XML 52 R17.htm IDEA: XBRL DOCUMENT
v3.21.2

Benefit Plans | 12 Months Ended
--- | ---
Aug. 31, 2021
Retirement Benefits [Abstract] |
Benefit Plans | Benefit Plans We have various pension and other defined benefits as well as defined contribution plans in which substantially all employees may participate. We also have nonqualified supplemental executive and Board retirement plans. We provide defined life insurance and health care benefits for certain retired employees and Board of Directors participants. The plan is contributory based on years of service and family status, with retiree contributions adjusted annually. Financial information on changes in projected benefit obligation, plan assets funded and balance sheet status as of August 31, 2021 and 2020, is as follows:
| Qualified Pension Benefits |  | Nonqualified Pension Benefits |  | Other Benefits
| 2021 |  | 2020 |  | 2021 |  | 2020 |  | 2021 |  | 2020
| (Dollars in thousands)
Change in benefit obligation: |  |  |  |  |  |  |  |  |  |  |
Projected benefit obligation at beginning of period | $ | 918,002 |  |  | $ | 876,696 |  |  | $ | 19,183 |  |  | $ | 19,047 |  |  | $ | 30,316 |  |  | $ | 31,098 |
Service cost | 45,229 |  |  | 42,151 |  |  | 433 |  |  | 405 |  |  | 1,186 |  |  | 1,050 |
Interest cost | 16,563 |  |  | 21,722 |  |  | 273 |  |  | 429 |  |  | 493 |  |  | 747 |
Actuarial loss (gain) | 34,958 |  |  | 6,265 |  |  | 2,034 |  |  | 1,382 |  |  | (765) |  |  | (2,286) |
Assumption change | (12,847) |  |  | 40,694 |  |  | (55) |  |  | 775 |  |  | (398) |  |  | 1,275 |
Plan amendments | 113 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Settlements | — |  |  | — |  |  | — |  |  | (2,130) |  |  | — |  |  | — |
Benefits paid | (76,779) |  |  | (69,526) |  |  | (1,264) |  |  | (725) |  |  | (1,763) |  |  | (1,568) |
Projected benefit obligation at end of period | $ | 925,239 |  |  | $ | 918,002 |  |  | $ | 20,604 |  |  | $ | 19,183 |  |  | $ | 29,069 |  |  | $ | 30,316 |
Change in plan assets: |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of period | $ | 976,542 |  |  | $ | 909,427 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Actual gain on plan assets | 70,161 |  |  | 90,241 |  |  | — |  |  | — |  |  | — |  |  | — |
Company contributions | 23,200 |  |  | 46,400 |  |  | 1,264 |  |  | 2,855 |  |  | 1,763 |  |  | 1,568 |
Settlements | — |  |  | — |  |  | — |  |  | (2,130) |  |  | — |  |  | — |
Benefits paid | (76,779) |  |  | (69,526) |  |  | (1,264) |  |  | (725) |  |  | (1,763) |  |  | (1,568) |
Fair value of plan assets at end of period | $ | 993,124 |  |  | $ | 976,542 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Funded status at end of period | $ | 67,885 |  |  | $ | 58,540 |  |  | $ | (20,604) |  |  | $ | (19,183) |  |  | $ | (29,069) |  |  | $ | (30,316) |
Amounts recognized on balance sheet: |  |  |  |  |  |  |  |  |  |  |
Noncurrent assets | $ | 67,885 |  |  | $ | 58,540 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Accrued benefit cost: |  |  |  |  |  |  |  |  |  |  |
Current liabilities | — |  |  | — |  |  | (2,220) |  |  | (1,660) |  |  | (1,970) |  |  | (2,090) |
Noncurrent liabilities | — |  |  | — |  |  | (18,384) |  |  | (17,523) |  |  | (27,099) |  |  | (28,226) |
Ending balance | $ | 67,885 |  |  | $ | 58,540 |  |  | $ | (20,604) |  |  | $ | (19,183) |  |  | $ | (29,069) |  |  | $ | (30,316) |
Amounts recognized in accumulated other comprehensive loss (pretax): |  |  |  |  |  |  |  |  |  |  |
Prior service cost (credit) | $ | 873 |  |  | $ | 938 |  |  | $ | (388) |  |  | $ | (502) |  |  | $ | (2,270) |  |  | $ | (2,715) |
Net loss (gain) | 199,785 |  |  | 225,983 |  |  | 5,579 |  |  | 3,813 |  |  | (14,862) |  |  | (15,064) |
Ending balance | $ | 200,658 |  |  | $ | 226,921 |  |  | $ | 5,191 |  |  | $ | 3,311 |  |  | $ | (17,132) |  |  | $ | (17,779) |
The accumulated benefit obligation of the qualified pension plans was $877.9 million and $871.6 million at August 31, 2021 and 2020, respectively. The accumulated benefit obligation of the nonqualified pension plans was $20.5 million and $18.2 million at August 31, 2021 and 2020, respectively. Information for the pension plans with an accumulated benefit obligation in excess of plan assets is set forth below:
| Years Ended August 31,
| 2021 |  | 2020
| (Dollars in thousands)
Projected benefit obligation | $ | 20,604 |  |  | $ | 19,183 |
Accumulated benefit obligation | 20,513 |  |  | 18,172 |
Components of net periodic benefit costs for the years ended August 31, 2021, 2020 and 2019, are as follows:
| Qualified Pension Benefits |  | Nonqualified Pension Benefits |  | Other Benefits
| 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019
| (Dollars in thousands)
Components of net periodic benefit costs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost | $ | 45,229 |  |  | $ | 42,151 |  |  | $ | 38,592 |  |  | $ | 433 |  |  | $ | 405 |  |  | $ | 311 |  |  | $ | 1,186 |  |  | $ | 1,050 |  |  | $ | 1,053 |
Interest cost | 16,563 |  |  | 21,722 |  |  | 28,396 |  |  | 273 |  |  | 429 |  |  | 747 |  |  | 493 |  |  | 747 |  |  | 1,094 |
Expected return on assets | (43,641) |  |  | (46,684) |  |  | (44,968) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Settlement of retiree obligations | — |  |  | — |  |  | 51 |  |  | — |  |  | — |  |  | 191 |  |  | — |  |  | — |  |  | — |
Prior service cost (credit) amortization | 178 |  |  | 178 |  |  | 190 |  |  | (114) |  |  | (114) |  |  | (75) |  |  | (445) |  |  | (445) |  |  | (556) |
Actuarial loss (gain) amortization | 21,790 |  |  | 21,583 |  |  | 12,348 |  |  | 212 |  |  | 98 |  |  | 2 |  |  | (1,365) |  |  | (1,392) |  |  | (1,627) |
Net periodic benefit cost (benefit) | $ | 40,119 |  |  | $ | 38,950 |  |  | $ | 34,609 |  |  | $ | 804 |  |  | $ | 818 |  |  | $ | 1,176 |  |  | $ | (131) |  |  | $ | (40) |  |  | $ | (36) |
Plan assumptions for the years ended August 31, 2021, 2020 and 2019, are as follows:
| Qualified Pension Benefits |  | Nonqualified Pension Benefits |  | Other Benefits
| 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019
Weighted-average assumptions to determine the net periodic benefit cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest credit rate for cash balance plans | 4.65 | % |  | 4.65 | % |  | 4.65 | % |  | 4.65 | % |  | 4.65 | % |  | 4.65 | % |  | N/A |  | N/A |  | N/A
Discount rate | 2.65 % |  | 3.06 | % |  | 4.23 | % |  | 2.07 % |  | 2.70 | % |  | 4.09 | % |  | 2.43 % |  | 2.89 | % |  | 4.08 | %
Expected return on plan assets | 4.90 % |  | 5.50 | % |  | 5.50 | % |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A
Rate of compensation increase | 4.99 % |  | 5.28 | % |  | 5.14 | % |  | 4.99 % |  | 5.28 | % |  | 5.14 | % |  | N/A |  | N/A |  | N/A
Weighted-average assumptions to determine the benefit obligations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 2.78 % |  | 2.67 | % |  | 3.06 | % |  | 2.08 % |  | 2.15 | % |  | 2.70 | % |  | 2.57 % |  | 2.43 | % |  | 2.89 | %
Rate of compensation increase | 4.79 % |  | 4.99 | % |  | 5.28 | % |  | 4.79 % |  | 4.99 | % |  | 5.28 | % |  | N/A |  | N/A |  | N/A
Components of net periodic benefit costs and amounts recognized in other comprehensive loss (income) for the years ended August 31, 2021, 2020 and 2019, are as follows:
| Qualified Pension Benefits |  | Nonqualified Pension Benefits |  | Other Benefits
| 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019
| (Dollars in thousands)
Other comprehensive loss (income): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service cost | $ | 113 |  |  | $ | — |  |  | $ | 18 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Net actuarial loss (gain) | (4,408) |  |  | 3,401 |  |  | 47,556 |  |  | 1,978 |  |  | 2,157 |  |  | 1,917 |  |  | (1,163) |  |  | (1,011) |  |  | 801 |
Amortization of actuarial (gain) loss | (21,790) |  |  | (21,583) |  |  | (12,307) |  |  | (212) |  |  | (98) |  |  | (2) |  |  | 1,365 |  |  | 1,392 |  |  | 1,627 |
Amortization of prior service (credit) costs | (178) |  |  | (178) |  |  | (190) |  |  | 114 |  |  | 114 |  |  | 75 |  |  | 445 |  |  | 445 |  |  | 556 |
Settlement of retiree obligations (a) | — |  |  | — |  |  | — |  |  | — |  |  | (397) |  |  | (191) |  |  | — |  |  | — |  |  | — |
Total recognized in other comprehensive loss (income) | $ | (26,263) |  |  | $ | (18,360) |  |  | $ | 35,077 |  |  | $ | 1,880 |  |  | $ | 1,776 |  |  | $ | 1,799 |  |  | $ | 647 |  |  | $ | 826 |  |  | $ | 2,984 |
(a) Reflects amounts reclassified from accumulated other comprehensive loss (income) to net earnings. Estimated amortization in fiscal 2022 from accumulated other comprehensive loss into net periodic benefit cost is as follows:
| Qualified Pension Benefits |  | Nonqualified Pension Benefits |  | Other Benefits
| (Dollars in thousands)
Amortization of prior service cost (credit) | $ | 178 |  |  | $ | (114) |  |  | $ | (445) |
Amortization of actuarial loss (gain) | 23,343 |  |  | 478 |  |  | (1,259) |
A significant assumption for pension costs and obligations is the discount rate. We utilize a full-yield curve approach by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The discount rate reflects the rate at which the associated benefits could be effectively settled as of the measurement date. In estimating this rate, we look at rates of return on fixed-income investments of similar duration to the liabilities in the plans that receive high investment-grade ratings by recognized ratings agencies. For measurement purposes, a 6.8% annual rate of increase in the per capita cost of covered health care benefits was assumed for the year ended August 31, 2021. The rate was assumed to decrease gradually to 4.5% by 2028 and remain at that level thereafter. An annual analysis of the risk versus the return of the investment portfolio is conducted to justify the expected long-term rate of return assumption. We generally use long-term historical return information for the targeted asset mix identified in asset and liability studies. Adjustments are made to the expected long-term rate of return assumption when deemed necessary, based upon revised expectations of future investment performance of the overall investment markets. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in the assumed health care cost trend rates would have the following effects:
| 1% Increase |  | 1% Decrease
| (Dollars in thousands)
Effect on total of service and interest cost components | $ | 180 |  |  | $ | (150) |
Effect on postretirement benefit obligation | 2,000 |  |  | (1,700) |
Contributions depend primarily on market returns on the pension plan assets and minimum funding level requirements. During fiscal 2021, we made a discretionary contribution of $23.2 million to the pension plans. Based on the funded status of the qualified pension plans as of August 31, 2021, we do not currently believe we will be required to contribute to these plans in fiscal 2022, although we may voluntarily elect to do so. We expect to pay $4.2 million to participants of the nonqualified pension and postretirement benefit plans during fiscal 2022. Our retiree benefit payments, which reflect expected future service, are anticipated to be paid as follows:
| Qualified Pension Benefits |  | Nonqualified Pension Benefits |  | Other Benefits |  |
| (Dollars in thousands)
2022 | $ | 70,100 |  |  | $ | 2,220 |  |  | $ | 1,970 |  |  |
2023 | 70,900 |  |  | 2,490 |  |  | 2,260 |  |  |
2024 | 70,300 |  |  | 2,210 |  |  | 2,340 |  |  |
2025 | 71,400 |  |  | 2,110 |  |  | 2,340 |  |  |
2026 | 73,900 |  |  | 2,100 |  |  | 2,290 |  |  |
2027-2031 | 342,700 |  |  | 7,930 |  |  | 8,920 |  |  |
We have trusts that hold the assets for the defined benefit plans. CHS has a qualified plan committee that sets investment guidelines with the assistance of external consultants. Investment objectives for the plans' assets are as follows: •Optimization of the long-term returns on plan assets at an acceptable level of risk; •Maintenance of broad diversification across asset classes and among investment managers; and •Focus on long-term return objectives. Asset allocation targets promote optimal expected return and volatility characteristics given the long-term time horizon for fulfilling the obligations of the pension plans. The investment portfolio contains a diversified portfolio of investment categories, including equities, fixed-income securities and real estate. Securities are also diversified in terms of domestic and international securities, short- and long-term securities, growth and value equities, large and small cap stocks, as well as active and passive management styles. Our pension plans' investment policy strategy is such that liabilities match assets. This is being accomplished through the asset portfolio mix by reducing volatility and de-risking the plans. The plans' target allocation percentages range between 45% and 80% for fixed income securities and range between 20% and 55% for equity securities. The qualified plan committee believes that with prudent risk tolerance and asset diversification, the plans should be able to meet pension obligations in the future. Our pension plans' recurring fair value measurements by asset category at August 31, 2021 and 2020, are presented in the tables below:
| 2021
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (Dollars in thousands)
Cash and cash equivalents | $ | 11,383 |  |  | $ | — |  |  | $ | — |  |  | $ | 11,383 |
Equities: |  |  |  |  |  |  |
Common/collective trust at net asset value (1) | — |  |  | — |  |  | — |  |  | 180,766 |
Fixed income securities: |  |  |  |  |  |  |
Common/collective trust at net asset value (1) | — |  |  | — |  |  | — |  |  | 707,831 |
Partnership and joint venture interests measured at net asset value (1) | — |  |  | — |  |  | — |  |  | 93,144 |
Total | $ | 11,383 |  |  | $ | — |  |  | $ | — |  |  | $ | 993,124 |
| 2020
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (Dollars in thousands)
Cash and cash equivalents | $ | 57,801 |  |  | $ | — |  |  | $ | — |  |  | $ | 57,801 |
Equities: |  |  |  |  |  |  |
Common/collective trust at net asset value (1) | — |  |  | — |  |  | — |  |  | 219,050 |
Fixed income securities: |  |  |  |  |  |  |
Common/collective trust at net asset value (1) | — |  |  | — |  |  | — |  |  | 603,250 |
Partnership and joint venture interests measured at net asset value (1) | — |  |  | — |  |  | — |  |  | 94,400 |
Other assets measured at net asset value (1) | — |  |  | — |  |  | — |  |  | 2,041 |
Total | $ | 57,801 |  |  | $ | — |  |  | $ | — |  |  | $ | 976,542 |
(1) In accordance with ASC Topic 820-10, Fair Value Measurement, certain assets that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the tables above are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the "Financial information on changes in projected benefit obligation, plan assets funded and balance sheet status" table above. Definitions for valuation levels are found in Note 16, Fair Value Measurements. We use the following valuation methodologies for assets measured at fair value. Common/collective trusts. Common/collective trusts primarily consist of equity and fixed income funds and are valued using other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risks, referenced indices, quoted prices in inactive markets, adjusted quoted prices in active markets, adjusted quoted prices on foreign equity securities that were adjusted in accordance with pricing procedures approved by the trust, etc.). Common/collective trust investments can be redeemed daily and without restriction. Redemption of the entire investment balance generally requires a 45- to 60-day notice period. The equity funds provide exposure to large, mid and small cap U.S. equities, international large and small cap equities and emerging market equities. The fixed income funds provide exposure to U.S., international and emerging market debt securities. Partnership and joint venture interests. Valued at the net asset value of shares held by the plan at year-end as a practical expedient for fair value. The net asset value is based on the fair value of the underlying assets owned by the trust, minus its liabilities, then divided by the number of units outstanding. Redemptions of these interests generally require a 45- to 60-day notice. Other assets. Other assets primarily include real estate funds and hedge funds held in the asset portfolio of our U.S. defined benefit pension plans. We are one of approximately 400 employers that contribute to the Co-op Retirement Plan ("Co-op Plan"), which is a defined benefit plan constituting a "multiple employer plan" under the Internal Revenue Code of 1986, as amended, and a "multiemployer plan" under the accounting standards. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects: •Assets contributed to the multiemployer 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 may be borne by the remaining participating employers; and •If we choose to stop participating in the multiemployer plan, we may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The withdrawal liability associated with the multiemployer plan was approximately $32.0 million as of August 31, 2021. Our participation in the Co-op Plan for the years ended August 31, 2021, 2020 and 2019, is outlined in the table below:
|  |  |  | Contributions of CHS |  |  |  |
|  |  |  | (Dollars in thousands) |  |  |  |
Plan Name |  | EIN/Plan Number |  | 2021 |  | 2020 |  | 2019 |  | Surcharge Imposed |  | Expiration Date of Collective Bargaining Agreement
Co-op Retirement Plan |  | 01-0689331 / 001 |  | $ | 1,172 |  |  | $ | 1,455 |  |  | $ | 1,712 |  |  | N/A |  | N/A
Our contributions for the years stated above did not represent more than 5% of total contributions to the Co-op Plan as indicated in the Co-op Plan's most recently available annual report (Form 5500). Provisions of the Pension Protection Act of 2006 ("PPA") do not apply to the Co-op Plan because there is a special exemption for cooperative plans if the plan is maintained by more than one employer and at least 85% of the employers are rural cooperatives or cooperative organizations owned by agricultural producers. In the Co-op Plan, a "zone status" determination is not required, and therefore not determined. In addition, the accumulated benefit obligations and plan assets are not determined or allocated separately by individual employers. The most recent financial statements available in 2021 and 2020 are for the Co-op Plan's year-end at March 31, 2021 and 2020, respectively. In total, the Co-op Plan was at least 80% funded on those dates based on the total plan assets and accumulated benefit obligations. Because the provisions of the PPA do not apply to the Co-op Plan, funding improvement plans and surcharges are not applicable. Future contribution requirements are determined each year as part of the actuarial valuation of the plan and may change as a result of plan experience. In addition to the contributions to the Co-op Plan listed above, total contributions to individually insignificant multi-employer pension plans were immaterial in fiscal 2021, 2020 and 2019. We have other contributory defined contribution plans covering substantially all employees. Total contributions by us to these plans were $30.1 million, $34.5 million and $31.0 million, for the years ended August 31, 2021, 2020 and 2019, respectively.

X
- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -URI http://asc.fasb.org/topic&trid=2197446 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI http://asc.fasb.org/topic&trid=2127225 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
Name: | us-gaap_CompensationAndEmployeeBenefitPlansTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration