Employee Benefit Plans

3 Months Ended

Oct. 31, 2019

Retirement Benefits, Description [Abstract]

Employee Benefit Plans

Employee Benefit Plans

The Company and certain of its international subsidiaries have defined benefit pension plans for many of their hourly and salaried employees. There are two types of U.S. plans. The first type of U.S. plan (Hourly Pension Plan) is a traditional defined benefit pension plan primarily for union production employees. The second plan (Salaried Pension Plan) is for some salaried and non-union production employees that provides defined benefits pursuant to a cash balance feature whereby a participant accumulates a benefit comprised of a percentage of current salary that varies with years of service, interest credits and transition credits. The Company no longer allows entrants into the U.S. Salaried Pension Plan and the employees no longer accrue Company contribution credits under the plan. Instead, eligible employees receive a 3% annual Company retirement contribution to their 401(k) in addition to the Company’s normal 401(k) match. The non-U.S. plans generally provide pension benefits based on years of service and compensation level. Components of net periodic benefit cost other than the service cost component are included in other income, net in the Condensed Consolidated Statements of Earnings.

Net periodic benefit costs for the Company’s pension plans include the following components (in millions):

	Three Months Ended October 31,
	2019			2018
Net periodic benefit costs:
Service cost	$	1.6		$	1.5
Interest cost	3.4			4.1
Expected return on assets	(6.5		)	(6.6		)
Prior service cost amortization	0.2			0.1
Actuarial loss amortization	1.6			1.1
Net periodic benefit costs	$	0.3		$	0.2

The Company’s general funding policy is to make at least the minimum required contributions as required by applicable regulations, plus any additional amounts that it determines to be appropriate. For the three months ended October 31, 2019, the Company made required contributions of $1.1 million to its non-qualified U.S. pension plans and $0.3 million to its non-U.S. pension plans.

The estimated minimum funding requirement for the Company’s qualified U.S. plans for the plan year ending July 31, 2020 is $4.4 million. In accordance with the Pension Protection Act of 2006, this contribution obligation may be met with existing credit balances that resulted from payments above the minimum obligation in prior years. The Company has sufficient credit balances to meet the minimum obligation for the plan year ending July 31, 2020. In November 2019, the Company utilized existing credits as contributions to the U.S. pension plans of $1.1 million. The Company estimates it will contribute an additional $0.8 million to its non-U.S. pension plans during the remainder of fiscal 2020 based upon the local government prescribed funding requirements. Future estimates of the Company’s required pension plan contributions may change significantly depending on the actual rate of return on plan assets, discount rates and regulatory requirements.