Employee Benefits

12 Months Ended

Oct. 31, 2023

Retirement Benefits [Abstract]

Employee Benefits

Note 10. Employee Benefits

Cooper's Retirement Income Plan

The Company's Retirement Income Plan (Plan), a defined benefit plan, is only available to full-time United States employees, subject to the soft freeze mentioned below. The Company's contributions are designed to fund normal cost on a current basis and to fund the estimated prior service cost of benefit improvements. The unit credit actuarial cost method is used to determine the annual cost. The Company pays the entire cost of the Plan and funds such costs as they accrue. Virtually all of the assets of the Plan are comprised of equities and participation in equity and fixed income funds.

The Company uses individual spot rates along the yield curve that correspond with the timing of each benefit payment to determine the service and interest costs of components of its net periodic benefit cost utilizing the correlation of projected cash outflows and corresponding spot rates on the yield curve.

The following table sets forth the Plan's benefit obligations and fair value of the Plan assets at October 31, 2023, 2022 and 2021 and the funded status of the Plan and net periodic pension costs for each of the years in the three-year periods ended October 31, 2023. The net amounts recognized in the Consolidated Balance Sheets consist of noncurrent liabilities. The accumulated benefit obligation was $131.5 million, $134.9 million and $207.6 million for the years ended October 31, 2023, 2022 and 2021.

Retirement Income Plan

Years Ended October 31, (In millions)	2023		2022		2021
Change in benefit obligation
Benefit obligation, beginning of year	$	148.0	$	230.9	$	218.8
Service cost	10.0		18.3		17.2
Interest cost	7.9		5.1		4.4
Benefits paid	(10.5)		(13.1)		(11.5)
Actuarial (gain)/loss	(10.9)		(93.2)		2.0
Benefit obligation, end of year	$	144.5	$	148.0	$	230.9
Change in plan assets
Fair value of plan assets, beginning of year	$	142.9	$	199.5	$	159.5
Actual return on plan assets	4.1		(43.5)		38.8
Employer contributions	1.1		—		12.7
Benefits paid	(10.5)		(13.1)		(11.5)
Fair value of plan assets, end of year	$	137.6	$	142.9	$	199.5
Funded status at end of year	$	(6.9)	$	(5.1)	$	(31.4)

Years Ended October 31, (In millions)	2023		2022		2021
Amounts recognized in accumulated other comprehensive income consist of:
Net loss	$	4.1	$	8.0	$	44.4
Accumulated other comprehensive income	$	4.1	$	8.0	$	44.4

Years Ended October 31, (In millions)	2023		2022		2021
Reconciliation of (prepaid) accrued pension cost:
(Prepaid)/Accrued pension cost at prior fiscal year end	$	(2.9)	$	(13.0)	$	(14.8)
Net periodic benefit cost	6.8		10.1		14.5
Contributions made during the year	(1.1)		—		(12.7)
(Prepaid)/Accrued pension cost at fiscal year end	$	2.8	$	(2.9)	$	(13.0)

Years Ended October 31, (In millions)	2023		2022		2021
Components of net periodic benefit cost and other amounts recognized in the Consolidated Statements of Income:
Net periodic benefit cost:
Service cost	$	10.0	$	18.3	$	17.2
Interest cost	7.9		5.1		4.4
Expected return on plan assets	(11.1)		(15.5)		(12.5)
Recognized actuarial loss	—		2.2		5.4
Net periodic pension cost	$	6.8	$	10.1	$	14.5

Years Ended October 31, (In millions)	2023		2022		2021
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Net (gain) loss	$	(4.0)	$	(34.1)	$	(24.4)
Amortizations of net gain	—		(2.5)		(5.4)
Total recognized in other comprehensive (income) loss	$	(4.0)	$	(36.6)	$	(29.8)
Total recognized in net periodic benefit cost and other comprehensive (income) loss	$	2.8	$	(26.2)	$	(15.2)

Years Ended October 31,	2023		2022		2021
Weighted-average assumptions used in computing the net periodic pension cost and projected benefit obligation at year end:
Discount rate for determining net periodic pension cost:
Projected Benefit Obligation	5.74	%	2.76	%	2.78	%
Service Cost	5.77	%	2.79	%	2.86	%
Interest Cost	5.51	%	2.28	%	2.07	%
Discount rate for determining benefit obligations at year end	6.22	%	5.74	%	2.76	%
Rate of compensation increase for determining expense	3.60	%	3.60	%	3.60	%
Rate of compensation increase for determining benefit obligations at year end	3.60	%	3.60	%	3.60	%
Expected rate of return on plan assets for determining net periodic pension cost	8.00	%	8.00	%	8.00	%
Expected rate of return on plan assets at year end	8.00	%	8.00	%	8.00	%
Measurement date for determining assets and benefit obligations at year end	10/31/2023		10/31/2022		10/31/2021

The discount rate enables us to state expected future cash flows at a present value on the measurement date. The discount rate used for the Plan is based primarily on the yields of a universe of high-quality corporate bonds rated AA or above, with durations corresponding to the expected durations of the benefit obligations. A change in the discount rate will cause the present value of benefit obligations to change in the opposite direction.

The expected rate of return on plan assets was determined based on a review of historical returns, both for this plan and for medium- to large-sized defined benefit pension funds with similar asset allocations. This review generated separate expected returns for each asset class listed below. These expected future returns were then blended based on this Plan's target asset allocation.

Reasons for Significant Liability Gains and Losses

The projected benefit obligation experienced a net gain of approximately $10.9 million during the year. This net gain is the result of assumption changes resulting in a gain of approximately $12.9 million, offset by losses of approximately $2.0 million due to demographic experience. The key assumption changes were the increase in the discount rate (gain of $7.8 million), a changes in assumptions for lump sum determination (gain of $5.1 million). Demographic losses were due to the net effect of retirement rates, termination rates, salary increases and other experience that was different from assumed.

Plan Assets

Weighted-average asset allocations at year end, by asset category are as follows:

Years Ended October 31,	2023		2022		2021
Asset category
Cash and cash equivalents	2.9	%	2.0	%	5.0	%
Corporate common stock	26.0	%	33.6	%	31.6	%
Equity mutual funds	39.1	%	33.9	%	32.8	%
Balanced funds	2.4	%	1.8	%	1.4	%
Alternative investments	0.7	%	0.9	%	1.0	%
Bond mutual funds	28.9	%	27.8	%	28.2	%
Total	100.0	%	100.0	%	100.0	%

The Plan invests in a diversified portfolio of assets intended to minimize risk of poor returns while maximizing expected portfolio returns. To achieve the long-term rate of return, plan assets will be invested in a mixture of instruments, including but not limited to, corporate common stock (may include the Company's stock), investment grade bond funds, cash, balanced funds, real estate funds, small or large cap equity funds and international equity funds. The allocation of assets will be determined by the investment manager and will typically include 50% to 70% equities with the remainder invested in fixed income, hedging strategy funds and cash. Presently, this diversified portfolio is expected to return roughly 8% in the long run.

As of the measurement date of October 31, 2023, the fair value measurement of plan assets is as follows:

(In millions)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset category
Cash and cash equivalents	$	3.9	$	3.9	$	—	$	—
Corporate common stock	35.8		35.8		—		—
Equity mutual funds	53.9		53.9		—		—
Balanced Funds	3.3		3.3		—		—
Alternative investments	0.9		0.9		—		—
Fixed income	39.8		15.8		24.0		—
Total	$	137.6	$	113.6	$	24.0	$	—

The Plan has an established process for determining the fair value of plan assets. For investments in equity and bond mutual funds, and real estate funds, fair value is based on observable, Level 1 inputs.

Plan Cash Flows

Contributions

The Company made $1.1 million and no contributions to the Plan in fiscal 2023 and fiscal 2022, respectively. The Company contribution to the Plan was $12.7 million for fiscal 2021. The Company closely monitors the funded status of the Plan with respect to legislative and accounting rules. The Company expected to make contributions totaling $1.1 million to the Plan during fiscal 2024.

Estimated Future Benefit Payments

Years (In millions)
2024	$	10.9
2025	$	11.0
2026	$	10.3
2027	$	11.2
2028	$	12.3
2029-2033	$	65.9

Plan Soft Freeze

On June 18, 2019, the Board of Directors of the Company approved a soft freeze of the Plan effective August 1, 2019. The Plan was closed to employees hired on or after August 1, 2019, including former participants or employees rehired on or after August 1, 2019, and employees hired in connection with a stock or asset acquisition, merger or other similar transaction on or after August 1, 2019. Existing employees already covered by the Plan, continue to accrue their benefits.

Cooper's 401(k) Savings Plan

Cooper's 401(k) savings plan provides for the deferral of compensation as described in the Internal Revenue Code and is available to substantially all United States employees. Employees who participate in the 401(k) plan may elect to have up to 75% of their pre-tax salary or wages deferred and contributed to the trust established under the Plan. Cooper's contributions on account of participating employees, were $10.1 million, $9.0 million and $7.2 million for the years ended October 31, 2023, 2022 and 2021, respectively.