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Employee Benefit Plans | 12 Months Ended
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Jun. 01, 2019
Retirement Benefits [Abstract] |
Compensation and Employee Benefit Plans | Employee Benefit Plans The Company maintains retirement benefit plans for substantially all of its employees. Pension Plans and Post-Retirement Medical Insurance The Company offers certain employees retirement benefits under domestic defined benefit p lans. 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 remaining domestic and international pension plans, as well as its post-retirement medical plan, is the last day of the fiscal year. 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
| 2019 |  | 2018 |  | 2019 |  | 2018
(In millions) | Domestic |  | International |  | Domestic |  | International |  |  |  |
Change in benefit obligation: |  |  |  |  |  |  |  |  |  |  |
Benefit obligation at beginning of year | $ | 1.0 |  |  | $ | 105.9 |  |  | $ | 1.0 |  |  | $ | 113.8 |  |  | $ | 4.0 |  |  | $ | 5.0 |
Interest cost | — |  |  | 2.7 |  |  | 0.1 |  |  | 2.7 |  |  | 0.1 |  |  | 0.1 |
Plan Amendments | — |  |  | 0.9 |  |  | — |  |  | — |  |  | — |  |  | — |
Foreign exchange impact | — |  |  | (6.0 | ) |  | — |  |  | 4.2 |  |  | — |  |  | — |
Actuarial loss (gain) | 0.1 |  |  | 9.7 |  |  | — |  |  | (12.2 | ) |  | (0.3 | ) |  | (0.5 | )
Benefits paid | (0.1 | ) |  | (4.1 | ) |  | (0.1 | ) |  | (2.6 | ) |  | (0.5 | ) |  | (0.6 | )
Benefit obligation at end of year | $ | 1.0 |  |  | $ | 109.1 |  |  | $ | 1.0 |  |  | $ | 105.9 |  |  | $ | 3.3 |  |  | $ | 4.0 |
Change in plan assets: |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | $ | — |  |  | $ | 94.6 |  |  | $ | — |  |  | $ | 80.5 |  |  | $ | — |  |  | $ | — |
Actual return on plan assets | — |  |  | 2.5 |  |  | — |  |  | 1.2 |  |  | — |  |  | — |
Foreign exchange impact | — |  |  | (5.1 | ) |  | — |  |  | 2.8 |  |  | — |  |  | — |
Employer contributions | 0.1 |  |  | 0.3 |  |  | 0.1 |  |  | 12.7 |  |  | 0.5 |  |  | 0.6 |
Benefits paid | (0.1 | ) |  | (4.1 | ) |  | (0.1 | ) |  | (2.6 | ) |  | (0.5 | ) |  | (0.6 | )
Fair value of plan assets at end of year | $ | — |  |  | $ | 88.2 |  |  | $ | — |  |  | $ | 94.6 |  |  | $ | — |  |  | $ | — |
Funded status: |  |  |  |  |  |  |  |  |  |  |
Under funded status at end of year | $ | (1.0 | ) |  | $ | (20.9 | ) |  | $ | (1.0 | ) |  | $ | (11.3 | ) |  | $ | (3.3 | ) |  | $ | (4.0 | )
Components of the amounts recognized in the Consolidated Balance Sheets: |  |  |  |
Current liabilities | $ | (0.1 | ) |  | $ | — |  |  | $ | (0.1 | ) |  | $ | — |  |  | $ | (0.6 | ) |  | $ | (0.6 | )
Non-current liabilities | $ | (0.9 | ) |  | $ | (20.9 | ) |  | $ | (0.9 | ) |  | $ | (11.3 | ) |  | $ | (2.7 | ) |  | $ | (3.4 | )
Components of the amounts recognized in Accumulated other comprehensive loss before the effect of income taxes:
Prior service cost | $ | — |  |  | $ | 0.8 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Unrecognized net actuarial loss (gain) | $ | 0.3 |  |  | $ | 47.3 |  |  | $ | 0.3 |  |  | $ | 40.8 |  |  | $ | (1.3 | ) |  | $ | (1.1 | )
Accumulated other comprehensive loss | $ | 0.3 |  |  | $ | 48.1 |  |  | $ | 0.3 |  |  | $ | 40.8 |  |  | $ | (1.3 | ) |  | $ | (1.1 | )
The Company retrospectively adopted ASU 2017-07 - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost on June 3, 2018. As the Company's pension and post retirement medical plans are frozen and not open to new plan participants, these plans no longer have a service component in net periodic benefit cost. Prior to adoption, the Company recorded net periodic benefit costs related to its defined benefit pension and post-retirement medical plans within Selling, general and administrative expenses. As a result of adoption, these costs are recorded within Other, net. The Company retrospectively reclassified $1.4 million and $0.3 million of net periodic benefit cost in the Consolidated Statements of Comprehensive Income for fiscal years 2018 and 2017, respectively, from Selling, general and administrative to Other, net. The accumulated benefit obligation for the Company's domestic pension benefit plans tota led $1.0 million as of the end of both fiscal 2019 and fiscal 2018. For its international plans, the accumulated benefit obligation tota led $105.4 million and $102.2 million as of fiscal 2019 and fiscal 2018, respectively. The following table summarizes the totals for pension plans with accumulated benefit obligations in excess of plan assets:
Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets
(In millions) | 2019 |  | 2018
Projected benefit obligation | $ | 110.1 |  |  | $ | 106.9 |
Accumulated benefit obligation | $ | 106.4 |  |  | $ | 103.1 |
Fair value of plan assets | $ | 88.2 |  |  | $ | 94.6 |
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 (Loss):
| Pension Benefits |  | Post-Retirement Benefits
(In millions) | 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017
Domestic: |  |  |  |  |  |  |  |  |  |  |
Interest cost | $ | — |  |  | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 0.2 |
Net periodic benefit cost | $ | — |  |  | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 0.2 |
International: |  |  |  |  |  |  |  |  |  |  |
Interest cost | $ | 2.7 |  |  | $ | 2.7 |  |  | $ | 2.7 |  |  |  |  |  |  |
Expected return on plan assets | (4.5 | ) |  | (5.6 | ) |  | (4.7 | ) |  |  |  |  |  |
Net amortization | 2.8 |  |  | 4.2 |  |  | 2.2 |  |  |  |  |  |  |
Net periodic benefit cost | $ | 1.0 |  |  | $ | 1.3 |  |  | $ | 0.2 |  |  |  |  |  |  |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss):
| Pension Benefits |  | Post-Retirement Benefits
(In millions) | 2019 |  | 2018 |  | 2019 |  | 2018
Domestic: |  |  |  |  |  |  |
Net actuarial gain | $ | 0.1 |  |  | $ | — |  |  | $ | (0.3 | ) |  | $ | (0.5 | )
Total recognized in other comprehensive loss | $ | 0.1 |  |  | $ | — |  |  | $ | (0.3 | ) |  | $ | (0.5 | )
International: |  |  |  |  |  |  |
Net actuarial (gain) loss | $ | 11.7 |  |  | $ | (7.7 | ) |  |  |  |
Net amortization | (2.7 | ) |  | (4.2 | ) |  |  |  |
Total recognized in other comprehensive loss | $ | 9.0 |  |  | $ | (11.9 | ) |  |  |  |
The net actuarial loss, incl uded in accumulated other comprehensive loss (pretax), expected to be recognized in net periodic benefit cost during fiscal 2020 is $3.3 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:
| 2019 |  | 2018 |  | 2017
(Percentages) | Domestic |  | International |  | Domestic |  | International |  | Domestic |  | International
Discount rate | 3.99 |  | 2.87 |  | 3.53 |  | 2.49 |  | 3.51 |  | 3.43
Compensation increase rate | n/a |  | 3.10 |  | n/a |  | 3.25 |  | n/a |  | 2.95
Expected return on plan assets | n/a |  | 4.80 |  | n/a |  | 6.10 |  | n/a |  | 6.10
The weighted-average used in the determination of the projected benefit obligations:
Discount rate | 3.47 |  | 2.39 |  | 3.99 |  | 2.87 |  | 3.53 |  | 2.49
Compensation increase rate | n/a |  | 3.20 |  | n/a |  | 3.10 |  | n/a |  | 3.25
The Company uses a full yield curve approach to estimate the interest component of net periodic benefit cost for pension and other postretirement benefits. This method applies the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. In calculating post-retirement benefit obligations for fiscal 2020, a 6.7 percent annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2019, decreasing gradually to 4.3 percent by 2038 and remaining at that level thereafter. For purposes of calculating post-retirement benefit costs, a 7.1 percent annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2019, decreasing gradually to 4.3 percent by 2038 and remaining at that level thereafter. Changes in assumed health care cost-trend rates is not expected to have a significant impact on the post-employment liability. Plan Assets and Investment Strategies The Company's international employee benefit plan assets consist mainly of listed fixed income obligations and common/collective trusts. 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 2019 and asset categories for the Company's primary international pension plan for fiscal 2019 and 2018 are as follows:
Asset Category | Targeted Asset Allocation Percentage |  | Percentage of Plan Assets at Year End
2019 |  | 2018 |  | 2019 |  | 2018
Fixed income | 35 |  | 35 |  | 33 |  |  | 36 |
Common collective trusts | 65 |  | 65 |  | 67 |  |  | 64 |
Total |  |  |  |  | 100 |  |  | 100 |
(In millions) |  |  | International Plan as of June 1, 2019
Asset Category |  |  | Level 1 |  | Level 2 |  | Total
Cash and cash equivalents |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Foreign government obligations |  |  | — |  |  | 29.3 |  |  | 29.3 |
Common collective trusts-balanced |  |  | — |  |  | 58.9 |  |  | 58.9 |
Total |  |  | $ | — |  |  | $ | 88.2 |  |  | $ | 88.2 |
(In millions) |  |  | International Plan as of June 2, 2018
Asset Category |  |  | Level 1 |  | Level 2 |  | Total
Cash and cash equivalents |  |  | $ | 0.2 |  |  | $ | — |  |  | $ | 0.2 |
Foreign government obligations |  |  | — |  |  | 33.4 |  |  | 33.4 |
Common collective trusts-balanced |  |  | — |  |  | 61.0 |  |  | 61.0 |
Total |  |  | $ | 0.2 |  |  | $ | 94.4 |  |  | $ | 94.6 |
Cash Flows The Company reviews pension funding requirements to determine the contribution to be made in the next year. Actual contributions will be dependent upon investment returns, changes in pension obligations and other economic and regulatory factors. During fiscal 2019, the Company made total cash contributions of $0.9 million to its benefit plans. In fiscal 2018, the Company made total cash contributions of $13.4 million to its benefit plans. The following represents a summary of the benefits expected to be paid by the plans in future fiscal years. These expected benefits were estimated based on the same actuarial valuation assumptions used to determine benefit obligations at June 1, 2019.
(In millions) | Pension Benefits Domestic |  | Pension Benefits International |  | Post-Retirement Benefits
2020 | $ | 0.1 |  |  | $ | 1.8 |  |  | $ | 0.5 |
2021 | $ | 0.1 |  |  | $ | 1.9 |  |  | $ | 0.4 |
2022 | $ | 0.1 |  |  | $ | 2.3 |  |  | $ | 0.4 |
2023 | $ | 0.1 |  |  | $ | 2.1 |  |  | $ | 0.4 |
2024 | $ | 0.1 |  |  | $ | 2.3 |  |  | $ | 0.3 |
2025-2029 | $ | 0.3 |  |  | $ | 16.7 |  |  | $ | 1.1 |
Profit Sharing, 401(k) Plan, and Core Contribution Substantially all of the Company’s domestic employees are eligible to participate in a defined contribution retirement plan, primarily the Herman Miller, Inc. profit sharing and 401(k) plan (the "plan"). Employees under the plan are eligible to begin participating on their date of hire. Until June 4, 2017, the plan provided for discretionary contributions for eligible participants, payable in the Company's common stock, of not more than 6 percent of employees' wages based on the Company's financial performance. Effective June 4, 2017, the Company discontinued the Employer Profit Sharing Contribution and instead, began allocating those funds to other components of pay and retirement. Under the plan the Company matches 100 percent of employee contributions to their 401(k) accounts up to 3 percent of their pay. Effective September 3, 2017, the Company increased the Employer Matching Contribution from 3 percent to 4 percent for all eligible employees. A core contribution of 4 percent is also included for most participants of the plan. There was an additional 1 percent contribution added to the quarterly Core Contribution for the quarter prior to the increased Employer Matching Contribution effective September 3, 2017. The Company’s other defined contribution retirement plans may provide for matching contributions, non-elective contributions and discretionary contributions as declared by management. The cost of the Herman Miller, Inc. profit sharing contribution during fiscal 2017 was $6.0 million. No profit sharing contribution was made in fiscal 2019 or fiscal 2018. The expense recorded for the Company's 401(k) matching contributions and core contributions was approximately $25.4 million, $24.9 million and $22.8 million in fiscal years 2019, 2018 and 2017, respectively.

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -URI http://asc.fasb.org/topic&trid=2197446 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI http://asc.fasb.org/topic&trid=2127225 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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