| Schedule of Components of Pension Cost and Income |
The components of pension cost (income) for VF’s defined benefit plans were as follows:
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Year Ended March |
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| (In thousands) |
|
2024 |
|
|
2023 |
|
2022 |
| Service cost — benefits earned during the period |
|
$ |
8,924 |
|
|
|
$ |
10,632 |
|
|
$ |
14,288 |
|
| Interest cost on projected benefit obligations |
|
47,079 |
|
|
|
44,732 |
|
|
37,534 |
|
| Expected return on plan assets |
|
(63,569) |
|
|
|
(63,157) |
|
|
(77,432) |
|
| Settlement charges |
|
3,538 |
|
|
|
93,731 |
|
|
7,466 |
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|
|
|
|
|
|
|
|
| Amortization of deferred amounts: |
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|
|
|
|
| Net deferred actuarial losses |
|
16,195 |
|
|
|
16,395 |
|
|
11,310 |
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| Deferred prior service credits |
|
(80) |
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|
|
(453) |
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|
(440) |
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| Net periodic pension cost (income) |
|
$ |
12,087
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|
$ |
101,880
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|
$ |
(7,274) |
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| Weighted average actuarial assumptions used to determine pension cost (income): |
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| Discount rate in effect for determining service cost |
|
2.50 |
% |
|
|
1.42 |
% |
|
0.46 |
% |
| Discount rate in effect for determining interest cost |
|
4.85 |
% |
|
|
4.09 |
% |
|
2.16 |
% |
| Expected long-term return on plan assets |
|
5.99 |
% |
|
|
5.24 |
% |
|
4.53 |
% |
Rate of compensation increase (a)
|
|
2.19 |
% |
|
|
1.95 |
% |
|
2.01 |
% |
(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.
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| Schedule of 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:
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| (In thousands) |
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March 2024 |
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March 2023 |
| Fair value of plan assets, beginning of period |
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$ |
1,111,710 |
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$ |
1,643,435 |
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| Actual return on plan assets |
|
17,332 |
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|
|
(146,068) |
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| VF contributions |
|
30,167 |
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|
|
22,683 |
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| Participant contributions |
|
5,447 |
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|
|
5,035 |
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| Settlement |
|
— |
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|
|
(328,412) |
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| Benefits paid |
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(81,150) |
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|
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(79,865) |
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| Currency translation |
|
1,736 |
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(5,098) |
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| Fair value of plan assets, end of period |
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1,085,242 |
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|
1,111,710 |
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| Projected benefit obligations, beginning of period |
|
1,021,333 |
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|
|
1,557,715 |
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| Service cost |
|
8,924 |
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|
10,632 |
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| Interest cost |
|
47,079 |
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|
|
44,732 |
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| Participant contributions |
|
5,447 |
|
|
|
5,035 |
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| Actuarial gain |
|
(7,518) |
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|
|
(183,536) |
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| Settlement |
|
— |
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|
(328,412) |
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| Benefits paid |
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(81,150) |
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|
|
(79,865) |
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| Plan amendments |
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(489) |
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|
(478) |
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| Currency translation |
|
1,731 |
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(4,490) |
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Projected benefit obligations, end of period (a)
|
|
995,357 |
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|
1,021,333 |
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| Funded status, end of period |
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$ |
89,885
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$ |
90,377
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(a)The change in projected benefit obligations in the year ended March 2023 was driven by actuarial gains, primarily as a result of changes in discount rates and the purchase of an irrevocable group annuity contract relating to approximately $330.0 million of the U.S. qualified defined benefit pension plan obligations.
Pension benefits are reported in the Consolidated Balance Sheets as a net asset or liability based on the overfunded or underfunded status of the defined benefit plans, assessed on a plan-by-plan basis.
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| (In thousands) |
|
March 2024 |
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March 2023 |
| Amounts included in Consolidated Balance Sheets: |
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| Other assets (Note 11) |
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$ |
175,110 |
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$ |
183,929 |
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| Accrued liabilities (Note 14) |
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(6,597) |
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|
(20,727) |
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| Other liabilities (Note 16) |
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(78,628) |
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|
(72,825) |
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| Funded status |
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$ |
89,885 |
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$ |
90,377
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| Accumulated other comprehensive loss, pretax: |
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| Net deferred actuarial losses |
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$ |
260,512 |
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$ |
241,864 |
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| Net deferred prior service credits |
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(4,290) |
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|
(4,286) |
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| Total accumulated other comprehensive loss, pretax |
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$ |
256,222 |
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|
$ |
237,578
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| Accumulated benefit obligations |
|
$ |
976,120 |
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|
$ |
1,005,159
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| Weighted average actuarial assumptions used to determine pension obligations: |
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| Discount rate |
|
4.94 |
% |
|
|
4.89 |
% |
Rate of compensation increase (a)
|
|
2.11 |
% |
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|
2.15 |
% |
(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.
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| Schedule of Components of Pension Plans with an Accumulated Benefit Obligation and Projected Benefit Obligation in Excess of Plan Assets |
The following provides information for VF's defined benefit plans with projected benefit obligations and accumulated benefit obligations in excess of plan assets:
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| (In thousands) |
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March 2024 |
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March 2023 |
| Projected benefit obligations |
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$ |
183,329 |
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$ |
186,532 |
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| Accumulated benefit obligations |
|
164,092 |
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|
170,357 |
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| Fair value of plan assets |
|
98,104 |
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|
92,980 |
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The net amount of projected benefit obligations and plan assets for underfunded defined benefit plans was $85.2 million and $93.6 million as of March 2024 and 2023, respectively, and was reported in accrued liabilities and other liabilities in the Consolidated Balance Sheets.
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| Schedule of Fair Value of Investments Held by Pension Plan |
The fair value of investments held by VF’s defined benefit plans at March 2024 and March 2023, by asset class, is summarized below. Refer to Note 24 for a description of the three levels of the fair value measurement hierarchy.
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Total Plan
Assets |
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Fair Value Measurements |
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| (In thousands) |
Level 1 |
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Level 2 |
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Level 3 |
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| March 2024 |
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| Plan assets |
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| Cash equivalents |
$ |
4,428 |
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|
$ |
4,428 |
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|
$ |
— |
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|
$ |
— |
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| Fixed income securities: |
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| U.S. Treasury and government agencies |
2 |
|
|
— |
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|
2 |
|
|
— |
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| Insurance contracts |
103,362 |
|
|
— |
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|
103,362 |
|
|
— |
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| Futures contracts |
2,661 |
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|
2,661 |
|
|
— |
|
|
— |
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| Total plan assets in the fair value hierarchy |
110,453
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|
$ |
7,089
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|
$ |
103,364
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|
$ |
—
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| Plan assets measured at net asset value |
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|
|
|
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| Cash equivalents |
87,748 |
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| Equity securities: |
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| Domestic |
33,510 |
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| International |
40,933 |
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| Fixed income securities: |
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| Corporate and international bonds |
751,147 |
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| Alternative investments |
61,451 |
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| Total plan assets measured at net asset value |
974,789 |
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| Total plan assets |
$ |
1,085,242
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| |
Total Plan
Assets |
|
Fair Value Measurements |
| (In thousands) |
Level 1 |
|
Level 2 |
|
Level 3 |
| March 2023 |
|
|
|
|
|
|
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| Plan assets |
|
|
|
|
|
|
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| Cash equivalents |
$ |
983 |
|
|
$ |
983 |
|
|
$ |
— |
|
|
$ |
— |
|
| Fixed income securities: |
|
|
|
|
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|
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| U.S. Treasury and government agencies |
3 |
|
|
— |
|
|
3 |
|
|
— |
|
| Insurance contracts |
97,429 |
|
|
— |
|
|
97,429 |
|
|
— |
|
| Futures contracts |
6,649 |
|
|
6,649 |
|
|
— |
|
|
— |
|
| Total plan assets in the fair value hierarchy |
105,064
|
|
|
$ |
7,632
|
|
|
$ |
97,432
|
|
|
$ |
—
|
|
| Plan assets measured at net asset value |
|
|
|
|
|
|
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| Cash equivalents |
118,114 |
|
|
|
|
|
|
|
| Equity securities: |
|
|
|
|
|
|
|
| Domestic |
34,957 |
|
|
|
|
|
|
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| International |
51,577 |
|
|
|
|
|
|
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| Fixed income securities: |
|
|
|
|
|
|
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| Corporate and international bonds |
734,455 |
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|
|
|
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| Alternative investments |
67,543 |
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|
|
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|
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| Total plan assets measured at net asset value |
1,006,646 |
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| Total plan assets |
$ |
1,111,710
|
|
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|
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