v3.23.3
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS
9 Months Ended
Oct. 01, 2023
Retirement Benefits [Abstract]  
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS
Net Periodic Benefit Cost
The components of net periodic benefit cost for the three months ended October 1, 2023 and October 2, 2022 were as follows:
Pension BenefitsOther Benefits
Three Months EndedThree Months Ended
October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Service cost$3,747$4,028$57$80
Interest cost10,259 8,810 1,794 1,154 
Expected return on plan assets(12,275)(11,973)— — 
Amortization of prior service credit(1,414)(1,413)(13)— 
Amortization of net loss (gain)4,974 4,563 (242)26 
Settlement loss943 3,728 926 — 
Total net periodic benefit cost$6,234 $7,743 $2,522 $1,260 
We made contributions of $987 and $5,314 to the pension plans and other benefits plans, respectively, during the third quarter of 2023. In the third quarter of 2022, we made contributions of $824 and $1,484 to our pension plans and other benefit plans, respectively. The contributions in 2023 and 2022 also included benefit payments from our non-qualified pension plans and post-retirement benefit plans.
The components of net periodic benefit cost for the nine months ended October 1, 2023 and October 2, 2022 were as follows:
 
Pension BenefitsOther Benefits
Nine Months EndedNine Months Ended
October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Service cost$11,269$13,639$166$238
Interest cost30,819 20,438 5,984 3,467 
Expected return on plan assets(37,041)(36,788)— — 
Amortization of prior service credit(4,243)(4,238)(13)— 
Amortization of net loss14,961 10,402 (901)77 
Settlement loss5,332 14,104 926 — 
Total net periodic benefit cost$21,097 $17,557 $6,162 $3,782 
We made contributions of $4,849 and $16,224 to the pension plans and other benefits plans, respectively, during the first nine months of 2023. In the first nine months of 2022, we made contributions of $4,580 and $12,059 to our pension plans and other benefit plans, respectively. The contributions in 2023 and 2022 also included benefit payments from our non-qualified pension plans and post-retirement benefit plans.
The non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans is reflected within other (income) expense, net in the Consolidated Statements of Income (see Note 17).
During the first nine months of 2023, we recognized pension settlement charges in our hourly retirement plan due to lump sum withdrawals by employees retiring or leaving the Company. The non-cash settlement charges, which represent the acceleration of a portion of the respective plan’s accumulated unrecognized actuarial loss, were triggered when the cumulative lump sum distributions exceeded the plan’s anticipated annual service and interest costs. In connection with the third quarter 2023 settlements, the related plan assets and liabilities were remeasured using a discount rate as of the remeasurement date that was 53 basis points higher than the rate as of December 31, 2022 and an expected rate of return on plan assets of 6.3%, which was consistent with the rate as of December 31, 2022.
Annuitization of Other Post Employment Benefits
On August 21, 2023, the Hershey Employee Benefits Committee approved the purchase of an irrevocable group annuity contract with an insurance company for eligible retirees of The Hershey Company Retiree Medical and Life Insurance Plan to cover their medical benefits. On August 31, 2023, we paid $88,689 for the irrevocable group annuity contract. As a result of this transaction, we remeasured the projected benefit obligation and recognized a $926 non-cash pre-tax settlement charge during the quarter ended October 1, 2023.