| Retirement Benefits and Postemployment Benefits |
NOTE 14. RETIREMENT BENEFITS AND POSTEMPLOYMENT BENEFITS Defined Benefit Pension Plans We have defined benefit pension plans covering many employees in the United States, Canada, Switzerland, and the United Kingdom. Benefits for salaried employees are based on length of service and final average compensation. Benefits for hourly employees include various monthly amounts for each year of credited service. Our funding policy is consistent with the requirements of applicable laws. We made no voluntary contributions to our principal U.S. plans in fiscal 2025 or fiscal 2024. We do no t expect to be required to make any contributions to our principal U.S. plans in fiscal 2026. Our principal U.S. retirement plan covering salaried employees has a provision that any excess pension assets would be allocated to active participants if the plan is terminated within five years in control. All salaried employees hired on or after June 1, 2013, are eligible for a retirement program that does not include a defined Other Postretirement Benefit Plans We also sponsor plans that provide health care benefits to many of our retirees in the United States, Canada, and Brazil. The U.S. salaried health care benefit plan is contributory, with retiree contributions based on years of service. We make decisions to fund related trusts for certain employees and retirees on an annual basis. We made no voluntary contributions to these plans in fiscal 2025 no t expect to be required to make any contributions to these plans in fiscal 2026. Health Care Cost Trend Rates Assumed health care cost trends are as follows: Fiscal Year 2025 2024 Health care cost trend rate for next year 7.9 % and 7.9 % 7.3 % and 7.3 % Rate to which the cost trend rate is assumed to decline (ultimate rate) 4.5 % 4.5 % Year that the rate reaches the ultimate trend rate 2034 2033 We review our health care cost trend rates annually. Our review is based on data we collect about our health care claims experience and information provided by our actuaries. This information includes recent plan experience, plan design, overall industry experience and projections, and assumptions used by other similar organizations. Our initial health care cost trend rate is adjusted as necessary to remain consistent with this review, recent experiences, and short-term expectations. Our initial health care cost trend rate assumption is 7.9 percent for retirees age 65 and over and for retirees under age 65 at the end of fiscal 2025. Rates are graded down annually until the ultimate trend rate of 4.5 2034 for all retirees. The trend rates are applicable for calculations only if the retirees’ benefits increase as a result of health care inflation. The ultimate trend rate is adjusted annually, as necessary, to approximate the current economic view on the rate of long-term inflation plus an appropriate health care cost premium. Assumed trend rates for health care costs have an important effect on the amounts reported for the other postretirement benefit plans. Postemployment Benefit Plans Under certain circumstances, we also provide accruable benefits, primarily severance, to former or inactive employees in the United States, Canada, and Mexico. We recognize an obligation for any of these benefits that vest or accumulate with service. Postemployment benefits that do not vest or accumulate with service (such as severance based solely on annual pay rather than years of service) are charged to expense when incurred. Our postemployment benefit plans are unfunded. Summarized financial information about defined benefit pension, other postretirement benefit, and postemployment benefit plans is presented below: Defined Benefit Pension Plans Other Postretirement Benefit Plans Postemployment Benefit Plans Fiscal Year Fiscal Year Fiscal Year In Millions 2025 2024 2025 2024 2025 2024 Change in Plan Assets: Fair value at beginning of year $ 5,439.7 $ 5,778.6 $ 463.2 $ 456.0 Actual return on assets 188.6 (23.2) 35.7 45.6 Employer contributions 30.7 30.0 0.1 0.1 Plan participant contributions 2.4 2.0 6.6 6.4 Benefits payments (349.5) (349.5) (47.6) (44.9) Foreign currency 5.3 1.8 - - Fair value at end of year (a) $ 5,317.2 $ 5,439.7 $ 458.0 $ 463.2 Change in Projected Benefit Obligation: Benefit obligation at beginning of year $ 5,801.7 $ 5,970.7 $ 403.0 $ 430.6 $ 129.0 $ 131.0 Service cost 51.8 56.8 4.3 4.7 7.0 7.4 Interest cost 306.9 296.5 21.1 21.3 4.0 4.0 Plan amendment 0.4 1.2 - - - (9.6) Curtailment/other - (13.9) - - 8.1 10.2 Plan participant contributions 2.4 2.0 6.6 6.4 - - Actuarial (gain) loss (191.4) (174.4) (48.1) (14.1) (2.1) 10.3 Benefits payments (349.5) (339.1) (49.0) (45.7) (22.9) (24.3) Foreign currency 5.2 1.9 (0.5) (0.2) - - Projected benefit obligation at end of year (a) $ 5,627.5 $ 5,801.7 $ 337.4 $ 403.0 $ 123.1 $ 129.0 Plan assets (less) more than benefit obligation as of $ (310.3) $ (362.0) $ 120.6 $ 60.2 $ (123.1) $ (129.0) (a) Plan assets and obligations are measured as of May 31, 2025 , and May 31, 2024 . During fiscal 2025, the decrease in defined benefit pension obligations was primarily driven by actuarial gains due to an increase in the discount rate, and the decrease in other postretirement obligations was primarily driven by actuarial gains due to plan experience. During fiscal 2024, the decreases in defined benefit pension obligations and other postretirement obligations were primarily driven by actuarial gains due to an increase in the discount rate. As of May 25, 2025, other postretirement benefit plans had benefit obligations of $ 9.4 million that are unfunded. As of May 26, 2024, other postretirement benefit plans had benefit obligations of $ 11.5 million that are unfunded. Postemployment benefit plans are not funded and had benefit obligations of $ 123.1 129.0 million as of May 25, 2025, and May 26, 2024, respectively. The accumulated benefit obligation for all defined benefit pension plans was $ 5,540.2 million as of May 25, 2025, and $ 5,684.1 million as of May 26, 2024. Amounts recognized in AOCI as of May 25, 2025, and May 26, 2024, are as follows: Defined Benefit Pension Plans Other Postretirement Benefit Plans Postemployment Benefit Plans Total Fiscal Year Fiscal Year Fiscal Year Fiscal Year In Millions 2025 2024 2025 2024 2025 2024 2025 2024 Net actuarial (loss) gain $ (1,935.4) $ (1,991.1) $ 212.7 $ 190.4 $ (4.1) $ (5.6) $ (1,726.8) $ (1,806.3) Prior service (costs) credits (7.5) (9.8) 67.4 84.7 6.0 6.8 65.9 81.7 Amounts recorded in accumulated $ (1,942.9) $ (2,000.9) $ 280.1 $ 275.1 $ 1.9 $ 1.2 $ (1,660.9) $ (1,724.6) Plans with accumulated benefit obligations in excess of plan assets as of May 25, 2025, and May 26, 2024 are as follows: Defined Benefit Pension Plans Fiscal Year In Millions 2025 2024 Projected benefit obligation $ 449.7 $ 449.4 Accumulated benefit obligation 440.1 438.8 Plan assets at fair value 16.3 12.0 Components of net periodic benefit expense are as follows: Defined Benefit Pension Plans Other Postretirement Benefit Plans Postemployment Benefit Plans Fiscal Year Fiscal Year Fiscal Year In Millions 2025 2024 2023 2025 2024 2023 2025 2024 2023 Service cost $ 51.8 $ 56.8 $ 70.3 $ 4.3 $ 4.7 $ 5.1 $ 7.0 $ 7.4 $ 8.4 Interest cost 306.9 296.5 258.5 21.1 21.3 17.9 4.0 4.0 3.1 Expected return on (420.1) (417.7) (420.5) (35.9) (34.7) (31.1) - - - Amortization of losses 100.4 86.5 113.2 (20.5) (20.4) (19.3) 0.5 0.1 0.4 Amortization of prior 1.4 1.8 1.5 (22.1) (21.8) (23.2) (1.6) 0.3 0.3 Other adjustments - - - - - - 11.5 8.3 10.4 Settlement or - (4.0) (0.7) - - - - - - Net expense (income) $ 40.4 $ 19.9 $ 22.3 $ (53.1) $ (50.9) $ (50.6) $ 21.4 $ 20.1 $ 22.6 Assumptions Weighted-average assumptions used to determine fiscal year-end benefit obligations are as follows: Defined Benefit Pension Plans Other Postretirement Benefit Plans Postemployment Benefit Plans Fiscal Year Fiscal Year Fiscal Year 2025 2024 2025 2024 2025 2024 Discount rate 5.79 % 5.52 % 5.67 % 5.52 % 5.04 % 5.05 % Rate of salary increases 3.88 4.23 - - 4.13 4.46 Weighted-average assumptions used to determine fiscal year net periodic benefit expense are as follows: Defined Benefit Pension Plans Other Postretirement Benefit Plans Postemployment Benefit Plans Fiscal Year Fiscal Year Fiscal Year 2025 2024 2023 2025 2024 2023 2025 2024 2023 Discount rate 5.52 % 5.18 % 4.39 % 5.52 % 5.19 % 4.36 % 5.05 % 4.55 % 3.62 % Service cost 5.58 5.27 4.57 5.58 5.15 4.41 5.37 5.00 3.69 Interest cost 5.40 5.06 4.03 5.38 4.96 3.80 5.05 4.61 3.35 Rate of 4.23 4.20 4.18 - - - 4.46 4.46 4.46 Expected long-term 7.63 7.13 6.70 7.79 7.34 6.76 - - - Discount Rates We estimate the service and interest cost components of the net periodic benefit expense for our United States and most of our international defined benefit pension, other postretirement benefit, and postemployment benefit plans utilizing a full yield curve approach by applying the specific spot rates along the yield curve used to determine the benefit obligation to the relevant projected cash flows. Our discount rate assumptions are determined annually as of May 31 for our defined benefit pension, other postretirement benefit, and postemployment benefit plan obligations. We also use discount rates as of May 31 to determine defined benefit pension, other postretirement benefit, and postemployment benefit plan income and expense for the following fiscal year. We work with our outside actuaries to determine the timing and amount of expected future cash outflows to plan participants and, using the Aa Above Median corporate bond yield, to develop a forward interest rate curve, including a margin to that index based on our credit risk. This forward interest rate curve is applied to our expected future cash outflows to determine our discount rate assumptions. Fair Value of Plan Assets The fair values of our pension and postretirement benefit plans’ assets and their respective levels in the fair value hierarchy by asset category were as follows: May 31, 2025 May 31, 2024 In Millions Level 1 Level 2 Level 3 Total Assets Level 1 Level 2 Level 3 Total Assets Fair value measurement of pension Equity (a) $ 200.6 $ 383.8 $ - $ 584.4 $ 225.9 $ 391.4 $ - $ 617.3 Fixed income (b) 1,529.7 2,019.2 - 3,548.9 1,497.0 2,014.4 - 3,511.4 Real asset investments (c) 59.7 - - 59.7 82.6 - - 82.6 Other investments (d) - - 0.1 0.1 - - 0.1 0.1 Cash and accruals 137.2 0.1 - 137.3 158.3 0.1 - 158.4 Fair value measurement of pension $ 1,927.2 $ 2,403.1 $ 0.1 $ 4,330.4 $ 1,963.8 $ 2,405.9 $ 0.1 $ 4,369.8 Assets measured at net asset value (e) 986.8 1,069.9 Total pension plan assets $ 5,317.2 $ 5,439.7 Fair value measurement of postretirement benefit plan assets: Fixed income (b) $ 90.5 $ - $ - $ 90.5 $ 95.1 $ - $ - $ 95.1 Cash and accruals 33.7 - - 33.7 24.9 - - 24.9 Fair value measurement of $ 124.2 $ - $ - $ 124.2 $ 120.0 $ - $ - $ 120.0 Assets measured at net asset value (e) 333.8 343.2 Total postretirement benefit $ 458.0 $ 463.2 (a) Primarily publicly traded common stock for purposes of total return and to maintain equity exposure consistent with policy allocations. Investments include: United States and international public equity securities, and equity futures valued at closing prices from national exchanges, commingled funds valued at fair value using the unit values provided by the investment managers, and certain private equity securities valued using a matrix of pricing inputs reflecting assumptions based on the best information available. (b) Primarily government and corporate debt securities and futures for purposes of total return, managing fixed income exposure to policy allocations, and duration targets. Investments include: fixed income securities and bond futures generally valued at closing prices from national exchanges, fixed income pricing models, and independent financial analysts; and fixed income commingled funds valued at unit values provided by the investment managers, which are based on the fair value of the underlying investments. (c) Publicly traded common stocks in energy, real estate, and infrastructure for the purpose of total return, which are generally valued at closing prices from national exchanges. (d) Insurance and annuity contracts to provide a stable stream of income for pension retirees. Fair values are based on the fair value of the underlying investments and contract fair values established by the providers. (e) Primarily limited partnerships, trust-owned life insurance, common collective trusts, and certain private equity securities that are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. There were no transfers into or out of level 3 investments in fiscal 2025. During fiscal 2024, the initial public offering of certain equity securities previously priced using non-observable inputs resulted in the transfer of $ 34.3 million out of level 3 investments. There were no transfers into level 3 investments in fiscal 2024. Expected Rate of Return on Plan Assets Our expected rate of return on plan assets is determined by our asset allocation, our historical long-term investment performance, our estimate of future long-term returns by asset class (using input from our actuaries, investment services, and investment managers), and long-term inflation assumptions. We review this assumption annually for each plan; however, our annual investment performance for one particular year does not, by itself, significantly influence our evaluation. Weighted-average asset allocations for our defined benefit pension and other postretirement benefit plans are as follows: Defined Benefit Pension Plans Other Postretirement Benefit Plans Fiscal Year Fiscal Year 2025 2024 2025 2024 Asset category: United States equities 6.4 % 7.2 % 26.0 % 27.8 % International equities 4.4 4.1 14.9 14.4 Private equities 9.3 10.2 9.1 11.2 Fixed income 70.9 68.3 50.0 46.6 Real assets 9.0 10.2 - - Total 100.0 % 100.0 % 100.0 % 100.0 % The investment objective for our defined benefit pension and other postretirement benefit plans is to secure the benefit obligations to participants at a reasonable cost to us. Our goal is to optimize the long-term return on plan assets at a moderate level of risk. The defined benefit pension plan and other postretirement benefit plan portfolios are broadly diversified across asset classes. Within asset classes, the portfolios are further diversified across investment styles and investment organizations. For the U.S. defined benefit pension plans, the long-term investment policy allocation is: 8 percent to equities in the United States; 5 equities; 7 percent to private equities; 71 percent to fixed income; and 9 percent to real assets (real estate, energy, and infrastructure). For other U.S. postretirement benefit plans, the long-term investment policy allocations are: 26 percent to equities in the United States; 13 percent to international equities; 7 percent to total private equities; and 54 percent to fixed income. The actual allocations to these asset classes may vary tactically around the long-term policy allocations based on relative market valuations. Contributions and Future Benefit Payments no t expect to be required to make contributions to our defined benefit pension, other postretirement benefit, and postemployment benefit plans in fiscal 2026. Actual fiscal 2026 contributions could exceed our current projections, as influenced by our decision to undertake discretionary funding of our benefit trusts and future changes in regulatory requirements. Estimated benefit payments, which reflect expected future service, as appropriate, are expected to be paid from fiscal 2026 to fiscal 2035 as follows: In Millions Defined Benefit Pension Plans Other Postretirement Benefit Plans Gross Payments Postemployment Benefit Plans Fiscal 2026 $ 360.9 $ 30.9 $ 22.8 Fiscal 2027 367.0 28.6 19.2 Fiscal 2028 372.7 28.0 17.6 Fiscal 2029 378.1 27.4 15.5 Fiscal 2030 382.9 26.7 13.9 Fiscal 2031-2035 1,965.2 121.2 56.9 Defined Contribution Plans The General Mills Savings Plan is a defined contribution plan that covers domestic salaried, hourly, nonunion, and certain union employees. This plan is a 401(k) savings plan that includes a number of investment funds, including a Company stock fund and an Employee Stock Ownership Plan (ESOP). We sponsor another money purchase plan for certain domestic hourly employees with net assets of $ 19.7 million as of May 25, 2025, and $ 19.5 million as of May 26, 2024. We also sponsor defined contribution plans in many of our foreign locations. Our total recognized expense related to defined contribution plans was $ 96.1 $ 94.0 million in fiscal 2024, and $ 97.2 We match a percentage of employee contributions to the General Mills Savings Plan. The Company match is directed to investment options of the participant’s choosing. The number of shares of our common stock allocated to participants in the ESOP was 3.2 million as of May 25, 2025, and 3.5 million as of May 26, 2024. The ESOP’s only assets are our common stock and temporary cash balances. The Company stock fund and the ESOP collectively held $ 292.7 393.0 million of Company common stock as of May 25, 2025, and May 26, 2024, respectively. |