The Corporation maintains ten separate and distinct pension and other post-retirement defined benefit plans, consisting of three domestic plans and seven separate foreign pension plans. The domestic plans include a qualified pension plan, a non-qualified pension plan, and a postretirement health-benefits plan. The foreign plans consist of one defined benefit pension plan each in the United Kingdom, Canada, and Switzerland, two in Germany, and two in Mexico.

The Corporation maintains a defined benefit pension plan (the “CW Pension Plan”) covering certain employee populations under six benefit formulas: a non-contributory non-union and union formula for certain Curtiss-Wright (CW) employees, a contributory union and non-union benefit formula for employees at the EMD business unit, and two benefit formulas providing annuity benefits for participants in the former Williams Controls salaried and union plans.

CW non-union employees hired prior to February 1, 2010 receive a “traditional” benefit based on years of credited service, using the five highest consecutive years’ compensation during the last ten years of service. These employees became participants under the CW Pension Plan after one year of service and were vested after three years of service. CW non-union employees hired on or after the effective date were eligible for a cash balance benefit through December 31, 2013, and were transitioned to the new defined contribution plan, further described below. CW union employees who have negotiated a benefit under the CW Pension Plan are entitled to a benefit based on years of service multiplied by a monthly pension rate.

The formula for EMD employees covers both union and non-union employees and is designed to satisfy the requirements of relevant collective bargaining agreements. Employee contributions are withheld each pay period and are equal to 1.5% of salary. The benefits for the EMD employees are based on years of service and compensation. On December 31, 2012, the Corporation amended the CW Pension Plan to close the benefit to EMD employees hired after January 1, 2014.

Participants of the former Williams Controls Retirement Income Plan for salaried employees are either deferred vested participants or currently receiving benefits, as benefit accruals under the plan were frozen to future accruals effective January 1, 2003. Benefits in the salaried plan are based on average compensation and years of service.

Participants of the former Williams Controls UAW Local 492 Plan for union employees are entitled to a benefit based on years of service multiplied by a monthly pension rate, and may be eligible for supplemental benefits based upon attainment of certain age and service requirements.

Effective January 1, 2014, all active non-union employees participating in the final and career average pay formulas in the defined benefit plan will cease accruals 15 years from the effective date of the amendment. In addition to the sunset provision, cash balance benefit accruals for non-union participants ceased as of January 1, 2014. Non-union employees who were not currently receiving final or career average pay benefits became eligible to participate in a new defined contribution plan which provides both employer match and non-elective contribution components. Subsequent to the original amendment, the Corporation successfully negotiated the sunset provision into the bargaining agreements for all represented employees that received benefits through this plan.

As of December 31, 2020, and 2019, the Corporation had a noncurrent pension asset of $80.8 million and a noncurrent pension liability of $50.2 million, respectively. The change in balance was primarily due to a voluntary contribution of $150 million to the plan on January 8, 2020 as well as favorable asset experience due to strong market returns during 2020, partially offset by a decrease in the discount rate as of December 31, 2020.

The Corporation also maintains a non-qualified restoration plan (the “CW Restoration Plan”) covering those employees of CW and EMD whose compensation or benefits exceed the IRS limitation for pension benefits. Benefits under the CW Restoration Plan are not funded, and, as such, the Corporation had an accrued pension liability of $71.8 million and $59.6 million as of December 31, 2020 and 2019, respectively. The Corporation’s contributions to the CW Restoration Plan are expected to be $6.1 million in 2021.

The Corporation provides post-employment benefits consisting of retiree health and life insurance to three distinct groups of employees/retirees: the CW Grandfathered plan, and plans assumed in the acquisitions of EMD and Williams Controls.

The Corporation also provides retiree health and life insurance benefits for substantially all Curtiss-Wright EMD employees. The plan provides basic health and welfare coverage for pre-65 participants based on years of service and are subject to certain caps. Effective January 1, 2011, the Corporation modified the benefit design for post-65 retirees by introducing Retiree Reimbursement Accounts (RRAs) to participants in lieu of the traditional benefit delivery. Participant accounts are funded a set amount annually that can be used to purchase supplemental coverage on the open market, effectively capping the benefit.

The plan also provides retiree health and life insurance benefits for certain retirees of the Williams Controls salaried and union pension plans. Effective August 31, 2013, the Corporation modified the benefit design for post-65 retirees by introducing RRAs to align with the EMD delivery model.

The Corporation had an accrued postretirement benefit liability as of December 31, 2020 and 2019 of $25.7 million and $23.6 million, respectively. The Corporation expects to contribute $1.6 million to the plan during 2021.

As of December 31, 2020 and 2019, the total projected benefit obligation related to all foreign plans was $115.5 million and $102.7 million, respectively. As of December 31, 2020 and 2019, the Corporation had a net pension liability of $2.6 million and $0.2 million, respectively. The Corporation's contributions to the foreign plans are expected to be $1.5 million in 2021.


	Pension Benefits						Postretirement Benefits
(In thousands)	2020		2019		2018		2020		2019		2018
Service cost	$	26,013	$	23,664	$	27,116	$	506	$	432	$	490
Interest cost	23,847		29,019		26,149		609		796		719
Expected return on plan assets	(67,217)		(59,153)		(58,641)		—		—		—
Amortization of prior service cost	(269)		(283)		(252)		(657)		(656)		(656)
Recognized net actuarial loss/(gain)	23,062		9,310		16,867		(5)		(198)		(131)
Cost of settlements/curtailments	2,395		—		337		—		—		—
Net periodic benefit cost	$	7,831	$	2,557	$	11,576	$	453	$	374	$	422

The cost of settlements/curtailments indicated above represents events that are accounted for under guidance on employers’ accounting for settlements and curtailments of defined benefit pension plans. In 2020, settlement charges were incurred in Mexico and Switzerland. In addition, a curtailment was recognized in Mexico as a result of the Corporation's restructuring initiatives. In 2018, a settlement charge was incurred in connection with restructuring in Switzerland.

The following table outlines the Corporation's consolidated disclosure of the pension benefits and postretirement benefits information described previously. The Corporation had no foreign postretirement plans. All plans were valued using a December 31, 2020 measurement date.


	Pension Benefits				Postretirement Benefits
(In thousands)	2020		2019		2020		2019
Change in benefit obligation:
Beginning of year	$	945,187	$	814,894	$	23,566	$	22,060
Service cost	26,013		23,664		506		432
Interest cost	23,847		29,019		609		796
Plan participants’ contributions	1,366		1,276		331		346
Actuarial (gain) loss	92,596		118,893		3,048		2,124
Benefits paid	(46,607)		(43,736)		(2,390)		(2,192)
Actual expenses	(1,526)		(1,846)		—		—
Curtailments	1,636		—		—		—
Settlements	(3,867)		—		—		—
Currency translation adjustments	5,390		3,023		—		—
End of year	$	1,044,035	$	945,187	$	25,670	$	23,566


Change in plan assets:
Beginning of year	$	835,139	$	738,296	$	—	$	—
Actual return on plan assets	105,810		133,896		—		—
Employer contribution	155,359		3,867		2,059		1,846
Plan participants’ contributions	1,366		1,276		331		346
Benefits paid	(46,607)		(43,736)		(2,390)		(2,192)
Actual expenses	(1,526)		(1,846)		—		—
Settlements	(3,867)		—		—		—
Currency translation adjustments	4,835		3,386		—		—
End of year	$	1,050,509	$	835,139	$	—	$	—

Funded status	$	6,474	$	(110,048)	$	(25,670)	$	(23,566)


	Pension Benefits				Postretirement Benefits
(In thousands)	2020		2019		2020		2019
Amounts recognized on the balance sheet
Noncurrent assets	$	92,554	$	11,711	$	—	$	—
Current liabilities	(6,444)		(5,143)		(1,596)		(1,547)
Noncurrent liabilities	(79,636)		(116,616)		(24,074)		(22,019)
Total	$	6,474	$	(110,048)	$	(25,670)	$	(23,566)
Amounts recognized in accumulated other comprehensive income (AOCI)
Net actuarial loss (gain)	$	294,545	$	263,660	$	624	$	(2,429)
Prior service cost	(321)		(934)		(747)		(1,404)
Total	$	294,224	$	262,726	$	(123)	$	(3,833)
Information for pension plans with an accumulated benefit obligation in excess of plan assets:
Projected benefit obligation	$	114,297	$	881,731	N/A		N/A
Accumulated benefit obligation	111,807		848,309		N/A		N/A
Fair value of plan assets	28,217		759,972		N/A		N/A


	Pension Benefits				Postretirement Benefits
	2020		2019		2020		2019
Weighted-average assumptions in determination of benefit obligation:
Discount rate	2.36	%	3.05	%	2.43	%	3.15	%
Rate of compensation increase	3.41	%	3.46	%	N/A		N/A
Health care cost trends:
Rate assumed for subsequent year	N/A		N/A		7.25	%	7.50	%
Ultimate rate reached in 2026	N/A		N/A		4.50	%	4.50	%
Weighted-average assumptions in determination of net periodic benefit cost:
Discount rate	3.05	%	4.09	%	3.15	%	4.20	%
Expected return on plan assets	7.11	%	7.59	%	N/A		N/A
Rate of compensation increase	3.46	%	3.50	%	N/A		N/A
Health care cost trends:
Rate assumed for subsequent year	N/A		N/A		7.50	%	7.85	%
Ultimate rate reached in 2026	N/A		N/A		4.50	%	4.50	%

The Corporation applies the spot rate, or full yield curve, approach for developing discount rates. The discount rate for each plan's past service liabilities and service cost is determined by discounting the plan’s expected future benefit payments using a yield curve developed from high quality bonds that are rated Aa or better by Moody’s as of the measurement date. The yield curve calculation matches the notional cash inflows of the hypothetical bond portfolio with the expected benefit payments to arrive at one effective rate for these components. Interest cost is determined by applying the spot rate from the full yield curve to each anticipated benefit payment, based on the anticipated optional form elections.

The overall expected return on assets assumption is based on a combination of historical performance of the pension fund and expectations of future performance. Expected future performance is determined by weighting the expected returns for each asset class by the plan’s asset allocation. The expected returns are based on long-term capital market assumptions utilizing a ten-year time horizon through consultation with investment advisors. While consideration is given to recent performance and historical returns, the assumption represents a long-term prospective return.

The overall objective for plan assets is to earn a rate of return over time to meet anticipated benefit payments in accordance with plan provisions. The long-term investment objective of the domestic retirement plans is to achieve a total rate of return, net of fees, which exceeds the actuarial overall expected return on asset assumptions used for funding purposes and which provides an appropriate premium over inflation. The intermediate-term objective of the domestic retirement plans, defined as three to five years, is to outperform each of the capital markets in which assets are invested, net of fees. During periods of extreme market volatility, preservation of capital takes a higher precedence than outperforming the capital markets.

The Finance Committee of the Corporation’s Board of Directors is responsible for formulating investment policies, developing investment manager guidelines and objectives, and approving and managing qualified advisors and investment managers. The guidelines established define permitted investments within each asset class and apply certain restrictions such as limits on concentrated holdings, and prohibits selling securities short, buying on margin, and the purchase of any securities issued by the Corporation.

The Corporation maintains the funds of the CW Pension Plan under a trust that is diversified across investment classes and among investment managers to achieve an optimal balance between risk and return. As a part of its diversification strategy, the Corporation has established target allocations for each of the following assets classes: domestic equity securities, international equity securities, and debt securities. Below are the Corporation’s actual and established target allocations for the CW Pension Plan, representing 88% of consolidated assets:


	As of December 31,		Target	Expected
	2020	2019	Exposure	Range
Asset class
Domestic equities	54%	51%	50%	40%-60%
International equities	15%	15%	15%	10%-20%
Total equity	69%	66%	65%	55%-75%
Fixed income	31%	34%	35%	25%-45%

Foreign plan assets represent 11% of consolidated plan assets, with most of the assets supporting the U.K. plan. Generally, the foreign plans follow a similar asset allocation strategy and are more heavily weighted in fixed income resulting in a weighted expected return on assets assumption of 3.5% for all foreign plans.

The Corporation may from time to time require the reallocation of assets in order to bring the retirement plans into conformity with these ranges. The Corporation may also authorize alterations or deviations from these ranges where appropriate for achieving the objectives of the retirement plans.


Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	22,457	$	2,010	$	20,447	$	—
Equity securities- Mutual funds (1)	534,479		427,391		107,088		—
Bond funds (2)	273,979		211,372		62,607		—
Other (3)	4,224		—		—		4,224
December 31, 2019	$	835,139	$	640,773	$	190,142	$	4,224
Cash and cash equivalents	$	16,710	$	1,376	$	15,334	$	—
Equity securities- Mutual funds (1)	688,257		570,293		117,964		—
Bond funds (2)	341,140		242,627		98,513		—
Other (3)	4,402		—		—		4,402
December 31, 2020	$	1,050,509	$	814,296	$	231,811	$	4,402

(1)This category consists of domestic and international equity securities. It is comprised of U.S. securities benchmarked against the S&P 500 index and Russell 2000 index, international mutual funds benchmarked against the MSCI EAFE index, global equity index mutual funds associated with our U.K. based pension plans and balanced funds associated with the U.K. and Canadian based pension plans.

(2)This category consists of domestic and international bonds. The domestic fixed income securities are benchmarked against the Bloomberg Barclays Capital Aggregate Bond index, actively-managed bond mutual funds comprised of domestic investment grade debt, fixed income derivatives, and below investment-grade issues, U.S. mortgage backed securities, asset backed securities, municipal bonds, and convertible debt. International bonds consist of bond mutual funds for institutional investors associated with the CW Pension Plan, Switzerland, and U.K. based pension plans.

Equity securities and exchange-traded equity and bond mutual funds are valued using a market approach based on the quoted market prices of identical instruments. Pooled institutional funds are valued at their net asset values and are calculated by the sponsor of the fund.

Fixed income securities are primarily valued using a market approach utilizing various underlying pricing sources and methodologies. Real estate investment trusts are priced at net asset value based on valuations of the underlying real estate holdings using inputs such as discounted cash flows, independent appraisals, and market-based comparable data.

Cash balances in the United States are held in a pooled fund and classified as a Level 2 asset. Non-U.S. cash is valued using a market approach based on quoted market prices of identical instruments.


(In thousands)	Insurance Contracts		Other		Total
December 31, 2018	$	8,408	$	2,313	$	10,721
Actual return on plan assets:
Relating to assets still held at the reporting date	—		115		115
Purchases, sales, and settlements	(8,408)		1,715		(6,693)
Foreign currency translation adjustment	—		81		81
December 31, 2019	$	—	$	4,224	$	4,224
Actual return on plan assets:
Relating to assets still held at the reporting date	5		(20)		(15)
Relating to assets sold during the period	—		(58)		(58)
Purchases, sales, and settlements	523		(680)		(157)
Foreign currency translation adjustment	49		359		408
December 31, 2020	$	577	$	3,825	$	4,402


(In thousands)	Pension Plans		Postretirement Plans		Total
2021	$	55,668	$	1,596	$	57,264
2022	55,872		1,592		57,464
2023	56,721		1,595		58,316
2024	61,772		1,569		63,341
2025	58,203		1,548		59,751
2026 — 2030	295,165		7,099		302,264

The Corporation offers all of its full-time domestic employees the opportunity to participate in a defined contribution plan. Costs incurred by the Corporation in the administration and record keeping of the defined contribution plan are paid for by the Corporation and are not considered material.

Effective January 1, 2014, all non-union employees who were not currently receiving final or career average pay benefits became eligible to receive employer contributions in the Corporation's sponsored 401(k) plan. The employer contributions include both employer match and non-elective contribution components, up to a maximum employer contribution of 7% of eligible compensation. During the year ended December 31, 2020, the expense relating to the plan was $19.3 million, consisting of $10.0 million in matching contributions to the plan in 2020, and $9.3 million in non-elective contributions, primarily paid in January 2021. Cumulative contributions of approximately $104 million are expected to be made from 2021 through 2025.