Pension Plans (Tables) - Pension Benefits

12 Months Ended

May 31, 2020

Components of Net Periodic Pension and Postretirement Costs

Net periodic pension cost consisted of the following for the year ended May 31:

	U.S. Plans									Non-U.S. Plans
(In thousands)	2020			2019			2018			2020			2019			2018
Service cost	$	39,425		$	37,528		$	37,859		$	5,400		$	4,693		$	4,620
Interest cost		20,415			21,987			17,518			4,842			5,420			5,025
Expected return on plan assets		(34,291	)		(33,867	)		(32,342	)		(7,118	)		(7,907	)		(8,270	)
Amortization of:
Prior service cost		9			118			117			(36	)		(30	)		(31	)
Net actuarial losses recognized		18,516			13,087			14,470			2,029			1,229			1,758
Curtailment/settlement losses		-			-			-			86			89			128
Net Pension Cost	$	44,074		$	38,853		$	37,622		$	5,203		$	3,494		$	3,230

Changes in Benefit Obligations and Plan Assets

The changes in benefit obligations and plan assets, as well as the funded status of our pension plans at May 31, 2020 and 2019, were as follows:

	U.S. Plans						Non-U.S. Plans
(In thousands)	2020			2019			2020			2019
Benefit obligation at beginning of year	$	660,277		$	617,255		$	205,967		$	194,149
Service cost		39,425			37,528			5,400			4,693
Interest cost		20,415			21,987			4,842			5,420
Benefits paid		(41,186	)		(45,917	)		(6,269	)		(7,488	)
Participant contributions		-			-			1,106			1,003
Plan amendments		-			11			(893	)		(33	)
Plan combination		-			-			922			-
Plan settlements/curtailments		-			-			(288	)		(607	)
Actuarial losses		83,808			29,413			2,718			17,286
Premiums paid		-			-			(99	)		(97	)
Currency exchange rate changes		-			-			(3,128	)		(8,359	)
Benefit Obligation at End of Year	$	762,739		$	660,277		$	210,278		$	205,967
Fair value of plan assets at beginning of year	$	496,865		$	487,233		$	187,112		$	188,960
Actual return on plan assets		8,689			(2,272	)		9,899			6,737
Employer contributions		52,182			57,821			6,331			6,770
Participant contributions		-			-			1,106			1,003
Benefits paid		(41,186	)		(45,917	)		(6,269	)		(7,488	)
Plan combination		-			-			182			-
Premiums paid		-			-			(99	)		(97	)
Plan settlements/curtailments		-			-			(281	)		(580	)
Currency exchange rate changes		-			-			(3,107	)		(8,193	)
Fair Value of Plan Assets at End of Year	$	516,550		$	496,865		$	194,874		$	187,112
(Deficit) of plan assets versus benefit obligations at end of year	$	(246,189	)	$	(163,412	)	$	(15,404	)	$	(18,855	)
Net Amount Recognized	$	(246,189	)	$	(163,412	)	$	(15,404	)	$	(18,855	)
Accumulated Benefit Obligation	$	662,197		$	553,392		$	197,167		$	192,533

Amounts Recognized in Consolidated Balance Sheet

Amounts recognized in the Consolidated Balance Sheets for the years ended May 31, 2020 and 2019 are as follows:

	U.S. Plans						Non-U.S. Plans
(In thousands)	2020			2019			2020			2019
Noncurrent assets	$	-		$	-		$	13,395		$	9,047
Current liabilities		(8	)		(8	)		(547	)		(435	)
Noncurrent liabilities		(246,181	)		(163,404	)		(28,252	)		(27,467	)
Net Amount Recognized	$	(246,189	)	$	(163,412	)	$	(15,404	)	$	(18,855	)

Relationship between Plans Benefit Obligations and Assets

The following table summarizes the relationship between our plans' benefit obligations and assets:

	U.S. Plans
	2020				2019
(In thousands)	Benefit Obligation		Plan Assets		Benefit Obligation		Plan Assets
Plans with projected benefit obligations in excess of plan assets	$	762,739	$	516,550	$	660,277	$	496,865
Plans with accumulated benefit obligations in excess of plan assets		662,197		516,550		553,392		496,865
Plans with assets in excess of projected benefit obligations		-		-		-		-
Plans with assets in excess of accumulated benefit obligations		-		-		-		-
	Non-U.S. Plans
	2020				2019
(In thousands)	Benefit Obligation		Plan Assets		Benefit Obligation		Plan Assets
Plans with projected benefit obligations in excess of plan assets	$	163,589	$	134,791	$	162,824	$	134,921
Plans with accumulated benefit obligations in excess of plan assets		150,478		134,598		149,390		134,921
Plans with assets in excess of projected benefit obligations		46,689		60,083		43,143		52,191
Plans with assets in excess of accumulated benefit obligations		46,689		60,276		43,143		52,191

Pretax Net Actuarial Loss and Prior Service (Costs) Recognized in Accumulated Other Comprehensive Income (Loss) not Affecting Retained Earnings

The following table presents the pretax net actuarial loss and prior service (costs) recognized in accumulated other comprehensive income (loss) not affecting retained earnings:

	U.S. Plans						Non-U.S. Plans
(In thousands)	2020			2019			2020			2019
Net actuarial loss	$	(341,179	)	$	(250,286	)	$	(48,090	)	$	(51,184	)
Prior service (costs) credits		(20	)		(28	)		1,098			224
Total recognized in accumulated other comprehensive    income not affecting retained earnings	$	(341,199	)	$	(250,314	)	$	(46,992	)	$	(50,960	)

Changes Recognized in Other Comprehensive Income

The following table includes the changes recognized in other comprehensive income:

		U.S. Plans						Non-U.S. Plans
(In thousands)		2020			2019			2020			2019
Changes in plan assets and benefit obligations recognized in other    comprehensive income:
	Prior service cost	$	-		$	11		$	(893	)	$	(33	)
	Net loss (gain) arising during the year		109,409			65,552			(70	)		18,456
	Effect of exchange rates on amounts included in AOCI		-			-			(922	)		(1,593	)
Amounts recognized as a component of net periodic benefit cost:
	Amortization or curtailment recognition of prior service (cost) benefit		(9	)		(118	)		36			30
	Amortization or settlement recognition of net (loss)		(18,516	)		(13,087	)		(2,115	)		(1,345	)
	Total recognized in other comprehensive loss (income)	$	90,884		$	52,358		$	(3,964	)	$	15,515

Amounts in Accumulated Other Comprehensive Income (Loss) that have not yet been Recognized in Net Periodic Pension Cost, but will be Recognized in Consolidated Statements of Income

The following table presents the amounts in accumulated other comprehensive income (loss) as of May 31, 2020 that have not yet been recognized in net periodic pension cost, but are expected to be recognized in our Consolidated Statements of Income during the fiscal year ending May 31, 2021:

(In thousands)	U.S. Plans			Non-U.S. Plans
Net actuarial loss	$	(27,457	)	$	(2,106	)
Prior service (cost) credit	$	(8	)	$	141

Weighted-Average Assumptions used to Determine Benefit Obligations and Net Periodic and Postretirement Costs

The following weighted-average assumptions were used to determine our year-end benefit obligations and net periodic pension cost under the plans:

	U.S. Plans						Non-U.S. Plans
Year-End Benefit Obligations	2020			2019			2020			2019
Discount rate		2.77	%		3.64	%		2.49	%		2.61	%
Rate of compensation increase		3.19	%		3.80	%		2.86	%		2.86	%

	U.S. Plans									Non-U.S. Plans
Net Periodic Pension Cost	2020			2019			2018			2020			2019			2018
Discount rate		3.65	%		4.12	%		3.81	%		2.61	%		3.09	%		2.79	%
Expected return on plan assets		7.40	%		7.40	%		7.89	%		3.91	%		4.30	%		4.37	%
Rate of compensation increase		3.80	%		3.80	%		3.80	%		2.86	%		2.85	%		3.00	%

Weighted-Average Actual and Target Allocation of Plan Assets

The following tables illustrate the weighted-average actual and target allocation of plan assets:

	U.S. Plans
	Target Allocation			Actual Asset Allocation
(Dollars in millions)	as of May 31, 2020			2020		2019
Equity securities		55	%	$	261.0	$	295.1
Fixed income securities		25	%		106.4		83.8
Multi-class		20	%		118.2		78.1
Cash (1)					30.8		39.7
Other					0.2		0.2
Total assets		100	%	$	516.6	$	496.9
	Non-U.S. Plans
	Target Allocation			Actual Asset Allocation
(Dollars in millions)	as of May 31, 2020			2020		2019
Equity securities		33	%	$	79.3	$	79.9
Fixed income securities		48	%		88.2		79.3
Cash					0.1		0.1
Property and other		19	%		27.3		27.8
Total assets		100	%	$	194.9	$	187.1

(1) The larger than target cash position at May 31, 2020 results from our February 2020 contribution to the RPM International Inc. Retirement Plan because of our plans to invest the February contribution over a period of time, due to dollar cost averaging.    

Pension Plan Assets Categorized using Fair Value Hierarchy

The following tables present our pension plan assets as categorized using the fair value hierarchy at May 31, 2020 and 2019:

U.S. Plans
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at May 31, 2020
U.S. Treasury and other government	$	-	$	12,973	$	-	$	12,973
State and municipal bonds		-		508		-		508
Foreign bonds		-		715		-		715
Mortgage-backed securities		-		23,824		-		23,824
Corporate bonds		-		34,317		-		34,317
Stocks - large cap		19,589		-		-		19,589
Mutual funds - equity		-		241,426		-		241,426
Mutual funds - multi-class		-		118,205		-		118,205
Mutual funds - fixed		-		33,993		-		33,993
Cash and cash equivalents		30,830		-		-		30,830
Limited partnerships		-		-		170		170
Total	$	50,419	$	465,961	$	170	$	516,550

Non-U.S. Plans
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at May 31, 2020
Pooled equities	$	-	$	78,472	$	-	$	78,472
Pooled fixed income		-		87,610		-		87,610
Foreign bonds		-		603		-		603
Insurance contracts		-		-		27,267		27,267
Mutual funds		-		855		-		855
Cash and cash equivalents		67		-		-		67
Total	$	67	$	167,540	$	27,267	$	194,874

U.S. Plans
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at May 31, 2019
U.S. Treasury and other government	$	-	$	13,854	$	-	$	13,854
State and municipal bonds		-		386		-		386
Foreign bonds		-		1,031		-		1,031
Mortgage-backed securities		-		20,075		-		20,075
Corporate bonds		-		26,204		-		26,204
Stocks - mid cap		13,392		-		-		13,392
Stocks - small cap		15,720		-		-		15,720
Mutual funds - equity		-		265,969		-		265,969
Mutual funds - multi-class		-		78,143		-		78,143
Mutual funds - fixed		-		22,215		-		22,215
Cash and cash equivalents		39,704		-		-		39,704
Limited partnerships		-		-		172		172
Total	$	68,816	$	427,877	$	172	$	496,865

Non-U.S. Plans
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at May 31, 2019
Pooled equities	$	-	$	78,733	$	-	$	78,733
Pooled fixed income		-		79,061		-		79,061
Foreign bonds		-		227		-		227
Insurance contracts		-		-		27,843		27,843
Mutual funds		-		1,125		-		1,125
Cash and cash equivalents		123		-		-		123
Total	$	123	$	159,146	$	27,843	$	187,112

Activity that Occurred for Level Three Assets

The following table includes the activity that occurred during the years ended May 31, 2020 and 2019 for our Level 3 assets:

			Actual Return on Plan Assets For:
	Balance at		Assets Still Held			Assets Sold		Purchases, Sales and			Balance at
(In thousands)	Beginning of Period		at Reporting Date			During Year		Settlements, net (1)			End of Period
Year ended May 31, 2020	$	28,015		(691	)		-		113		$	27,437
Year ended May 31, 2019		28,448		1,228			-		(1,661	)		28,015

(1) Includes the impact of exchange rate changes during the year.