Employee Benefit Plans

The company maintains retirement benefit plans for substantially all of its employees.

Pension Plans and Post-Retirement Medical Insurance

The principal domestic retirement plan is a defined-benefit plan with benefits determined by a cash balance calculation. Benefits under this plan are based upon an employee's years of service and earnings. The company also offers certain employees retirement benefits under other domestic defined benefit plans. The company provides healthcare benefits to employees who retired from service on or before a qualifying date in 1998. As of the qualifying date, the company discontinued offering post-retirement medical to future retirees. Benefits to qualifying retirees under this plan are based on the employee's years of service and age at the date of retirement.

In addition to the domestic pension and retiree healthcare plan, one of the company's wholly owned foreign subsidiaries has a defined-benefit pension plan based upon an average final pay benefit calculation.

The measurement date for the company's principal domestic and international pension plans, as well as its post-retirement medical plan, is the last day of the fiscal year.

During the fourth quarter of fiscal 2012, the company announced its intent to change its employee retirement programs from a defined benefit-based model to a defined contribution structure. The company approved a plan to freeze future benefit accruals of its primary domestic defined benefit plan as of September 1, 2012. At this time, the company began to transition employees to a new defined contribution program. The termination process for the domestic defined benefit plans is expected to be completed during fiscal 2014. The company also froze its International defined benefit plan during fiscal 2012.

Benefit Obligations and Funded Status

The following table presents, for the fiscal years noted, a summary of the changes in the projected benefit obligation, plan assets and funded status of the company's domestic and international pension plans and post-retirement plan:



	Pension Benefits												Post-Retirement Benefits
	2013						2012						2013			2012
(In millions)	Domestic			International			Domestic			International
Change in benefit obligation:
Benefit obligation at beginning of year	$	332.7		$	86.1		$	309.9		$	75.0		$	9.8		$	10.3
Service cost	1.9			—			7.0			1.3			—			—
Interest cost	10.9			3.7			14.4			3.9			0.3			0.4
Curtailments	—			—			(4.3		)	—			—			—
Plan settlements	(40.0		)	—			—			—			—			—
Foreign exchange impact	—			(1.2		)	—			(5.5		)	—			—
Actuarial (gain)/loss	15.6			4.5			22.4			12.8			(0.2		)	—
Employee contributions	—			—			—			0.3			—			—
Benefits paid	(6.4		)	(1.9		)	(16.7		)	(1.7		)	(0.9		)	(0.9		)
Benefit obligation at end of year	$	314.7		$	91.2		$	332.7		$	86.1		$	9.0		$	9.8

Change in plan assets:
Fair value of plan assets at beginning of year	$	316.9		$	72.6		$	273.4		$	69.0		$	—		$	—
Actual return on plan assets	19.5			11.1			10.0			(3.9		)	—			—
Foreign exchange impact	—			(1.2		)	—			(4.9		)	—			—
Employer contributions	—			3.6			50.2			13.8			0.9			0.9
Employee contributions	—			—			—			0.3			—			—
Plan settlements	(40.0		)	—			—			—			—			—
Benefits paid	(6.4		)	(1.9		)	(16.7		)	(1.7		)	(0.9		)	(0.9		)
Fair value of plan assets at end of year	$	290.0		$	84.2		$	316.9		$	72.6		$	—		$	—

Funded status:
Under funded status at end of year	$	(24.7	)	$	(7.0	)	$	(15.8	)	$	(13.5	)	$	(9.0	)	$	(9.8	)

Components of the amounts recognized in the Consolidated Balance Sheets:
Current liabilities	$	(0.1	)	$	—		$	(0.1	)	$	—		$	(1.0	)	$	(1.1	)
Non-current liabilities	$	(24.6	)	$	(7.0	)	$	(15.7	)	$	(13.5	)	$	(8.0	)	$	(8.7	)

Components of the amounts recognized in accumulated other comprehensive loss before the effect of income taxes:
Unrecognized net actuarial loss	$	140.5		$	27.9		$	162.8		$	31.3		$	1.3		$	1.6
Unrecognized prior service cost (credit)	—			—			—			—			—			0.1
Accumulated other comprehensive loss (income)	$	140.5		$	27.9		$	162.8		$	31.3		$	1.3		$	1.7

The accumulated benefit obligation for the company's domestic pension benefit plans totaled $314.7 million and $332.7 million as of the end of fiscal years 2013 and 2012, respectively. For its international plans, these amounts totaled $88.3 million and $83.3 million as of the same dates, respectively.

The following table is a summary of the annual cost of the company's pension and post-retirement plans:



Components of Net Periodic Benefit Costs and Other Changes Recognized in Other Comprehensive Income:
	Pension Benefits									Post-Retirement Benefits
(In millions)	2013			2012			2011			2013		2012		2011
Domestic:
Service cost	$	1.9		$	7.0		$	6.9		$	—	$	—	$	—
Interest cost	10.9			14.4			15.1			0.3		0.4		0.5
Expected return on plan assets	(12.1		)	(19.3		)	(18.7		)	—		—		—
Net amortization	11.8			7.2			6.0			0.1		0.1		0.1
Curtailment (gain)	—			(1.7		)	—			—		—		—
Settlement Loss	18.8			—			—			—		—		—
Net periodic benefit cost	$	31.3		$	7.6		$	9.3		$	0.4	$	0.5	$	0.6

International:
Service cost	$	—		$	1.3		$	1.9
Interest cost	3.7			3.9			4.3
Expected return on plan assets	(4.9		)	(4.8		)	(4.2		)
Net amortization	1.4			0.3			1.2
Net periodic benefit cost	$	0.2		$	0.7		$	3.2



Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Income) Loss:
	Pension Benefits						Post-Retirement Benefits
(In millions)	2013			2012			2013			2012
Domestic:
Net actuarial (gain) loss	$	8.2		$	27.4		$	(0.3	)	$	—
Net amortization, curtailment, and settlements	(30.6		)	(5.5		)	(0.1		)	(0.1		)
Total recognized in other comprehensive (income) loss	$	(22.4	)	$	21.9		$	(0.4	)	$	(0.1	)

International:
Net actuarial (gain) loss	$	(1.7	)	$	21.5
Effect of exchange rates on amounts included in accumulated other comprehensive income	(0.2		)	(1.5		)
Net amortization	(1.4		)	(0.3		)
Total recognized in other comprehensive (income) loss	$	(3.3	)	$	19.7

The net actuarial loss, included in accumulated other comprehensive income (pretax), expected to be recognized in net periodic benefit cost during fiscal 2014 is $11.1 million.

Actuarial Assumptions

The weighted-average actuarial assumptions used to determine the benefit obligation amounts and the net periodic benefit cost for the company's pension and post-retirement plans are as follows:



The weighted-average used in the determination of net periodic benefit cost:
	2013		2012		2011
(Percentages)	Domestic	International	Domestic	International	Domestic	International
Discount rate	3.34	4.20	4.75	5.40	4.75	5.40
Compensation increase rate	3.00	3.00	3.00	3.50	3.00	3.50
Expected return on plan assets	4.20	6.00	7.00	7.00	7.75	6.80

The weighted-average used in the determination of the projected benefit obligations:
Discount rate	3.43	4.40	3.57	4.20	5.25	5.50
Compensation increase rate	n/a	3.50	3.00	3.00	4.50	4.90

In calculating post-retirement benefit obligations for fiscal 2013, a 7.4 percent annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2014, decreasing gradually to 4.5 percent by 2029 and remaining at that level thereafter. For purposes of calculating post-retirement benefit costs, a 7.5 percent annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2013, decreasing gradually to 4.5 percent by 2029 and remaining at that level thereafter.

Assumed health care cost-trend rates have a significant effect on the amounts reported for retiree health care costs. A one-percentage-point change in the assumed health care cost-trend rates would have the following effects:



(In millions)	1 Percent Increase		1 Percent Decrease
Effect on total fiscal 2013 service and interest cost components	$	—	$	—
Effect on post-retirement benefit obligation at June 1, 2013	$	0.4	$	(0.4	)

Plan Assets and Investment Strategies

The company's primary domestic employee benefit plan assets consist mainly of short duration fixed income obligations and cash. The company's primary objective for invested pension plan assets in this plan is to provide for sufficient liquidity to satisfy all of its benefit obligations in connection with its objective of terminating the pension plan in fiscal 2014. Accordingly, the company has developed an investment strategy that it believes maximizes the probability of meeting this overall objective. In developing its strategy, the company considered the need to balance the varying risks associated with each asset class with the long-term nature of its benefit obligations.

The company's international employee benefit plan assets consist mainly of listed common stocks, mutual funds, fixed income obligations, common/collective trusts, and cash. The company's primary objective for invested pension plan assets is to provide for sufficient long-term growth and liquidity to satisfy all of its benefit obligations over time. Accordingly, the company has developed an investment strategy that it believes maximizes the probability of meeting this overall objective. This strategy includes the development of a target investment allocation by asset category in order to provide guidelines for making investment decisions. This target allocation emphasizes the long-term characteristics of individual asset classes as well as the diversification among multiple asset classes. In developing its strategy, the company considered the need to balance the varying risks associated with each asset class with the long-term nature of its benefit obligations. The company's strategy moving forward will be to increase the level of fixed income investments as the funding status improves, thereby more closely matching the return on assets with the liabilities of the plans.

The company utilizes independent investment managers to assist with investment decisions within the overall guidelines of the investment strategy.

The target asset allocation at the end of fiscal 2013 and asset categories for the company's primary pension plans for fiscal 2013 and 2012 are as follows:



Primary Domestic Plan
Asset Category	Targeted Asset Allocation Percentage		Percentage of Plan Assets at Year End
Asset Category	Targeted Asset Allocation Percentage		2013		2012
Equities	—		10		19
Fixed Income	100		86		80
Other	—		4		1
Total			100		100

International Plan
Asset Category
Equities	—		—		42
Fixed Income	20		26		49
Other	80		74		9
Total			100		100

(In millions)	Domestic Plans as of June 1, 2013
Asset Category	Level 1		Level 2		Total
Cash and cash equivalents	$	12.5	$	—	$	12.5
US & international equity securities	2.2		—		2.2
Debt securities-corporate	7.6		—		7.6
Common collective trust-equities	—		26.5		26.5
Common collective trusts-fixed income	—		241.2		241.2
Total	$	22.3	$	267.7	$	290.0

(In millions)	International Plan as of June 1, 2013
Asset Category	Level 1		Level 2		Total
Cash and cash equivalents	$	0.2	$	—	$	0.2
Foreign government obligations	—		22.0		22.0
Common collective trusts-balanced	—		62.0		62.0
Total	$	0.2	$	84.0	$	84.2

(In millions)	Domestic Plans as of June 2, 2012
Asset Category	Level 1		Level 2		Total
Cash and cash equivalents	$	3.6	$	—	$	3.6
US & international equity securities	3.9		—		3.9
Debt securities-corporate	13.6		—		13.6
Common collective trust-equities	—		54.3		54.3
Common collective trusts-fixed income	—		238.8		238.8
Equities-Herman Miller stock	2.7		—		2.7
Total	$	23.8	$	293.1	$	316.9

(In millions)	International Plan as of June 2, 2012
Asset Category	Level 1		Level 2		Total
Cash and cash equivalents	$	0.2	$	—	$	0.2
Foreign government obligations	—		11.0		11.0
Common collective trusts-balanced	—		61.4		61.4
Total	$	0.2	$	72.4	$	72.6

Cash Flows

The company is reviewing whether any additional voluntary pension plan contributions will be made in the next year. Actual contributions will be dependent upon plan termination, investment returns, changes in pension obligations, and other economic and regulatory factors. In fiscal 2013, the company made cash contributions totaling $4.5 million to its benefit plans. The company plans to terminate the primary domestic pension plan in fiscal 2014. At the time of termination, the company will be required to make additional cash contributions to the plans, which are currently estimated to total between $50 million to $55 million.

The following represents a summary of the benefits expected to be paid by the plans in future fiscal years assuming no termination of the primary domestic pension plan. If the company proceeds with the termination of the primary domestic benefit plans in fiscal 2014 as planned, all benefits will be distributed in fiscal 2014. These expected benefits were estimated based on the same actuarial valuation assumptions used to determine benefit obligations at June 1, 2013.



(In millions)	Pension Benefits Domestic		Pension Benefits International		Post-Retirement Benefits
2014	$	35.7	$	1.5	$	1.0
2015	$	29.8	$	1.6	$	1.0
2016	$	28.9	$	1.7	$	0.9
2017	$	27.4	$	1.9	$	0.9
2018	$	26.1	$	2.2	$	0.8
2019 - 2023	$	92.0	$	12.6	$	3.3

Profit Sharing, 401(k) Plan, and Core Contribution

Herman Miller, Inc. has a trusteed profit sharing plan that includes substantially all domestic employees. These employees are eligible to begin participating on their date of hire. The plan provides for discretionary contributions, payable in the company's common stock, of not more than 6 percent of employees' wages based on the company's financial performance. The cost of the profit sharing contribution during fiscal 2013, 2012, and 2011 were $5.3 million, $3.4 million and $7.7 million, respectively.

The company has traditionally matched 50 percent of employee contributions to their 401(k) accounts up to 6 percent of their pay. On September 1, 2012, this was amended to a match of 100 percent up to 3 percent of their pay. A core contribution of 4 percent was also added to the plan. This core contribution was effective as of January 1, 2012 for new employees starting after that date and September 1, 2012 for existing employees. The cost of the company's 401(k) matching contributions and core contributions charged against operations was approximately $17.0 million, $6.8 million, and $2.0 million in fiscal years 2013, 2012 and 2011, respectively.