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PENSION PLANS | 12 Months Ended
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Jul. 25, 2020
Compensation Related Costs [Abstract] |
PENSION PLANS | PENSION PLANS Company-Sponsored Pension Plans The Company sponsored four defined benefit pension plans. One of the plans was terminated in fiscal 2020, and two of the plans are frozen and participants no longer earn service credit. Two are tax-qualified plans covering members of unions. Benefits under these two plans are based on a fixed amount for each year of service. One is a tax-qualified plan covering nonunion associates. Benefits under this plan are based upon percentages of annual compensation. Funding for these plans is based on an analysis of the specific requirements and an evaluation of the assets and liabilities of each plan. The fourth plan is an unfunded, nonqualified plan providing supplemental pension benefits to certain executives. Net periodic pension cost for the four plans include the following components:
| 2020 |  | 2019 |  |
Service cost | $ | 202 |  |  | $ | 213 |  |  |
Interest cost on projected benefit obligation | 2,154 |  |  | 2,674 |  |  |
Expected return on plan assets | (2,792) |  |  | (2,873) |  |  |
Loss on settlement | 1,604 |  |  | 441 |  |  |
Amortization of gains and losses | 555 |  |  | 605 |  |  |
Net periodic pension cost | $ | 1,723 |  |  | $ | 1,060 |  |  |
On December 23, 2019, the Company terminated the Village Super Market, Inc. Retail Clerks Employees’ Retirement Plan. All participants of the plan were former employees of a store previously closed in 1994. An annuity contract totaling $1,302 was purchased with an insurance company for all participants who did not elect a lump sum distribution. Additionally, lump sum distributions related to the termination totaled $451. The plan had sufficient assets to satisfy all termination transaction obligations, and no benefit obligation or plan assets related to the Village Super Market, Inc. Retail Clerks Employees’ Retirement Plan remain as of July 25, 2020. As a result of this termination, the Company recognized a non-cash pre-tax settlement charge totaling $669 during fiscal 2020. This settlement charge represents the plan’s remaining unrecognized losses within accumulated other comprehensive loss as of the termination date. Additionally, the Company recognized a settlement loss of $935 and $441 in fiscal 2020 and 2019, respectively, for a plan where benefits paid exceeded the sum of the service cost and interest cost components of net periodic pension cost. The changes in benefit obligations and the reconciliation of the funded status of the Company’s plans to the consolidated balance sheets were as follows:
| 2020 |  | 2019
Changes in Benefit Obligation: |  |  |
Benefit obligation at beginning of year | $ | 69,932 |  |  | $ | 69,553 |
Service cost | 202 |  |  | 213 |
Interest cost | 2,154 |  |  | 2,674 |
Benefits paid | (887) |  |  | (779) |
Settlement | (6,733) |  |  | (6,331) |
Actuarial loss | 12,181 |  |  | 4,602 |
Benefit obligation at end of year | $ | 76,849 |  |  | $ | 69,932 |
Changes in Plan Assets: |  |  |
Fair value of plan assets at beginning of year | $ | 65,173 |  |  | $ | 61,071 |
Actual return on plan assets | 13,130 |  |  | 6,203 |
Employer contributions | — |  |  | 5,009 |
Benefits paid | (887) |  |  | (779) |
Settlements paid | (6,733) |  |  | (6,331) |
Fair value of plan assets at end of year | 70,683 |  |  | 65,173 |
Funded status at end of year | $ | 6,166 |  |  | $ | 4,759 |
Amounts recognized in the consolidated balance sheets: |  |  |
Pension liabilities | 6,166 |  |  | 4,759 |
Accumulated other comprehensive loss, net of income taxes | 8,092 |  |  | 8,342 |
Amounts included in Accumulated other comprehensive loss (pre-tax): |  |  |
Net actuarial loss | $ | 11,299 |  |  | $ | 11,615 |
In fiscal 2020 the Company began the process of terminating the Village Super Market, Inc. Employees’ Retirement Plan. Upon satisfaction of all regulatory requirements, the Company will fully fund and liquidate all plan assets to purchase annuity contracts from an insurance company for all participants who do not elect a lump sum distribution. At that time, the Company will recognize a non-cash pre-tax settlement charge representing the plan’s remaining unrecognized losses within accumulated other comprehensive loss as of the termination date. As of July 25, 2020, the pre-tax amount included in Accumulated other comprehensive loss related to this plan is $10,823. Company expects approximately $600 of the net actuarial loss, excluding the impact of any potential plan settlements, to be recognized as a component of net periodic benefit costs in fiscal 2021. The accumulated benefit obligations of the four plans were $76,849 and $69,932 at July 25, 2020 and July 27, 2019, respectively. The following information is presented for those plans with an accumulated benefit obligation in excess of plan assets:
| 2020 |  | 2019
Projected benefit obligation | $ | 11,465 |  |  | $ | 10,203 |
Accumulated benefit obligation | 11,465 |  |  | 10,203 |
Fair value of plan assets | 4,068 |  |  | 3,783 |
Weighted average assumptions used to determine benefit obligations and net periodic pension cost for the Company’s defined benefit plans were as follows:
| 2020 |  | 2019 |  |
Assumed discount rate — net periodic pension cost | 3.41 | % |  | 3.99 | % |  |
Assumed discount rate — benefit obligation | 2.26 | % |  | 3.41 | % |  |
Assumed rate of increase in compensation levels | 4.5 | % |  | 4.5 | % |  |
Expected rate of return on plan assets | 4.82 | % |  | 5.50 | % |  |
Investments in the pension trusts are overseen by the trustees of the plans, who are officers of Village. In fiscal 2018, the Company transitioned to a liability-driven investment ("LDI") strategy. A LDI strategy focuses on maintaining a close to fully-funded status over the long-term with minimal funded status risk. This is achieved by investing more of the plan assets in fixed income instruments to more closely match the duration of the plan liability. The investment allocation to fixed income instruments will increase as each plans' funded status increases. The target allocations for plan assets are 0-15% equity securities, 85-100% fixed income securities and 0-10% cash. Asset allocations are reviewed periodically and appropriate rebalancing is performed. Equity securities include investments in large-cap, small-cap and mid-cap companies located both in and outside the United States. Fixed income securities include U.S. treasuries, mortgage-backed securities and corporate bonds of companies from diversified industries. Investments in securities are made through mutual funds. In addition, one plan held Class A common stock of Village in the amount of $573 and $568 at July 25, 2020 and July 27, 2019, respectively. Risk management is accomplished through diversification across asset classes and fund strategies, multiple investment portfolios and investment guidelines. The plans do not allow for investments in derivative instruments. The fair value of the pension assets were as follows:
|  | July 25, 2020 |  |  |  |  |  | July 27, 2019 |  |  |  |
Asset Category |  | Level 1 |  | Assets Measured at NAV |  | Total |  | Level 1 |  | Assets Measured at NAV |  | Total
Cash |  | $ | 61 |  |  | $ | — |  |  | $ | 61 |  |  | $ | 37 |  |  | $ | — |  |  | $ | 37 |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |
Company stock |  | 573 |  |  | — |  |  | 573 |  |  | 568 |  |  | — |  |  | 568 |
Mutual/Collective Trust Funds - U.S. (1) |  |  |  | 1,214 |  |  | 1,214 |  |  | — |  |  | 4,401 |  |  | 4,401 |
Mutual/Collective Trust Funds - International (1) |  | — |  |  | 396 |  |  | 396 |  |  | — |  |  | 2,613 |  |  | 2,613 |
Fixed income securities: |  |  |  |  |  |  |  |  |  |  |  |
Mutual/Collective Trust Funds - Fixed Income (1) |  | — |  |  | 68,439 |  |  | 68,439 |  |  | — |  |  | 57,554 |  |  | 57,554 |
Total |  | $ | 634 |  |  | $ | 70,049 |  |  | $ | 70,683 |  |  | $ | 605 |  |  | $ | 64,568 |  |  | $ | 65,173 |
(1)Includes pools of investments that are measured at fair value using the Net Asset Value (NAV) per share (or its equivalent) practical expedient. The NAV is based on the underlying net assets owned by the fund and the relative interest of each participating investor in the fair value of the underlying assets. The underlying investments are classified as either level 1 or 2 of the fair value hierarchy. Based on actuarial assumptions, estimated future defined benefit payments, which may be significantly impacted by participant elections related to retirement dates and forms of payment, are as follows:
Fiscal Year |
2021 | $ | 3,850 |
2022 | 2,730 |
2023 | 2,920 |
2024 | 3,160 |
2025 | 11,260 |
2026 - 2030 | 17,130 |
The Company expects contributions to its defined benefit pension plans to be immaterial in fiscal 2021. Multi-Employer Plans The Company contributes to three multi-employer pension plans under collective bargaining agreements covering union-represented employees. These plans provide benefits to participants that are generally based on a fixed amount for each year of service. Based on the most recent information available, certain of these multi-employer plans are underfunded. The amount of any increase or decrease in Village’s required contributions to these multi-employer pension plans will depend upon the outcome of collective bargaining, actions taken by trustees who manage the plans, government regulations and the actual return on assets held in the plans, among other factors. The risks of participating in multi-employer pension plans are different from the risks of participating in single-employer pension plans in the following respects: •Assets contributed to a multi-employer plan by one employer may be used to provide benefits to employees of other participating employers. •If a participating employer stops contributing to the plan, the unfunded obligations of the plan allocable to such withdrawing employer may be borne by the remaining participating employers. •If the Company stops participating in some of its multi-employer pension plans, the Company may be required to pay those plans an amount based on its allocable share of the underfunded status of the plan, referred to as a withdrawal liability. The Company’s participation in these plans is outlined in the following tables. The “EIN / Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three-digit pension plan number. The most recent “Pension Protection Act Zone Status” available in 2019 and 2018 is for the plan’s year-end at December 31, 2019 and December 31, 2018, respectively, unless otherwise noted. Among other factors, generally, plans in the red zone are less than 65 percent funded, plans in the yellow zone are between 65 and 80 percent funded and plans in the green zone are at least 80 percent funded. The “FIP/RP Status Pending / Implemented” column indicates plans for which a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented.
|  | Pension Protection Act Zone Status |  | FIP/RP Status Pending / Implemented | Contributions for the year ended (5) |  |  |  | Expiration date of Collective- Bargaining Agreement
Pension Fund | EIN / Pension Plan Number | 2019 | 2018 |  | July 25, 2020 | July 27, 2019 |  | Surcharge Imposed (6) |
Pension Plan of Local 464A (1) | 22-6051600-001 | Green | Green | N/A | $ | 886 |  | $ | 894 |  |  | N/A | October 2020
UFCW Local 1262 & Employers Pension Fund (2), (4) | 22-6074414-001 | Red | Red | Implemented | 3,435 |  | 3,502 |  |  | No | October 2023
UFCW Regional Pension Plan (3), (4) | 16-6062287-074 | Red | Red | Implemented | $ | 1,472 |  | $ | 1,439 |  |  | No | June 2020
Total Contributions |  |  |  |  | $ | 5,793 |  | $ | 5,835 |  |  |  |
(1)The information for this fund was obtained from the Form 5500 filed for the plan’s year-end at December 31, 2019 and December 31, 2018. (2)The information for this fund was obtained from the Form 5500 filed for the plan’s year-end at December 31, 2018 and December 31, 2017. (3)The information for this fund was obtained from the Form 5500 filed for the plan’s year-end at September 30, 2019 and September 30, 2018. (4)This plan has elected to utilize special amortization provisions provided under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010. There were no changes to the plan’s zone status as a result of this election. (5)The Company’s contributions represent more than 5% of the total contributions received by each applicable pension fund for all periods presented. (6)Under the Pension Protection Act, a surcharge may be imposed when employers make contributions under a collective bargaining agreement that is not in compliance with a rehabilitation plan. As of July 25, 2020, the collective bargaining agreements under which the Company was making contributions were in compliance with rehabilitation plans adopted by each applicable pension fund. Other Multi-Employer Benefit Plans The Company also contributes to various other multi-employer benefit plans that provide health and welfare benefits to active and retired participants. Total contributions made by the Company to these other multi-employer benefit plans were $29,965 and $28,325 in fiscal 2020 and 2019, respectively. Defined Contribution Plans The Company sponsors a 401(k) savings plan for certain eligible associates. Company contributions under that plan, which are based on specified percentages of associate contributions, were $1,765 and $1,390 in fiscal 2020 and 2019, respectively. The Company also contributes to union sponsored defined contribution plans for certain eligible associates. Company contributions under these plans were $713 and $755 in fiscal 2020 and 2019, respectively.

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