Annual report pursuant to Section 13 and 15(d)

RETIREMENT AND SAVINGS BENEFIT PLANS (Tables)

v3.19.1
RETIREMENT AND SAVINGS BENEFIT PLANS (Tables)
12 Months Ended
Mar. 30, 2019
Retirement Benefits [Abstract]  
Components of Pension Cost
The components of pension cost for VF’s defined benefit plans were as follows:
 
 
Year Ended March
 
 
Three Months
Ended March
(Transition Period)
 
Year Ended December
(In thousands)
 
2019
 
 
2018
 
2017
 
2016
Service cost — benefits earned during the period
 
$
22,352

 
 
$
5,912

 
$
24,890

 
$
25,839

Interest cost on projected benefit obligations
 
63,434

 
 
14,825

 
58,989

 
68,020

Expected return on plan assets
 
(93,409
)
 
 
(25,314
)
 
(94,807
)
 
(99,540
)
Settlement charges
 
8,856

 
 

 

 
50,922

Curtailments
 
9,530

 
 

 
1,671

 

Amortization of deferred amounts:
 
 
 
 
 
 
 
 
 
Net deferred actuarial losses
 
28,474

 
 
8,548

 
41,440

 
65,212

Deferred prior service costs
 
494

 
 
647

 
2,646

 
2,584

Total pension expense
 
$
39,731

 
 
$
4,618

 
$
34,829

 
$
113,037

Weighted average actuarial assumptions used to determine pension expense:
 
 
 
 
 
 
 
 
 
Discount rate in effect for determining service cost
 
3.85
%
 
 
3.58
%
 
4.08
%
 
4.54
%
Discount rate in effect for determining interest cost
 
3.51
%
 
 
3.13
%
 
3.26
%
 
3.56
%
Expected long-term return on plan assets
 
5.58
%
 
 
5.72
%
 
5.72
%
 
5.81
%
Rate of compensation increase
 
3.73
%
 
 
3.73
%
 
3.78
%
 
3.90
%
Reconciliation of Changes in Fair Value of Defined Benefit Plan Assets and Projected Benefit Obligations
The following provides a reconciliation of the changes in fair value of VF’s defined benefit plan assets and projected benefit obligations for each period, and the funded status at the end of each period:
(In thousands)
 
March 2019
 
 
March 2018
 
December 2017
Fair value of plan assets, beginning of period
 
$
1,751,760

 
 
$
1,809,649

 
$
1,673,297

Actual return on plan assets
 
82,947

 
 
(39,495
)
 
204,017

VF contributions
 
41,581

 
 
3,205

 
9,807

Participant contributions
 
4,136

 
 
1,018

 
4,011

Benefits paid
 
(118,513
)
 
 
(27,441
)
 
(93,900
)
Currency translation
 
(10,817
)
 
 
4,824

 
12,417

Fair value of plan assets, end of period
 
1,751,094

 
 
1,751,760

 
1,809,649

Projected benefit obligations, beginning of period
 
1,884,485

 
 
1,943,821

 
1,808,327

Service cost
 
22,352

 
 
5,912

 
24,890

Interest cost
 
63,434

 
 
14,825

 
58,989

Participant contributions
 
4,136

 
 
1,018

 
4,011

Actuarial loss (gain)
 
10,653

 
 
(59,511
)
 
131,040

Benefits paid
 
(118,513
)
 
 
(27,441
)
 
(93,900
)
Plan amendments
 
715

 
 

 

Curtailments
 
(33,826
)
 
 

 
(5,664
)
Currency translation
 
(14,505
)
 
 
5,861

 
16,128

Projected benefit obligations, end of period
 
1,818,931

 
 
1,884,485

 
1,943,821

Funded status, end of period
 
$
(67,837
)
 
 
$
(132,725
)
 
$
(134,172
)
Pension benefits are reported in the Consolidated Balance Sheets as a net asset or liability based on the overfunded or underfunded status of the defined benefit plans, assessed on a plan-by-plan basis.
(In thousands)
 
March 2019
 
 
March 2018
 
December 2017
Amounts included in Consolidated Balance Sheets:
 
 
 
 
 
 
 
Other assets (Note 10)
 
$
117,405

 
 
$
76,671

 
$
82,296

Accrued liabilities (Note 12)
 
(10,260
)
 
 
(32,814
)
 
(27,277
)
Other liabilities (Note 14)
 
(174,982
)
 
 
(176,582
)
 
(189,191
)
Funded status
 
$
(67,837
)
 
 
$
(132,725
)
 
$
(134,172
)
Accumulated other comprehensive loss, pretax:
 
 
 
 
 
 
 
Net deferred actuarial losses
 
$
399,093

 
 
$
452,329

 
$
454,463

Deferred prior service costs
 
563

 
 
9,878

 
10,533

Total accumulated other comprehensive loss, pretax
 
$
399,656

 
 
$
462,207

 
$
464,996

Accumulated benefit obligations
 
$
1,778,910

 
 
$
1,783,600

 
$
1,837,776

Weighted average actuarial assumptions used to determine pension obligations:
 
 
 
 
 
 
 
Discount rate
 
3.68
%
 
 
3.76
%
 
3.46
%
Rate of compensation increase (a)
 
2.74
%
 
 
3.73
%
 
3.73
%

(a) 
Rate of compensation increase is calculated as the weighted average rate of compensation increase for active plans. Frozen plans are excluded from the calculation.
Fair Value of Investments Held by Pension Plan
The fair value of investments held by VF’s defined benefit plans at March 2019, March 2018 and December 2017, by asset class, is summarized below. Refer to Note 22 for a description of the three levels of the fair value measurement hierarchy.
 
Total Plan
Assets
 
Fair Value Measurements
 
(In thousands)
Level 1
 
Level 2
 
Level 3
 
March 2019
 
 
 
 
 
 
 
 
Plan assets
 
 
 
 
 
 
 
 
Cash equivalents
$
3,023

 
$
3,023

 
$

 
$

 
Fixed income securities:
 
 
 
 
 
 
 
 
U.S. Treasury and government agencies
7

 

 
7

 

 
Insurance contracts
71,521

 

 
71,521

 

 
Commodities
(347
)
 
(347
)
 

 

 
Total plan assets in the fair value hierarchy
$
74,204

 
$
2,676

 
$
71,528

 
$

 
Plan assets measured at net asset value
 
 
 
 
 
 
 
 
Cash equivalents
36,349

 
 
 
 
 
 
 
Equity securities:
 
 
 
 
 
 
 
 
Domestic
82,659

 
 
 
 
 
 
 
International
97,766

 
 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
Corporate and international bonds
1,309,123

 
 
 
 
 
 
 
Alternative investments
150,993

 
 
 
 
 
 
 
Total plan assets measured at net asset value
1,676,890

 
 
 
 
 
 
 
Total plan assets
$
1,751,094

 
 
 
 
 
 
 

 
Total Plan
Assets
 
Fair Value Measurements
(In thousands)
Level 1
 
Level 2
 
Level 3
March 2018
 
 
 
 
 
 
 
Plan assets
 
 
 
 
 
 
 
Cash equivalents
$
14,694

 
$
14,694

 
$

 
$

Fixed income securities:
 
 
 
 
 
 
 
U.S. Treasury and government agencies
8

 

 
8

 

Insurance contracts
67,444

 

 
67,444

 

Commodities
(7,091
)
 
(7,091
)
 

 

Total plan assets in the fair value hierarchy
$
75,055

 
$
7,603

 
$
67,452

 
$

Plan assets measured at net asset value
 
 
 
 
 
 
 
Cash equivalents
38,833

 
 
 
 
 
 
Equity securities:
 
 
 
 
 
 
 
Domestic
114,958

 
 
 
 
 
 
International
155,330

 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
Corporate and international bonds
1,211,103

 
 
 
 
 
 
Alternative investments
156,481

 
 
 
 
 
 
Total plan assets measured at net asset value
1,676,705

 
 
 
 
 
 
Total plan assets
$
1,751,760

 
 
 
 
 
 

 
Total Plan
Assets
 
Fair Value Measurements
(In thousands)
Level 1
 
Level 2
 
Level 3
December 2017
 
 
 
 
 
 
 
Plan assets
 
 
 
 
 
 
 
Cash equivalents
$
8,191

 
$
8,191

 
$

 
$

Fixed income securities:
 
 
 
 
 
 
 
U.S. Treasury and government agencies
8

 

 
8

 

Insurance contracts
69,448

 

 
69,448

 

Commodities
(372
)
 
(372
)
 

 

Total plan assets in the fair value hierarchy
$
77,275

 
$
7,819

 
$
69,456

 
$

Plan assets measured at net asset value
 
 
 
 
 
 
 
Cash equivalents
36,313

 
 
 
 
 
 
Equity securities:
 
 
 
 
 
 
 
Domestic
152,154

 
 
 
 
 
 
International
173,608

 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
Corporate and international bonds
1,215,558

 
 
 
 
 
 
Alternative investments
154,741

 
 
 
 
 
 
Total plan assets measured at net asset value
1,732,374

 
 
 
 
 
 
Total plan assets
$
1,809,649