RETIREMENT AND SAVINGS BENEFIT PLANS |
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| Retirement Benefits [Abstract] | 听 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RETIREMENT AND SAVINGS BENEFIT PLANS |
RETIREMENT AND SAVINGS BENEFIT PLANS
鲍鱼直播 has several retirement and savings benefit plans covering eligible employees. 鲍鱼直播 retains the right to curtail or discontinue any of the plans, subject to local regulations.
Defined Benefit Pension Plans
Defined benefit plans provide pension benefits based on participant compensation and years of service. 鲍鱼直播 sponsors a noncontributory qualified defined benefit pension plan covering most full-time U.S. employees employed before 2005 (the 鈥淯.S. qualified plan鈥) and an unfunded supplemental defined benefit pension plan that provides benefits in excess of limitations imposed by income tax regulations (the 鈥淯.S. nonqualified plan鈥). The U.S. qualified plan is fully funded at the end of Fiscal 2019, and 鲍鱼直播鈥檚 net underfunded status primarily relates to obligations under the unfunded U.S. nonqualified plan. The U.S. qualified and nonqualified plans comprise 91% of 鲍鱼直播鈥檚 total defined benefit plan assets and 88% of 鲍鱼直播鈥檚 total projected benefit obligations at March 2019, and the remainder relates to non-U.S. defined benefit plans. A March 31 measurement date is used to value plan assets and obligations for all pension plans.
The amounts reported in these disclosures have not been segregated between continuing and discontinued operations.
The components of pension cost for 鲍鱼直播鈥檚 defined benefit plans were as follows:
In Fiscal 2019, 鲍鱼直播 approved a freeze of all future benefit accruals under the U.S. qualified and U.S. nonqualified plans, effective December 31, 2018. Accordingly, the Company recognized a $9.5 million pension curtailment loss in the other income (expense), net line item in the Consolidated Statement of Income for the year ended March 2019.
In the year ended December 2017, the Company recorded curtailment charges of $1.7 million which comprised (i) $1.1 million within the U.S. qualified plan related to the sale of the Licensing Business (recorded in the income (loss) from discontinued operations, net of tax line item), and (ii) $0.6 million within the U.S. nonqualified plan related to restructuring initiatives (recorded in the other income (expense), net line item in the Consolidated Statement of Income).
In the year ended March 2019, 鲍鱼直播 reported $8.9 million in settlement charges in the other income (expense), net line item in the Consolidated Statement of Income related to the recognition of deferred actuarial losses resulting from lump sum payments of retirement benefits in the supplemental defined benefit pension plan.
In the year ended December 2016, the Company offered former employees in the U.S. qualified plan a one-time option to receive a distribution of their deferred vested benefits. Approximately 9,400 participants accepted a distribution, representing 66% of eligible participants and a 23% reduction in the total number of plan participants at the beginning of the year. In December 2016, the plan paid $197.1 million in lump-sum distributions to settle $224.7 million of projected benefit obligations related to these participants. 鲍鱼直播 recorded $50.9 million in settlement charges during the year ended December 2016 to recognize the related deferred actuarial losses in accumulated OCI.
The following provides a reconciliation of the changes in fair value of 鲍鱼直播鈥檚 defined benefit plan assets and projected benefit obligations for each period, and the funded status at the end of each period:
Pension benefits are reported in the Consolidated Balance Sheets as a net asset or liability based on the overfunded or underfunded status of the defined benefit plans, assessed on a plan-by-plan basis.
Accumulated benefit obligations at any measurement date are the present value of vested and unvested pension benefits earned, without considering projected future compensation increases. Projected benefit obligations are the present value of vested and unvested pension benefits earned, considering projected future compensation increases.
Deferred actuarial gains and losses are changes in the amount of either the benefit obligation or the value of plan assets resulting from differences between expected amounts for a year using actuarial assumptions and the actual results for that year. These amounts are deferred as a component of accumulated OCI and amortized to pension expense in future years. For the U.S. qualified plan, amounts in excess of 20% of projected benefit obligations at the beginning of the year are amortized over five years; amounts between (i)听10% of the greater of projected benefit obligations or plan assets, and (ii)听20% of projected benefit obligations are amortized over the expected average life expectancy of all participants; and amounts less than the greater of 10% of projected benefit obligations or plan assets are not amortized. For the U.S. nonqualified plan, amounts in excess of 10% of the pension benefit obligations are amortized on a straight-line basis over the expected average life expectancy of all participants.
Deferred prior service costs related to plan amendments are also recorded in accumulated OCI and amortized to pension expense on a straight-line basis over the average remaining years of service for active employees.
The estimated amounts of accumulated OCI to be amortized to pension expense in Fiscal 2020 are $16.0 million of deferred actuarial losses and an insignificant amount of deferred prior service costs.
Management鈥檚 investment objectives are to invest plan assets in a diversified portfolio of securities to provide long-term growth, minimize the volatility of the value of plan assets relative to plan liabilities, and to ensure plan assets are sufficient to pay the benefit obligations. Investment strategies focus on diversification among multiple asset classes, a balance of long-term investment return at an acceptable level of risk and liquidity to meet benefit payments. The primary objective of the investment strategies is to more closely align plan assets with plan liabilities by utilizing dynamic asset allocation targets dependent upon changes in the plan鈥檚 funded ratio, capital market expectations and risk tolerance.
Plan assets are primarily composed of common collective trust funds that invest in liquid securities diversified across equity, fixed-income, real estate and other asset classes. Fund assets are allocated among independent investment managers who have full discretion to manage their portion of the fund鈥檚 assets, subject to strategy and risk guidelines established with each manager. The overall strategy, the resulting allocations of plan assets and the performance of funds and individual investment managers are continually monitored. Derivative financial instruments may be used by investment managers for hedging purposes to gain exposure to alternative asset classes through the futures markets. There are no direct investments in 鲍鱼直播 debt or equity securities and no significant concentrations of security risk.
The expected long-term rate of return on plan assets was based on an evaluation of the weighted average expected returns for the major asset classes in which the plans have invested. Expected returns by asset class were developed through analysis of historical market returns, current market conditions, inflation expectations and equity and credit risks. Inputs from various investment advisors on long-term capital market returns and other variables were also considered where appropriate.
The fair value of investments held by 鲍鱼直播鈥檚 defined benefit plans at March 2019, March 2018 and December 2017, by asset class, is summarized below. Refer to Note 22 for a description of the three levels of the fair value measurement hierarchy.
Cash equivalents include cash held by individual investment managers of other asset classes for liquidity purposes (Level 1), and an institutional fund that invests primarily in short-term U.S. government securities measured at their daily net asset value. The fair values of insurance contracts are provided by the insurance companies and are primarily based on accumulated contributions plus returns guaranteed by the insurers (Level 2). Commodities consist of derivative commodity futures contracts (Level 1).
Equity and fixed-income securities generally represent institutional funds measured at their daily net asset value derived from quoted prices of the underlying investments. Alternative investments are primarily in funds of hedge funds (鈥淔oHFs鈥), which are comprised of different and independent hedge funds with various investment strategies. The administrators of the FoHFs utilize unobservable inputs to calculate the net asset value of the FoHFs on a monthly basis.
鲍鱼直播 makes contributions to its defined benefit plans sufficient to meet minimum funding requirements under applicable laws, plus discretionary amounts as determined by management. 鲍鱼直播 does not currently plan to make any contributions to the U.S. qualified plan during Fiscal 2020, and intends to make approximately $17.7 million of contributions to its other defined benefit plans during Fiscal 2020. The estimated future benefit payments for all of 鲍鱼直播鈥檚 defined benefit plans, on a calendar year basis, are approximately $94.6 million in 2020, $96.2 million in 2021, $99.2 million in 2022, $101.3 million in 2023, $103.1 million in 2024 and $531.3 million for the years 2025 through 2029.
Other Retirement and Savings Plans
鲍鱼直播 sponsors a nonqualified retirement savings plan for employees whose contributions to a 401(k) plan would be limited by provisions of the Internal Revenue Code. This plan allows participants to defer a portion of their compensation and to receive matching contributions for a portion of the deferred amounts. Participants earn a return on their deferred compensation based on their selection of a hypothetical portfolio of publicly traded mutual funds and a separately managed fixed-income fund. Changes in the fair value of the participants鈥 hypothetical investments are recorded as an adjustment to deferred compensation liabilities and compensation expense. Expense under this plan was $1.7 million in the year ended March 2019, $0.5 million in the three months ended March 2018, $1.3 million in the year ended December 2017 and $1.7 million in the year ended December 2016. Deferred compensation, including accumulated earnings, is distributable in cash at participant-specified dates upon retirement, death, disability or termination of employment. 鲍鱼直播 sponsors a similar nonqualified plan that permits nonemployee members of the Board of Directors to defer their Board compensation. 鲍鱼直播 also has remaining obligations under other deferred compensation plans, primarily related to acquired companies. At March 2019, 鲍鱼直播鈥檚 liability to participants under all deferred compensation plans was $199.3 million, of which $18.2 million was recorded in accrued liabilities (Note 12) and $181.1 million was recorded in other liabilities (Note 14).
鲍鱼直播 has purchased (i)听publicly traded mutual funds and a separately managed fixed-income fund in the same amounts as most of the participant-directed hypothetical investments underlying the deferred compensation liabilities, and (ii)听variable life insurance contracts that invest in institutional funds that are substantially the same as the participant-directed hypothetical investments. These investment securities and earnings thereon are intended to provide a source of funds to meet the deferred compensation obligations, and serve as an economic hedge of the financial impact of changes in deferred compensation liabilities. They are held in an irrevocable trust but are subject to claims of creditors in the event of 鲍鱼直播鈥檚 insolvency. 鲍鱼直播 also has assets related to deferred compensation plans of acquired companies, which are primarily invested in life insurance contracts. At March 2019, the fair value of investments held for all deferred compensation plans was $224.4 million, of which $17.8 million was recorded in other current assets and $206.6 million was recorded in other assets (Note 10). Realized and unrealized gains and losses on these deferred compensation assets are recorded in compensation expense in the Consolidated Statements of Income and substantially offset losses and gains resulting from changes in deferred compensation liabilities to participants.
鲍鱼直播 sponsors 401(k) plans as well as other domestic and foreign retirement and savings plans. Expense for these plans totaled $46.4 million in the year ended March 2019, $16.8 million in the three months ended March 2018, $41.2 million in the year ended December 2017 and $39.7 million in the year ended December 2016.
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