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Commitments and Contingencies
12 Months Ended
Jan. 02, 2021
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 9 – Commitments and Contingencies

The Company is engaged from time-to-time in routine legal proceedings incidental to its business. The Company does not believe that these routine legal proceedings, taken as a whole, will have a material impact on its business or financial condition. While the ultimate effect of such actions cannot be predicted with certainty, management believes that their outcome will not result in an adverse effect on the Company’s consolidated financial position, operating results or liquidity.

The Company subleases property at certain locations and for 2020, 2019 and 2018, received rental income of $4.0 million, $4.0 million and $3.6 million, respectively. In the event of customer default, the Company would be responsible for fulfilling these lease obligations. Future payment obligations under these leases are disclosed in Note 10. Contingencies related to credit risk and collectability are disclosed in Note 3.

Unions represent approximately 7% of SpartanNash’s associates. These associates are covered by collective bargaining agreements (“CBAs”). The facilities covered by CBAs, the unions representing the covered associates and the expiration dates for each existing CBA are provided in the following table:

 

Distribution Center Locations

 

Union Locals

 

Expiration Dates

Landover, Maryland

 

IBT 639

 

March, 2021

Lima, Ohio

 

IBT 908

 

January 2022

Bellefontaine, Ohio GTL Truck Lines, Inc.

 

IBT 908

 

February 2022

Bellefontaine, Ohio General Merchandise Service Division

 

IBT 908

 

February 2022

Norfolk, Virginia

 

IBT 822

 

April 2022

Columbus, Georgia

 

IBT 528

 

September 2022

Grand Rapids, Michigan

 

IBT 406

 

October 2022

 

The Company contributes to the Central States Southeast and Southwest Pension Fund (“Central States Plan” or “the Plan”), a multi-employer pension plan, in accordance with provisions in place in collective bargaining agreements covering its supply chain operations in Bellefontaine, Lima, and Grand Rapids. This Plan provides retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Trustees are appointed by contributing employers and unions; however, SpartanNash is not a trustee of the Plan. The trustees typically are responsible for determining the level of benefits to be provided to participants, as well as for such matters as the investment of the assets held in trust and the overall administration of the plan. The Company currently contributes to the Plan under the terms outlined in the “Primary Schedule” of Central States’ Rehabilitation Plan or those outlined in the “Default Schedule.” Both the Primary and Default schedules require varying increases in employer contributions over the previous year’s contribution. Increases are negotiated within each collective bargaining agreement and vary by location. The Plan continues to be in red zone status, and according to the Pension Protection Act (“PPA”), is considered to be in “critical and declining” zone status. Among other factors, plans in the “critical and declining” zone are generally less than 65% funded and are projected to become insolvent within the next 15 years (or 20 years depending on the ratio of active-to-inactive participants).

Based on the most recent information available to the Company, management believes that the present value of actuarial accrued liabilities in this multi-employer plan significantly exceeds the value of the assets held in trust to pay benefits. Because SpartanNash is one of a number of employers contributing to this plan, it is difficult to estimate the amount of the underfunding. Management is not aware of any significant change in funding levels since January 2, 2021. To reduce this underfunding, management expects multi-employer pension plan contributions to increase in future years. Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and can be reasonably determined.