FY2021 10-K Document - FINAL 11 15 21 - Flipbook - Page 66
Table of Contents
In determining our U.S. pension expense for 2021, we assumed an average rate of return on U.S. pension assets of
approximately 5.0% measured over a planning horizon with reasonable and acceptable levels of risk. The rate of
return was based on the actual asset allocation of 37% in equity securities and 63% in fixed income securities at
October 3, 2020. As a result of the pension settlement transaction, we modified our asset allocation to align our
investment portfolio to maintain the funded status of the plan. In determining our non-U.S. pension expense for 2021,
we assumed an average rate of return on non-U.S. pension assets of approximately 3.2% measured over a planning
horizon with reasonable and acceptable levels of risk. The rate of return assumed an average asset allocation of 40%
in equity securities and 60% in fixed income securities and other investments.
The weighted average asset allocations by asset category for the pension plans as of October 2, 2021 and October 3,
2020 are as follows:
U.S. Plans
Asset category:
Equity
Fixed Income
Other
Non-U.S. Plans
Target
2021
Actual
2020
Actual
Target
2021
Actual
2020
Actual
30%-40%
60%-70%
—%
35%
65%
—%
37%
63%
—%
25%-45%
45%-65%
5%-15%
32%
63%
5%
24%
38%
38%
The valuation methodologies used for pension plan assets measured at fair value have been applied consistently.
Cash and cash equivalents: Direct cash holdings valued at cost, which approximates fair value.
Money market funds: Institutional short-term investment vehicles valued daily.
Shares of registered investment companies: Consists of both equity and fixed income mutual funds. Valued at quoted
market prices that represent the net asset value ("NAV") of shares held by the plan at year end.
Fixed income securities: Valued using methods, such as dealer quotes, available trade information, spreads, bids and
offers provided by a pricing vendor.
Equity securities: Traded on national exchanges are valued at the last reported sales price. Investments denominated
in foreign currencies are translated into U.S. dollars using the last reported exchange rate.
Collective investment trust: NAV of the fund is calculated daily by the investment manager.
Unit linked life insurance funds: NAV value of the fund is calculated daily by the investment manager.
Investment in insurance contracts: Valued at contract value, which is the fair value of the underlying investment of the
insurance company.
Limited partnerships: Valued at NAV of units held. The NAV is used as a practical expedient to estimate fair value. The
NAV is based on the fair value of the underlying investments held by the fund less its liability. This practical expedient
is not used when it is determined to be probable that the fund will sell the investment for an amount different from the
reported NAV.
Securities or other assets for which market quotations are not readily available or for which market quotations do not
represent the value at the time of pricing (including certain illiquid securities) are fair valued in accordance with
procedures established under the supervision and responsibility of the Trustee of that investment. Such procedures
may include the use of independent pricing services or affiliated advisor pricing, which use prices based upon yields
or prices of securities of comparable quality, coupon, maturity and type, indications as to values from dealers,
operating data and general market conditions.
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