Annual report pursuant to Section 13 and 15(d)

RETIREMENT AND SAVINGS BENEFIT PLANS (Tables)

v3.20.1
RETIREMENT AND SAVINGS BENEFIT PLANS (Tables)
12 Months Ended
Mar. 28, 2020
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)
 
2020
 
 
2019
 
2018
 
2017
Service cost — benefits earned during the period
 
$
14,476

 
 
$
22,352

 
$
5,912

 
$
24,890

Interest cost on projected benefit obligations
 
55,575

 
 
63,434

 
14,825

 
58,989

Expected return on plan assets
 
(91,309
)
 
 
(93,409
)
 
(25,314
)
 
(94,807
)
Settlement charges
 
27,443

 
 
8,856

 

 

Curtailments
 

 
 
9,530

 

 
1,671

Transfers to Kontoor Brands
 
668

 
 

 

 

Amortization of deferred amounts:
 
 
 
 
 
 
 
 
 
Net deferred actuarial losses
 
14,848

 
 
28,474

 
8,548

 
41,440

Deferred prior service costs
 
1,887

 
 
494

 
647

 
2,646

Total pension expense
 
$
23,588

 
 
$
39,731

 
$
4,618

 
$
34,829

Weighted average actuarial assumptions used to determine pension expense:
 
 
 
 
 
 
 
 
 
Discount rate in effect for determining service cost
 
1.46
%
 
 
3.85
%
 
3.58
%
 
4.08
%
Discount rate in effect for determining interest cost
 
3.20
%
 
 
3.51
%
 
3.13
%
 
3.26
%
Expected long-term return on plan assets
 
5.40
%
 
 
5.58
%
 
5.72
%
 
5.72
%
Rate of compensation increase (a)
 
2.74
%
 
 
3.73
%
 
3.73
%
 
3.78
%

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 2020


March 2019
Fair value of plan assets, beginning of period
 
$
1,751,094

 
 
$
1,751,760

Actual return on plan assets
 
173,261

 
 
82,947

VF contributions
 
26,372

 
 
41,581

Participant contributions
 
4,298

 
 
4,136

Transfer to Kontoor Brands
 
(6,697
)
 
 

Benefits paid
 
(233,398
)
 
 
(118,513
)
Currency translation
 
(2,155
)
 
 
(10,817
)
Fair value of plan assets, end of period
 
1,712,775

 
 
1,751,094

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

 
 
1,884,485

Service cost
 
14,476

 
 
22,352

Interest cost
 
55,575

 
 
63,434

Participant contributions
 
4,298

 
 
4,136

Actuarial loss (gain)
 
84,057

 
 
10,653

Benefits paid
 
(233,398
)
 
 
(118,513
)
Plan amendments
 
655

 
 
715

Transfer to Kontoor Brands
 
(17,279
)
 
 

Curtailments
 

 
 
(33,826
)
Currency translation
 
(539
)
 
 
(14,505
)
Projected benefit obligations, end of period
 
1,726,776

 
 
1,818,931

Funded status, end of period
 
$
(14,001
)
 
 
$
(67,837
)
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 2020
 
 
March 2019
Amounts included in Consolidated Balance Sheets:
 
 
 
 
 
Other assets (Note 11)
 
$
166,955

 
 
$
117,405

Accrued liabilities (Note 13)
 
(10,449
)
 
 
(10,260
)
Other liabilities (Note 15)
 
(170,507
)
 
 
(174,982
)
Funded status
 
$
(14,001
)
 
 
$
(67,837
)
Accumulated other comprehensive loss, pretax:
 
 
 
 
 
Net deferred actuarial losses
 
$
357,989

 
 
$
399,093

Net deferred prior service credits
 
(733
)
 
 
563

Total accumulated other comprehensive loss, pretax
 
$
357,256

 
 
$
399,656

Accumulated benefit obligations
 
$
1,703,224

 
 
$
1,778,910

Weighted average actuarial assumptions used to determine pension obligations:
 
 
 
 
 
Discount rate
 
3.18
%
 
 
3.68
%
Rate of compensation increase (a)
 
2.22
%
 
 
2.74
%

The amounts reported in the table above for the prior period have not been segregated between continuing and discontinued operations. The March 2019 balances include $11.0 million of pension liabilities related to the Jeans business, which were transferred in connection with the spin-off.
(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 2020 and March 2019, by asset class, is summarized below. Refer to Note 23 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 2020
 
 
 
 
 
 
 
 
Plan assets
 
 
 
 
 
 
 
 
Cash equivalents
$
9,421

 
$
9,421

 
$

 
$

 
Fixed income securities:
 
 
 
 
 
 
 
 
U.S. Treasury and government agencies
6

 

 
6

 

 
Insurance contracts
76,161

 

 
76,161

 

 
Commodities
3,878

 
3,878

 

 

 
Total plan assets in the fair value hierarchy
89,466

 
$
13,299

 
$
76,167

 
$

 
Plan assets measured at net asset value
 
 
 
 
 
 
 
 
Cash equivalents
54,745

 
 
 
 
 
 
 
Equity securities:
 
 
 
 
 
 
 
 
Domestic
70,503

 
 
 
 
 
 
 
International
71,365

 
 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
Corporate and international bonds
1,293,768

 
 
 
 
 
 
 
Alternative investments
132,928

 
 
 
 
 
 
 
Total plan assets measured at net asset value
1,623,309

 
 
 
 
 
 
 
Total plan assets
$
1,712,775

 
 
 
 
 
 
 

 
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