Graco Inc.

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SEC Filings

10-Q
GRACO INC filed this Form 10-Q on 10/25/2017
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4.Retirement Benefits

The components of net periodic benefit cost for retirement benefit plans were as follows (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 29,
2017
 
September 23,
2016
 
September 29,
2017
 
September 23,
2016
Pension Benefits
 
 
 
 
 
 
 
Service cost
$
1,917

 
$
1,968

 
$
5,732

 
$
5,880

Interest cost
3,874

 
3,902

 
11,477

 
11,765

Expected return on assets
(4,236
)
 
(4,504
)
 
(12,700
)
 
(13,509
)
Amortization and other
2,408

 
2,491

 
6,932

 
7,410

Net periodic benefit cost
$
3,963

 
$
3,857

 
$
11,441

 
$
11,546

Postretirement Medical
 
 
 
 
 
 
 
Service cost
$
150

 
$
136

 
$
451

 
$
407

Interest cost
274

 
271

 
820

 
813

Amortization
(2
)
 
(120
)
 
(7
)
 
(360
)
Net periodic benefit cost
$
422

 
$
287

 
$
1,264

 
$
860


The Company made a $20 million tax-deductible contribution to its funded U.S. defined benefit plan in the third quarter of 2017. Also in the third quarter, the Company approved an amendment to restructure the plan effective October 30, 2017. Under the restructuring, the plan will purchase insurance contracts to settle a portion of its benefit obligations. The Company expects that net periodic benefit cost for the fourth quarter will include a settlement loss related to the restructuring, estimated to be in the range of $11 million to $13 million. The actual amount of the settlement loss will depend on the value of plan assets, the amount transferred to the insurance company and the discount rate as of the measurement date.

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