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Note 6 - Pension Plans
 12 Months Ended
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.