18. PENSION AND POSTRETIREMENT BENEFITS

We have defined benefit retirement plans (“pension plans”) for eligible salaried and hourly employees. Benefits are based on years of credited service and average compensation or stated amounts for each year of service. We also sponsor postretirement plans which provide certain medical and dental benefits to qualifying U.S. employees. Effective August 1, 2013, our defined benefit pension plan for eligible salaried employees was closed to new hire salaried employees. New hire salaried employees will generally be eligible to participate in our defined contribution plan.

During fiscal 2026, in connection with the termination and settlement of a pension plan for the benefit of certain hourly employees, we transferred $40.3 million of our U.S. defined benefit pension plan obligations to an insurance company through the purchase of an irrevocable group annuity contract. The group annuity contract was purchased and funded directly from the assets of our pension plans, resulting in an immaterial actuarial loss in other comprehensive income. As a result of this transaction, we recognized a noncash pre-tax settlement loss of $2.7 million in pension and postretirement non-service income in the fourth quarter of fiscal 2026.

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During fiscal 2025, we transferred $760.6 million of our U.S. defined benefit pension plan obligations to an insurance company through the purchase of an irrevocable group annuity contract (the “U.S. buy-out contract”). This included approximately 22,000 retired participants in the salaried and hourly pension plans. The group annuity contract was purchased and funded directly with $678.3 million from the assets of our pension plans, resulting in an actuarial gain of $82.3 million in other comprehensive income (loss). As a result of this transaction, we recognized a noncash pre-tax settlement gain of $13.0 million in pension and postretirement non-service income in the fourth quarter of fiscal 2025.

During the second quarter of fiscal 2024, the Company provided a voluntary lump-sum settlement offer to certain vested participants in the salaried and hourly pension plans in order to reduce a portion of the pension obligation. During the third quarter of fiscal 2024, approximately $135 million was distributed from the pension plan assets in connection with this offer. The lump-sum settlement did exceed our service and interest cost for our hourly pension plans, which required a remeasurement in the third quarter of fiscal 2024. In connection with the remeasurement, we updated the effective discount rate assumption for the impacted pension plan obligations from 5.52% to 5.20%, as of December 31, 2023. The settlement and related remeasurement resulted in the recognition of an immaterial settlement loss, reflected in pension and postretirement non-service income, as well as a loss in other comprehensive income (loss) totaling $6.8 million in the third quarter of fiscal 2024.

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We recognize the funded status of our pension and postretirement plans in the Consolidated Balance Sheets. For our pension plans, we also recognize as a component of accumulated other comprehensive income, the net of tax results of the actuarial gains or losses within the corridor and prior service costs or credits that arise during the period but are not recognized in net periodic benefit cost. For our postretirement plans, we also recognize as a component of accumulated other comprehensive income, the net of tax results of the gains or losses and prior service costs or credits that arise during the period but are not recognized in net periodic benefit cost. These amounts will be adjusted out of accumulated other comprehensive income as they are subsequently recognized as components of net periodic benefit cost. For our pension plans, we have elected to immediately recognize actuarial gains and losses in our operating results in the year in which they occur, to the extent they exceed the corridor, eliminating amortization. Amounts are included in the components of pension and postretirement plan costs, below, as recognized net actuarial loss (gain).

The changes in benefit obligations and plan assets at May 31, 2026 and May 25, 2025 are presented in the following table.

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The $66.5 million actuarial loss increasing our projected benefit obligation at the end of fiscal 2026 is principally related to the decrease in the discount rate from 5.91% to 5.65%. 

The funded status and amounts recognized in our Consolidated Balance Sheets at May 31, 2026 and May 25, 2025 were as follows:

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The accumulated benefit obligation for all defined benefit pension plans was $1.68 billion and $1.69 billion at May 31, 2026 and May 25, 2025, respectively.

The projected benefit obligation and accumulated benefit obligation for pension plans with accumulated benefit obligations in excess of plan assets at May 31, 2026 and May 25, 2025 were as follows:

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Components of pension and postretirement plan costs included:

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In fiscal 2026, 2025, and 2024, the Company recorded gains of $25.2 million, $3.5 million, and $12.5 million, respectively, reflecting the year-end write-off of actuarial gains and losses in excess of 10% of our pension liability.

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Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) were as follows:

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Weighted-Average Actuarial Assumptions Used to Determine Net Expense

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The Company uses a split discount rate (spot-rate approach) for the U.S. plans and certain foreign plans. The spot-rate approach applies separate discount rates for each projected benefit payment in the calculation of pension service and interest cost.

We amortize prior service cost for our pension and postretirement plans, as well as amortizable gains and losses for our postretirement plans, in equal annual amounts over the average expected future period of vested service. For plans with no active participants, average life expectancy is used instead of average expected useful service.

Plan Assets

The fair value of plan assets, summarized by level within the fair value hierarchy described in Note 19, as of May 31, 2026, was as follows:

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The fair value of plan assets, summarized by level within the fair value hierarchy described in Note 19, as of May 25, 2025, was as follows:

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Level 1 assets are valued based on quoted prices in active markets for identical securities. The majority of the Level 1 assets listed above include the common stock of both U.S. and international companies, mutual funds, and master limited partnership units, all of which are actively traded and priced in the market.

Level 2 assets are valued based on other significant observable inputs including quoted prices for similar securities, yield curves, indices, etc. Level 2 assets consist primarily of individual fixed income securities where values are based on quoted prices of similar securities and observable market data.

Level 3 assets consist of investments where active market pricing is not readily available and, as such, fair value is estimated using significant unobservable inputs.

Certain assets that are measured at fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. Such investments are generally considered long-term in nature with varying redemption availability. For certain of these investments, with a fair value of approximately $21.9 million as of May 31, 2026, the asset managers have the ability to impose customary redemption gates which may further restrict or limit the redemption of invested funds therein. As of May 31, 2026, no such gates were imposed.

As of May 31, 2026, we have unfunded commitments for additional investments of $32.0 million in private equity funds and $5.4 million in natural resources funds. We expect unfunded commitments to be funded from plan assets rather than the general assets of the Company.

To develop the expected long-term rate of return on plan assets assumption for the pension plans, we consider the current asset allocation strategy, the historical investment performance, and the expectations for future returns of each asset class.

Our pension plan weighted-average asset allocations by asset category were as follows:

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The Company’s pension asset strategy is designed to align our pension plan assets with our projected benefit obligation to reduce volatility by targeting an investment strategy of approximately 90% in fixed-income securities and approximately 10% in return seeking assets, primarily equity securities, real estate, and private assets.

Assumed health care cost trend rates have a significant effect on the benefit obligation of the postretirement plans.

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We currently anticipate making contributions of approximately $10.3 million to our pension plans in fiscal 2027. We anticipate making contributions of $6.1 million to our other postretirement plans in fiscal 2027. These estimates are based on ERISA guidelines, current tax laws, plan asset performance, and liability assumptions, which are subject to change.

The following table presents estimated future gross benefit payments for our plans:

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Multiemployer Pension Plans

The Company contributes to several multiemployer defined benefit pension plans under collective bargaining agreements that cover certain units of its union-represented employees. The risks of participating in such plans are different from the risks of single-employer plans, in the following respects:

The Company’s participation in multiemployer plans for the fiscal year ended May 31, 2026 is outlined in the table below. For each plan that is individually significant to the Company the following information is provided:

For plans that are not individually significant to Conagra Brands the total amount of contributions is presented in the aggregate.

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The Company was not listed in the Forms 5500 filed by any of the other plans or for any of the other years as providing more than 5% of the plan’s total contributions. At the date our financial statements were issued, Forms 5500 were not available for plan years ending in calendar year 2025.

Certain employees are covered under defined contribution plans. The expense related to these plans was $65.3 million, $66.7 million, and $62.3 million in fiscal 2026, 2025, and 2024, respectively.