v3.26.3
Retirement Plans
 9 Months Ended
Sep. 27, 2026
Retirement Benefits [Abstract]  
Retirement Plans

Q. RETIREMENT PLANS

ASC 715, “Compensation—Retirement Benefits,” requires an employer with defined benefit plans or other postretirement benefit plans to recognize an asset or a liability on its balance sheet for the overfunded or underfunded status of the plans as defined by ASC 715. The pension asset or liability represents a difference between the fair value of the pension plan’s assets and the projected benefit obligation at December 31. Teradyne uses a December 31 measurement date for all its plans.

Defined Benefit Pension Plans

Teradyne has defined benefit pension plans covering a portion of domestic employees and employees of certain non-U.S. subsidiaries. Benefits under these plans are based on employees’ years of service and compensation. Teradyne’s funding policy is to make contributions to these plans in accordance with local laws and to the extent that such contributions are tax deductible. The assets of the U.S. qualified pension plan consist primarily of fixed income and equity securities. In addition, Teradyne has an unfunded supplemental executive defined benefit plan in the United States to provide retirement benefits in excess of levels allowed by the Employee Retirement Income Security Act (“ERISA”) and the Internal Revenue Code (the “IRC”), as well as unfunded qualified foreign plans.

During the three months ended September 27, 2026, Teradyne recognized a non-cash settlement gain of $0.1 million related to lump sum distributions paid to retired or terminated employees. The gain is the result of the aggregate of the cumulative lump sum distributions exceeding the total annual service and interest costs. Due to the remeasurement, the reduction in pension benefit obligation and pension assets was $4.6 million.

During the three months ended September 28, 2025, Teradyne recognized a non-cash settlement gain of $0.8 million related to lump sum distributions paid to retired or terminated employees. The gain is the result of the aggregate of the cumulative lump sum distributions exceeding the total annual service and interest costs. Due to the remeasurement, the reduction in pension benefit obligation and pension assets was $4.7 million.

In the nine months ended September 27, 2026, and September 28, 2025, Teradyne contributed $2.7 million and $2.4 million, respectively, to the U.S. supplemental executive defined benefit pension plan, and $1.2 million and $3.6 million, respectively, to certain qualified pension plans for non-U.S. subsidiaries.

For the three and nine months ended September 27, 2026, and September 28, 2025, Teradyne’s net periodic pension cost was comprised of the following:

 

 

 

For the Three Months Ended

 

 

 

September 27, 2026

 

 

September 28, 2025

 

 

 

United
States

 

 

Foreign

 

 

United
States

 

 

Foreign

 

 

 

(in thousands)

 

Service cost

 

$

141

 

 

$

296

 

 

$

153

 

 

$

149

 

Interest cost

 

 

1,358

 

 

 

345

 

 

 

1,426

 

 

 

300

 

Expected return on plan assets

 

 

(982

)

 

 

(54

)

 

 

(989

)

 

 

(24

)

Net actuarial loss (gain)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Settlement loss (gain)

 

 

(71

)

 

 

—

 

 

 

(800

)

 

 

—

 

Settlement expense

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total net periodic pension cost

 

$

446

 

 

$

586

 

 

$

(210

)

 

$

425

 

 

 

 

For the Nine Months Ended

 

 

 

September 27, 2026

 

 

September 28, 2025

 

 

 

United
States

 

 

Foreign

 

 

United
States

 

 

Foreign

 

 

 

(in thousands)

 

Service cost

 

$

427

 

 

$

897

 

 

$

462

 

 

$

437

 

Interest cost

 

 

4,074

 

 

 

1,046

 

 

 

4,299

 

 

 

892

 

Expected return on plan assets

 

 

(2,932

)

 

 

(163

)

 

 

(2,970

)

 

 

(71

)

Net actuarial loss (gain)

 

 

(43

)

 

 

—

 

 

 

41

 

 

 

—

 

Settlement loss (gain)

 

 

(71

)

 

 

—

 

 

 

(800

)

 

 

—

 

Settlement expense

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total net periodic pension cost

 

$

1,455

 

 

$

1,780

 

 

$

1,032

 

 

$

1,258

 

 

Postretirement Benefit Plan

In addition to receiving pension benefits, Teradyne employees in the United States who meet early retirement eligibility requirements as of their termination dates may participate in Teradyne’s Welfare Plan, which includes medical and dental benefits up to age 65. Death benefits provide a fixed sum to retirees’ survivors and are available to all retirees. Substantially all of Teradyne’s current U.S. employees could become eligible for these benefits and the existing benefit obligation relates primarily to those employees. During the nine months ended September 28, 2025, Teradyne recorded special termination benefit charges associated with a voluntary early retirement program.

For the three and nine months ended September 27, 2026, and September 28, 2025, Teradyne’s net periodic postretirement benefit cost was comprised of the following:

 

 

 

For the Three Months
 Ended

 

 

For the Nine Months
 Ended

 

 

 

September 27,
2026

 

 

September 28,
2025

 

 

September 27,
2026

 

 

September 28,
2025

 

 

 

(in thousands)

 

 

(in thousands)

 

Service cost

 

$

7

 

 

$

9

 

 

$

22

 

 

$

27

 

Interest cost

 

 

67

 

 

 

76

 

 

 

200

 

 

 

229

 

Amortization of prior service credit

 

 

(1

)

 

 

(2

)

 

 

(4

)

 

 

(7

)

Special termination benefits

 

 

—

 

 

 

—

 

 

 

—

 

 

 

684

 

Net actuarial loss (gain)

 

 

—

 

 

 

—

 

 

 

(114

)

 

 

87

 

Total net periodic postretirement benefit cost

 

$

73

 

 

$

83

 

 

$

105

 

 

$

1,020