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Pension And Other Postretirement Benefit Plans
 12 Months Ended
Mar. 31, 2020
Defined Benefit Plan [Abstract]  
Pension And Other Postretirement Benefit Plans PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
Defined Benefit Plans
Description of Plans
 The Company sponsors several defined benefit pension plans covering salaried and certain hourly employees in the U.S., as well as certain foreign and other employee groups. These plans provide retirement benefits based primarily on employee compensation and years of service. Plan assets consist primarily of equity and fixed income investments. The Company also sponsors defined benefit plans that provide postretirement health and life insurance benefits for eligible U.S. employees and retirees who have attained specific age and service levels, although postretirement life insurance benefits were discontinued several years ago for all employees who were not already retired. The health benefits are funded by the Company as the costs of those benefits are incurred. The plan design includes cost-sharing features such as deductibles and coinsurance. The life insurance benefits are funded with deposits to a reserve account held by an insurance company. The Company has the right to amend or discontinue its pension and other postretirement benefit plans at any time.
In the following disclosures, the term “accumulated benefit obligation” (“ABO”) represents the actuarial present value of estimated future benefit payments earned by participants in the Company's defined benefit pension plans as of the balance sheet date without regard to the estimated effect of future compensation increases on those benefits. The term does not apply to other postretirement benefits. “Projected benefit obligation” refers to the projected benefit obligation (“PBO”) for pension benefits and the accumulated postretirement benefit obligation (“APBO”) for other postretirement benefits. These amounts represent the actuarial present value of estimated future benefit payments earned by participants in the benefit plans as of the balance sheet date. For pension benefits, the projected benefit obligation includes the estimated effect of future compensation increases on those benefits.
Actuarial Assumptions
Assumptions used for financial reporting purposes to compute net periodic benefit cost and benefit obligations for the Company's primary defined benefit plans were as follows:
 
Pension Benefits
 
Other Postretirement Benefits
 
2020
  
2019
  
2018
 
2020
  
2019
  
2018
Discount rates:
 
  
 
  
 
 
 
  
 
  
 
Benefit cost for plan year
4.00
%
  
4.10
%
  
4.10
%
 
3.80
%
  
3.90
%
  
3.90
%
Benefit obligation at end of plan year
3.60
%
  
4.00
%
  
4.10
%
 
3.40
%
  
3.80
%
  
3.90
%
Expected long-term return on plan assets:
 
 
 
 
 
 
 
 
 
 
 
Benefit cost for plan year
6.75
%
  
6.75
%
  
7.00
%
 
3.00
%
  
3.00
%
  
3.00
%
Salary scale:
 
  
 
  
 
 
 
  
 
  
 
Benefit cost for plan year
4.00
%
 
4.00
%
 
4.00
%
 
4.00
%
 
4.00
%
 
4.00
%
Benefit obligation at end of plan year
4.00
%
 
4.00
%
 
4.00
%
 
4.00
%
 
4.00
%
 
4.00
%
Healthcare cost trend rate
N/A

  
N/A

  
N/A

 
7.34
%
  
7.60
%
  
8.10
%

Changes in the discount rates in the above table reflect prevailing market interest rates at the end of each fiscal year when the benefit obligations are actuarially measured. The expected long-term return on plan assets is developed from financial models used to project future returns on the underlying assets of the funded plans and is reviewed on an annual basis. The healthcare cost trend rate used by the Company is based on a study of medical cost inflation rates that is reviewed and updated annually for continued applicability. The revised trend assumption of 7.34% in 2020 declines gradually to 4.44% in 2028. The Company has caps in place on postretirement medical benefits that limit its cost for a large segment of the retiree population. As a result, changes to the healthcare cost trend rate have a limited impact on the postretirement medical plan liability and expense.

Benefit Obligations, Plan Assets, and Funded Status
The following table reflects the changes in benefit obligations and plan assets in fiscal years 2020 and 2019, as well as the funded status of the plans at March 31, 2020 and 2019:
 
Pension
Benefits
  
Other Postretirement Benefits
 
March 31,
 
March 31,
 
2020
 
2019
 
2020
 
2019
Actuarial present value of benefit obligation:
 
 
 
 
 
 
 
Accumulated benefit obligation
$
281,242

  
$
273,370

 
 
 
 
Projected benefit obligation
287,082

  
278,189

 
$
30,282

 
$
31,635

 
 
 
 
 
 
 
 
Change in projected benefit obligation:
 
 
 
 
 
 
 
Projected benefit obligation, beginning of year
$
278,189

 
$
273,658

 
$
31,635

 
$
32,945

Service cost
5,990

 
6,008

 
199

 
222

Interest cost
10,747

 
10,810

 
1,306

 
1,371

Effect of discount rate change
14,479

 
5,177

 
1,326

 
563

Foreign currency exchange rate changes
(1,477
)
 
(2,526
)
 
(1,012
)
 
(447
)
Settlements
(6,038
)
 
—

 
—

 
—

Other
1,029

 
7,268

 
(744
)
 
(126
)
Benefit payments
(15,837
)
 
(22,206
)
 
(2,428
)
 
(2,893
)
Projected benefit obligation, end of year
$
287,082

 
$
278,189

 
$
30,282

 
$
31,635

 
 
 
 
 
 
 
 
Change in plan assets:
 
 
 
 
 
 
 
Plan assets at fair value, beginning of year
$
244,969

 
$
229,568

 
$
3,717

 
$
3,467

Actual return on plan assets
10,551

 
9,772

 
152

 
150

Employer contributions
6,037

 
29,489

 
1,928

 
2,993

Settlements
(6,038
)
 
—

 
—

 
—

Foreign currency exchange rate changes
(1,232
)
 
(1,654
)
 
—

 
—

Benefit payments
(15,837
)
 
(22,206
)
 
(2,428
)
 
(2,893
)
Plan assets at fair value, end of year
$
238,450

 
$
244,969

 
$
3,369

 
$
3,717

 
 
 
 
 
 
 
 
Funded status:
 
 
 
 
 
 
 
Funded status of the plans, end of year
$
(48,632
)
  
$
(33,220
)
  
$
(26,913
)
 
$
(27,918
)

In fiscal year 2020, some employees covered by a foreign pension plan elected to convert their lifetime annuity benefit into limited fixed payments based on the actuarially determined liability at the time of the election. The election to change the defined benefit resulted in a partial plan settlement and recognition of a $0.7 million settlement charge for the fiscal year ended March 31, 2020.
The Company funds its non-regulated U.S. pension plan, one of its foreign pension plans, and its postretirement medical plans on a pay-as-you-go basis as the benefit payments are incurred. Those plans account for approximately 71% of the $48.6 million unfunded pension obligation and approximately 94% of the $26.9 million unfunded postretirement benefit obligation shown on the funded status line in the above table at March 31, 2020. The increase in employer pension contributions in fiscal year 2019 reflects higher contributions to the Company's U.S. ERISA-regulated pension plan to realize incremental income tax benefits, as well as higher contributions to the non-regulated U.S. plan to fund lump-sum benefit payments to retiring participants.
The funded status of the Company’s plans at the end of fiscal years 2020 and 2019 was reported in the consolidated balance sheets as follows:
 
Pension
Benefits
 
Other Postretirement Benefits
 
March 31,
 
March 31,
 
2020
 
2019
 
2020
 
2019
Non-current asset (included in other noncurrent assets)
$
346

 
$
1,837

 
$
—

 
$
—

Current liability (included in accounts payable and accrued expenses)
(2,978
)
 
(1,490
)
 
(2,233
)
 
(2,228
)
Non-current liability (reported as pensions and other postretirement benefits)
(46,000
)
 
(33,567
)
 
(24,680
)
 
(25,690
)
Amounts recognized in the consolidated balance sheets
$
(48,632
)
 
$
(33,220
)
 
$
(26,913
)
 
$
(27,918
)

Additional information on the funded status of the Company’s plans as of the respective measurement dates for the fiscal years ended March 31, 2020 and 2019, is as follows:
 
Pension
Benefits
 
Other Postretirement Benefits
 
March 31,
 
March 31,
 
2020
 
2019
 
2020
 
2019
For plans with a projected benefit obligation in excess of plan assets:
 
 
 
 
 
 
 
Aggregate projected benefit obligation (PBO)
$
284,327

 
$
269,622

 
$
30,282

 
$
31,635

Aggregate fair value of plan assets
235,349

 
234,565

 
3,369

 
3,717

For plans with an accumulated benefit obligation in excess of plan assets:
 
 
 
 
 
 
 
Aggregate accumulated benefit obligation (ABO)
278,515

 
35,070

 
N/A

 
N/A

Aggregate fair value of plan assets
235,349

 
4,023

 
N/A

 
N/A


With the additional employer contributions noted above and the return on plan assets during fiscal year 2019, the assets of the Company's U.S. ERISA-regulated pension plan exceeded the accumulated benefit obligation (ABO) at March 31, 2019.
Net Periodic Benefit Cost
The components of the Company’s net periodic benefit cost were as follows:
 
Pension Benefits
 
Other Postretirement Benefits
 
Fiscal Year Ended March 31,
 
Fiscal Year Ended March 31,
 
2020
 
2019
 
2018
 
2020
 
2019
 
2018
Components of net periodic benefit cost:
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
5,990

 
$
6,008

 
$
5,177

 
$
199

 
$
222

 
$
229

Interest cost
10,747

 
10,810

 
10,801

 
1,306

 
1,371

 
1,471

Expected return on plan assets
(16,671
)
 
(15,695
)
 
(15,962
)
 
(106
)
 
(99
)
 
(87
)
Settlement cost
676

 
—

 
—

 
—

 
—

 
—

Net amortization and deferral
3,709

 
3,491

 
3,735

 
(647
)
 
(710
)
 
(620
)
Net periodic benefit cost
$
4,451

 
$
4,614

 
$
3,751

 
$
752

 
$
784

 
$
993


A one-percentage-point increase or decrease in the assumed healthcare cost trend rate would not result in a significant change to the March 31, 2020 accumulated postretirement benefit obligation or the aggregate service and interest cost components of the net periodic postretirement benefit expense for fiscal year 2021.
Amounts Included in Accumulated Other Comprehensive Loss
Amounts included in accumulated other comprehensive loss at the beginning of the year are amortized as a component of net periodic benefit cost during the year. The amounts recognized in other comprehensive income or loss for fiscal years 2020 and 2019 and the amounts included in accumulated other comprehensive loss at the end of those fiscal years are shown below. All amounts shown are before allocated income taxes.
 
Pension
Benefits
 
Other Postretirement Benefits
 
March 31,
 
March 31,
 
2020
 
2019
 
2020
 
2019
Change in net actuarial loss (gain):
 
 
 
 
 
 
 
Net actuarial loss (gain), beginning of year
$
81,502

 
$
69,333

 
$
(6,201
)
 
$
(7,247
)
Losses (gains) arising during the year
21,838

 
17,884

 
302

 
513

Settlement
(529
)
 
—

 
—

 
—

Amortization included in net periodic benefit cost during the year
(5,786
)
 
(5,715
)
 
534

 
533

Net actuarial loss (gain), end of year
97,025

 
81,502

 
(5,365
)
 
(6,201
)
 
 
 
 
 
 
 
 
Change in prior service cost (benefit):
 
 
 
 
 
 
 
Prior service cost (benefit), beginning of year
(7,479
)
 
(9,703
)
 
(766
)
 
(965
)
Amortization included in net periodic benefit cost during the year
2,077

 
2,224

 
202

 
199

Prior service cost (benefit), end of year
(5,402
)
 
(7,479
)
 
(564
)
 
(766
)
 
 
 
 
 
 
 
 
Total amounts in accumulated other comprehensive loss
at end of year, before income taxes
$
91,623

 
$
74,023

 
$
(5,929
)
 
$
(6,967
)

Amounts in the above table reflect the Company and its consolidated subsidiaries. The accumulated other comprehensive loss reported in the consolidated balance sheets also includes pension and other postretirement benefit amounts related to ownership interests in unconsolidated affiliates.
The Company expects to recognize approximately $6.1 million of the March 31, 2020 net actuarial loss and $2.2 million of the March 31, 2020 prior service benefit in net periodic benefit cost during fiscal year 2021.
Allocation of Pension Plan Assets
The Company has established, and periodically adjusts, target asset allocations for its investments in its U.S. ERISA-regulated defined benefit pension plan, which represents 97% of consolidated plan assets and 85% of consolidated PBO at March 31, 2020, to balance the needs of liquidity, total return, and risk control. The assets are required to be diversified across asset classes and investment styles to achieve that balance. During the year, the asset allocation is reviewed for adherence to the target policy and rebalanced to the targeted weights. The Company reviews the expected long-term returns of the asset allocation each year to help determine whether changes are needed. The return is evaluated on a weighted-average basis in relation to inflation. The assumed long-term rate of return used to calculate annual benefit expense is based on the asset allocation and expected market returns for the respective asset classes.
The weighted–average target pension asset allocation and target ranges at the March 31, 2020 measurement date and the actual asset allocations at the March 31, 2020 and 2019 measurement dates by major asset category were as follows:
 
 
 
 
 
 
 
Actual Allocation
 
Target Allocation
 
 
 
 
 
March 31,
Major Asset Category
 
Range
 
2020
 
2019
Equity securities
29.0
%
 
19
%
-
39%
 
25.4
%
 
31.2
%
Fixed income securities (1) 
66.0
%
 
56
%
-
76%
 
70.3
%
 
64.8
%
Alternative investments
5.0
%
 
0
%
-
10%
 
4.3
%
 
4.0
%
Total
100.0
%
 
 
 
 
 
100.0
%
 
100.0
%

(1) 
Actual amounts include high yield securities and cash balances held for the payment of benefits.    
Universal makes regular contributions to its pension and other postretirement benefit plans. As previously noted, for postretirement health benefits, contributions reflect funding of those benefits as they are incurred. The Company expects to make contributions of approximately $6.0 million to its ERISA regulated defined benefit pension plan and $4.0 million to its non-ERISA regulated pension plans in fiscal year 2021.
Estimated future benefit payments to be made from the Company’s plans are as follows:
Fiscal Year
Pension
Benefits
 
Other
Postretirement
Benefits
2021
$
17,561

 
$
2,668

2022
19,620

 
2,545

2023
17,326

 
2,445

2024
17,992

 
2,346

2025
17,774

 
2,246

2026 - 2030
89,919

 
9,672



Fair Values of Pension Plan Assets
Assets held by the Company's defined benefit pension plans primarily consist of equity securities, fixed income securities, and alternative investments. Equity securities are primarily invested in actively-traded mutual funds with underlying common stock investments in U.S. and foreign companies ranging in size from small to large corporations. Fixed income securities are also held primarily through actively-traded mutual funds with the underlying investments in both U.S. and foreign securities. The methodologies for determining the fair values of the plan assets are outlined below. Where the values are based on quoted prices for the securities in an active market, they are classified as Level 1 of the fair value hierarchy. Where secondary pricing sources are used, they are classified as Level 2 of the hierarchy. Pricing models that use significant unobservable inputs are classified as Level 3.
•
Equity securities: Investments in equity securities through actively-traded mutual funds are valued based on the net asset values of the units held in the respective funds, which are determined by obtaining quoted prices on nationally recognized securities exchanges. These securities are classified as Level 1.
•
Fixed income securities: Fixed income investments that are held through mutual funds are valued based on the net asset values of the units held in the respective funds, which are determined by obtaining quoted prices on nationally recognized securities exchanges. These securities are classified as Level 1. Other fixed income investments are valued at an estimated price that a dealer would pay for a similar security on the valuation date using observable market inputs and are classified as Level 2. These market inputs may include yield curves for similarly rated securities. Small amounts of cash are held in common collective trusts. Fixed income securities also include insurance assets, which are valued based on an actuarial calculation. Those securities are classified as Level 3.
•
Alternative investments: Real estate assets are valued using valuation models that incorporate income and market approaches, including external appraisals, to derive fair values. The hedge fund allocation is a fund of hedge funds and is valued by the manager based on the net asset value of each fund. These models use significant unobservable inputs and are classified as Level 3 within the fair value hierarchy.
Fair values of the assets of the Company’s pension plans as of March 31, 2020 and 2019, classified based on how their values were determined under the fair value hierarchy are as follows:
 
March 31, 2020
 
Level 1
 
Level 2
 
Level 3
 
Total
Equity securities
$
58,204

 
$
—

 
$
—

 
$
58,204

Fixed income securities (1) 
162,667

 
3,101

 
4,668

 
170,436

Alternative investments
—

 
—

 
9,810

 
9,810

Total investments
$
220,871

 
$
3,101

 
$
14,478

 
$
238,450

 
March 31, 2019
 
Level 1
 
Level 2
 
Level 3
 
Total
Equity securities
$
71,561

 
$
—

 
$
—

 
$
71,561

Fixed income securities (1) 
149,798

 
10,399

 
4,025

 
164,222

Alternative investments
—

 
—

 
9,186

 
9,186

Total investments
$
221,359

 
$
10,399

 
$
13,211

 
$
244,969

(1) 
Includes high yield securities and cash and cash equivalent balances.
Other Benefit Plans
Universal and several subsidiaries offer employer defined contribution savings plans. Amounts charged to expense for these plans were approximately $2.7 million for fiscal year 2020, $2.6 million for fiscal year 2019, and $2.3 million for fiscal year 2018.