Defined Benefit Pension Plan Settlement and Termination |
9 Months Ended |
|---|---|
Jun. 27, 2026 | |
| Retirement Benefits [Abstract] | |
| Defined Benefit Pension Plan Settlement and Termination | 14. Defined Benefit Pension Plan Settlement and Termination During the latter part of fiscal 2025, the Company initiated actions to terminate its Defined Benefit Pension Plan (the "Plan"). While such actions continued during the first two quarters of fiscal 2026, none of them resulted in a significant financial impact for the Plan or Company. However, during the third quarter of fiscal 2026, the pension benefits earned by the majority of Plan participants were settled via (i) lump-sum cash payments and (ii) the purchase of group annuity contracts from Pacific Life Insurance Company and Pacific Life & Annuity Company (collectively, “Pacific Life”) that irrevocably transferred the future benefit obligations and annuity administration for 2,044 Plan participants or their beneficiaries (“Transferred Participants”) to Pacific Life. This transfer did not affect the amount of the (i) future benefit obligations or (ii) monthly benefit payments for the Transferred Participants, both of which are irrevocably guaranteed by Pacific Life, with Pacific Life assuming responsibility for disbursing monthly benefit payments effective August 1, 2026. The $92.1 million total amount paid for the lump-sum distributions and purchase of the group annuity contracts was funded entirely from Plan assets, with no additional funding required by the Company as part of these transactions. Subsequent to the lump-sum cash payments and purchase of group annuity contracts, the Plan is relieved of the primary responsibility for paying the benefit obligations earned by the impacted Plan participants in future periods, which constitutes a plan settlement. The provisions of ASC 715, Postretirement Benefits, indicate that the settlement of all, or more than a minor portion, of a pension plan benefit obligation represents an event that requires the recognition in income of all, or part, of the net gain or loss deferred in accumulated other comprehensive income or loss. However, such guidance also requires that the Plan's benefit obligations and assets be remeasured immediately prior to computing and recognizing a settlement gain or loss. During the third quarter of fiscal 2026, the Company, with assistance from its external actuarial specialist, remeasured the Plan's benefit obligations and assets, which resulted in a $13.1 million increase, $10.0 million decrease and $3.1 million increase in the pension, accumulated other comprehensive loss and deferred tax liabilities balances, respectively, included on the Condensed Consolidated Balance Sheet as of June 27, 2026. Subsequently, since the Plan settled over 99% of its remeasured benefit obligations during the third quarter of fiscal 2026, the Company recognized a $19.6 million settlement loss during the three and nine months ended June 27, 2026, which is included within other income (expense), net on the Condensed Consolidated Statements of Operations. The recording of such loss resulted in a $17.9 million decrease and $1.7 million increase in the accumulated other comprehensive loss and deferred tax liabilities balances, respectively, included on the Condensed Consolidated Balance Sheet as of June 27, 2026. At June 27, 2026, the $17.7 million pension balance included on the Condensed Consolidated Balance Sheet is comprised of Plan assets and benefit obligations approximating $18.5 million and $0.8 million, respectively. The benefit obligations are expected to be settled via (i) the monthly benefit payment to retirees during July 2026, which are expected to approximate $0.7 million, and (ii) the transfer of the approximate $0.1 million of pension benefits for the small number of remaining Plan participants via a cash payment to the Pension Benefit Guaranty Corporation ("PBGC") prior to the end of 2026, both using Plan assets. The settlement of these benefit obligations will result in the recording of an additional settlement loss on the Condensed Consolidated Statements of Operations during the fourth quarter of fiscal 2026, and perhaps in a subsequent period depending on the timing of making such payments, which is not expected to be material. The Plan's assets will also be used to pay Plan expenses in future periods, which include the fees charged by external service providers that assisted with the termination process as well as regulatory fees and expenses. Following the settlement of the benefit obligations and Plan expenses discussed above, the Plan's remaining excess assets will be available to return to the Company and the Plan will terminate.
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