What was the service cost for Chick Fil A's Postretirement Medical Plan in 2022?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
uly 31, 2023. A subsequent remeasurement was performed as of December 31, 2023 for a lump sum payment received by one participant in December 2023. As a result of the settlements, the Company recognized a settlement loss of approximately $1,470,000 in 2023 which is reflected as a component of total pension expense.
The early retirement option further provided all electing employees company-paid postretirement health benefits, including for those not otherwise eligible under the plan's standard eligibility provisions. These additional benefits granted to employees not otherwise eligible are deemed special termination benefits under ASC 715, which requires the recognition of an expense in the period the employees irrevocably accept the offer and the benefit is reasonably estimable. The Company recognized one-time special termination benefit expenses related to the postretirement healthcare plans of approximately $2,449,000 in 2023.
The following table sets forth the plan's funded status and amounts recognized in the Company's consolidated balance sheets at December 31, 2024 and 2023, respectively.
Chick-fil-A, Inc. Notes to Consolidated Financial Statements December 31, 2024, 2023, and 2022
| | Pension Plans | | |
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the service cost for the Postretirement Medical Plan in 2023 was $20,712,628. The service cost for 2024 was $26,414,010.
The table also includes other changes in benefit obligations such as the benefit obligation at the end of the prior year, interest cost, plan participants' contributions, actuarial loss/(gain), plan amendments/new entrants, new and acquired plans, settlement/curtailment, benefits paid, other adjustments, and retiree drug subsidy received. These figures provide a comprehensive view of how the benefit obligations for the Postretirement Medical Plan change over time.
Understanding these costs and obligations can be crucial for assessing the financial health and stability of Chick Fil A, as well as the potential long-term liabilities associated with employee benefits. However, the service cost for Chick Fil A's Postretirement Medical Plan in 2022 is not listed in the provided table.