Employee Benefit Plans

12 Months Ended

May 31, 2025

Pension Plan

One of the Company's wholly owned foreign subsidiaries has a defined-benefit pension plan based upon an average final pay benefit calculation. The measurement date for this plan is the last day of the fiscal year and the plan is frozen to new participants.

Prior to the end of the second quarter of fiscal 2025, the Knoll subsidiary had one domestic defined-benefit pension plan covering eligible U.S. nonunion employees. The measurement date for this plan had been the last day of the fiscal year and the plan was frozen to new participants. In the second quarter of fiscal 2025, the Company completed the termination of the defined-benefit pension plan held by the Knoll subsidiary, which was fully funded as of November 30, 2024. During the second quarter of fiscal 2025, the Company settled its obligations under the plan by providing lump-sum payments of $39.9 million to eligible participants who elected to receive them and entering into an annuity purchase contract for the remaining liability of $84.7 million. The Company recognized a pension plan termination gain of $1.5 million during the twelve months ended May 31, 2025, which represents the acceleration of unamortized net actuarial losses previously included within accumulated other comprehensive income. The gain was recorded in Other (income) expense, net within our Condensed Consolidated Statements of Comprehensive Income.

Benefit Obligations and Funded Status

The following table presents, for the fiscal years noted, a summary of the changes in the projected benefit obligation, plan assets and funded status of the Company's pension plans:



(In millions)	2025				2024
	Domestic		International		Domestic		International

Change in benefit obligation:
Benefit obligation at beginning of year	$	125.9	$	81.2	$	123.8	$	76.0

Interest cost	2.7		4.3		6.1		4.1


Plan settlements	(123.5)		—		—		—
Foreign exchange impact	—		4.5		—		1.8
Actuarial loss (gain) (1)	(1.3)		(8.1)		4.4		2.6


Benefits paid	(3.8)		(4.0)		(8.4)		(3.3)

Benefit obligation at end of year	$	—	$	77.9	$	125.9	$	81.2

Change in plan assets:
Fair value of plan assets at beginning of year	$	123.1	$	89.3	$	126.3	$	84.4
Actual return on plan assets	6.0		(3.2)		5.7		4.5
Foreign exchange impact	—		4.9		—		2.0
Employer contributions	—		0.3		0.1		1.7

Asset reversion	(0.6)		—		—		—
Plan settlements	(123.5)		—		—		—

Actual expenses paid	(1.2)		—		(0.6)		—
Benefits paid	(3.8)		(4.0)		(8.4)		(3.3)

Fair value of plan assets at end of year	$	—	$	87.3	$	123.1	$	89.3

Funded status:
Over (under) funded status at end of year	$	—	$	9.4	$	(2.8)	$	8.1

Components of the amounts recognized in the Consolidated Balance Sheets:
Current assets	$	—	$	—	$	—	$	—
Non-current assets	$	—	$	9.4	$	—	$	8.1
Current liabilities	$	—	$	—	$	—	$	—
Non-current liabilities	$	—	$	—	$	2.8	$	—

Components of the amounts recognized in Accumulated other comprehensive loss before the effect of income taxes:
Prior service cost	$	—	$	0.3	$	—	$	0.4
Unrecognized net actuarial loss (gain)	—		31.1		3.5		29.2

Accumulated other comprehensive loss (gain)	$	—	$	31.4	$	3.5	$	29.6

(1) In fiscal 2025 and 2024, the net actuarial loss (gain) includes amounts resulting from changes in actuarial assumptions utilized to calculate our benefit plan obligations such as the weighted-average discount rate.

The accumulated benefit obligation for the Company's pension plans totaled $75.3 million and $203.8 million as of the end of fiscal 2025 and fiscal 2024, respectively.

The following table is a summary of the annual cost (income) related to the Company's pension plans:


Components of Net Periodic Benefit Costs and Other Changes Recognized in Other Comprehensive Income (Loss):
(In millions)	2025				2024				2023
	Domestic		International		Domestic		International		Domestic		International
Service cost	$	0.9	$	—	$	—	$	—	$	—	$	—
Interest cost	2.7		4.3		6.1		4.1		6.1		3.1
Expected return on plan assets	(2.0)		(5.7)		(9.1)		(5.0)		(8.3)		(4.7)
Pension plan termination gain	(1.5)		—		—		—		—		—
Expected administrative expenses	—		—		0.7		—		0.6		—
Settlement related expenses	—		—		—		—		(0.6)		—
Amortization of prior service cost	—		0.1		—		0.1		—		0.1
Amortization of net (gain) loss	—		0.6		(0.1)		—		(0.1)		2.2
Net periodic benefit (income) cost	$	0.1	$	(0.7)	$	(2.4)	$	(0.8)	$	(2.3)	$	0.7


Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss):
(In millions)	2025				2024
	Domestic		International		Domestic		International
Net actuarial loss (gain)	$	(4.1)	$	0.9	$	7.8	$	3.1
Net amortization	—		(0.7)		0.1		(0.1)
Pension plan termination gain	1.5		—		—		—
Effect of exchange rates	—		—		—		0.7
Total recognized in other comprehensive loss	$	(2.6)	$	0.2	$	7.9	$	3.7

Actuarial Assumptions

The weighted-average actuarial assumptions used to determine the benefit obligation amounts and the net periodic benefit cost for the Company's pension plans are as follows:


Weighted-average assumptions used in the determination of net periodic benefit cost:
(Percentages)	2025		2024		2023
	Domestic	International	Domestic	International	Domestic	International

Discount rate(1)	5.10	5.18	5.17	5.34	varies	3.33
Compensation increase rate	N/A	3.15	N/A	3.00	N/A	4.45
Expected return on plan assets	4.46	5.40	6.80	4.80	6.80	4.80
(1) Due to settlement activity during FYE 2023 in the domestic plan, there were two remeasurements as of 3/4/2023 and 6/3/2023. The discount rate for beginning of period in fiscal 2023 is 4.40% and 5.18%, respectively.

Weighted-average assumptions used in the determination of the projected benefit obligations:
Discount rate	N/A	5.82	5.10	5.18	5.17	5.34
Compensation increase rate	N/A	2.80	N/A	3.15	N/A	3.00

For the international plan, the Company uses a full yield curve approach to estimate the benefit obligation discount rate and the interest component of net periodic benefit cost for pension benefits. This method applies the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The same process was used for the domestic plan until year end of fiscal 2024. In fiscal 2024 for the domestic plan, the discount rate was derived from a combination of the rates from annuity providers for the annuity purchase portion of the benefit obligation and November 2023 IRS lump sum segment rates for the lump sum portion of the benefit obligation.

Plan Assets and Investment Strategies

The assets of the Company's employee benefit plan consist mainly of listed fixed income obligations and common/collective trusts. The Company's primary objective for invested pension plan assets is to provide for sufficient long-term growth and liquidity to satisfy all of its benefit obligations over time. Accordingly, the Company has developed an investment strategy that it believes maximizes the probability of meeting this overall objective. This strategy includes the development of a target investment allocation by asset category in order to provide guidelines for making investment decisions. This target allocation emphasizes the long-term characteristics of individual asset classes as well as the diversification among multiple asset classes. In developing its strategy, the Company considered the need to balance the varying risks associated with each asset class with the long-term nature of its benefit obligations.The Company's strategy is to increase the level of fixed income investments as the funding status improves, thereby more closely matching the return on assets with the liabilities of the plan.

The Company utilizes independent investment managers to assist with investment decisions within the overall guidelines of the investment strategy. The target asset allocation at the end of fiscal 2025 and asset categories for the Company's pension plans for fiscal 2025 and 2024 are as follows:


	Targeted Asset Allocation Percentage
Asset Category	2025			2024
	Domestic	International		Domestic		International

Fixed income	—%	74%		61%		76%
Cash	—%	1%		39%		1%
Common collective trusts	—%	25%		—%		23%

Total	—%	100%		100%		100%

	Percentage of Plan Assets at Year End
	2025			2024
	Domestic	International		Domestic		International
Fixed income	—%	63%		61%		69%
Cash	—%	12%		39%		9%
Common collective trusts	—%	25%		—%		22%
Total	—%	100%		100%		100%

		May 31, 2025
(In millions)		Domestic
Asset Category		Level 1		Level 2		Total

Cash and cash equivalents		$	—	$	—	$	—
U.S. government securities		—		—		—
Corporate bonds		—		—		—
Common collective trusts-balanced		—		—		—
Total		$	—	$	—	$	—

		May 31, 2025
(In millions)		International
Asset Category		Level 1		Level 2		Total
Cash and cash equivalents		$	10.3	$	—	$	10.3
Foreign government obligations		—		54.8		54.8
Common collective trusts-balanced		—		22.2		22.2
Total		$	10.3	$	77.0	$	87.3

		June 1, 2024
(In millions)		Domestic
Asset Category		Level 1		Level 2		Total
Cash and cash equivalents		$	47.5	$	—	$	47.5
U.S. government securities		—		10.0		10.0
Corporate bonds		—		65.6		65.6
Common collective trusts-balanced		—		—		—
Total		$	47.5	$	75.6	$	123.1

		June 1, 2024
(In millions)		International
Asset Category		Level 1		Level 2		Total
Cash and cash equivalents		$	8.3	$	—	$	8.3
Foreign government obligations		—		61.4		61.4
Common collective trusts-balanced		—		19.6		19.6
Total		$	8.3	$	81.0	$	89.3

Cash Flows

The Company reviews pension funding requirements to determine the contribution to be made in the next year. Actual contributions will be dependent upon investment returns, changes in pension obligations and other economic and regulatory factors. During fiscal 2025 and fiscal 2024, the Company made total cash contributions of $0.3 million and $1.8 million, respectively, to its pension plans.

The Company expects to contribute approximately $0.9 million to its pension plan in fiscal 2026. The following represents a summary of the benefits expected to be paid by the plan in future fiscal years. These expected benefits were estimated based on the same actuarial valuation assumptions used to determine benefit obligations at May 31, 2025.


(In millions)	Pension Benefits

2026	$	3.3
2027	$	5.5
2028	$	4.2
2029	$	4.8
2030	$	5.3
2030 - 2034	$	27.7

401(k) Plan

Substantially all of the Company’s domestic employees are eligible to participate in a defined contribution retirement plan, primarily the MillerKnoll Retirement Plan. Employees under the plan are eligible to begin participating on their date of hire. The Company contributes to the plans as matching contributions a certain percentage of the participant’s salary deferral, subject to certain limitations defined in the plan documents. The Company’s other defined contribution retirement plans may provide for matching contributions, non-elective contributions and discretionary contributions as declared by management.

The expense recorded for the Company's 401(k) matching and other discretionary contributions was $23.1 million, $22.0 million and $32.4 million in fiscal years 2025, 2024 and 2023, respectively.

MILLERKNOLL, INC. 10-K