Employee Benefit Plans

12 Months Ended

Dec. 31, 2023

Employee Benefit Plans

Employee Benefit Plans

(15) Employee Benefit Plans

The Company’s U.S. employees are eligible to participate in the Company’s 401(k) savings plan. Since January 1, 2012, the Company has provided a base contribution of 2% of an employee’s salary, regardless of whether the employee participates in the plan. Further, the Company matches 100% of employee contributions of up to the first 4% of eligible compensation. The Company’s match contributions for the years ended December 31, 2023, 2022 and 2021, were $8.1 million, $7.6 million and $6.6 million, respectively. Charges for Europe pension plans approximated $3.3 million, $4.3 million and $4.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. These costs relate to plans administered by certain European subsidiaries, with benefits calculated according to government requirements and paid out to employees upon retirement or change of employment.

With the acquisition of Bradley on October 23, 2023, the Company acquired the defined benefit retirement plan (“the Pension Plan”) of Bradley. The Pension Plan was frozen effective September 30, 2011, and the Pension Plan pension benefit obligation (“PBO”) was close to fully funded prior to the acquisition date. The Company terminated the Pension Plan with an effective date of plan termination of December 31, 2023. Distribution of plan assets pursuant to the termination will not be made until completion of the plan termination process with the Pension Benefit Guaranty Corporation.

The Company expects the distribution for the Pension Plan to be completed by December 31, 2024. Except for retirees receiving payments under the Pension Plan (or “in pay status”), participants in the Pension Plan will have the choice of receiving either a single lump sum payment or an annuity. Retirees in pay status will continue to receive payments of their benefits under the Pension Plan pursuant to their current annuity elections. The Company plans to purchase annuity contracts from an insurance company for all retirees and participants that choose annuities as a payment option under the Pension Plan. The lump sum payments paid to participants will represent the actuarial equivalent value of the participants’ remaining accrued benefits under the Pension Plan as of the distribution date, calculated in accordance with the terms of the plan and based on the participants’ ages on the distribution date.

As a result of the plan termination, and similar to the opening balance sheet liability, the December 31, 2023 balance sheet liability was calculated on a termination basis by valuing the PBO on a going concern basis using the Pension Plan cash flows and a spot curve as of December 31, 2023 conditions, for assumed lump sum election rates, lump sum cost, and insurer premium.

The funded status of the defined benefit plans and amounts recognized in the consolidated balance sheets are as follows:

	Year Ended
	December 31, 2023
	(in millions)
Change in projected benefit obligation
Balance at beginning of period (October 23, 2023)	$	68.0
Service cost		—
Administration costs paid		—
Interest cost		0.7
Actuarial loss (gain)		5.5
Benefits paid		(0.7)
Balance at end of year	$	73.5
Change in fair value of plan assets
Balance at beginning of period (October 23, 2023)	$	67.9
Actual gain (loss) on assets		7.2
Employer contributions		—
Administration costs paid		—
Benefits paid		(0.7)
Fair value of plan assets at end of the year	$	74.4
Funded (underfunded) status at end of year	$	0.9

Amounts recognized in the consolidated balance sheets are as follows:

	December 31, 2023
	(in millions)
Current liabilities	$	—
Noncurrent assets (liabilities)		0.9
Net amount recognized	$	0.9

Amounts recognized in accumulated other comprehensive income consist of:

	December 31, 2023
	(in millions)
Net actuarial gain recognized	$	(0.9)

The components of net periodic benefit cost are as follows:

	Year Ended
	December 31, 2023
	(in millions)
Service cost - benefits earned	$	—
Interest costs on benefit obligation		0.7
Expected return on assets		(0.7)
Net actuarial loss amortization	$	—
Net periodic benefit cost	$	—

For fiscal year 2024, the estimated net actuarial loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost is immaterial.

Assumptions:

Weighted-average assumptions used to determine benefit obligations:

	December 31, 2023
	(in millions)
Discount rate	4.64	%

Weighted-average assumptions used to determine net periodic benefit costs:

	December 31, 2023
	(in millions)
Discount rate	5.36	%
Long-term rate of return on assets	5.60	%

Discount rates were selected based upon rates of return assuming a plan termination basis as of December 31, 2023. The discount rate selected was the equivalent rate for the estimated settlement liability. In selecting the expected long-term rate of return on assets, the Company considers the average rate of earnings expected on the funds invested or to be invested to provide for the benefits of this plan. This includes considering the trust’s asset allocation and the expected returns likely to be earned over the life of the plan.

Plan assets

The Company’s investment policies employed an approach at the end of fiscal year 2023 to better match the asset allocation to the liability duration due to the expected asset and liability transfer later in fiscal year 2024. A mix of cash and fixed income investments were used to align to the expected liability settlement and equity investments were no longer part of the portfolio. Fixed income investments consist of domestic and international corporate notes, federal and state treasury notes, and money market funds. Investment and market risk are measured and monitored on an going basis.

The weighted average asset allocations by asset category are as follows:

	December 31, 2023
	(in millions)
Asset Category
Cash	39	%
Equity	-
Fixed Income	61
Total	100	%

The following table presents the investments in the Pension Plan measured at fair value at December 31, 2023:

	December 31, 2023
	Level 1		Level 2		Level 3		Total
	(in millions)
Cash	$	28.9	$	—	$	—	$	28.9
Fixed income securities
Corporate notes		—		31.7		—		31.7
Treasury notes		12.7		—		—		12.7
Other investments(a)	$	1.7	$	—	$	—	$	1.7
Total investments	$	43.3	$	31.7	$	—	$	75.0

(a) Includes Aetna Co. Annuity Contract and accrued interest and dividends

Cash flows

The information related to the Company’s pension funds cash flow is as follows:

	Year Ended
	December 31, 2023
	(in millions)
Employer contributions	$	—
Benefit payments	$	0.7

The Company does not expect to contribute any amounts in 2024 to the Pension Plan.

Expected benefit payments to be paid by the pension plans are as follows:

	(in millions)
During fiscal year ending December 31, 2024	$	73.5
During fiscal year ending December 31, 2025		N/A (1)
During fiscal year ending December 31, 2026		N/A (1)
During fiscal year ending December 31, 2027		N/A (1)
During fiscal year ending December 31, 2028		N/A (1)
During fiscal year ending December 31, 2029 through December 31, 2033		N/A (1)

(1) Benefits under the Pension Plan are expected to be distributed by December 31, 2024.