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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Dec. 30, 2023
Retirement Benefits [Abstract]  
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS
The Company maintains defined contribution plans, a deferred compensation plan, and two defined benefit plans. The two defined benefit plans include the OshKosh B’Gosh pension plan and a post-retirement life and medical plan.
OshKosh B’Gosh Pension Plan
Funded Status
The retirement benefits under the OshKosh B’Gosh pension plan were frozen as of December 31, 2005. A reconciliation of changes in the projected pension benefit obligation and plan assets is as follows:
For the fiscal year ended
(dollars in thousands)December 30, 2023December 31, 2022
Change in projected benefit obligation:
Projected benefit obligation at beginning of year$53,847 $70,875 
Interest cost2,617 1,909 
Actuarial loss (gain)1,376 (16,021)
Benefits paid(3,055)(2,916)
Projected benefit obligation at end of year $54,785 $53,847 
Change in plan assets:
Fair value of plan assets at beginning of year$55,245 $68,689 
Actual return on plan assets3,769 (10,528)
Benefits paid(3,055)(2,916)
Fair value of plan assets at end of year$55,959 $55,245 
Funded status$1,174 $1,398 
The accumulated benefit obligation is equal to the projected benefit obligation as of December 30, 2023 and December 31, 2022 because the plan is frozen. The Company does not expect to make any contributions to the OshKosh B’Gosh pension plan during fiscal 2024 as the plan’s funding exceeds the minimum funding requirements.
The actuarial loss in fiscal 2023 was primarily attributable to decreased discount rates, and the actuarial gain in fiscal 2022 was primarily attributable to increased discount rates. The plan became fully funded in fiscal 2022. The funded status asset is included in Other assets in the Company’s consolidated balance sheet.
Net Periodic Pension Cost and Changes Recognized in Other Comprehensive Income
The components of net periodic pension cost recognized in the statement of operations and changes recognized in other comprehensive income were as follows:
For the fiscal year ended
(dollars in thousands)December 30, 2023December 31, 2022January 1, 2022
Recognized in the statement of operations:
Interest cost$2,617 $1,909 $1,818 
Expected return on plan assets(2,372)(3,432)(3,577)
Amortization of net loss(*)
189 217 428 
Net periodic pension cost (benefit)$434 $(1,306)$(1,331)
Changes recognized in other comprehensive income:
Net gain arising during the fiscal year$(21)$(2,062)$(4,765)
Amortization of net loss(*)
(189)(217)(428)
Total changes recognized in other comprehensive income$(210)$(2,279)$(5,193)
Total net periodic pension cost (benefit) and changes recognized in other comprehensive income$224 $(3,585)$(6,524)
(*)Represents pre-tax amounts reclassified from accumulated other comprehensive loss. For fiscal 2024, approximately $0.2 million is expected to be reclassified from accumulated other comprehensive loss to a component of net periodic pension cost.
Assumptions
The actuarial assumptions used in determining the benefit obligation and net periodic pension cost for our pension plan is presented in the following table:
Benefit obligation20232022
Discount rate4.75%5.00%
Net periodic pension cost202320222021
Discount rate5.00%2.75%2.50%
Expected long-term rate of return on plan assets5.00%5.50%6.00%
The discount rates used at December 30, 2023, December 31, 2022, and January 1, 2022 were determined with consideration given to the FTSE Pension Liability Index and the Bloomberg US Aggregate AA Bond Index, adjusted for the timing of expected plan distributions. The Company believes these indexes reflect a risk-free rate consistent with a portfolio of high quality debt instruments with maturities that are comparable to the timing of the expected payments under the plan. The expected long-term rate of return assumption is equal to the assumed discount rate. Refer to “Plan Assets” below in Note 17, Employee Benefit Plans for further discussion.
The decreased discount rate assumption at December 30, 2023 resulted in an increase in the amount of the pension plan’s projected benefit obligation of approximately $1.4 million. A 0.25% change in the assumed discount rate as of December 30, 2023 would result in an increase or decrease in the amount of the pension plan's projected benefit obligation of approximately $1.5 million.
The Company currently expects benefit payments for its defined benefit pension plan as follows for the next ten fiscal years:
(dollars in thousands)
2024$3,210 
2025$3,220 
2026$3,340 
2027$3,610 
2028$3,710 
2029-2033$20,030 
Plan Assets
The Company conducts periodic asset-liability studies for our defined benefit pension plan to develop a policy glide path which adjusts the asset allocation with funded status. During fiscal 2022, the plan became fully funded, and the Company allocated its investments to fixed income securities as a result. These fixed income securities include funds holding corporate bonds of companies from diverse industries and U.S. Treasuries. The expected long-term rate of return on plan assets is 4.75%.
The fair value of the Company’s pension plan assets at December 30, 2023 and December 31, 2022, by asset category, were as follows:
(dollars in thousands)December 30, 2023December 31, 2022
Asset categoryTotalLevel 1
Level 2
Total
Level 1
Level 2
Cash and cash equivalents$— $— $— $2,204 $2,204 $— 
Fixed income securities:
Corporate bonds(*)
55,959 55,959 — 53,041 52,805 236 
$55,959 $55,959 $— $55,245 $55,009 $236 
(*)This category invests in both U.S. Treasuries and corporate debt from U.S. issuers from diverse industries.
Post-retirement Life and Medical Plan
Under a defined benefit plan frozen in 1991, the Company offers a comprehensive post-retirement medical plan to current and certain future retirees and their spouses. The Company also offers life insurance to current and certain future retirees. Employee contributions are required as a condition of participation for both medical benefits and life insurance and the Company’s liabilities are net of these expected employee contributions.
Accumulated Post-Retirement Benefit Obligation
The following is a reconciliation of the accumulated post-retirement benefit obligation (“APBO”) under this plan:
For the fiscal years ended
(dollars in thousands)December 30, 2023December 31, 2022
APBO at beginning of fiscal year$1,745 $2,662 
Service cost6 14 
Interest cost78 63 
Actuarial loss (gain)3 (763)
Plan participants’ contribution— 15 
Benefits paid(195)(246)
APBO at end of fiscal year$1,637 $1,745 
Approximately $1.4 million and $1.5 million of the APBO at the end of fiscal 2023 and 2022, respectively, were classified as Other long term liabilities in the Company’s consolidated balance sheets.
Net Periodic Post-Retirement Benefit Cost and Changes Recognized in Other Comprehensive Income
The components of net periodic post-retirement benefit cost recognized in the statement of operations and changes recognized in other comprehensive income were as follows:
For the fiscal year ended
(dollars in thousands)December 30, 2023December 31, 2022January 1, 2022
Recognized in the statement of operations:
Service cost
$6 $14 $15 
Interest cost
78 63 57 
Amortization of net gain(*)
(428)(320)(295)
Net periodic post-retirement benefit (income) cost$(344)$(243)$(223)
Changes recognized in other comprehensive income:
Net loss (gain) arising during the fiscal year$3 $(763)$(140)
Amortization of net gain(*)
428 320 295 
Total changes recognized in other comprehensive income$431 $(443)$155 
Total net periodic post-retirement benefit (income) cost and changes recognized in other comprehensive income$87 $(686)$(68)
(*)Represents pre-tax amounts reclassified from accumulated other comprehensive loss. For fiscal 2024, approximately $0.4 million is expected to be reclassified from accumulated other comprehensive loss to a component of net periodic post-retirement benefit (income) cost.
Assumptions
The actuarial computations utilized the following assumptions, using year-end measurement dates:
Post-retirement benefit obligation20232022
Discount rate4.75%4.75%
Net periodic post-retirement benefit cost202320222021
Discount rate4.75%2.50%2.00%
The discount rates used at December 30, 2023, December 31, 2022, and January 1, 2022, were determined with primary consideration given to the FTSE Pension Discount Curve and Liability Index adjusted for the timing of expected plan distributions. The Company believes this index reflects a risk-free rate with maturities that are comparable to the timing of the expected payments under the plan.
The effects on the Company’s plan of all future increases in health care costs are borne primarily by employees; accordingly, increasing medical costs are not expected to have any material effect on the Company’s future financial results.
The Company’s contribution for these post-retirement benefit obligations was approximately $0.2 million for fiscal years 2023 and 2022 and approximately $0.3 million for fiscal year 2021. The Company expects that its contribution and benefit payments for post-retirement benefit obligations will be approximately $0.2 million for fiscal years 2024, 2025, 2026, 2027, and 2028. For the five years subsequent to fiscal 2028, the aggregate contributions and benefit payments for post-retirement benefit obligations is expected to be approximately $0.6 million. The Company does not pre-fund this plan and as a result there are no plan assets.
Deferred Compensation Plan
The Company maintains a deferred compensation plan allowing voluntary salary and incentive compensation deferrals for qualifying employees as permitted by the Internal Revenue Code. Participant deferrals earn investment returns based on a select number of investment options, including equity, debt, and real estate mutual funds. Deferred compensation plan liabilities are recognized in Other long term liabilities on the Company’s consolidated balance sheets. Changes in the balance, excluding those related to contributions or payments, are included in Other expense (income), net on the Company’s consolidated statement of operations. The Company invests comparable amounts in marketable securities to approximate the participant’s return on selected investment options.
Defined Contribution Plan
The Company also sponsors defined contribution savings plans in the United States and Canada. The U.S. plan covers employees who are at least 21 years of age and have completed one calendar month of service and, if part-time, work a minimum of one thousand hours of service within the one-year period following the commencement of employment or during any subsequent calendar year. The plan provides for a discretionary employer match of employee contributions. The Company’s expense for the U.S. defined contribution savings plan totaled approximately $8.1 million, $8.2 million, and $16.1 million for the fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022, respectively.