inputs for the asset or liability
The Company evaluates fair value measurement inputs on an ongoing basis in order to determine if there is a change of sufficient significance to warrant a transfer between levels. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company's valuation process. The Defined Benefit Plan assets are comprised of various investment funds, which are valued based upon their quoted market prices. The invested pension plan assets of the Defined Benefit Plan are all Level 2 assets under ASC 820, Fair Value Measurements (“ASC 820”). During fiscal 2021 and fiscal 2020, there were no transfers between levels. There are no sources of significant concentration risk in the invested assets at September 30, 2021. The following table sets forth, by level within the fair value hierarchy, a summary of the Defined Benefit Plan’s investments measured at fair value:
(in thousands) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
October 2, 2021 |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |
Equity securities |  | $ | — |  |  | $ | 87,827 |  |  | $ | — |  |  | $ | 87,827 |
Debt securities |  | — |  |  | 49,510 |  |  | — |  |  | 49,510 |
Total assets at fair value |  | $ | — |  |  | $ | 137,337 |  |  | $ | — |  |  | $ | 137,337 |
October 3, 2020 |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |
Equity securities |  | $ | — |  |  | $ | 60,016 |  |  | $ | — |  |  | $ | 60,016 |
Debt securities |  | — |  |  | 62,466 |  |  | — |  |  | 62,466 |
Total assets at fair value |  | $ | — |  |  | $ | 122,482 |  |  | $ | — |  |  | $ | 122,482 |
The following table represents net periodic benefit (income) expense and changes in plan assets and benefit obligations recognized in other comprehensive (income) loss, before tax effect, for the fiscal years presented:
(in thousands) | 2021 |  | 2020 |  | 2019
Interest cost | $ | 4,227 |  |  | $ | 4,947 |  |  | $ | 6,047 |
Expected return on plan assets | (7,777) |  |  | (7,384) |  |  | (7,619) |
Amortization of net loss | 1,861 |  |  | 1,720 |  |  | 2,758 |
Net periodic benefit (income) expense | $ | (1,689) |  |  | $ | (717) |  |  | $ | 1,186 |
Net (gain) loss | $ | (16,038) |  |  | $ | 4,671 |  |  | $ | 26,083 |
Amortization of net loss | (1,861) |  |  | (1,720) |  |  | (2,758) |
Total recognized in other comprehensive (income) loss | $ | (17,899) |  |  | $ | 2,951 |  |  | $ | 23,325 |
Total recognized in net periodic pension benefit (income) expense and other comprehensive (income) loss | $ | (19,588) |  |  | $ | 2,234 |  |  | $ | 24,511 |
The estimated net loss for the Defined Benefit Plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $1.2 million. The unrecognized gain or loss is amortized as follows: the total unrecognized gain or loss, less the larger of 10% of the liability or 10% of the assets, is divided by the average future working lifetime of active plan participants. The following actuarial assumptions were used to determine the benefit obligations at the dates indicated:
Weighted-average assumptions used to determine benefit obligations: |  | October 2, 2021 |  | October 3, 2020
Discount rate |  | 2.80 | % |  | 2.55 | %
Rate of compensation increase |  | N/A |  | N/A
Weighted-average assumptions used to determine net periodic benefit cost: |  | October 2, 2021 |  | October 3, 2020
Discount rate |  | 2.55 | % |  | 3.10 | %
Expected long-term return on plan assets |  | 6.37 | % |  | 6.37 | %
Rate of compensation increase |  | N/A |  | N/A
The benchmark for the discount rates is an estimate of the single equivalent discount rate determined by matching the Defined Benefit Plan’s future expected cash flows to spot rates from a yield curve comprised of high-quality corporate bond rates of various durations. The Defined Benefit Plan asset allocations at the dates indicated are as follows:
|  | October 2, 2021 |  | October 3, 2020
Equity securities |  | 64 | % |  | 49 | %
Debt securities |  | 36 | % |  | 51 | %
Total securities |  | 100 | % |  | 100 | %
There was no Company common stock included in equity securities. Assets of the Defined Benefit Plan are invested primarily in funds that further invest in equity or debt securities. Assets are valued using quoted prices in active markets. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the PBO. In estimating that rate, appropriate consideration is given to the returns being earned by the plan assets in the fund and rates of return expected to be available for reinvestment and a building block method. The expected rate of return on each asset class is broken down into three components: (1) inflation, (2) the real risk-free rate of return (i.e., the long-term estimate of future returns on default free U.S. government securities), and (3) the risk premium for each asset class (i.e., the expected return in excess of the risk-free rate). The investment strategy for pension plan assets is to limit risk through asset allocation, diversification, selection and timing. Assets are managed on a total return basis, with dividends and interest reinvested in the account. The Company expects to contribute $0 to its Defined Benefit Plan in fiscal 2022 in accordance with required IRS minimums. The following benefit payments are expected to be paid out of the Company's pension assets to the plan participants in the fiscal years indicated:
(in thousands) | Expected Payments
2022 | $ | 8,249 |
2023 | 8,438 |
2024 | 8,592 |
2025 | 8,766 |
2026 | 8,870 |
2027 - 2031 | 44,253 |
Total expected future benefit payments | $ | 87,168 |
Defined Contribution Plan The Company offers a defined contribution 401(k) plan covering substantially all U.S. employees and a defined contribution plan for Canadian employees. During fiscal 2021, fiscal 2020 and fiscal 2019, the Company offered a 50% match on the first 6% of the employee’s contributions. However, due to the impacts of COVID-19, the Company temporarily paused this match from October 2020 through July 2021. The plans also provide for an additional discretionary match depending on Company performance. Compensation expense related to defined contribution plans totaled $0.5 million, $2.2 million and $2.2 million for fiscal 2021, fiscal 2020, and fiscal 2019, respectively. Health Benefits The Company provides and is predominantly self-insured for medical, dental, and accident and sickness benefits. A liability related to this obligation is recorded on the Company’s Consolidated Balance Sheets as accrued expenses. Total expense related to this plan recorded for fiscal 2021, fiscal 2020, and fiscal 2019, was $13.8 million, $14.9 million, and $12.1 million, respectively. Employee Compensation Plans The MIP compensates certain key salaried management employees and is derived based upon the "Adjusted EBITDA" (earnings before interest, taxes, depreciation, and amortization, as adjusted) and "Free Cash Flow" metrics. There were no MIP bonus liabilities included in accrued expenses on the Consolidated Balance Sheets at October 2, 2021 and October 3, 2020, respectively.

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