FY2021 10-K Document - FINAL 11 15 21 - Flipbook - Page 65
Table of Contents
The following table provides aggregate information for the pension plans, which have projected benefit obligations in
excess of plan assets:
October 2,
2021
$
256,084
64,143
Projected benefit obligation
Fair value of plan assets
October 3,
2020
$
312,995
111,776
Weighted-average assumptions used to determine net periodic benefit cost and weighted-average assumptions used
to determine benefit obligations as of the measurement dates are as follows:
U.S. Plans
2021
Assumptions for net periodic benefit cost:
Service cost discount rate
Interest cost discount rate
Return on assets
Rate of compensation increase
Assumptions for benefit obligations:
Discount rate
Rate of compensation increase
3.1
2.6
5.0
3.3
%
%
%
%
3.2 %
3.5 %
Non-U.S. Plans
2020
2019
3.5
2.9
4.5
2.9
4.4
4.1
5.3
3.5
%
%
%
%
3.0 %
3.3 %
2021
%
%
%
%
3.3 %
2.9 %
1.5
1.2
3.2
2.6
2020
%
%
%
%
1.8 %
2.8 %
1.6
1.3
2.7
2.1
2019
%
%
%
%
1.4 %
2.2 %
2.9
2.6
3.5
2.5
%
%
%
%
1.6 %
2.1 %
Pension plan investment policies and strategies are developed on a plan specific basis, which varies by country. The
overall objective for the long-term expected return on both domestic and international plan assets is to earn a rate of
return over time to meet anticipated benefit payments in accordance with plan provisions. The long-term investment
objective of both the domestic and international retirement plans is to maintain the economic value of plan assets and
future contributions by producing positive rates of investment return after subtracting inflation, benefit payments and
expenses. Each of the plan’s strategic asset allocations is based on this long-term perspective and short-term
fluctuations are viewed with appropriate perspective.
The U.S. qualified defined benefit plan’s assets are invested for long-term investment results. To accommodate the
long-term investment horizon while providing appropriate liquidity, the plan maintains a liquid cash reserve sufficient to
allow the plan to meet its benefit payment, fee and expense obligations. Its assets are broadly diversified to help
alleviate the risk of adverse returns in any one security or investment class. The international plans’ assets are
invested in both low-risk and high-risk investments in order to achieve the long-term investment strategy objective.
Investment risks for both domestic and international plans are considered within the context of the entire asset
allocation, rather than on a security-by-security basis.
The U.S. qualified defined benefit plan and certain international plans have investment committees that are
responsible for formulating investment policies, developing manager guidelines and objectives and approving and
managing qualified advisors and investment managers. The guidelines established for each of the plans define
permitted investments within each asset class and apply certain restrictions such as limits on concentrated holdings in
order to meet overall investment objectives.
Pension obligations and the related costs are determined using actuarial valuations that involve several assumptions.
The return on assets assumption reflects the average rate of return expected on funds invested or to be invested to
provide for the benefits included in the projected benefit obligation. In determining the return on assets assumption,
we consider the relative weighting of plan assets, the historical performance of total plan assets and individual asset
classes and economic and other indicators of future performance. Asset management objectives include maintaining
an adequate level of diversification to reduce interest rate and market risk and to provide adequate liquidity to meet
immediate and future benefit payment requirements.
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