鲍鱼直播

Annual report pursuant to Section 13 and 15(d)

RETIREMENT AND SAVINGS BENEFIT PLANS

v3.22.1
RETIREMENT AND SAVINGS BENEFIT PLANS
 12 Months Ended
Apr. 02, 2022
Retirement Benefits [Abstract] 听
RETIREMENT AND SAVINGS BENEFIT PLANS RETIREMENT AND SAVINGS BENEFIT PLANS
鲍鱼直播 has various 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 2022,
and 鲍鱼直播鈥檚 net underfunded status primarily relates to obligations under the unfunded U.S. nonqualified plan. As of December 31, 2018, the U.S. qualified defined benefit pension plan and supplemental defined benefit pension plan were frozen for all future benefit accruals. The U.S. qualified and nonqualified plans comprise 89% of 鲍鱼直播鈥檚 total defined benefit plan assets and 87% of 鲍鱼直播鈥檚 total projected benefit obligations at March 2022, 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 (income) for 鲍鱼直播鈥檚 defined benefit plans were as follows:
Year Ended March
(In thousands) 2022 2021 2020
Service cost 鈥 benefits earned during the period $ 14,288听 $ 15,747听 $ 14,476听
Interest cost on projected benefit obligations 37,534听 47,316听 55,575听
Expected return on plan assets (77,432) (83,107) (91,309)
Settlement charges 7,466听 1,584听 27,443听
Curtailments 鈥斕 920听 鈥斕
Transfers to Kontoor Brands 鈥斕 鈥斕 668听
Amortization of deferred amounts:
Net deferred actuarial losses 11,310听 11,911听 14,848听
Deferred prior service costs (credits) (440) (81) 1,887听
Net periodic pension cost (income) $ (7,274) $ (5,710) $ 23,588听
Weighted average actuarial assumptions used to determine pension cost (income):
Discount rate in effect for determining service cost 0.46听 % 1.32听 % 1.46听 %
Discount rate in effect for determining interest cost 2.16听 % 2.82听 % 3.20听 %
Expected long-term return on plan assets 4.53听 % 4.97听 % 5.40听 %
Rate of compensation increase (a)
2.01听 % 2.04听 % 2.74听 %
(a)Rate of compensation increase is calculated as the weighted average rate of compensation increase for active plans. Frozen plans are excluded from the calculation.
鲍鱼直播 recorded $7.5 million, $1.6 million and $4.4 million of settlement charges in the other income (expense), net line item in the Consolidated Statements of Operations for the years ended March 2022, 2021 and 2020, respectively. These settlement charges related to the recognition of deferred actuarial losses resulting from lump-sum payments of retirement benefits in the U.S. nonqualified plan.
Additionally, in the year ended March 2020, the Company offered former employees in the U.S. qualified plan a lump-sum option to receive a distribution of their deferred vested benefits. 鲍鱼直播 recorded a $23.0听million settlement charge in the other income (expense), net line item in the Consolidated Statement of Operations during the year ended March 2020 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:
(In thousands) March 2022 March 2021
Fair value of plan assets, beginning of period $ 1,755,414听 $ 1,712,775听
Actual return on plan assets (26,855) 110,467听
鲍鱼直播 contributions 34,035听 17,714听
Participant contributions 5,026听 4,434听
Benefits paid (118,389) (101,753)
Currency translation (5,796) 11,777听
Fair value of plan assets, end of period 1,643,435听 1,755,414听
Projected benefit obligations, beginning of period 1,741,710听 1,726,776听
Service cost 14,288听 15,747听
Interest cost 37,534听 47,316听
Participant contributions 5,026听 4,434听
Actuarial (gain) loss (117,214) 40,264听
Benefits paid (118,389) (101,753)
Plan amendments 鈥斕 (3,098)
Curtailments 鈥斕 (729)
Currency translation (5,240) 12,753听
Projected benefit obligations, end of period (a)
1,557,715听 1,741,710听
Funded status, end of period $ 85,720听 $ 13,704听
(a)The changes in projected benefit obligations in the years ended March 2022 and 2021 were driven by actuarial gains and losses, respectively, primarily as a result of changes in discount rates.
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.
(In thousands) March 2022 March 2021
Amounts included in Consolidated Balance Sheets:
Other assets (Note 11) 213,820听 $ 197,484听
Accrued liabilities (Note 13) (16,927) (17,030)
Other liabilities (Note 15) (111,173) (166,750)
Funded status $ 85,720 $ 13,704听
Accumulated other comprehensive loss, pretax:
Net deferred actuarial losses $ 326,929 $ 358,916听
Net deferred prior service credits (4,204) (4,588)
Total accumulated other comprehensive loss, pretax $ 322,725 $ 354,328听
Accumulated benefit obligations $ 1,539,593 $ 1,710,678听
Weighted average actuarial assumptions used to determine pension obligations:
Discount rate 3.65听 % 2.94%
Rate of compensation increase (a)
1.95听 % 2.30%
(a)Rate of compensation increase is calculated as the weighted average rate of compensation increase for active plans. Frozen plans are excluded from the calculation.
The actuarial model utilizes discount rates, which are used to estimate the present value of future cash outflows necessary to meet the projected benefit obligations for 鲍鱼直播's defined benefit plans. The discount rates reflect the estimated interest rate that 鲍鱼直播 could use to settle its projected benefit obligations at the valuation date. The discount rate assumption is based on current market interest rates. 鲍鱼直播 selects a discount rate for each defined benefit pension plan by matching high quality corporate bond yields to the timing of the projected benefit payments to participants in each plan. 鲍鱼直播 uses the spot rate approach to measure service and interest costs. Under the spot rate approach, the full yield curve is applied separately to cash flows for each projected benefit obligation, service cost, and interest cost for a more precise calculation.
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 cost (income) 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 credits related to plan amendments are also recorded in accumulated OCI and amortized to pension cost (income) on a straight-line basis over the average remaining years of service for active employees.
The following provides information for 鲍鱼直播's defined benefit plans with projected benefit obligations and accumulated benefit obligations in excess of plan assets:
(In thousands) March 2022 March 2021
Projected benefit obligations $ 213,002听 $ 268,277听
Accumulated benefit obligations 194,879听 237,245听
Fair value of plan assets 84,902听 84,497听
The net amount of projected benefit obligations and plan assets for underfunded defined benefit plans was $128.1听million and $183.8 million as of March 2022 and 2021, respectively, and was reported in accrued liabilities and other liabilities in the Consolidated Balance Sheets.

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 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 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 2022 and March 2021, by asset class, is summarized below. Refer to Note 23 for a description of the three levels of the fair value measurement hierarchy.
听 Total Plan
Assets		 Fair Value Measurements
(In thousands) Level 1 Level 2 Level听3
March 2022
Plan assets
Cash equivalents $ 5,761听 $ 5,761听 $ 鈥斕 $ 鈥斕
Fixed income securities:
U.S. Treasury and government agencies 4听 鈥斕 4听 鈥斕
Insurance contracts 88,574听 鈥斕 88,574听 鈥斕
Futures contracts (2,812) (2,812) 鈥斕 鈥斕
Total plan assets in the fair value hierarchy 91,527听 $ 2,949听 $ 88,578听 $ 鈥听
Plan assets measured at net asset value
Cash equivalents 73,849听
Equity securities:
Domestic 94,844听
International 77,468听
Fixed income securities:
Corporate and international bonds 1,177,421听
Alternative investments 128,326听
Total plan assets measured at net asset value 1,551,908听
Total plan assets $ 1,643,435听

听 Total Plan
Assets		 Fair Value Measurements
(In thousands) Level 1 Level 2 Level听3
March 2021
Plan assets
Cash equivalents $ 7,410听 $ 7,410听 $ 鈥斕 $ 鈥斕
Fixed income securities:
U.S. Treasury and government agencies 5听 鈥斕 5听 鈥斕
Insurance contracts 84,497听 鈥斕 84,497听 鈥斕
Futures contracts (4,452) (4,452) 鈥斕 鈥斕
Total plan assets in the fair value hierarchy 87,460听 $ 2,958听 $ 84,502听 $ 鈥听
Plan assets measured at net asset value
Cash equivalents 78,191听
Equity securities:
Domestic 96,509听
International 88,488听
Fixed income securities:
Corporate and international bonds 1,240,551听
Alternative investments 164,215听
Total plan assets measured at net asset value 1,667,954听
Total plan assets $ 1,755,414听
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). Futures contracts consist of U.S. Treasury bond 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 2023, and intends to make approximately $26.2 million of contributions to its other defined benefit plans during Fiscal 2023. The estimated future benefit payments for all of 鲍鱼直播鈥檚 defined benefit plans, are approximately $106.4 million in 2023, $101.5 million in 2024, $102.6 million in 2025, $99.3 million in 2026, $99.8 million in 2027 and $484.0 million for the years 2028 through 2032.
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 $1.3 million, $1.4 million and $2.7 million in the years ended March 2022, 2021 and 2020, respectively. 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 2022, 鲍鱼直播鈥檚 liability to participants under all deferred compensation plans was $129.1听million, of which $14.7 million was recorded in accrued liabilities (Note 13) and $114.4 million was recorded in other liabilities (Note 15).
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 2022, the value of investments held for all deferred compensation plans was $179.7 million, of which $13.9 million was recorded in other current assets and $165.8 million was recorded in other assets (Note 11). Realized and unrealized gains and losses on these deferred compensation assets are recorded in compensation expense in the Consolidated Statements of Operations 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 $42.0 million, $34.5 million and $48.7 million in the years ended March 2022, 2021 and 2020, respectively.