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Pensions and Postretirement Benefits
 12 Months Ended
Dec. 31, 2019
Retirement Benefits, Description [Abstract]  
Pensions and Postretirement Benefits Other Than Pensions PENSIONS AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

The Company sponsors several U.S. defined benefit and defined contribution plans covering substantially all U.S. employees. Additionally, the Company has non-U.S. defined benefit and defined contribution plans covering eligible non-U.S. employees. Postretirement benefits, other than pensions, provide healthcare benefits, and in some instances, life insurance benefits for certain eligible employees.

Pension Plans

The noncontributory defined benefit pension plans covering non-collectively bargained U.S. employees provide benefits on an average pay formula while most plans for collectively bargained U.S. employees provide benefits on a flat dollar benefit formula. The non-U.S. pension plans generally provide benefits based on earnings and years of service. The Company also maintains additional other supplemental plans for officers and other key employees.

The following table details information regarding the Company’s pension plans at December 31:
 
 
U.S.
 
NON-U.S.
In millions
 
2019
 
2018
 
2019
 
2018
Change in benefit obligations:
 
 
 
 
 
 
 
 
Benefit obligation at beginning of year
 
$
293.3

 
$
317.5

 
$
356.8

 
$
396.3

Service cost
 
6.5

 
8.6

 
1.7

 
3.3

Interest cost
 
11.7

 
10.4

 
8.8

 
8.4

Employee contributions
 
—

 
—

 
0.3

 
0.3

Amendments
 
—

 
—

 
(0.8
)
 
5.0

Actuarial losses (gains)
 
42.2

 
(25.4
)
 
45.7

 
(14.9
)
Benefits paid
 
(13.0
)
 
(16.5
)
 
(16.9
)
 
(19.4
)
Foreign exchange rate changes
 
—

 
—

 
13.9

 
(21.1
)
Curtailments and settlements
 
—

 
—

 
(5.0
)
 
(0.2
)
Acquisitions
 
—

 
—

 
—

 
0.5

Other, including expenses paid
 
0.3

 
(1.3
)
 
—

 
(1.4
)
Benefit obligation at end of year
 
$
341.0

 
$
293.3

 
$
404.5

 
$
356.8

Change in plan assets:
 
 
 
 
 

 

Fair value at beginning of year
 
$
259.4

 
$
283.2

 
$
352.2

 
$
398.4

Actual return on plan assets
 
50.4

 
(12.1
)
 
55.2

 
(9.8
)
Company contributions
 
6.0

 
6.1

 
10.6

 
5.4

Employee contributions
 
—

 
—

 
0.3

 
0.3

Benefits paid
 
(13.0
)
 
(16.5
)
 
(16.9
)
 
(19.4
)
Foreign exchange rate changes
 
—

 
—

 
15.2

 
(20.8
)
Curtailment and settlements
 
—

 
—

 
(6.2
)
 
(0.2
)
Other, including expenses paid
 
(1.3
)
 
(1.3
)
 
(1.4
)
 
(1.7
)
Fair value of assets at end of year
 
$
301.5

 
$
259.4

 
$
409.0

 
$
352.2

Funded status:
 
 
 
 
 

 

Plan assets (less than) exceeding benefit obligations
 
$
(39.5
)
 
$
(33.9
)
 
$
4.5

 
$
(4.6
)
Amounts included in the balance sheet:
 
 
 
 
 

 

Other noncurrent assets
 
$
—

 
$
—

 
$
29.3

 
$
21.1

Accrued compensation and benefits
 
(0.5
)
 
(0.3
)
 
(0.8
)
 
(1.1
)
Postemployment and other benefit liabilities
 
(39.0
)
 
(33.6
)
 
(24.0
)
 
(24.6
)
Net amount recognized
 
$
(39.5
)
 
$
(33.9
)
 
$
4.5

 
$
(4.6
)

It is the Company’s objective to contribute to the pension plans to ensure adequate funds are available in the plans to make benefit payments to plan participants and beneficiaries when required. However, certain plans are not funded due to either legal, accounting or tax requirements in certain jurisdictions. As of December 31, 2019, approximately 5% of the Company's projected benefit obligation relates to plans that are not funded, of which the majority are non-U.S. plans.

The pretax amounts recognized in Accumulated other comprehensive loss were as follows:
 
 
U.S.
In millions
 
Prior service cost
 
Net actuarial losses
 
Total
December 31, 2017
 
$
(1.8
)
 
$
(72.5
)
 
$
(74.3
)
Current year changes recorded to Accumulated other comprehensive loss
 
—

 
(1.1
)
 
(1.1
)
Amortization reclassified to earnings
 
0.3

 
4.0

 
4.3

December 31, 2018
 
$
(1.5
)
 
$
(69.6
)
 
$
(71.1
)
Current year changes recorded to Accumulated other comprehensive loss
 
—

 
(4.2
)
 
(4.2
)
Amortization reclassified to earnings
 
0.3

 
4.7

 
5.0

December 31, 2019
 
$
(1.2
)
 
$
(69.1
)
 
$
(70.3
)

 
 
NON-U.S.
In millions
 
Prior service cost
 
Net actuarial losses
 
Total
December 31, 2017
 
$
0.1

 
$
(60.6
)
 
$
(60.5
)
Current year changes recorded to Accumulated other comprehensive loss
 
(5.0
)
 
(10.4
)
 
(15.4
)
Amortization reclassified to earnings
 
—

 
0.9

 
0.9

Currency translation and other
 
0.2

 
3.9

 
4.1

December 31, 2018
 
$
(4.7
)
 
$
(66.2
)
 
$
(70.9
)
Current year changes recorded to Accumulated other comprehensive loss
 
0.8

 
(4.8
)
 
(4.0
)
Amortization reclassified to earnings
 
0.2

 
1.3

 
1.5

Settlements/curtailments reclassified to earnings
 
—

 
2.3

 
2.3

Currency translation and other
 
(0.1
)
 
(2.4
)
 
(2.5
)
December 31, 2019
 
$
(3.8
)
 
$
(69.8
)
 
$
(73.6
)

Weighted-average assumptions used:
Benefit obligations at December 31,
 
2019
 
2018
Discount rate:
 
 
 
 
U.S. plans
 
3.3
%
 
4.3
%
Non-U.S. plans
 
1.9
%
 
2.8
%
Rate of compensation increase:
 
 
 
 
U.S. plans
 
3.0
%
 
3.0
%
Non-U.S. plans
 
3.0
%
 
3.3
%

The accumulated benefit obligation for all U.S. defined benefit pension plans was $332.4 million and $284.8 million at December 31, 2019 and 2018, respectively. The accumulated benefit obligation for all non-U.S. defined benefit pension plans was $396.7 million and $349.1 million at December 31, 2019 and 2018, respectively.

The Company estimates the service and interest cost components of net periodic benefit cost utilizing a full yield-curve approach. Under this approach, the Company applies discounting using the applicable spot rates derived from the yield curve to discount the cash flows used to measure the benefit obligation. These spot rates align to each of the projected benefit obligations and service cost cash flows.

Information regarding pension plans with accumulated benefit obligations more than plan assets were:
 
 
U.S.
 
NON-U.S.
In millions
 
2019
 
2018
 
2019
 
2018
Projected benefit obligation
 
$
341.0

 
$
293.3

 
$
34.0

 
$
34.5

Accumulated benefit obligation
 
332.4

 
284.8

 
29.1

 
29.6

Fair value of plan assets
 
$
301.5

 
$
259.4

 
$
9.5

 
$
8.8


Future pension benefit payments are expected to be paid as follows:
In millions
U.S.
 
NON-U.S.
2020
$
19.3

 
$
18.7

2021
21.6

 
19.3

2022
21.2

 
20.0

2023
23.6

 
20.6

2024
28.1

 
21.6

2025 - 2029
$
99.5

 
$
119.6


The components of the Company’s net periodic pension benefit costs for the years ended December 31 include the following:
 
 
U.S.
In millions
 
2019
 
2018
 
2017
Service cost
 
$
6.5

 
$
6.8

 
$
7.1

Interest cost
 
11.7

 
10.5

 
10.5

Expected return on plan assets
 
(12.5
)
 
(14.4
)
 
(12.0
)
Administrative costs and other
 
1.7

 
1.6

 
1.6

Net amortization of:
 
 
 
 
 
 
Prior service costs
 
0.3

 
0.3

 
0.3

Plan net actuarial losses
 
4.7

 
4.1

 
4.8

Net periodic pension benefit cost
 
$
12.4

 
$
8.9

 
$
12.3


 
 
NON-U.S.
In millions
 
2019
 
2018
 
2017
Service cost
 
$
1.7

 
$
1.7

 
$
1.5

Interest cost
 
8.8

 
8.4

 
8.9

Expected return on plan assets
 
(13.0
)
 
(15.4
)
 
(14.3
)
Administrative costs and other
 
1.3

 
1.8

 
2.5

Net amortization of:
 

 

 

Prior service costs
 
0.2

 
—

 
—

Plan net actuarial losses
 
1.4

 
0.9

 
1.9

Net curtailment and settlement losses
 
2.3

 
—

 
0.1

Net periodic pension benefit cost (income)
 
$
2.7

 
$
(2.6
)
 
$
0.6


The Service cost component of Net periodic pension benefit cost (income) is recorded in Cost of goods sold and Selling and administrative expenses within the Consolidated Statements of Comprehensive Income. The remaining components of Net periodic pension benefit cost (income) are recorded within Other expense (income), net within the Consolidated Statements of Comprehensive Income.

Pension expense for 2020 is projected to be approximately $7.4 million, utilizing the assumptions for calculating the pension benefit obligations at the end of 2019.

Weighted-average assumptions used:
Net periodic pension cost for the year ended December 31,
 
2019
 
2018
 
2017
Discount rate:
 
 
 
 
 
 
U.S. plans
 
4.3
%
 
3.6
%
 
4.1
%
Non-U.S. plans
 
2.8
%
 
2.5
%
 
2.6
%
Rate of compensation increase:
 
 
 
 
 
 
U.S. plans
 
3.0
%
 
3.0
%
 
3.5
%
Non-U.S. plans
 
3.3
%
 
3.3
%
 
3.2
%
Expected return on plan assets:
 
 
 
 
 
 
U.S. plans
 
5.0
%
 
5.3
%
 
4.8
%
Non-U.S. plans
 
3.8
%
 
4.0
%
 
4.0
%

The expected long-term rate of return on plan assets reflects the average rate of returns expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The expected long-term rate of return on plan assets is based on what is achievable given the plan’s investment policy, the types of assets held and target asset allocations. The expected long-term rate of return is determined as of the measurement date. Each plan is reviewed, along with its historical returns and target asset allocations, to determine the appropriate expected long-term rate of return on plan assets to be used.

The Company's overall objective in managing defined benefit plan assets is to ensure that all present and future benefit obligations are met as they come due. The goal is to achieve this while trying to mitigate volatility in plan funded status, contributions and expense by better matching the characteristics of the plan assets to that of the plan liabilities. Each plan’s funded status and asset allocation is monitored regularly in addition to investment manager performance.

The fair values of the Company’s U.S. pension plan assets at December 31, 2019, by asset category were as follows:
 
 
Fair value measurements
 
 
 
Total
In millions
 
Quoted prices in active markets for identical assets (Level 1)
 
Significant other observable inputs
(Level 2)
 
Significant unobservable inputs (Level 3)
 
Assets measured at NAV
 
Cash, cash equivalents and short-term investments
 
$
—

 
$
—

 
$
—

 
$
4.7

 
$
4.7

Common collective trusts
 
—

 
—

 
—

 
262.5

 
262.5

Other(a)
 
—

 
—

 
—

 
34.3

 
34.3

Total U.S. pension plan assets
 
$
—

 
$
—

 
$
—

 
$
301.5

 
$
301.5

(a)
Includes a group trust diversified credit fund and real estate investment trust.

The fair values of the Company’s U.S. pension plan assets at December 31, 2018, by asset category were as follows:
 
 
Fair value measurements
 
 
 
Total
In millions
 
Quoted prices in active markets for identical assets (Level 1)
 
Significant other observable inputs
(Level 2)
 
Significant unobservable inputs (Level 3)
 
Assets measured at NAV
 
Cash, cash equivalents and short-term investments
 
$
—

 
$
3.1

 
$
—

 
$
—

 
$
3.1

Common collective trusts
 
—

 
—

 
—

 
237.6

 
237.6

Other(a)
 
—

 
—

 
—

 
18.7

 
18.7

Total U.S. pension plan assets
 
$
—

 
$
3.1

 
$
—

 
$
256.3

 
$
259.4

(a)
Includes a group trust diversified credit fund.

No material transfers in or out of Level 3 occurred during the year ended December 31, 2019 or 2018.

The Company determines the fair value of its U.S. pension plan assets using the following methodologies:

•
Cash, cash equivalents and short-term investments – Short-term investments are valued at their daily net asset value (NAV) per share or the equivalent based upon the fair value of the underlying investments. NAV per share or the equivalent is used for fair value purposes as a practical expedient and is calculated by the investment manager or sponsor of the fund. These investments primarily consist of short-term investment funds.
•
Common collective trusts - Common collective trust (CCT) funds are not publicly traded and are valued at NAV per share or the equivalent based upon the fair value of the underlying investments. NAV per share or the equivalent is used for fair value purposes as a practical expedient and is calculated by the investment manager or sponsor of the applicable fund. CCT funds consist of a variety of publicly traded securities, including equity mutual funds, U.S. government and agency obligations, corporate and non-U.S. bonds, securitized credit and emerging market debt. There are no unfunded commitments, redemption frequency restrictions or other redemption restrictions related to such investments.

The fair values of the Company’s non-U.S. pension plan assets at December 31, 2019, by asset category were as follows:
 
 
Fair value measurements
 
 
 
Total
In millions
 
Quoted prices in active markets for identical assets (Level 1)
 
Significant other observable inputs
(Level 2)
 
Significant unobservable inputs (Level 3)
 
Assets measured at NAV
 
Cash, cash equivalents and short-term investments
 
$
0.9

 
$
—

 
$
—

 
$
56.9

 
$
57.8

Equity mutual funds
 
—

 
2.7

 
—

 
102.5

 
105.2

Corporate and non-U.S. bonds
 
—

 
118.0

 
—

 
70.1

 
188.1

Other(a)
 
—

 
9.0

 
3.4

 
45.5

 
57.9

Total non-U.S. pension plan assets
 
$
0.9

 
$
129.7

 
$
3.4

 
$
275.0

 
$
409.0

(a) Primarily includes a core diversified credit fund and derivative contracts.

The fair values of the Company’s non-U.S. pension plan assets at December 31, 2018, by asset category were as follows:
 
 
Fair value measurements
 
 
 
Total
In millions
 
Quoted prices in active markets for identical assets (Level 1)
 
Significant other observable inputs
(Level 2)
 
Significant unobservable inputs (Level 3)
 
Assets measured at NAV
 
Cash, cash equivalents and short-term investments
 
$
1.3

 
$
36.1

 
$
—

 
$
—

 
$
37.4

Equity mutual funds
 
—

 
2.6

 
—

 
88.7

 
91.3

Corporate and non-U.S. bonds
 
—

 
109.4

 
—

 
31.7

 
141.1

Other(a)
 
—

 
41.3

 
3.2

 
37.9

 
82.4

Total non-U.S. pension plan assets
 
$
1.3

 
$
189.4

 
$
3.2

 
$
158.3

 
$
352.2

(a) Primarily includes insurance contracts, mortgage-backed securities, real estate and derivative contracts.

No material transfers in or out of Level 3 occurred during the year ended December 31, 2019 or 2018.

The Company determines the fair value of its non-U.S. pension plan assets using the following methodologies:

•
Cash, cash equivalents and short-term investments – Cash equivalents are valued using a market approach with inputs including quoted market prices for either identical or similar instruments. Short-term investments are valued at the closing price or amount held on deposit by the custodian bank, at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the credit-worthiness of the issuer, or at their NAV per share or the equivalent based upon the fair value of the underlying investments. NAV per share or the equivalent is used for fair value purposes as a practical expedient and is calculated by the investment manager or sponsor of the fund. These investments primarily consist of short-term investment funds.
•
Equity mutual funds – Equity mutual funds are primarily valued at their NAV per share or the equivalent. NAV per share or the equivalent is used for fair value purposes as a practical expedient. NAV is calculated by the investment manager or sponsor of the fund.
•
Corporate and non-U.S. bonds – Quoted market prices are not available for these securities. Fair values are either estimated using pricing models and/or quoted prices of securities with similar characteristics or discounted cash flows, in which instances such securities are classified as Level 2 or valued at their NAV per share or the equivalent. NAV per share or the equivalent is used for fair value purposes as a practical expedient and are calculated by the investment manager or sponsor of the fund.

The Company made employer contributions of $6.0 million to the U.S. pension plans in 2019, $6.1 million in 2018 and $55.7 million in 2017 (of which $50.0 million was discretionary). The Company made required and discretionary contributions to its non-U.S. pension plans of $10.6 million in 2019, $5.4 million in 2018 and $5.2 million in 2017.

The Company currently projects that approximately $11.5 million will be contributed to its U.S and non-U.S. plans in 2020. The Company’s policy allows it to fund an amount, which could be in excess of or less than the pension cost expensed, subject to the limitations imposed by current tax regulations. The Company anticipates funding the plans in 2020 in accordance with contributions required by funding regulations or the laws of each jurisdiction.

Most of the Company’s U.S. employees are covered by defined contribution plans. Employer contributions are determined based on criteria specific to the individual plans and amounted to approximately $15.6 million, $14.4 million and $14.0 million in 2019, 2018 and 2017, respectively. The Company’s contributions relating to non-U.S. defined contribution plans and other non-U.S. benefit plans were $6.0 million, $8.0 million and $7.0 million in 2019, 2018 and 2017, respectively.

Deferred Compensation Plan

The Company maintains an Executive Deferred Compensation Plan ("EDCP"), which is an unfunded, nonqualified plan that, prior to 2019, permitted certain employees to defer receipt of up to 50% of their annual salary and up to 100% of their annual bonus awards, performance stock plan awards and restricted stock units received upon commencement of employment. As of December 31, 2019 and 2018, the deferred compensation liability balance was $17.4 million and $15.1 million, respectively, which was recorded within Postemployment and other benefit liabilities in the Consolidated Balance Sheets.

Postretirement Benefits Other Than Pensions

The Company sponsors a postretirement ("OPEB") plan that provides for healthcare benefits, and in some instances, life insurance benefits, that cover certain eligible retired employees. The Company funds postretirement benefit obligations principally on a pay-as-you-go basis. Generally, postretirement health benefits are contributory with contributions adjusted annually. Life insurance plans for retirees are primarily noncontributory. Net periodic postretirement benefit income is included within Other expense (income), net within the Consolidated Statements of Comprehensive Income.

The benefit obligation related to the Company's postretirement plans as of December 31, 2019 and 2018 was $6.8 million and $7.6 million, respectively, and is classified as Accrued compensation and benefits and Postemployment and other benefit liabilities within the Consolidated Balance Sheets. Net periodic postretirement benefit income was $0.1 million, $0.5 million and $1.4 million, for the years ended December 31, 2019, 2018 and 2017, respectively. Net period postretirement benefit income (expense) for 2020 is not projected to be material. Benefit payments for postretirement benefits, which are net of expected plan participant contributions and Medicare Part D subsidies, are expected to be less than $1 million per year for the foreseeable future.