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Pension and Other Postretirement Benefits
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefits Pension and Other Postretirement Benefits
 
The accounting standards related to employers’ accounting for defined benefit pension and other postretirement plans requires the Company to recognize the funded status of its defined benefit postretirement plans as assets or liabilities in the accompanying consolidated balance sheets and to recognize changes in the funded status of the plans in comprehensive income.

The Company has various defined contribution plans, the largest of which is its Retirement Savings Plan. Most U.S. salaried and non-union hourly employees are eligible to participate in this plan. See Note 17 for further discussion of the Retirement Savings Plan. The Company also maintains various other defined contribution plans which cover certain other employees. Company contributions under certain of these plans are based on the performance of the business units and employee compensation. Contribution expense under these other defined contribution plans was $5,475, $5,301 and $6,874 in 2021, 2020 and 2019, respectively.

Defined benefit pension plans in the U.S. cover a majority of the Company’s U.S. employees at the Engineered Components and Force & Motion Control businesses of Industrial, certain former U.S. employees, including retirees, and a portion of employees at the Company’s Corporate Office. Employees at certain international businesses within Industrial are also covered by defined benefit pension plans. Plan benefits for salaried and non-union hourly employees are based on years of service and average salary. Plans covering union hourly employees provide benefits based on years of service. The Company funds U.S. pension costs in accordance with the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Non-U.S. defined benefit pension plans cover certain employees of certain international locations in Europe and Canada.
 
The Company provides other medical, dental and life insurance postretirement benefits for certain of its retired employees in the U.S. and Canada. It is the Company’s practice to fund these benefits as incurred.
 
The accompanying balance sheets reflect the funded status of the Company’s defined benefit pension plans at December 31, 2021 and 2020. Reconciliations of the obligations and funded status of the plans follow:
 
 20212020
 U.S.Non-U.S.TotalU.S.Non-U.S.Total
Benefit obligation, January 1$461,296 $96,508 $557,804 $430,625 $87,031 $517,656 
Service cost4,378 2,169 6,547 4,134 2,135 6,269 
Interest cost11,963 786 12,749 14,015 1,069 15,084 
Amendments862 — 862 — 1,014 1,014 
Actuarial (gain) loss(10,734)(3,747)(14,481)37,709 2,812 40,521 
Benefits paid(25,009)(4,499)(29,508)(25,049)(3,422)(28,471)
Transfers in— 2,468 2,468 — 767 767 
Plan curtailments— (603)(603)(138)— (138)
Plan settlements— (2,464)(2,464)— (2,165)(2,165)
Participant contributions— 1,171 1,171 — 1,127 1,127 
Foreign exchange rate changes— (2,329)(2,329)— 6,140 6,140 
Benefit obligation, December 31442,756 89,460 532,216 461,296 96,508 557,804 
Fair value of plan assets, January 1413,898 88,880 502,778 380,242 82,265 462,507 
Actual return on plan assets30,880 2,214 33,094 55,813 3,849 59,662 
Company contributions2,794 1,403 4,197 2,892 1,545 4,437 
Participant contributions— 1,171 1,171 — 1,127 1,127 
Benefits paid(25,009)(4,499)(29,508)(25,049)(3,422)(28,471)
Plan settlements— (2,464)(2,464)— (2,165)(2,165)
Transfers in— 2,468 2,468 — 767 767 
Foreign exchange rate changes— (1,807)(1,807)— 4,914 4,914 
Fair value of plan assets, December 31422,563 87,366 509,929 413,898 88,880 502,778 
Underfunded status, December 31$(20,193)$(2,094)$(22,287)$(47,398)$(7,628)$(55,026)

Benefit obligations decreased in 2021 primarily due to actuarial gains, resulting largely from increases in the discount rate, and the payment of benefits to plan participants, partially offset by interest costs. Benefit obligations increased in 2020 primarily due to actuarial losses, resulting largely from declines in discount rates, and interest costs, partially offset by the payment of benefits to plan participants.

Projected benefit obligations related to pension plans with benefit obligations in excess of plan assets follow:
 20212020
 U.S.Non-U.S.TotalU.S.Non-U.S.Total
Projected benefit obligation$43,184 $49,272 $92,456 $352,062 $52,481 $404,543 
Fair value of plan assets5,592 34,463 40,055 298,966 34,947 333,913 
 
Information related to pension plans with accumulated benefit obligations in excess of plan assets follows:
 20212020
 U.S.Non-U.S.TotalU.S.Non-U.S.Total
Accumulated benefit obligation$43,108 $49,131 $92,239 $340,158 $52,357 $392,515 
Fair value of plan assets5,592 34,463 40,055 298,966 34,947 333,913 
 
The accumulated benefit obligation for all defined benefit pension plans was $520,356 and $545,918 at December 31, 2021 and 2020, respectively.
Amounts related to pensions recognized in the accompanying balance sheets consist of:
 20212020
 U.S.Non-U.S.TotalU.S.Non-U.S.Total
Other assets$17,399 $12,715 $30,114 $5,698 $9,906 $15,604 
Accrued liabilities3,160 — 3,160 3,204 — 3,204 
Accrued retirement benefits34,432 14,809 49,241 49,892 17,534 67,426 
Accumulated other non-owner changes to equity, net(96,425)(13,684)(110,109)(118,951)(19,132)(138,083)
 
Amounts related to pensions recognized in accumulated other non-owner changes to equity, net of tax, at December 31, 2021 and 2020, respectively, consist of:
 20212020
 U.S.Non-U.S.TotalU.S.Non-U.S.Total
Net actuarial loss$(94,496)$(13,095)$(107,591)$(117,409)$(18,687)$(136,096)
Prior service costs(1,929)(589)(2,518)(1,542)(445)(1,987)
$(96,425)$(13,684)$(110,109)$(118,951)$(19,132)$(138,083)
 
The accompanying balance sheets reflect the underfunded status of the Company’s other postretirement benefit plans at December 31, 2021 and 2020. Reconciliations of the obligations and underfunded status of the plans follow:
 
20212020
Benefit obligation, January 1$33,104 $33,239 
Service cost103 81 
Interest cost819 1,041 
Actuarial (gain) loss(2,115)950 
Benefits paid(2,690)(3,203)
Participant contributions589 960 
Foreign exchange rate changes29 36 
Benefit obligation, December 3129,839 33,104 
Fair value of plan assets, January 1— — 
Company contributions2,101 2,243 
Participant contributions589 960 
Benefits paid(2,690)(3,203)
Fair value of plan assets, December 31— — 
Underfunded status, December 31$29,839 $33,104 

Benefit obligations decreased in 2021 primarily due to increases in actuarial gains, resulting largely from increases in the discount rate, and by the payment of benefits to plan participants. Benefit obligations remained flat in 2020 as benefit payments offset an increase in actuarial losses, driven by declines in the discount rate, and interest cost.
 
Amounts related to other postretirement benefits recognized in the accompanying balance sheets consist of:
20212020
Accrued liabilities$2,883 $3,114 
Accrued retirement benefits26,956 29,990 
Accumulated other non-owner changes to equity, net(2,198)(4,036)
Amounts related to other postretirement benefits recognized in accumulated other non-owner changes to equity, net of tax, at December 31, 2021 and 2020 consist of:
20212020
Net actuarial loss$(2,141)$(3,979)
Prior service loss(57)(57)
$(2,198)$(4,036)
 
The sources of changes in accumulated other non-owner changes to equity, net, during 2021 were: 
PensionOther
Postretirement
Benefits
Prior service cost$(657)$— 
Net gain15,679 1,620 
Amortization of prior service costs136 22 
Amortization of actuarial loss12,431 198 
Foreign exchange rate changes385 (2)
$27,974 $1,838 

Weighted-average assumptions used to determine benefit obligations as of December 31, are:
20212020
U.S. plans:
Discount rate2.95 %2.65 %
Increase in compensation3.03 %2.56 %
Non-U.S. plans:
Discount rate1.17 %0.83 %
Increase in compensation2.77 %2.75 %
Interest crediting rate1.34 %1.34 %

The investment strategy of the plans is to generate a consistent total investment return sufficient to pay present and future plan benefits to retirees, while minimizing the long-term cost to the Company. Target allocations for asset categories are used to earn a reasonable rate of return, provide required liquidity and minimize the risk of large losses. Targets may be adjusted, as necessary, to reflect trends and developments within the overall investment environment. The weighted-average target investment allocations by asset category were as follows during 2021: 65% in equity securities and 35% in fixed income securities, including cash.
The fair values of the Company’s pension plan assets at December 31, 2021 and 2020 by asset category are as follows:
  Fair Value Measurements Using
Asset CategoryTotalQuoted Prices in
Active Markets for
Identical Assets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
December 31, 2021
Cash and short-term investments$4,195 $4,195 $— $— 
Equity securities:
U.S. large-cap49,079 — 49,079 — 
U.S. mid-cap19,469 19,469 — — 
U.S. small-cap18,795 18,795 — — 
International equities136,557 — 136,557 — 
Global equity60,393 60,393 — — 
Fixed income securities:
U.S. bond funds143,035 — 143,035 — 
International bonds75,515 — 75,515 — 
Other2,891 — — 2,891 
$509,929 $102,852 $404,186 $2,891 
December 31, 2020
Cash and short-term investments3,678 3,678 — — 
Equity securities:
U.S. large-cap44,693 — 44,693 — 
U.S. mid-cap20,346 20,346 — — 
U.S. small-cap19,422 19,422 — — 
International equities153,315 — 153,315 — 
Global equity55,552 55,552 — — 
Fixed income securities:
U.S. bond funds125,309 — 125,309 — 
       International bonds77,221 — 77,221 — 
Other3,242 — — 3,242 
$502,778 $98,998 $400,538 $3,242 
 
The fair values of the Level 1 assets are based on quoted market prices from various financial exchanges. The fair values of the Level 2 assets are based primarily on quoted prices in active markets for similar assets or liabilities. The Level 2 assets are comprised primarily of commingled equity funds and fixed income securities. Commingled equity funds are valued at their net asset values based on quoted market prices of the underlying assets. Fixed income securities are valued using a market approach which considers observable market data for the underlying asset or securities. The Level 3 assets relate to a defined benefit plan within the Molding Solutions business. These pension assets are fully insured and have been estimated based on accrued pension rights and actuarial rates. These pension assets are limited to fulfilling the Company's pension obligations.
 
The Company expects to contribute approximately $4,617 to the pension plans in 2022. No contributions to the U.S. Qualified pension plans, specifically, are required, and the Company does not currently plan to make any discretionary contributions to such plans in 2022.
    
The following are the estimated future net benefit payments, which include future service, over the next 10 years:
PensionsOther
Postretirement
Benefits
2022$29,285 $2,883 
202329,499 2,676 
202429,790 2,493 
202529,556 2,339 
202629,288 2,167 
Years 2027-2031
148,523 9,144 
Total$295,941 $21,702 
 
Pension and other postretirement benefit costs consist of the following:
 PensionsOther
Postretirement Benefits
 202120202019202120202019
Service cost$6,547 $6,269 $5,425 $103 $81 $70 
Interest cost12,749 15,084 18,239 819 1,041 1,345 
Expected return on plan assets(27,858)(29,698)(29,425)— — — 
Amortization of prior service cost 332 359 404 29 27 25 
Recognized losses16,006 13,626 8,889 258 35 13 
Curtailment (gain)/loss(133)484 — — — — 
Settlement loss205 549 340 — — — 
Net periodic benefit cost$7,848 $6,673 $3,872 $1,209 $1,184 $1,453 
 
The curtailment loss of $484 and a majority of the settlement loss of $549 in 2020 relate to the restructuring and workforce reduction actions that were taken during the period. See Note 9.

The components of net periodic benefit cost other than service cost are included in Other Expense (Income) on the Consolidated Statements of Income.
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31 are:
 
202120202019
U.S. plans:
Discount rate2.65 %3.40 %4.40 %
Long-term rate of return7.25 %7.75 %7.75 %
Increase in compensation2.56 %2.56 %2.56 %
Non-U.S. plans:
Discount rate0.83 %1.28 %2.07 %
Long-term rate of return1.96 %3.02 %3.90 %
Increase in compensation2.75 %2.75 %2.72 %
Interest crediting rate1.34 %1.34 %1.03 %
 
The expected long-term rate of return is based on consideration of projected rates of return and the historical rates of return of published indices that reflect the plans’ target asset allocation.

The Company’s accumulated postretirement benefit obligations, exclusive of pensions, take into account certain cost-sharing provisions. The annual rate of increase in the cost of covered benefits (i.e., health care cost trend rate) is assumed to be 6.56% and 5.70% at December 31, 2021 and 2020, respectively, decreasing gradually to a rate of 4.00% by December 31, 2046.  
The Company actively contributes to a Swedish pension plan that supplements the Swedish social insurance system. The pension plan guarantees employees a pension based on a percentage of their salary and represents a multi-employer pension plan, however the pension plan was not significant in any year presented. This pension plan is not underfunded.

Contributions related to the individually insignificant multi-employer plans, as disclosure is required pursuant to the applicable accounting standards, are as follows:
Contributions by the Company
Pension Fund:202120202019
Swedish Pension Plan 835 $783 $754 
Total Contributions$835 $783 $754