XML 40 R24.htm IDEA: XBRL DOCUMENT v3.22.4
Benefit Plans
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefits Disclosure [Text Block] BENEFIT PLANS
Qualified Retirement Benefits. The Company has a qualified retirement plan covering certain U.S. employees that has been closed to new participants since 2003 and frozen since December 2013.

The Company has a number of non-U.S. defined benefit plans covering eligible employees located predominately in Europe, the most significant of which are German plans. Benefits for these plans are based primarily on each employee's final salary, with annual adjustments for inflation. The obligations in Germany consist of employer funded pension plans and deferred compensation plans. The employer funded pension plans are based upon direct performance-related commitments in terms of defined contribution plans. Each beneficiary receives, depending on individual pay-scale grouping, contractual classification, or income level, different yearly contributions. The contribution is multiplied by an age factor appropriate to the respective pension plan and credited to the individual retirement account of the employee. The retirement accounts may be used up at retirement by either a one-time lump-sum payout or payments of up to ten years.

The Company has other defined benefit plans outside the U.S., which have not been mentioned here due to materiality.

Supplemental Executive Retirement Benefits. The Company has non-qualified pension plans in the U.S. to provide supplemental retirement benefits to certain officers, which have also been frozen since December 2013. Benefits are payable at retirement based upon a percentage of the participant’s compensation, as defined.
Other Benefits. In addition to providing retirement benefits, the Company provides post-retirement healthcare and life insurance benefits (referred to as other benefits) for certain retired employees. Retired eligible employees in the U.S. may be entitled to these benefits based upon years of service with the Company, age at retirement and collective bargaining agreements. There are no plan assets and the Company funds the benefits as the claims are paid. The post-retirement benefit obligation was determined by application of the terms of medical and life insurance plans together with relevant actuarial assumptions and healthcare cost trend rates.

The following tables set forth the change in benefit obligation, change in plan assets, funded status, consolidated balance sheet presentation and net periodic benefit cost for the Company’s defined benefit pension plans and other benefits at and for the years ended December 31:
Retirement BenefitsOther Benefits
U.S. PlansNon-U.S. Plans
202220212022202120222021
Change in benefit obligation
Benefit obligation at beginning of year$584.4 $620.1 $420.5 $468.7 $5.7 $13.7 
Service cost— — 8.9 9.8 — 0.1 
Interest cost17.3 15.9 4.1 2.9 0.2 0.7 
Actuarial gain(133.8)(24.0)(80.5)(5.4)(1.2)(8.0)
Plan participant contributions— — 1.2 1.4 — — 
Benefits paid(25.7)(27.6)(6.5)(6.5)(0.5)(0.5)
Plan amendments— — (2.4)(2.9)— — 
Settlements(82.4)— (24.6)(18.4)— — 
Foreign currency impact— — (22.9)(29.1)0.1 (0.3)
Acquired benefit plans and other— — (0.3)— — — 
Benefit obligation at end of year359.8 584.4 297.5 420.5 4.3 5.7 
Change in plan assets
Fair value of plan assets at beginning of year511.3 486.4 394.4 394.1 — — 
Actual return on plan assets(113.8)48.9 (27.6)41.6 — — 
Employer contributions3.6 3.5 10.9 9.6 0.5 0.5 
Plan participant contributions— — 1.2 1.4 — — 
Benefits paid(25.7)(27.5)(6.5)(6.5)(0.5)(0.5)
Foreign currency impact— — (22.5)(27.5)— — 
Settlements(82.4)— (24.6)(18.3)— — 
Fair value of plan assets at end of year293.0 511.3 325.3 394.4 — — 
Funded status$(66.8)$(73.1)$27.8 $(26.1)$(4.3)$(5.7)
Amounts recognized in balance sheets
Noncurrent assets$— $— $— $— $— $— 
Current liabilities3.5 3.5 3.1 3.3 0.5 0.6 
Noncurrent liabilities (1)
63.3 69.6 (30.9)22.7 3.8 5.1 
Accumulated other comprehensive loss:
Unrecognized net actuarial (loss) gain (2)
(77.3)(94.9)45.4 13.8 5.6 4.8 
Unrecognized prior service (cost) benefit (2)
— — 5.9 3.9 — 
Net amount recognized$(10.5)$(21.8)$23.5 $43.7 $9.9 $10.5 
(1)    Included in the consolidated balance sheets in pensions, post-retirement and other benefits.
(2)    Represents amounts in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost.
Retirement BenefitsOther Benefits
U.S. PlansNon-U.S. Plans
202220212022202120222021
Change in accumulated other comprehensive loss
Balance at beginning of year$(94.9)$(154.5)$17.7 $(3.8)$4.8 $(3.8)
Prior service credit/loss recognized during the year— — 2.4 — — — 
Net actuarial gains (losses) recognized during the year(1.1)50.6 38.4 23.6 1.2 8.0 
Net actuarial (losses) gains occurring during the year4.4 9.0 (1.6)0.3 (0.5)0.2 
Net actuarial losses recognized due to settlement14.3 — (4.1)(1.1)— — 
Acquired benefit plans and other— — — (0.1)— 0.2 
Foreign currency impact— — (1.5)(1.2)0.1 0.2 
Balance at end of year$(77.3)$(94.9)$51.3 $17.7 $5.6 $4.8 
Retirement BenefitsOther Benefits
U.S. PlansNon-U.S. Plans
202220212020202220212020202220212020
Components of net periodic benefit cost
Service cost$— $— $3.8 $8.9 $9.8 $9.8 $— $0.1 $0.1 
Interest cost17.3 15.9 18.9 4.1 2.9 4.0 0.2 0.7 0.8 
Recognition/establishment of Germany benefit obligation— — — — — — — — — 
Expected return on plan assets(21.2)(22.3)(25.4)(14.5)(14.5)(13.4)— — — 
Other Adjustments— — — — — 0.2 — — — 
Amortization of prior service cost— — — (0.4)(0.1)2.8 — — — 
Recognized net actuarial (gain) loss4.4 8.9 7.8 (1.6)0.3 (0.6)(0.4)0.2 0.4 
Settlement (gain) loss14.3 — — (4.1)(1.1)1.1 — — — 
Net periodic benefit cost$14.8 $2.5 $5.1 $(7.6)$(2.7)$3.9 $(0.2)$1.0 $1.3 

The following table represents information for pension plans with an accumulated benefit obligation in excess of plan assets at December 31:
U.S. PlansNon-U.S. Plans
2022202120222021
Projected benefit obligation$359.8 $584.4 $189.2 $293.9 
Accumulated benefit obligation$359.8 $584.4 $181.6 $282.3 
Fair value of plan assets$293.0 $511.3 $51.7 $88.7 

The following table represents the weighted-average assumptions used to determine benefit obligations at December 31:
Pension BenefitsOther Benefits
U.S. PlansNon-U.S. Plans
202220212022202120222021
Discount rate5.59%2.99%4.92%2.39%6.84%4.22%
Rate of compensation increaseN/AN/A3.88%3.89%N/AN/A
The following table represents the weighted-average assumptions used to determine periodic benefit cost at December 31:
Pension BenefitsOther Benefits
U.S. PlansNon-U.S. Plans
202220212022202120222021
Discount rate2.99%2.62%2.39%1.90%4.22%5.19%
Expected long-term return on plan assets5.25%6.05%3.30%3.32%N/AN/A
Rate of compensation increaseN/AN/A3.89%3.63%N/AN/A

The discount rate is determined by analyzing the average return of high-quality (i.e., AA-rated) fixed-income investments and the year-over-year comparison of certain widely used benchmark indices as of the measurement date. The expected long-term rate of return on plan assets is primarily determined using the plan’s current asset allocation and its expected rates of return. The Company also considers information provided by its investment consultant, a survey of other companies using a December 31 measurement date and the Company’s historical asset performance in determining the expected long-term rate of return. The rate of compensation increase assumptions reflects the Company’s long-term actual experience and future and near-term outlook.

During 2021, the Society of Actuaries released new mortality tables (Pri-2012) and projection scales resulting from recent studies measuring mortality rates for various groups of individuals. As of December 31, 2022, the Company used the Pri-2012 mortality tables and the MP-2021 mortality projection scales. The Pri-2012 mortality tables were also used in 2021.

The following table represents assumed healthcare cost trend rates at December 31:
20222021
Healthcare cost trend rate assumed for next year6.0%5.6%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)4.0%4.0%
Year that rate reaches ultimate trend rate20462045

The healthcare trend rates for the postemployment benefits plans in the U.S. are reviewed based upon the results of actual claims experience. The Company used initial healthcare cost trends of 6.0 percent and 5.6 percent in 2022 and 2021, respectively, with an ultimate trend rate of 4.0 percent reached in 2046. Assumed healthcare cost trend rates have a modest effect on the amounts reported for the healthcare plans.

A one-percentage-point change in assumed healthcare cost trend rates results in a minimal impact to total service and interest cost and post-retirement benefit obligation.

The Company has a pension investment policy in the U.S. designed to achieve an adequate funded status based on expected benefit payouts and to establish an asset allocation that will meet or exceed the return assumption while maintaining a prudent level of risk. The plans' target asset allocation adjusts based on the plan's funded status. As the funded status improves or declines, the debt security target allocation will increase and decrease, respectively. The Company utilizes the services of an outside consultant in performing asset / liability modeling, setting appropriate asset allocation targets along with selecting and monitoring professional investment managers.

The U.S. plan assets are invested in equity and fixed income securities, alternative assets and cash. Within the equities asset class, the investment policy provides for investments in a broad range of publicly-traded securities including both domestic and international stocks diversified by value, growth and cap size. Within the fixed income asset class, the investment policy provides for investments in a broad range of publicly-traded debt securities with a substantial portion allocated to a long duration strategy in order to partially offset interest rate risk relative to the plans’ liabilities. The alternative asset class includes investments in diversified strategies with a stable and proven track record and low correlation to the U.S. stock market. Several plans outside of the U.S. are also invested in various assets, under various investment policies in compliance with local funding regulations.
The following table summarizes the Company’s target allocation for these asset classes in 2023, which are readjusted at least quarterly within a defined range for the U.S., and the Company’s actual pension plan asset allocation as of December 31, 2022 and 2021:
U.S. PlansNon-U.S. Plans
TargetActualTargetActual
202320222021202320222021
Equity securities41%43%46%52%52%55%
Debt securities50%48%50%26%26%25%
Real estate4%7%3%8%8%12%
Other5%2%1%14%14%8%
Total100%100%100%100%100%100%

The following table summarizes the fair value categorized into a three level hierarchy, as discussed in Note 1 of the consolidated financial statements, based upon the assumptions (inputs) of the Company’s plan assets as of December 31, 2022:
U.S. PlansNon-U.S. Plans
Fair ValueLevel 1Level 2NAVFair ValueLevel 1Level 2NAV
Cash and short-term investments$1.8 $1.8 $— $— $12.1 $11.4 $— $0.7 
Mutual funds0.8 0.8 — — — — — — 
Equity securities
U.S. small cap core— — — — — — — — 
International developed markets— — — — 170.4 167.5 — 2.9 
Fixed income securities
U.S. corporate bonds— — — — — — — — 
International corporate bonds— — — — 59.6 50.1 — 9.5 
U.S. government— — — — — — — — 
Fixed and index funds— — — — 23.7 14.2 — 9.5 
Common collective trusts
Real estate (a)20.1 — — 20.1 25.5 — 14.5 11.0 
Other (b)263.1 — — 263.1 16.8 — — 16.8 
Alternative investments
Private equity funds (c)7.2 — — 7.2 — — — — 
Other alternative investments (d)— — — — 17.2 0.3 — 16.9 
Fair value of plan assets at end of year$293.0 $2.6 $— $290.4 $325.3 $243.5 $14.5 $67.3 
The following table summarizes the fair value of the Company’s plan assets as of December 31, 2021:
U.S. PlansNon-U.S. Plans
Fair ValueLevel 1Level 2NAVFair ValueLevel 1Level 2NAV
Cash and short-term investments$2.5 $2.5 $— $— $19.7 $19.7 $— $— 
Other0.5 0.5 — — — — — — 
Mutual funds1.1 1.1 — — 0.7 — — 0.7 
Equity securities
U.S. small cap core— — — — — — — — 
International developed markets— — — — 216.8 214.6 — 2.2 
Fixed income securities
U.S. corporate bonds— — — — — — — — 
International corporate bonds— — — — 58.8 58.8 — — 
U.S. government— — — — — — — — 
Fixed and index funds— — — — 38.6 18.9 — 19.7 
Common collective trusts
Real estate (a)17.2 — — 17.2 45.8 — 15.9 29.9 
Other (b)485.9 — — 485.9 — — — — 
Alternative investments
Multi-strategy hedge funds— — — — — — — — 
Private equity funds (c)4.1 — — 4.1 — — — — 
Other alternative investments (d)— — — — 14.0 0.4 — 13.6 
Fair value of plan assets at end of year$511.3 $4.1 $— $507.2 $394.4 $312.4 $15.9 $66.1 

In 2022 and 2021, the fair value of investments categorized as level 3 represent the plan's interest in private equity, hedge and property funds. The fair value for these assets is determined based on the NAV as reported by the underlying investment managers.

(a) Real estate common collective trust. The objective of the real estate common collective trust (CCT) is to achieve long-term returns through investments in a broadly diversified portfolio of improved properties with stabilized occupancies. As of December 31, 2022, investments in this CCT, for U.S. plans, included approximately 22 percent office, 27 percent residential, 10 percent retail and 41 percent industrial, cash and other. As of December 31, 2021, investments in this CCT, for U.S. plans, included approximately 31 percent office, 24 percent residential, 12 percent retail and 33 percent industrial, cash and other. Investments in the real estate CCT can be redeemed once per quarter subject to available cash, with a 30-day notice.

(b) Other common collective trusts. At December 31, 2022, approximately 53 percent of the other CCTs are invested in fixed income securities including 36 percent in corporate bonds and 64 percent in U.S. Treasury and other. Approximately 19 percent of the other CCTs at December 31, 2022 are invested in Russell 1000 Fund large cap index funds, 16 percent in International Funds, and approximately 12 percent in funds, including emerging markets, real assets, and other funds. At December 31, 2021, approximately 52 percent of the other CCTs are invested in fixed-income securities, including approximately 42 percent in corporate bonds and 58 percent in U.S. Treasury and other. Approximately 20 percent of the other CCTs at December 31, 2021 are invested in Russell 1000 Fund large cap index funds, 15 percent in International Funds, and approximately 13 percent in funds, including emerging markets, real assets, and other funds. Investments in all common collective trust securities can be redeemed daily.
(c)    Private equity funds. The objective of the private equity funds is to achieve long-term returns through investments in a diversified portfolio of private equity limited partnerships that offer a variety of investment strategies, targeting low volatility and low correlation to traditional asset classes. As of December 31, 2022 and 2021, investments in these private equity funds include approximately 26 percent and 33 percent, respectively, in buyout private equity funds that usually invest in mature companies with established business plans, approximately 17 percent and 19 percent, respectively, in special situations private equity and debt funds that focus on niche investment strategies and approximately 24 percent and 29 percent respectively, in venture private equity funds that invest in early development or expansion of business. Investments in the private equity fund can be redeemed only with written consent from the general partner, which may or may not be granted. At December 31, 2022 and 2021 the Company had unfunded commitments of underlying funds $1.6 and $2.4, respectively.

(d) Other alternative investments. Following the Acquisition, the Company’s plan assets were expanded with a combination of insurance contracts, multi-strategy investment funds and company-owned real estate. The fair value for these assets is determined based on the NAV as reported by the underlying investment manager, insurance companies and the trustees of the CTA.

The following table represents the amortization amounts expected to be recognized during 2023:
U.S. Pension BenefitsNon-U.S. Pension BenefitsOther Benefits
Amount of net prior service credit$— $(0.7)$— 
Amount of net loss (gain)$0.6 $(3.7)$(0.6)

The Company contributed $15.0 to its retirement and other benefit plans, including contributions to the nonqualified plan and benefits paid from company assets. In 2022, the Company received a reimbursement of $17.0 from the CTA assets to the Company for benefits paid directly from company assets during the year ended December 31, 2022. The Company expects to contribute approximately $0.6 to its other post-retirement benefit plan and expects to contribute approximately $26.2 to its retirement plans, including the nonqualified plan, as well as benefits payments directly from the Company during the year ending December 31, 2023. The Company anticipates reimbursement of approximately $22 for certain benefits paid from its trustee in 2022. The following benefit payments, which reflect expected future service, are expected to be paid:
U.S. Pension BenefitsNon-U.S. Pension BenefitsOther Benefits Other Benefits
after Medicare
Part D Subsidy
2023$22.5 $22.6 $0.6 $0.5 
2024$23.3 $18.9 $0.5 $0.5 
2025$24.2 $20.1 $0.5 $0.5 
2026$25.0 $20.9 $0.5 $0.5 
2027$25.7 $22.6 $0.5 $0.4 
2028-2032$132.8 $103.4 $1.9 $1.8 

During 2022 the Company executed settlement agreements that reduced benefit obligations by $107.0 and resulted in non-cash expense of $10.1. These settlements included an agreement that the U.S. Pension Plan executed during the third quarter of 2022, which reduced benefit obligations by $82.4. As a result of the U.S. settlement, the Company recognized a non-cash expense of $14.3 which is reported in miscellaneous, net on the condensed consolidated statement of operations.

Retirement Savings Plan. The Company offers employee 401(k) savings plans (Savings Plans) to encourage eligible employees to save on a regular basis by payroll deductions. The Company match is determined by the Board of Directors and evaluated at least annually. Total Company match was $7.0, $7.4 and $6.9 for the years ended December 31, 2022, 2021 and 2020, respectively. The Company's basic match is 50 percent on the first 6 percent of a participant's qualified contributions, subject to IRS limits.