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EMPLOYEE BENEFIT PLANS (Notes)
 9 Months Ended
Sep. 30, 2022
Retirement Benefits [Abstract]  
EMPLOYEE BENEFIT PLANS
8. EMPLOYEE BENEFIT PLANS
Defined Contribution Plans
Wesco Distribution sponsors a defined contribution retirement savings plan for the majority of its U.S. employees (the "WESCO Distribution, Inc. Retirement Savings Plan"). Effective January 1, 2022, the defined contribution plan covering all of Anixter Inc.'s non-union U.S. employees (the "Anixter Inc. Employee Savings Plan") was merged with and into the WESCO Distribution, Inc. Retirement Savings Plan (the "U.S. Defined Contribution Plan Merger"). On December 31, 2021, participant account balances were transferred from the Anixter Inc. Employee Savings Plan to the WESCO Distribution, Inc. Retirement Savings Plan. In connection with the U.S. Defined Contribution Plan Merger, the WESCO Distribution, Inc. Retirement Savings Plan was amended to change the employer matching contribution at an amount equal to 100% of a participant's eligible elective deferrals up to 3% of the participant's eligible compensation and 50% of the next 4% of eligible compensation, and to eliminate discretionary employer contributions.
WESCO Distribution Canada LP, a wholly-owned subsidiary of the Company, sponsors a defined contribution plan covering the current full-time employees of WESCO Distribution Canada LP and part-time employees meeting certain requirements for continuous service, earnings and minimum hours of employment (the "Wesco Canadian Defined Contribution Plan"). Effective January 1, 2022, the defined contribution plan for certain employees of Anixter Canada Inc. and Anixter Power Solutions Canada Inc. (the "Anixter Canadian Defined Contribution Plan") was merged with and into an amended Wesco Canadian Defined Contribution Plan. During the first quarter of 2022, participant account balances were transferred from the Anixter Canadian Defined Contribution Plan to the amended Wesco Canadian Defined Contribution Plan. The amended Wesco Canadian Defined Contribution Plan provides a core employer contribution of 3% of a participant's eligible compensation, plus a matching contribution equal to 50% of a participant's elective contributions up to 4% of eligible compensation (for a maximum total employer contribution equal to 5%). The amended Wesco Canadian Defined Contribution Plan also requires employees of EECOL Electric Corp. hired on or after January 1, 2022 to join this Canadian defined contribution plan, and permits enrollment for those not participating in the defined benefit plan described below.
Wesco incurred charges of $12.4 million and $16.4 million for the three months ended September 30, 2022 and 2021, respectively, and $45.4 million and $49.1 million for the nine months ended September 30, 2022 and 2021, respectively, for all defined contribution plans.
Deferred Compensation Plans
Wesco Distribution sponsors a non-qualified deferred compensation plan (the "Wesco Deferred Compensation Plan") that permits select employees to make pre-tax deferrals of salary and bonus. Employees have the option to transfer balances allocated to their accounts in the Wesco Deferred Compensation Plan into any of the available investment options. The Wesco Deferred Compensation Plan is an unfunded plan. As of September 30, 2022 and December 31, 2021, the Company's obligation under the Wesco Deferred Compensation Plan was $19.6 million and $20.9 million, respectively, which is included in other noncurrent liabilities in the Condensed Consolidated Balance Sheets.
Defined Benefit Plans
Wesco sponsors a contributory defined benefit plan covering substantially all Canadian employees of EECOL Electric Corp., a wholly-owned subsidiary of the Company (the "EECOL Plan") and a Supplemental Executive Retirement Plan for certain executives of EECOL Electric Corp. (the "EECOL SERP").
Anixter Inc. sponsors the Anixter Inc. Pension Plan, which was closed to entrants first hired or rehired on or after July 1, 2015, and various defined benefit pension plans covering employees of foreign subsidiaries in Canada and Europe (together with the "EECOL Plan" and "EECOL SERP", the "Foreign Plans"). The majority of the Company's defined benefit pension plans are non-contributory, and with the exception of the U.S. and Canada, cover substantially all full-time employees in their respective countries. Retirement benefits are provided based on compensation as defined in each of the plan agreements. The Anixter Inc. Pension Plan is funded as required by the Employee Retirement Income Security Act of 1974 and the Internal Revenue Service. With the exception of the EECOL SERP, which is an unfunded plan, the Foreign Plans are funded as required by applicable foreign laws.
During the fourth quarter of 2021, the Company adopted certain plan amendments to: (i) freeze the benefits provided under the Anixter Inc. Pension Plan effective December 31, 2021, (ii) close participation in the EECOL Plan and EECOL SERP effective December 31, 2021, and (iii) freeze the benefit accruals under the Pension Plan for Employees of Anixter Canada Inc., the EECOL Plan and the EECOL SERP effective December 31, 2023.
The Company expects to contribute approximately $10.8 million to its Foreign Plans in 2022, of which approximately $9.3 million was contributed during the nine months ended September 30, 2022. The Company does not expect to make a contribution to its domestic qualified pension plan in 2022 due to its overfunded status.
The following tables set forth the components of net periodic pension (benefit) cost for the Company's defined benefit plans:
Three Months Ended
(In thousands)September 30, 2022September 30, 2021September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Domestic PlansForeign PlansTotal
Service cost$— $764 $2,047 $3,251 $2,047 $4,015 
Interest cost2,083 2,018 2,174 2,465 4,257 4,483 
Expected return on plan assets(3,497)(4,414)(4,017)(4,277)(7,514)(8,691)
Recognized actuarial gain(1)
— — (179)103 (179)103 
Net periodic pension (benefit) cost$(1,414)$(1,632)$25 $1,542 $(1,389)$(90)
Nine Months Ended
(In thousands)September 30, 2022September 30, 2021September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Domestic PlansForeign PlansTotal
Service cost$— $2,291 $6,318 $9,791 $6,318 $12,082 
Interest cost6,250 6,095 6,742 7,425 12,992 13,520 
Expected return on plan assets(10,491)(13,241)(12,468)(12,898)(22,959)(26,139)
Recognized actuarial gain(1)
— — (547)311 (547)311 
Settlement— (19)— — — (19)
Net periodic pension (benefit) cost$(4,241)$(4,874)$45 $4,629 $(4,196)$(245)
(1)    For the three and nine months ended September 30, 2022 and 2021, no material amounts were reclassified from accumulated other comprehensive income into net income.
The service cost of $2.0 million and $4.0 million for the three months ended September 30, 2022 and 2021, respectively, and $6.3 million and $12.1 million for the nine months ended September 30, 2022 and 2021, respectively, is reported as a component of selling, general and administrative expenses. The other components of net periodic pension (benefit) cost totaling net benefits of $3.4 million and $4.1 million for the three months ended September 30, 2022 and 2021, respectively, and $10.5 million and $12.3 million for the nine months ended September 30, 2022 and 2021, respectively, are presented as components of other non-operating income ("other expense (income), net").
Other Benefits
Prior to its acquisition by Wesco on June 22, 2020, Anixter granted restricted stock units in the ordinary course of business to its employees and directors. These awards, for which vesting did not accelerate solely as a result of the Company's merger with Anixter, were converted into cash-only settled Wesco phantom stock units, which vest ratably over a 3-year period. As of September 30, 2022 and December 31, 2021, the estimated fair value of these awards was $7.9 million and $22.7 million, respectively.
As of September 30, 2022, the Company's liability for these awards is $7.1 million, which is included in accrued payroll and benefit costs in the Condensed Consolidated Balance Sheet. As of December 31, 2021, the Company's liability for these awards was $17.3 million, of which $10.9 million was included in accrued payroll and benefit costs and $6.4 million was a component of other noncurrent liabilities in the Condensed Consolidated Balance Sheet.
The Company recognized compensation expense associated with these awards of $1.8 million and $3.4 million for the three months ended September 30, 2022 and 2021, respectively, and $1.6 million and $9.8 million for the nine months ended September 30, 2022 and 2021, respectively, which is reported as a component of selling, general and administrative expenses.
Compensation Related Costs, General
Other Benefits
Prior to its acquisition by Wesco on June 22, 2020, Anixter granted restricted stock units in the ordinary course of business to its employees and directors. These awards, for which vesting did not accelerate solely as a result of the Company's merger with Anixter, were converted into cash-only settled Wesco phantom stock units, which vest ratably over a 3-year period. As of September 30, 2022 and December 31, 2021, the estimated fair value of these awards was $7.9 million and $22.7 million, respectively.
As of September 30, 2022, the Company's liability for these awards is $7.1 million, which is included in accrued payroll and benefit costs in the Condensed Consolidated Balance Sheet. As of December 31, 2021, the Company's liability for these awards was $17.3 million, of which $10.9 million was included in accrued payroll and benefit costs and $6.4 million was a component of other noncurrent liabilities in the Condensed Consolidated Balance Sheet.
The Company recognized compensation expense associated with these awards of $1.8 million and $3.4 million for the three months ended September 30, 2022 and 2021, respectively, and $1.6 million and $9.8 million for the nine months ended September 30, 2022 and 2021, respectively, which is reported as a component of selling, general and administrative expenses.