Benefit Plans

12 Months Ended

Aug. 31, 2025

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, 2025 and 2024, is as follows:


	Qualified Pension Benefits				Nonqualified Pension Benefits				Other Benefits
	2025		2024		2025		2024		2025		2024
	(Dollars in thousands)
Change in benefit obligation:
Projected benefit obligation at beginning of period	$	760,763	$	708,511	$	26,443	$	20,980	$	24,787	$	22,572
Service cost	43,727		37,391		3,027		1,968		844		650
Interest cost	34,898		35,928		1,154		1,043		1,140		1,144
Actuarial loss (gain):
Experience study and mortality updates	8,394		2,988		365		244		(29)		—
Other demographic experience*	20,025		18,647		2,862		3,217		(646)		1,465
Discount rate change	(30,273)		21,372		(331)		626		(845)		681
Plan amendments	(6,236)		223		(227)		—		—		—

Benefits paid	(57,776)		(64,297)		(1,829)		(1,635)		(1,624)		(1,725)
Projected benefit obligation at end of period	$	773,522	$	760,763	$	31,464	$	26,443	$	23,627	$	24,787
Change in plan assets:
Fair value of plan assets at beginning of period	$	781,412	$	736,150	$	—	$	—	$	—	$	—
Actual (loss) gain on plan assets	22,650		67,559		—		—		—		—
Company contributions	30,000		42,000		1,829		1,635		1,624		1,725

Benefits paid	(57,776)		(64,297)		(1,829)		(1,635)		(1,624)		(1,725)
Fair value of plan assets at end of period	$	776,286	$	781,412	$	—	$	—	$	—	$	—
Funded status at end of period	$	2,764	$	20,649	$	(31,464)	$	(26,443)	$	(23,627)	$	(24,787)
Amounts recognized on balance sheet:
Noncurrent assets	$	11,969	$	20,649	$	—	$	—	$	—	$	—
Accrued benefit cost:
Current liabilities	—		—		(4,890)		(3,950)		(1,630)		(2,080)
Noncurrent liabilities	(9,205)		—		(26,574)		(22,493)		(21,997)		(22,707)
Ending balance	$	2,764	$	20,649	$	(31,464)	$	(26,443)	$	(23,627)	$	(24,787)
Amounts recognized in accumulated other comprehensive loss (pretax):
Prior service cost (credit)	$	(5,219)	$	1,216	$	(227)	$	(47)	$	(490)	$	(935)
Net loss (gain)	278,779		269,122		10,097		8,001		(14,662)		(14,335)
Ending balance	$	273,560	$	270,338	$	9,870	$	7,954	$	(15,152)	$	(15,270)

*Other demographic experience is comprised of all demographic experience different than anticipated, including terminations, retirements, deaths, pay, etc.

The accumulated benefit obligation of the qualified pension plans was $748.1 million and $727.9 million as of August 31, 2025 and 2024, respectively. The accumulated benefit obligation of the nonqualified pension plans was $31.3 million and $26.2 million as of August 31, 2025 and 2024, respectively.

Information for the pension plans with an accumulated benefit obligation in excess of plan assets is set forth below:


	Years Ended August 31,
	2025		2024
	(Dollars in thousands)
Projected benefit obligation	$	31,464	$	26,443
Accumulated benefit obligation	31,272		26,173

Components of net periodic benefit costs for the years ended August 31, 2025, 2024 and 2023, are as follows:


	Qualified Pension Benefits						Nonqualified Pension Benefits						Other Benefits
	2025		2024		2023		2025		2024		2023		2025		2024		2023
	(Dollars in thousands)
Components of net periodic benefit costs:
Service cost	$	43,727	$	37,391	$	38,579	$	3,027	$	1,968	$	1,840	$	844	$	650	$	670
Interest cost	34,898		35,928		30,588		1,154		1,043		741		1,140		1,144		1,035
Expected return on assets	(46,977)		(47,860)		(43,129)		—		—		—		—		—		—

Prior service cost (credit) amortization	199		178		149		(47)		(114)		(114)		(445)		(445)		(445)
Actuarial loss (gain) amortization	12,815		1,796		1,872		799		380		245		(1,192)		(1,616)		(1,615)
Net periodic benefit cost (benefit)	$	44,662	$	27,433	$	28,059	$	4,933	$	3,277	$	2,712	$	347	$	(267)	$	(355)

Components of net periodic benefit costs and amounts recognized in other comprehensive loss (income) for the years ended August 31, 2025, 2024 and 2023, are as follows:


	Qualified Pension Benefits						Nonqualified Pension Benefits						Other Benefits
	2025		2024		2023		2025		2024		2023		2025		2024		2023
	(Dollars in thousands)
Other comprehensive loss (income):
Prior service cost	$	(6,236)	$	223	$	490	$	(227)	$	—	$	—	$	—	$	—	$	—
Net actuarial loss (gain)	22,472		23,309		14,082		2,896		4,087		1,282		(1,519)		2,145		(1,865)
Amortization of actuarial (gain) loss	(12,815)		(1,796)		(1,872)		(799)		(380)		(245)		1,192		1,616		1,615
Amortization of prior service (credit) costs	(199)		(178)		(149)		47		114		114		445		445		445


Total recognized in other comprehensive loss (income)	$	3,222	$	21,558	$	12,551	$	1,917	$	3,821	$	1,151	$	118	$	4,206	$	195

Estimated amortization in fiscal 2026 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 costs (credit)	$	(595)	$	(30)	$	(445)
Amortization of actuarial loss (gain)	16,498		982		(1,197)

Plan assumptions for the years ended August 31, 2025, 2024 and 2023, are as follows:


	Qualified Pension Benefits						Nonqualified Pension Benefits						Other Benefits
	2025		2024		2023		2025		2024		2023		2025		2024		2023
Weighted-average assumptions to determine the net periodic benefit cost:
Interest credit rate	4.68	%	4.80	%	4.65	%	4.68	%	4.80	%	4.65	%	N/A		N/A		N/A
Discount rate	5.12	%	5.38	%	4.69	%	4.78	%	5.22	%	4.48	%	5.01	%	5.33	%	4.64	%
Expected return on plan assets	5.64	%	5.64	%	4.88	%	N/A		N/A		N/A		N/A		N/A		N/A
Rate of compensation increase	4.98	%	4.98	%	4.93	%	4.98	%	4.98	%	4.93	%	N/A		N/A		N/A
Weighted-average assumptions to determine the benefit obligations:
Interest credit rate	4.31	%	4.68	%	4.80	%	4.31	%	4.68	%	4.80	%	N/A		N/A		N/A
Discount rate	5.61	%	5.09	%	5.38	%	4.97	%	4.78	%	5.23	%	5.41	%	5.01	%	5.33	%
Rate of compensation increase	4.58	%	4.98	%	4.98	%	4.58	%	4.98	%	4.98	%	N/A		N/A		N/A

A significant assumption for pension costs and obligations is the discount rate. We use a full-yield curve approach by applying the specific spot rates along the yield curve used in 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.

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.

For measurement purposes, an 8.5% annual rate of increase in the per capita cost of covered health care benefits was assumed for the year ended August 31, 2025. The rate was assumed to decrease gradually to 4.5% by 2035 and remain at that level thereafter. 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	$	200	$	(170)
Effect on postretirement benefit obligation	1,700		(1,700)

Contributions depend primarily on market returns on the pension plan assets and minimum funding level requirements. During fiscal 2025, we made a discretionary contribution of $30.0 million to the pension plans. Based on the funded status of the qualified pension plans as of August 31, 2025, we do not currently believe we will be required to contribute to these plans in fiscal 2026, although we may voluntarily elect to do so. We expect to pay $6.5 million to participants of the nonqualified pension and postretirement benefit plans during fiscal 2026.

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)
2026	$	74,200	$	4,890	$	1,630
2027	74,300		5,080		1,870
2028	74,700		4,770		2,100
2029	76,700		4,510		2,010
2030	81,100		4,490		1,990
2031-2035	392,200		21,730		10,180

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:

•Optimize the long-term returns on plan assets at an acceptable level of risk;

•Maintain 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 as of August 31, 2025 and 2024, are presented in the tables below:


	2025
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Cash and cash equivalents	$	40,786	$	—	$	—	$	40,786
Equities:

Common/collective trust at net asset value (1)	—		—		—		172,659
Fixed income securities:

Common/collective trust at net asset value (1)	—		—		—		426,785
Marketable securities	28,079		85,685		—		113,764
Partnership and joint venture interests measured at net asset value (1)	—		—		—		22,292

Total	$	68,865	$	85,685	$	—	$	776,286


	2024
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Cash and cash equivalents	$	12,416	$	—	$	—	$	12,416
Equities:
Common/collective trust at net asset value (1)	—		—		—		156,462
Fixed income securities:

Common/collective trust at net asset value (1)	—		—		—		464,611
Marketable securities	31,298		93,763		—		125,061
Partnership and joint venture interests measured at net asset value (1)	—		—		—		22,862

Total	$	43,714	$	93,763	$	—	$	781,412

(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.

Marketable securities. Marketable securities are comprised primarily of investments in U.S. Treasury securities which are valued using quoted market prices and classified within Level 1, as well as various government agency obligations and corporate, foreign government and municipal issue fixed income marketable securities, which are valued using institutional bond or broker quotes along with various other market and industry inputs and classified within Level 2.

Partnership and joint venture interests. The net asset value of shares held by the plan at year-end is used to value these assets 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 period.

During fiscal 2024, we ceased our participation in the Co-op Retirement 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.

We have other contributory defined contribution plans covering substantially all employees. Total contributions by us to these plans were $47.1 million, $43.5 million and $38.7 million, for the years ended August 31, 2025, 2024 and 2023, respectively.