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Note 6 - Pension Plans | 12 Months Ended
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Sep. 29, 2019
Pension Plan [Member] |
Notes to Financial Statements |
Pension and Other Postretirement Benefits Disclosure [Text Block] | 6 PENSION PLANS We have several non-contributory defined benefit pension plans that together cover selected employees. Benefits under the plans were generally based on salary and years of service. Effective in 2012, substantially all benefits are frozen and only a small amount of additional benefits are being accrued. Our liability and related expense for benefits under the plans are recorded over the service period of employees based upon annual actuarial calculations. Plan funding strategies are influenced by government regulations. Plan assets consist primarily of domestic and foreign corporate equity securities, government and corporate bonds, hedge fund investments and cash. The net periodic cost (benefit) components of our pension plans are as follows:
(Thousands of Dollars) |  | 2019 |  |  | 2018 |  |  | 2017 |
Service cost for benefits earned during the year |  |  | 36 |  |  |  | 48 |  |  |  | 84 |
Interest cost on projected benefit obligation |  |  | 6,563 |  |  |  | 5,754 |  |  |  | 5,394 |
Expected return on plan assets |  |  | (8,073 | ) |  |  | (7,933 | ) |  |  | (7,878 | )
Amortization of net loss |  |  | 1,135 |  |  |  | 2,025 |  |  |  | 2,947 |
Amortization of prior service benefit |  |  | (100 | ) |  |  | (136 | ) |  |  | (136 | )
Net periodic pension cost (benefit) |  |  | (439 | ) |  |  | (242 | ) |  |  | 411 |
Changes in benefit obligations and plan assets are as follows:
(Thousands of Dollars) |  | 2019 |  |  | 2018 |
Benefit obligation, beginning of year |  |  | 176,531 |  |  |  | 191,645 |
Service cost |  |  | 36 |  |  |  | 48 |
Interest cost |  |  | 6,563 |  |  |  | 5,754 |
Actuarial loss (gain) |  |  | 20,687 |  |  |  | (9,464 | )
Benefits paid |  |  | (11,448 | ) |  |  | (11,452 | )
Benefit obligation, end of year |  |  | 192,369 |  |  |  | 176,531 |
Fair value of plan assets, beginning of year: |  |  | 151,255 |  |  |  | 149,762 |
Actual return on plan assets |  |  | 8,705 |  |  |  | 10,576 |
Benefits paid |  |  | (11,448 | ) |  |  | (11,452 | )
Administrative expenses paid |  |  | (2,163 | ) |  |  | (2,571 | )
Employer contributions |  |  | 650 |  |  |  | 4,940 |
Fair value of plan assets, end of year |  |  | 146,999 |  |  |  | 151,255 |
Funded status |  |  | (45,370 | ) |  |  | (25,276 | )
Disaggregated amounts recognized in the Consolidated Balance Sheets are as follows:
|  | September 29 |  |  | September 30 |
(Thousands of Dollars) |  | 2019 |  |  | 2018 |
Pension obligations |  |  | (45,370 | ) |  |  | (25,276 | )
Accumulated other comprehensive loss (before income taxes) |  |  | (53,066 | ) |  |  | (31,882 | )
Amounts recognized in accumulated other comprehensive income (loss) are as follows:
|  | September 29 |  |  | September 30 |
(Thousands of Dollars) |  | 2019 |  |  | 2018 |
Unrecognized net actuarial loss |  |  | (53,072 | ) |  |  | (31,988 | )
Unrecognized prior service benefit |  |  | 6 |  |  |  | 106 |
|  |  | (53,066 | ) |  |  | (31,882 | )
We expect to recognize $3,166,000 and $6,000 of unrecognized net actuarial loss and unrecognized prior service benefit, respectively, in net periodic pension cost in 2020. The accumulated benefit obligation for the plans total $192,369,000 at September 29, 2019 and $176,531,000 at September 30, 2018 . The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets are $192,369,000, $192,369,000 and $146,999,000, respectively, at September 29, 2019 . Assumptions Weighted-average assumptions used to determine benefit obligations are as follows:
|  | September 29 |  |  | September 30 |
(Percent) |  | 2019 |  |  | 2018 |
Discount rate |  |  | 3.1 |  |  |  | 4.2 |
Weighted-average assumptions used to determine net periodic benefit cost are as follows:
(Percent) |  | 2019 |  |  | 2018 |  |  | 2017 |
Discount rate - service cost |  |  | 4.2 |  |  |  | 3.7 |  |  |  | 3.5 |
Discount rate - interest cost |  |  | 3.9 |  |  |  | 3.1 |  |  |  | 2.8 |
Expected long-term return on plan assets |  |  | 5.5 |  |  |  | 5.5 |  |  |  | 5.5 |
For 2020, the expected long-term return on plan assets is 5.5%. The assumptions related to the expected long-term return on plan assets are developed through an analysis of historical market returns, current market conditions and composition of plan assets. Plan Assets The primary objective of our investment strategy is to satisfy our pension obligations at a reasonable cost. Assets are actively invested to balance real growth of capital through appreciation and reinvestment of dividend and interest income and safety of invested funds. Our investment policy outlines the governance structure for decision making, sets investment objectives and restrictions and establishes criteria for selecting and evaluating investment managers. The use of derivatives is prohibited, except on a case-by-case basis where the manager has a proven capability, and only to hedge quantifiable risks such as exposure to foreign currencies. An investment committee, consisting of certain of our executives and supported by independent consultants, is responsible for monitoring compliance with the investment policy. Assets are periodically redistributed to maintain the appropriate policy allocation. The weighted-average asset allocation of our pension assets is as follows:
(Percent) |  | Policy Allocation |  |  |  | Actual Allocation |
|  | September 29 |  |  | September 29 |  |  | September 30 |
Asset Class |  | 2019 |  |  | 2019 |  |  | 2018 |
Equity securities |  |  | 50 |  |  |  | 49 |  |  |  | 50 |
Debt securities |  |  | 35 |  |  |  | 34 |  |  |  | 32 |
TIPS |  |  | 5 |  |  |  | 5 |  |  |  | 4 |
Hedge fund investments |  |  | 10 |  |  |  | 10 |  |  |  | 10 |
Cash and cash equivalents |  |  | — |  |  |  | 2 |  |  |  | 4 |
Plan assets include no Company securities. Assets include cash and cash equivalents and receivables from time to time due to the need to reallocate assets within policy guidelines. Fair Value Measurements The fair value hierarchy of pension assets at September 29, 2019 is as follows:
(Thousands of Dollars) |  | NAV |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Cash and cash equivalents |  |  | — |  |  |  | 2,970 |  |  |  | — |  |  |  | — |
Domestic equity securities |  |  | 9,524 |  |  |  | 8,971 |  |  |  | 40,593 |  |  |  | — |
International equity securities |  |  | — |  |  |  | 6,525 |  |  |  | 7,283 |  |  |  | — |
TIPS |  |  | — |  |  |  | 6,918 |  |  |  | — |  |  |  | — |
Debt securities |  |  | — |  |  |  | 26,392 |  |  |  | 24,190 |  |  |  | — |
Hedge fund investments |  |  | 15,733 |  |  |  | — |  |  |  | — |  |  |  | — |
The fair value hierarchy of pension assets at September 30, 2018 is as follows:
(Thousands of Dollars) |  | NAV |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Cash and cash equivalents |  |  | — |  |  |  | 5,537 |  |  |  | — |  |  |  | — |
Domestic equity securities |  |  | 10,045 |  |  |  | 12,573 |  |  |  | 40,083 |  |  |  | — |
International equity securities |  |  | — |  |  |  | 7,070 |  |  |  | 7,560 |  |  |  | — |
TIPS |  |  | — |  |  |  | 6,535 |  |  |  | — |  |  |  | — |
Debt securities |  |  | — |  |  |  | 25,673 |  |  |  | 22,523 |  |  |  | — |
Hedge fund investments |  |  | 15,767 |  |  |  | — |  |  |  | — |  |  |  | — |
There were no purchases, sales or transfers of assets classified as Level 3 in 2019 or 2018 . Pension assets included in the fair value hierarchy at net asset value, or "NAV", include three investments:
| • | U.S. small cap value equity common/collective fund for which fund prices are not publicly available. The balance of this investment is $9,524,000 and $10,045,000 as of 9/29/2019 and 9/30/2018, respectively. We can redeem this fund on a monthly basis.
| • | Global equity long/short common/collective hedge fund-of-funds for which fund prices are established on a monthly basis. The balance of this investment is $7,923,000 and $8,116,000 as of 9/29/2019 and 9/30/2019, respectively. We can redeem up to 90% of our investment in this fund within 90 - 120 days of notice with the remaining distributed following completion of the audit of the Fund's financial statements for the year.
| • | Global equity long/short common/collective hedge fund-of-funds for which fund prices are established on a monthly basis. The balance of this investment is $7,810,000 and $7,651,000 as of 9/29/2019 and 9/30/2018, respectively. We can redeem up to 50% of our investment in this fund twice per year.
Cash Flows Based on our forecast at September 29, 2019 , we expect to make contributions of $6,718,000 to our pension trust in 2020. We anticipate future benefit payments to be paid from the pension trust as follows:
(Thousands of Dollars) |  |  |
2020 |  | 12,452 |
2021 |  | 11,770 |
2022 |  | 11,711 |
2023 |  | 11,725 |
2024 |  | 11,679 |
2025-2029 |  | 56,172 |
Other Plans We are obligated under an unfunded plan to provide fixed retirement payments to certain former employees. The plan is frozen and no additional benefits are being accrued. The accrued liability under the plan is $1,667,000 and $1,469,000 at September 29, 2019 and September 30, 2018 , respectively.

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