Post Retirement Benefit Plans

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Post Retirement Benefit Plans

17. Post Retirement Benefit Plans

Defined Contribution Plans

The Company sponsors various defined contribution plans that cover certain domestic and international employees. The Company may make contributions to these plans at its discretion. The Company contributed $13.7 million, $11.0 million and $9.4 million to such plans in the years ended December 31, 2023, 2022 and 2021, respectively.

Defined Benefit Plans

Substantially all of the Company’s employees in Switzerland, France, Japan and Thailand, as well as certain employees in Germany, are covered by Company-sponsored defined benefit pension plans. Retirement benefits are generally earned based on years of service and compensation during active employment. Eligibility is generally determined in accordance with local statutory requirements; however, the level of benefits and terms of vesting varies among plans.

The Company records pension service cost within cost of sales, selling, general and administrative, and research and development expenses while non-service related pension costs are recorded within interest and other income (expense), net in the consolidated statements of income and comprehensive income. The components of net periodic benefit costs included in the accompanying consolidated statements of income were as follows (in millions):

	2023			2022			2021
Components of net periodic benefit costs:
Service cost	$	5.5		$	6.5		$	8.1
Interest cost		5.2			1.0			0.5
Expected return on plan assets		(4.4	)		(1.7	)		(1.8	)
Settlement (gain) loss recognized		—			(0.3	)		0.1
Amortization of prior service (credit) cost		(0.8	)		(0.2	)		0.9
Amortization of actuarial losses		0.1			2.2			2.6
Net periodic benefit costs	$	5.6		$	7.5		$	10.4

The Company measures its benefit obligation and the fair value of plan assets as of December 31st each year. The changes in benefit obligations and plan assets under the defined benefit pension plans, projected benefit obligation and funded status of the plans were as follows (in millions):

	2023			2022
Change in benefit obligation:
Benefit obligation at beginning of year	$	197.8		$	253.9
Service cost		5.5			6.5
Interest cost		5.2			1.0
Plan participant contributions		6.4			5.1
Plan amendments		(2.4	)		(2.9	)
Plan settlements		—			(6.8	)
Benefits paid		(6.8	)		(2.1	)
Actuarial gain		27.5			(48.8	)
Premiums paid		(2.3	)		(1.7	)
Plan combinations / acquisitions		6.1			0.8
Impact of foreign currency exchange rates		19.1			(7.2	)
Benefit obligation at end of year		256.1			197.8
Change in plan assets:
Fair value of plan assets at beginning of year		150.3			147.8
Return on plan assets		1.5			2.5
Plan participant and employer contributions		14.4			11.9
Benefits paid		(6.8	)		(2.1	)
Plan settlements		—			(6.8	)
Premiums paid		(2.3	)		(1.7	)
Plan combinations / acquisitions		4.8			0.4
Impact of foreign currency exchange rates		15.5			(1.7	)
Fair value of plan assets at end of year		177.4			150.3
Net under-funded status	$	(78.7	)	$	(47.5	)

Plan amendments relate to further reductions in the mandatory conversion rates for the pension plan in Switzerland that will be effective from 2025 onwards. The accumulated benefit obligation for the defined benefit pension plans is $226.4 million and $168.6 million at December 31, 2023 and 2022, respectively. All defined benefit pension plans have an accumulated benefit obligation and projected benefit obligation in excess of plan assets at December 31, 2023, and 2022.

The following amounts were recognized in the accompanying consolidated balance sheets for the Company’s defined benefit plans (in millions):

	2023			2022
Current liabilities	$	(2.1	)	$	(1.8	)
Non-current liabilities		(76.6	)		(45.7	)
Net benefit obligation	$	(78.7	)	$	(47.5	)

The following pre-tax amounts were recognized in accumulated other comprehensive income for the Company’s defined benefit plans (in millions):

	2023			2022			2021
Reconciliation of amounts recognized in the consolidated balance sheets:
Prior service cost	$	14.6		$	12.0		$	9.4
Net actuarial gain (loss)		(27.4	)		4.2			(50.1	)
Accumulated other comprehensive gain (loss)		(12.8	)		16.2			(40.7	)
Accumulated contributions in excess of net periodic benefit cost		(65.9	)		(63.7	)		(65.4	)
Net amount recognized	$	(78.7	)	$	(47.5	)	$	(106.1	)

The amount in accumulated other comprehensive income at December 31, 2023, expected to be recognized as amortization of net loss within net periodic benefit cost in 2024 is $(0.5) million.

For the defined benefit pension plans, the Company uses a corridor approach to amortize actuarial gains and losses. Under this approach, net actuarial gains or losses in excess of ten percent of the larger of the projected benefit obligation or the fair value of plan assets are amortized over the average remaining service of active participants who are expected to receive benefits under the plans.

The following assumptions were used for defined benefit pension plans reflects the different economic environments within the various countries. The assumptions used to determine the net periodic benefit costs and the projected benefit obligations are as follows:

2023	Japan			France			Switzerland			Germany			Thailand
Annual discount rate—defined benefit obligation		1.1	%		3.2	%		1.4	%		3.6	%		3.5	%
Annual discount rate—defined benefit cost		0.9	%		3.8	%		2.4	%		3.9	%		3.7	%
Expected return on plan assets		—	%		3.0	%		2.7	%		—	%		—	%
Expected rate of compensation increase		3.0	%		3.0	%		2.2	%		2.6	%		5.6	%
2022	Japan			France			Switzerland			Germany			Thailand
Annual discount rate—defined benefit obligation		0.9	%		3.8	%		2.4	%		3.9	%		3.7	%
Annual discount rate—defined benefit cost		0.4	%		1.0	%		0.4	%		0.8	%		2.5	%
Expected return on plan assets		—	%		3.0	%		1.2	%		—	%		—	%
Expected rate of compensation increase		3.0	%		3.0	%		2.3	%		2.6	%		5.6	%
2021	Japan			France			Switzerland			Germany			Thailand
Annual discount rate—defined benefit obligation		0.4	%		1.0	%		0.4	%		0.8	%		—	%
Annual discount rate—defined benefit cost		0.4	%		0.6	%		0.1	%		0.5	%		—	%
Expected return on plan assets		—	%		3.0	%		1.2	%		—	%		—	%
Expected rate of compensation increase		3.0	%		2.0	%		1.0	%		2.6	%		—	%

To determine the expected long-term rate of return on pension plan assets, the Company considers current asset allocations, as well as historical and expected returns on various asset categories of plan assets. For the defined benefit pension plans, the Company applies the expected rate of return to a market-related value of assets, which stabilizes variability in assets to which the expected return is applied.

Asset Allocations by Asset Category

The fair value of the Company’s pension plan assets by asset category and by level in the fair value hierarchy, is as follows (in millions):

December 31, 2023	Total		Quoted Prices in Active Markets Available (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Plan Assets:
Group BPCE Life (a)	$	—	$	—	$	—	$	—
Swiss Life Collective BVG Foundation (b)		177.4		—		—		177.4
Total plan assets	$	177.4	$	—	$	—	$	177.4
December 31, 2022	Total		Quoted Prices in Active Markets Available (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Plan Assets:
Group BPCE Life (a)	$	0.1	$	—	$	—	$	0.1
Swiss Life Collective BVG Foundation (b)		150.2		—		—		150.2
Total plan assets	$	150.3	$	—	$	—	$	150.3

(a)The Company’s pension plan in France is invested in a larger fund that invests in a variety of instruments. The assets are not directly dedicated to the French pension plan. The Group BPCE Life fund invests in debt securities of foreign corporations and governments, equity securities of foreign government funds and private real estate funds. The French Plan Assets are expected to be fully utilized by the end of 2024 and the Company will fund the benefit payments as they become due and payable.

(b)The Company’s pension plan in Switzerland is outsourced to Swiss Life AG, an outside insurance provider. Under the insurance contract, the plan assets are invested in Swiss Life Collective BVG Foundation (the Foundation), which is an umbrella fund for which the retirement savings and interest rates are guaranteed a minimum of 1.25% on the mandatory withdrawal portion, as defined by Swiss law, and 0.50% on the non-mandatory portion starting 2024. The Foundation utilizes plan administrators and investment managers to oversee the investment allocation process, set long-term strategic targets and monitor asset allocations. The target allocations are 65% bonds, 2.5% cash, 7.5% equity investments and 25% real estate and mortgages. Should the Foundation yield a return greater than the guaranteed amounts, the Company, according to Swiss law, shall receive 90% of the additional return with Swiss Life AG retaining 10%. All investments and insurance risks are fully covered and there is a 100% capital and interest rate guarantee provided by Swiss Life. The withdrawal benefits and interest allocations are secured at all times by Swiss Life AG.

Contributions and Estimated Future Benefit Payments

For all of our plans except Switzerland, we do not have plan assets to payout benefit payments. Contributions are expected to be consistent with estimated benefit payments for the next fiscal year. The estimated future benefit payments are based on the same assumptions used to measure the Company’s benefit obligation at December 31, 2023. The following benefit payments reflect future employee service as appropriate (in millions):

2024	9.5
2025	9.8
2026	10.0
2027	11.2
2028	12.1
2029-2033	63.0