Employee Benefit Costs | Employee Benefit Costs: Retirement Plan and Other Postretirement Benefits The Company has noncontributory, defined benefit retirement plans and other postretirement benefit plans covering certain employees. In October 2012, the Board of Directors of the Company authorized an amendment to the Company's defined benefit retirement plans for U.S. non-bargaining employees. The amendment freezes accruals for all non-bargaining employees within the pension plan effective January 1, 2014. The Company uses a June 30 measurement date for all of its plans. The following provides a reconciliation of obligations, plan assets and funded status of the plans for the two years indicated (in thousands): Pension Benefits Other Postretirement Benefits Actuarial Assumptions: 2018 2017 2018 2017 Discounted Rate Used to Determine Present Value of Projected Benefit Obligation 4.30 % 4.00 % 4.25 % 3.85 % Weighted Average Expected Long-Term Rate of Return on Plan Assets 7.00 % 7.10 % n/a n/a Change in Benefit Obligations: Projected Benefit Obligation at Beginning of Year $ 1,116,705 $ 1,196,925 $ 66,693 $ 70,494 Service Cost 2,402 6,757 135 191 Interest Cost 43,068 43,357 2,372 2,382 Plan Settlements (101,553 ) — — — Plan Participant Contributions — — 2,346 1,918 Actuarial (Gain) Loss (27,541 ) (55,237 ) (146 ) 5,681 Benefits Paid (74,071 ) (75,097 ) (12,599 ) (13,973 ) Projected Benefit Obligation at End of Year $ 959,010 $ 1,116,705 $ 58,801 $ 66,693 Change in Plan Assets: Fair Value of Plan Assets at Beginning of Year $ 870,606 $ 883,585 $ — $ — Actual Return on Plan Assets 36,914 58,837 — — Plan Participant Contributions — — 2,346 1,918 Employer Contributions 33,748 3,281 10,253 12,055 Benefits Paid (74,071 ) (75,097 ) (12,599 ) (13,973 ) Plan Settlements (101,553 ) — — — Fair Value of Plan Assets at End of Year $ 765,644 $ 870,606 $ — $ — Funded Status: Plan Assets (Less Than) in Excess of Projected Benefit Obligation $ (193,366 ) $ (246,099 ) $ (58,801 ) $ (66,693 ) Amounts Recognized on the Balance Sheets: Accrued Pension Cost $ (189,872 ) $ (242,908 ) $ — $ — Accrued Wages and Salaries (3,494 ) (3,191 ) — — Accrued Postretirement Health Care Obligation — — (30,186 ) (35,132 ) Accrued Liabilities — — (8,418 ) (9,755 ) Accrued Employee Benefits — — (20,196 ) (21,806 ) Net Amount Recognized at End of Year $ (193,366 ) $ (246,099 ) $ (58,800 ) $ (66,693 ) Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Net of Tax: Net Actuarial Loss $ (218,066 ) $ (261,835 ) $ (11,815 ) $ (14,197 ) Prior Service Credit (Cost) (125 ) (223 ) 433 1,306 Net Amount Recognized at End of Year $ (218,191 ) $ (262,058 ) $ (11,382 ) $ (12,891 ) The accumulated benefit obligation for all defined benefit pension plans was $959 million and $1,117 million at July 1, 2018 and July 2, 2017 , respectively. The Company recognizes the funded status of its pension plan in the Consolidated Balance Sheets. The funded status is the difference between the projected benefit obligation and the fair value of its plan assets. The projected benefit obligation is the actuarial present value of all benefits expected to be earned by the employees’ service adjusted for future potential wage increases. Pension plan liabilities are revalued annually, or when an event occurs that requires remeasurement, based on updated assumptions and information about the individuals covered by the plan. The pension benefit obligation and related pension expense or income are impacted by certain actuarial assumptions, including the discount rate, mortality tables, and the expected rate of return on plan assets. The discount rate is selected using a methodology that matches plan cash flows with a selection of Standard and Poor’s AA or higher rated bonds, resulting in a discount rate that is consistent with a bond yield curve with comparable cash flows. In estimating the expected return on plan assets, the Company considers the historical returns on plan assets, adjusted for forward looking considerations, including inflation assumptions and active management of the plan’s invested assets. These rates are evaluated on an annual basis considering such factors as market interest rates and historical asset performance. For pension and other postretirement plans, accumulated actuarial gains and losses in excess of a 10 percent corridor are amortized on a straight-line basis from the date recognized over the average remaining life expectancy of all participants. Any prior service costs are amortized on a straight-line basis over the average remaining service of impacted employees at the time the unrecognized prior service cost was established. Approximately half of the costs related to defined pension benefit and other postretirement plans are included in cost of sales; the remainder is included in selling, general and administrative expenses. The following table summarizes the plans’ income and expense for the three years indicated (in thousands): Pension Benefits Other Postretirement Benefits 2018 2017 2016 2018 2017 2016 Components of Net Periodic (Income) Expense: Service Cost-Benefits Earned During the Year $ 2,402 $ 6,757 $ 3,532 $ 135 $ 191 $ 262 Interest Cost on Projected Benefit Obligation 43,068 43,357 52,110 2,372 2,382 3,170 Expected Return on Plan Assets (61,912 ) (64,427 ) (71,202 ) — — — Amortization of: Prior Service Cost (Credit) 179 180 180 (1,434 ) (2,654 ) (2,659 ) Actuarial Loss 15,332 16,957 13,007 3,453 2,796 3,234 Plan Settlements 41,157 — 20,245 — — — Net Periodic Expense (Income) $ 40,226 $ 2,824 $ 17,872 $ 4,526 $ 2,715 $ 4,007 Significant assumptions used in determining net periodic expense for the fiscal years indicated are as follows: Pension Benefits Other Postretirement Benefits 2018 2017 2016 2018 2017 2016 Discount Rate 4.00% 3.75% 4.55% 3.85% 3.60% 4.20% Expected Return on Plan Assets 7.10% 7.25% 7.50% n/a n/a n/a Compensation Increase Rate n/a n/a n/a n/a n/a n/a The amounts in Accumulated Other Comprehensive Income (Loss) that are expected to be recognized as components of net periodic (income) expense during the next fiscal year are as follows (in thousands): Pension Plans Other Postretirement Plans Prior Service Cost (Credit) $ 179 $ (729 ) Net Actuarial Loss 11,705 3,222 The “Other Postretirement Benefit” plans are unfunded. On May 14, 2010, the Company notified retirees and certain retirement eligible employees of various amendments to the Company-sponsored retiree medical plans intended to better align the plans offered to both hourly and salaried retirees. On August 16, 2010, a putative class of retirees who retired prior to August 1, 2006 and the United Steel Workers filed a complaint in the U.S. District Court for the Eastern District of Wisconsin (Merrill, Weber, Carpenter, et al.; United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO/CLC v. Briggs & Stratton Corporation; Group Insurance Plan of Briggs & Stratton Corporation; and Does 1 through 20, Docket No. 10-C-0700), contesting the Company's right to make these changes. In mid-December 2015, the parties agreed in principle to settle this case for an aggregate payment of $3.95 million covering both claimed benefits and plaintiffs’ attorneys fees, which resulted in a contribution of $1.975 million from the Company and $1.975 million from a third party insurance provider. The Company recorded a total charge of $1.975 million as Engineering, Selling, General and Administrative Expense on the Condensed Consolidated Statements of Operations in the second quarter of fiscal 2016 related to this matter. The parties filed a signed Stipulation of Settlement with the court on April 12, 2016 and the court held a hearing on the fairness, reasonableness and adequacy of the terms and conditions of the settlement and on the fee petition of the plaintiffs' counsel on August 11, 2016. The court approved the settlement following that hearing. For measurement purposes a 6.0% annual rate of increase in the per capita cost of covered health care claims was assumed for the Company for the fiscal year 2018 decreasing gradually to 4.5% for the fiscal year 2038 . The health care cost trend rate assumptions have a significant effect on the amounts reported. An increase of one percentage point would increase the accumulated postretirement benefit by $0.9 million and would increase the service and interest cost by $49 thousand for fiscal 2018 . A corresponding decrease of one percentage point would decrease the accumulated postretirement benefit by $1.0 million and decrease the service and interest cost by $51 thousand for the fiscal year 2018 . During the fourth quarter of fiscal 2018, the Company annuitized a portion of the qualified pension plan obligation which removed approximately $100 million of pension benefit obligation and offsetting assets. This transaction resulted in a non-cash pre-tax charge of $41.2 million ( $29.6 million after tax) during 2018. In the third quarter of fiscal 2016, the Company initiated a limited offer for former employees with vested benefits to elect to receive a lump sum payout of their benefits. This program reduced the size of the pension plan while allowing former employees who accepted the offer to control the investment of their retirement funds. The Company completed this program during the fourth quarter of fiscal 2016. As a result of this program, the Company recognized pension settlement expense of $20.2 million ( $13.2 million after tax) during fiscal 2016. Plan Assets A Board of Directors appointed Investment Committee (“Committee”) manages the investment of the pension plan assets. The Committee has established and operates under an Investment Policy. It determines the asset allocation and target ranges based upon periodic asset/liability studies and capital market projections. The Committee retains external investment managers to invest the assets. The Investment Policy prohibits certain investment transactions, such as lettered stock, commodity contracts, margin transactions and short selling, unless the Committee gives prior approval. The Company’s pension plan’s current target and asset allocations at July 1, 2018 and July 2, 2017 , by asset category are as follows: Plan Assets at Year-end Asset Category Target % 2018 2017 Domestic Equities 22%-30% 24% 23% International Equities 15%-20% 16% 16% Alternatives 0%-10% 7% 8% Fixed Income 49%-53% 51% 50% Cash Equivalents 0%-2% 2% 3% 100% 100% The plan’s investment strategy is based on an expectation that, over time, equity securities will provide higher total returns than debt securities, but with greater risk. The plan primarily minimizes the risk of large losses through diversification of investments by asset class, by investing in different types of styles within the classes and by using a number of different managers. The Committee monitors the asset allocation and investment performance monthly, with a more comprehensive quarterly review with its consultant. Beginning in fiscal 2014, the Committee revised the target asset allocation to shift to more fixed income and less alternative investments as a percentage of total plan assets. This revision to the target asset allocation was made to better match future cash flows from plan assets with the future cash flows of the projected benefit obligation. The plan’s expected return on assets is based on management’s and the Committee’s expectations of long-term average rates of return to be achieved by the plan’s investments. These expectations are based on the plan’s historical returns and expected returns for the asset classes in which the plan is invested. The Company has adopted the fair value provisions for the plan assets of its pension plans. The Company categorizes plan assets within a three level fair value hierarchy, as described in Note 5 . Investments stated at fair value as determined by quoted market prices (Level 1) include: Short-Term Investments: Short-Term Investments include cash and money market mutual funds that invest in short-term securities and are valued based on cost, which approximates fair value. Equity Securities: U.S. Common Stocks and International Mutual Funds are valued at the last reported sales price on the last business day of the fiscal year. Investments stated at estimated fair value using significant observable inputs (Level 2) include: Fixed Income Securities: Fixed Income Securities include investments in domestic bond collective trusts that are not traded publicly, but the underlying assets held in these funds are traded on active markets and the prices are readily observable. The investment in the trusts is valued at the last quoted price on the last business day of the fiscal year. Fixed Income Securities also include corporate and government bonds that are valued using a bid evaluation process with data provided by independent pricing sources. Investments stated at estimated fair value using net asset value per share as the practical expedient include: Other Investments: Other Investments include investments in limited partnerships and are valued at estimated fair value, as determined with the assistance of each respective limited partnership, based on the net asset value of the investment as of the balance sheet date, which is subject to judgment. The fair value of the major categories of the pension plans’ investments are presented below (in thousands): July 1, 2018 Category Total Level 1 Level 2 Level 3 Short-Term Investments: $ 17,061 $ 17,061 $ — $ — Fixed Income Securities: 394,188 — 394,188 — Equity Securities: U.S. common stocks 183,030 183,030 — — International mutual funds 118,674 118,674 — — Other Investments: Venture capital funds (A) (E) 26,078 — — — Debt funds (B) (E) 2,778 — — — Real estate funds (C) (E) 1,166 — — — Private equity funds (D) (E) 22,656 — — — Fair Value of Plan Assets at End of Year $ 765,631 $ 318,765 $ 394,188 $ — July 2, 2017 Category Total Level 1 Level 2 Level 3 Short-Term Investments: $ 25,563 $ 25,563 $ — $ — Fixed Income Securities: 433,372 — 433,372 — Equity Securities: U.S. common stocks 204,736 204,736 — — International mutual funds 141,565 141,565 — — Other Investments: Venture capital funds (A) (E) 31,060 — — — Debt funds (B) (E) 5,469 — — — Real estate funds (C) (E) 1,621 — — — Private equity funds (D) (E) 27,220 — — — Fair Value of Plan Assets at End of Year $ 870,606 $ 371,864 $ 433,372 $ — (A) This category invests in a combination of public and private securities of companies in financial distress, spin-offs, or new projects focused on technology and manufacturing. (B) This fund primarily invests in the debt of various entities including corporations and governments in emerging markets, mezzanine financing, or entities that are undergoing, are considered likely to undergo or have undergone a reorganization. (C) This category invests primarily in real estate related investments, including real estate properties, securities of real estate companies and other companies with significant real estate assets as well as real estate related debt and equity securities. (D) Primarily represents investments in all sizes of mostly privately held operating companies in the following core industry sectors: healthcare, energy, financial services, technology-media-telecommunications and industrial and consumer. (E) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. Contributions During fiscal 2018, the Company made $30 million in voluntary cash contributions to the qualified pension plan. Based upon current regulations and actuarial studies the Company is required to make no minimum contributions to the qualified pension plan in fiscal 2019, but the Company may choose to make discretionary contributions. The Company may be required to make further required contributions in future years or the future expected funding requirements may change depending on a variety of factors including the actual return on plan assets, the funded status of the plan in future periods, and changes in actuarial assumptions or regulations. Estimated Future Benefit Payments Projected benefit payments from the plans as of July 1, 2018 are estimated as follows (in thousands): Pension Benefits Other Postretirement Benefits Year Ending Qualified Non-Qualified Retiree Medical Retiree Life 2019 $ 63,219 $ 3,494 $ 6,987 $ 1,431 2020 63,304 3,533 5,810 1,436 2021 63,329 3,569 4,680 1,441 2022 63,220 3,651 4,040 1,442 2023 62,527 3,685 3,460 1,440 2024-2028 299,723 18,591 9,514 7,069 Defined Contribution Plans Employees of the Company may participate in a defined contribution savings plan that allows participants to contribute a portion of their earnings in accordance with plan specifications. A maximum of 1.5% to 4.0% of each participant’s salary, depending upon the participant’s group, is matched by the Company. Additionally, all domestic non-bargaining employees receive a Company non-elective contribution of 3.0% of the employee’s pay. The Company contributions totaled $14.5 million in each of the fiscal years 2018 , 2017 , and 2016 respectively. Postemployment Benefits The Company accrues the expected cost of postemployment benefits over the years that the employees render service. These benefits apply only to employees who become disabled while actively employed, or who terminate with at least thirty years of service and retire prior to age sixty-five. The items include disability payments, life insurance and medical benefits. These amounts were discounted using a 4.25% interest rate for fiscal 2018 and 3.85% interest rate for fiscal 2017 . Amounts are included in Accrued Employee Benefits in the Consolidated Balance Sheets. |