BENEFIT PLANS

The Company maintains a number of retirement and other post-retirement employee benefit plans.

Certain subsidiaries sponsor defined contribution plans. Benefits are determined and funded annually based upon the terms of the plans. Amounts recognized as cost under these plans amounted to $18.9 million, $17.2 million, and $15.4 million for the years ended December 31, 2018, 2017, and 2016, respectively.

Certain subsidiaries sponsor defined benefit plans. Benefits are provided to employees primarily based upon years of service and employees’ compensation for certain periods during the last years of employment. Prior to 2002, the Company’s U.S. operations also provided post-retirement medical benefits to their employees. Contributions for medical benefits are related to employee years of service.

The following tables set forth the change in benefit obligation, the change in plan assets, the funded status, and amounts recognized in the consolidated financial statements for the Company’s defined benefit plans and post-retirement plan at December 31, 2018 and 2017:



	U.S. Pension Benefits						Non-U.S. Pension Benefits						Other Benefits						Total
	2018			2017			2018			2017			2018			2017			2018			2017
Change in benefit obligation:
Benefit obligation at beginning of year	$	142,571		$	138,155		$	918,478		$	838,277		$	2,673		$	2,985		$	1,063,722		$	979,417
Service cost, gross	1,090			565			30,721			29,600			—			—			31,811			30,165
Interest cost	4,242			4,374			8,630			8,511			66			70			12,938			12,955
Actuarial losses (gains)	(10,019		)	6,979			(40,469		)	33,036			(167		)	18			(50,655		)	40,033
Plan amendments and other	—			—			974			(15,153		)	(8		)	137			966			(15,016		)
Benefits paid	(7,682		)	(7,502		)	(36,379		)	(30,356		)	(378		)	(537		)	(44,439		)	(38,395		)
Impact of foreign currency	—			—			(17,860		)	54,563			—			—			(17,860		)	54,563
Benefit obligation at end of year	$	130,202		$	142,571		$	864,095		$	918,478		$	2,186		$	2,673		$	996,483		$	1,063,722
Change in plan assets:
Fair value of plan assets at beginning of year	$	111,567		$	104,103		$	808,215		$	716,169		$	—		$	—		$	919,782		$	820,272
Actual return on plan assets	(8,419		)	14,869			(34,102		)	49,055			—			—			(42,521		)	63,924
Employer contributions	75			97			26,032			22,961			227			400			26,334			23,458
Plan participants’ contributions	—			—			15,176			13,503			151			137			15,327			13,640
Benefits paid	(7,682		)	(7,502		)	(36,379		)	(30,356		)	(378		)	(537		)	(44,439		)	(38,395		)
Impact of foreign currency and other	—			—			(11,532		)	36,883			—			—			(11,532		)	36,883
Fair value of plan assets at end of year	$	95,541		$	111,567		$	767,410		$	808,215		$	—		$	—		$	862,951		$	919,782
Funded status	$	(34,661	)	$	(31,004	)	$	(96,685	)	$	(110,263	)	$	(2,186	)	$	(2,673	)	$	(133,532	)	$	(143,940	)

Amounts recognized in the consolidated balance sheets consist of:



	U.S. Pension Benefits						Non-U.S. Pension Benefits						Other Benefits						Total
	2018			2017			2018			2017			2018			2017			2018			2017
Other non-current assets	$	—		$	—		$	46,014		$	40,493		$	—		$	—		$	46,014		$	40,493
Accrued and other liabilities	(110		)	(88		)	(4,884		)	(4,990		)	(431		)	(411		)	(5,425		)	(5,489		)
Pension and other post-retirement liabilities	(34,551		)	(30,916		)	(137,815		)	(145,766		)	(1,755		)	(2,262		)	(174,121		)	(178,944		)
Accumulated other comprehensive loss (income)	61,344			61,819			260,820			254,870			(910		)	(2,365		)	321,254			314,324
Total	$	26,683		$	30,815		$	164,135		$	144,607		$	(3,096	)	$	(5,038	)	$	187,722		$	170,384

The following amounts have been recognized in accumulated other comprehensive income (loss), before taxes, at December 31, 2018 and have not yet been recognized as a component of net periodic pension cost:



	U.S. Pension Benefits		Non-U.S. Pension Benefits			Other Benefits			Total			Total, After Tax
Plan amendments and prior service cost	$	—	$	(22,541	)	$	—		$	(22,541	)	$	(17,873	)
Actuarial losses (gains)	61,344		283,361			(910		)	343,795			266,332
Total	$	61,344	$	260,820		$	(910	)	$	321,254		$	248,459

The following changes in plan assets and benefit obligations were recognized in other comprehensive income (loss), before taxes, for the year ended December 31, 2018:



	U.S. Pension Benefits			Non-U.S. Pension Benefits			Other Benefits			Total			Total, After Tax
Net actuarial losses (gains)	$	5,329		$	24,637		$	(167	)	$	29,799		$	23,326
Plan amendment	—			974			—			974			780
Amortization of:
Actuarial (losses) gains	(5,804		)	(21,521		)	1,250			(26,075		)	(20,173		)
Plan amendments and prior service cost	—			6,947			372			7,319			5,807
Impact of foreign currency	—			(5,087		)	—			(5,087		)	(3,522		)
Total	$	(475	)	$	5,950		$	1,455		$	6,930		$	6,218

The accumulated benefit obligations at December 31, 2018 and 2017 were $130.2 million and $142.6 million, respectively, for the U.S. defined benefit pension plan and $731.4 million and $785.7 million, respectively, for all non-U.S. plans. Certain of the plans included within non-U.S. pension benefits have accumulated benefit obligations which exceed the fair value of plan assets. The projected benefit obligation, the accumulated benefit obligation, and fair value of assets of these plans as of December 31, 2018 were $189.2 million, $179.0 million, and $46.5 million, respectively.

The assumed discount rates and rates of increase in future compensation levels used in calculating the projected benefit obligations vary according to the economic conditions of the country in which the retirement plans are situated. The weighted average rates used for the purposes of the Company’s plans are as follows:



	U.S.				Non-U.S.
	2018		2017		2018		2017
Discount rate	4.11	%	3.49	%	1.22	%	0.97	%
Compensation increase rate	n/a		n/a		0.87	%	0.87	%
Expected long-term rate of return on plan assets	6.50	%	6.50	%	3.84	%	3.86	%

The assumed discount rates, rates of increase in future compensation levels, and the long-term rate of return used in calculating the net periodic pension cost vary according to the economic conditions of the country in which the retirement plans are situated. The weighted average rates used for the purposes of the Company’s plans are as follows:



	U.S.						Non-U.S.
	2018		2017		2016		2018		2017		2016
Discount rate	3.49	%	3.97	%	4.27	%	0.97	%	0.98	%	1.31	%
Compensation increase rate	n/a		n/a		n/a		0.87	%	0.85	%	1.03	%
Expected long-term rate of return on plan assets	6.50	%	6.75	%	7.25	%	3.86	%	4.09	%	4.58	%

Net periodic pension cost and net periodic post-retirement benefit for the defined benefit plans and U.S. post-retirement plan include the following components for the years ended December 31:



	U.S.									Non-U.S.									Other Benefits									Total
	2018			2017			2016			2018			2017			2016			2018			2017			2016			2018			2017			2016
Service cost, net	$	1,090		$	565		$	432		$	15,545		$	16,341		$	16,804		$	—		$	—		$	—		$	16,635		$	16,906		$	17,236
Interest cost on projected benefit obligations	4,242			4,374			4,428			8,630			8,511			10,664			66			70			76			12,938			12,955			15,168
Expected return on plan assets	(6,929		)	(6,737		)	(7,781		)	(31,005		)	(30,349		)	(33,168		)	—			—			—			(37,934		)	(37,086		)	(40,949		)
Recognition of actuarial losses/(gains) and prior service costs	5,804			6,556			7,606			14,575			16,247			12,923			(1,623		)	(2,674		)	(4,567		)	18,756			20,129			15,962
Settlement charge	—			—			7,963			—			—			—			—			—			—			—			—			7,963
Net periodic pension cost / (benefit)	$	4,207		$	4,758		$	12,648		$	7,745		$	10,750		$	7,223		$	(1,557	)	$	(2,604	)	$	(4,491	)	$	10,395		$	12,904		$	15,380

The amounts remaining in accumulated other comprehensive income (loss) that are expected to be recognized as a component of net periodic pension cost during 2019 are as follows:



	U.S. Pension Benefits		Non-U.S. Pension Benefits			Other Benefits			Total
Plan amendments and prior service costs	$	—	$	(6,798	)	$	—		$	(6,798	)
Actuarial losses (gains)	2,374		21,630			(691		)	23,313
Total	$	2,374	$	14,832		$	(691	)	$	16,515

The projected post-retirement benefit obligation was principally determined using discount rates of 2.65% in 2018 and 2.55% in 2017. Net periodic post-retirement benefit cost was principally determined using discount rates of 3.15% in 2018, 3.41% in 2017, and 3.54% in 2016. The health care cost trend rate was 6.4% in 2018, 7.0% in 2017, and 7.5% in 2016, decreasing to 4.50% in 2027. A one-percentage-point change in health care cost trend rates would have an immaterial impact on total service and interest cost components and the post-retirement benefit obligation.

The Company’s overall asset investment strategy is to achieve long-term growth while minimizing volatility by widely diversifying among asset types and strategies. Target asset allocations and investment return criteria are established by the pension committee or designated officers of each plan. Target asset allocation ranges for the U.S. pension plan include 35-55% in equity securities, 18-28% in fixed income securities, and 20-40% in other types of investments. International plan assets relate primarily to the Company’s Swiss plan with target allocations of 24-45% in equities, 35-55% in fixed income securities, and 15-25% in other types of investments. Actual results are monitored against targets and the trustees are required to report to the members of each plan, including an analysis of investment performance on an annual basis at a minimum. Day-to-day asset management is typically performed by third-party asset managers, reporting to the pension committees or designated officers.

The long-term rate of return on plan asset assumptions used to determine pension expense under U.S. GAAP is generally based on estimated future returns for the target investment mix determined by the trustees as well as historical investment performance.

The following table presents the fair value measurement of the Company’s plan assets by hierarchy level:



	December 31, 2018								December 31, 2017
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Observable Inputs for Identical Assets (Level 2)		Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Observable Inputs for Identical Assets (Level 2)		Unobservable Inputs (Level 3)		Total
Asset Category:
Cash and Cash Equivalents	$	111,484	$	—	$	—	$	111,484	$	154,751	$	—	$	—	$	154,751
Equity Securities:
Mettler-Toledo Stock	2,436		—		—		2,436		3,154		—		—		3,154
Equity Mutual Funds:
U.S.⁽¹⁾	4,989		22,569		—		27,558		6,011		27,984		—		33,995
International⁽²⁾	68,544		45,892		—		114,436		80,836		61,341		—		142,177
Emerging Markets⁽³⁾	95,146		692		—		95,838		100,346		1,096		—		101,442
Fixed Income Securities:
Corporate/Government Bonds⁽⁴⁾	71,644		—		—		71,644		72,334		—		—		72,334
Fixed Income Mutual Funds:
Insurance Contracts⁽⁵⁾	—		22,852		1,461		24,313		—		23,421		1,514		24,935
Core Bond⁽⁶⁾	95,493		54,448		—		149,941		136,157		57,499		—		193,656
Real Asset Mutual Funds:
Real Estate⁽⁷⁾	83,879		13,838		—		97,717		79,218		8,836		—		88,054
Commodities⁽⁸⁾	40,267		—		—		40,267		37,302		—		—		37,302
Other Types of Investments:
Debt Securities ⁽⁹⁾	38,616		—		—		38,616		—		—		—		—
Global Allocation Funds⁽¹⁰⁾	11,195		10,562		—		21,757		11,781		12,545		—		24,326
Insurance Linked Securities⁽¹¹⁾	18,664		—		—		18,664		12,147		—		—		12,147
Total assets in fair value hierarchy	$	642,357	$	170,853	$	1,461	$	814,671	$	694,037	$	192,722	$	1,514	$	888,273
Investments measured at net asset value:
International⁽²⁾							2,792								—
Emerging Markets ⁽³⁾							4,889								5,950
Multi-Strategy Fund of Hedge Funds ⁽¹²⁾							40,599								25,559
Total pension assets at fair value							$	862,951							$	919,782

_______________________________________


(1)	Represents primarily large capitalization equity mutual funds tracking the S&P 500 Index.


(2)	Represents all capitalization core and value equity mutual funds located primarily in Switzerland, the United Kingdom, and Canada.


(3)	Represents core and growth mutual funds and funds of mutual funds invested in emerging markets primarily in Eastern Europe, Latin America, and Asia.


(4)	Represents investments in high-grade corporate and government bonds located in Switzerland and the European Union.


(5)	Represents fixed and variable rate annuity contracts provided by insurance companies.


(6)	Represents fixed income mutual funds invested in the U.S., the United Kingdom, Switzerland, and European government bonds, high-grade corporate bonds, mortgage-backed securities, and collateralized mortgage obligations.


(7)	Represents mutual funds invested in real estate located primarily in Switzerland.


(8)	Represents commodity funds invested across a broad range of sectors.


(9)	Represents a loan to a wholly owned subsidiary of the Company. See Note 10 for additional disclosure.


(10)	Represents mutual funds invested globally in both equities and fixed income securities.


(11)	Represents a broadly diversified portfolio of assets that carry exposure to insurance risks, particularly insurance linked securities.

(12)

Represents investments in underlying globally diversified hedge funds. Investments that are measured using the net asset value (NAV) per share practical expedient have not been categorized in the fair value hierarchy. The amounts presented above are intended to permit reconciliation of the fair value hierarchy to the fair value of total plan assets in order to determine the amounts included in the consolidated balance sheet.

The fair value of the Company’s stock and corporate and government bonds are valued at the year-end closing price as reported on the securities exchange on which they are traded. Mutual funds are valued at the exchange-listed year end closing price or at the net asset value of shares held by the fund at the end of the year. Insurance contracts are valued by discounting the related cash flows using a current year end market rate or at cash surrender value, which is presumed to equal fair value. Funds of hedge funds are valued at the net asset value of shares held by the fund at the end of the year.

The following table presents a roll-forward of activity for the years ended December 31, 2018 and 2017 for Level 3 asset categories:



	Commodities			Insurance Contract			Total
Balance at December 31, 2016	$	5,594		$	1,300		$	6,894
Actual return on plan assets related to assets held at end of year	—			21			21
Sales	(5,711		)	(98		)	(5,809		)
Purchases	—			108			108
Impact of foreign currency	117			183			300
Balance at December 31, 2017	$	—		$	1,514		$	1,514
Actual return on plan assets related to assets held at end of year	—			14			14
Sales	—			(85		)	(85		)
Purchases	—			82			82
Impact of foreign currency	—			(64		)	(64		)
Balance at December 31, 2018	$	—		$	1,461		$	1,461

There were no transfers between any asset levels during the years ended December 31, 2018 and 2017.

The following benefit payments, which reflect expected future service as appropriate, are expected to be paid:



	U.S. Pension Benefits		Non-U.S. Pension Benefits		Other Benefits Net of Subsidy		Total
2019	$	8,051	$	43,494	$	431	$	51,976
2020	8,247		43,111		249		51,607
2021	8,396		45,220		231		53,847
2022	8,546		43,543		207		52,296
2023	8,698		44,397		180		53,275
2024-2028	43,532		222,671		666		266,869

In 2019, the Company expects to make employer pension contributions of approximately $25.3 million to its non-U.S. pension plan and employer contributions of approximately $0.4 million to its U.S. post-retirement medical plan.