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Employee Benefit Plans
 12 Months Ended
May 29, 2021
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefit Plans
The Company maintains retirement benefit plans for substantially all of its employees.

Pension 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 this plan is the last day of the fiscal year and the plan is frozen to new participants.

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 pension plan:
Pension Benefit
(In millions)20212020
Change in benefit obligation:
 
Benefit obligation at beginning of year
$126.5  $109.1 
Interest cost
2.2 2.4 
Plan Amendments
— — 
Foreign exchange impact
18.6 (2.9)
Actuarial (gain) loss (1)
(2.9)21.0 
Benefits paid
(3.5)(3.1)
Benefit obligation at end of year
$140.9  $126.5 
Change in plan assets:
Fair value of plan assets at beginning of year
$88.1 $88.2 
Actual return on plan assets
6.6 4.7 
Foreign exchange impact
13.7 (2.0)
Employer contributions
5.0 0.3 
Benefits paid
(3.5)(3.1)
Fair value of plan assets at end of year
$109.9 $88.1 
Funded status:
Under funded status at end of year
$(31.0)$(38.4)
Components of the amounts recognized in the Consolidated Balance Sheets:
Current liabilities
$— $— 
Non-current liabilities
$(30.9)$(38.3)
Components of the amounts recognized in Accumulated other comprehensive loss before the effect of income taxes:
Prior service cost$0.7 $0.7 
Unrecognized net actuarial loss (gain)
$61.8 $63.2 
Accumulated other comprehensive loss
$62.5 $63.9 
(1) In fiscal 2021 and 2020, the net actuarial (gain) loss includes amounts resulting from changes in actuarial assumptions utilized to calculate our benefit plan obligations such as the weighted-average discount rate.

The accumulated benefit obligation for the Company's pension plan totaled $135.5 million and $123.9 million as of fiscal 2021 and fiscal 2020, respectively.

The following table is a summary of the annual cost of the Company's pension plan:
Components of Net Periodic Benefit Costs and Other Changes Recognized in Other Comprehensive Income (Loss):
(In millions)202120202019
Interest cost$2.2 $2.4 $2.7 
Expected return on plan assets(4.6)(4.4)(4.5)
Amortization of prior service costs0.1 0.1 0.1 
Amortization of net (gain)/loss5.3 3.2 2.7 
Net periodic benefit cost$3.0 $1.3 $1.0 

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss):
(In millions)20212020
Net actuarial (gain) loss$(4.9)$20.6 
Net amortization3.5 (4.8)
Total recognized in other comprehensive loss$(1.4)$15.8 

The net actuarial loss, included in accumulated other comprehensive loss (pretax), expected to be recognized in net periodic benefit cost during fiscal 2022 is $4.8 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 plan are as follows:
Weighted-average assumptions used in the determination of net periodic benefit cost:
(Percentages)202120202019
Discount rate
1.66  2.39  2.87 
Compensation increase rate2.75 3.20 3.10 
Expected return on plan assets4.80  4.80  4.80 
Weighted-average assumptions used in the determination of the projected benefit obligations:
Discount rate
1.99  1.66  2.39 
Compensation increase rate3.20  2.75  3.20 

The Company uses a full yield curve approach to estimate the interest component of net periodic benefit cost for pension 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.

Plan Assets and Investment Strategies
The Company's 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 2021 and asset categories for the Company's pension plan for fiscal 2021 and 2020 are as follows:
Asset CategoryTargeted Asset Allocation PercentagePercentage of Plan Assets at Year End
2021202020212020
Fixed income31%35%32%37%
Common collective trusts69%65%68%63%
Total100%100%
(In millions)May 29, 2021
Asset CategoryLevel 1Level 2Total
Cash and cash equivalents0.7 — 0.7 
Foreign government obligations— 34.2 34.2 
Common collective trusts-balanced— 75.0 75.0 
Total$0.7 $109.2 $109.9 
(In millions)May 30, 2020
Asset CategoryLevel 1Level 2Total
Foreign government obligations— 31.4 31.4 
Common collective trusts-balanced— 56.7 56.7 
Total$— $88.1 $88.1 

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 2021 and fiscal 2020, the Company made total cash contributions of $5.4 million to its benefit plans.

The Company expects to contribute approximately $5.8 million to our benefit plans in fiscal 2022. 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 May 29, 2021.
(In millions)Pension Benefits
2022$3.9 
2023$3.9 
2024$4.0 
2025$4.0 
2026$4.1 
2027-2031$21.3 

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. Effective June 2017, the Company matches 100 percent of employee contributions to their 401(k) accounts up to 3 percent of their pay which was subsequently increased to 4 percent in September 2017 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. During the fourth quarter of fiscal 2020, the Company elected to temporarily suspend the Company's Core Contribution and 401(k) matches in order to reduce costs and preserve liquidity. The Company reinstated the previously suspended employer-paid retirement plan
contributions in the fourth quarter of fiscal 2021, and has also elected to make a catch-up contribution for the employer-paid retirement plan contributions that were suspended for a majority of fiscal 2020.

There were no Herman Miller, Inc. profit sharing contributions made in fiscal 2021, fiscal 2020 or fiscal 2019. The expense recorded for the Company's 401(k) matching and core contributions was $23.7 million, $22.2 million and $25.4 million in fiscal years 2021, 2020 and 2019, respectively.