What was the actuarial loss (gain) for SERP-related benefits for Del Taco in 2023?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Accumulated benefit obligation | $ 57,097 | $ 53,513 | | Fair value of plan assets | $ _ | $ |
Net periodic benefit cost — The components of the fiscal year net periodic benefit cost were as follows (in thousands):
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Qualified Plan: | |||
| Interest cost | $ 15,791 | $ 16,068 | $ 12,506 |
| Expected return on plan assets | (14,982) | (15,105) | (18,103) |
| Actuarial loss | 2,403 | 2,349 | 2,193 |
| Net periodic benefit (credit) cost | $ 3,212 | $ 3,312 | $ (3,404) |
| SERP: | |||
| Interest cost | $ 3,188 | $ 3,149 | $ 2,173 |
| Actuarial loss | 632 | 718 | 1,666 |
| Amortization of unrecognized prior service cost | 14 | 19 | 19 |
| Net periodic benefit cost | $ 3,834 | $ 3,886 | $ 3, |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the actuarial loss related to SERP (Supplemental Executive Retirement Plan) benefits in 2023 was $718. This figure represents the change in the present value of future benefits attributable to factors such as changes in actuarial assumptions (e.g., discount rate, mortality rate) or experience adjustments. Actuarial gains would occur if these changes resulted in a decrease in the estimated future benefit obligations.
For a prospective Del Taco franchisee, understanding these figures provides insight into the company's financial management and its obligations related to employee retirement benefits. While franchisees are not directly involved in managing these specific retirement plans, the overall financial health of the franchisor can impact the support and resources available to franchisees. A well-managed company is more likely to provide better training, marketing support, and supply chain efficiencies.
The SERP actuarial loss is part of the broader category of employee benefits expenses that Del Taco incurs. These expenses, while not directly impacting the day-to-day operations of a franchise, reflect the franchisor's commitment to its employees and its long-term financial planning. Franchisees benefit from associating with a stable and responsible franchisor, as it enhances the brand's reputation and overall sustainability.
It's important for potential franchisees to review the entire financial statement and related notes in the FDD to gain a comprehensive understanding of Del Taco's financial position. This includes analyzing trends in actuarial gains and losses over several years, as well as understanding the assumptions used to calculate these figures. Consulting with a financial advisor can help prospective franchisees interpret these financial statements and assess the overall risk and opportunity associated with investing in a Del Taco franchise.