Pension Plans (Tables) - Pension Benefits

12 Months Ended

May 31, 2021

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)	2021			2020			2019			2021			2020			2019
Service cost	$	44,520		$	39,425		$	37,528		$	6,355		$	5,400		$	4,693
Interest cost		15,223			20,415			21,987			5,308			4,842			5,420
Expected return on plan assets		(33,115	)		(34,291	)		(33,867	)		(7,286	)		(7,118	)		(7,907	)
Amortization of:
Prior service cost		8			9			118			(150	)		(36	)		(30	)
Net actuarial losses recognized		30,005			18,516			13,087			2,377			2,029			1,229
Curtailment/settlement losses		-			-			-			356			86			89
Net Pension Cost	$	56,641		$	44,074		$	38,853		$	6,960		$	5,203		$	3,494

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, 2021 and 2020, were as follows:

	U.S. Plans						Non-U.S. Plans
(In thousands)	2021			2020			2021			2020
Benefit obligation at beginning of year	$	762,739		$	660,277		$	210,278		$	205,967
Service cost		44,520			39,425			6,355			5,400
Interest cost		15,223			20,415			5,308			4,842
Benefits paid		(64,139	)		(41,186	)		(9,248	)		(6,269	)
Participant contributions		-			-			1,140			1,106
Plan amendments		-			-			-			(893	)
Plan combination		-			-			-			922
Plan settlements/curtailments		-			-			(2,342	)		(288	)
Actuarial losses/(gains)		63,730			83,808			(7,774	)		2,718
Premiums paid		-			-			(103	)		(99	)
Currency exchange rate changes		-			-			28,414			(3,128	)
Benefit Obligation at End of Year	$	822,073		$	762,739		$	232,028		$	210,278
Fair value of plan assets at beginning of year	$	516,550		$	496,865		$	194,874		$	187,112
Actual return on plan assets		157,702			8,689			21,350			9,899
Employer contributions		62,264			52,182			7,119			6,331
Participant contributions		-			-			1,140			1,106
Benefits paid		(64,139	)		(41,186	)		(9,248	)		(6,269	)
Plan combination		-			-			-			182
Premiums paid		-			-			(103	)		(99	)
Plan settlements/curtailments		-			-			(2,327	)		(281	)
Currency exchange rate changes		-			-			27,048			(3,107	)
Fair Value of Plan Assets at End of Year	$	672,377		$	516,550		$	239,853		$	194,874
(Deficit)/Surplus of plan assets versus benefit obligations at end of year	$	(149,696	)	$	(246,189	)	$	7,825		$	(15,404	)
Net Amount Recognized	$	(149,696	)	$	(246,189	)	$	7,825		$	(15,404	)
Accumulated Benefit Obligation	$	702,315		$	662,197		$	217,012		$	197,167

Amounts Recognized in Consolidated Balance Sheet

Amounts recognized in the Consolidated Balance Sheets for the years ended May 31, 2021 and 2020 are as follows:

	U.S. Plans						Non-U.S. Plans
(In thousands)	2021			2020			2021			2020
Noncurrent assets	$	-		$	-		$	22,698		$	13,395
Current liabilities		(8	)		(8	)		(471	)		(547	)
Noncurrent liabilities		(149,688	)		(246,181	)		(14,402	)		(28,252	)
Net Amount Recognized	$	(149,696	)	$	(246,189	)	$	7,825		$	(15,404	)

Relationship between Plans Benefit Obligations and Assets

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

	U.S. Plans
	2021				2020
(In thousands)	Benefit Obligation		Plan Assets		Benefit Obligation		Plan Assets
Plans with projected benefit obligations in excess of plan assets	$	822,073	$	672,377	$	762,739	$	516,550
Plans with accumulated benefit obligations in excess of plan assets		702,315		672,377		662,197		516,550
Plans with assets in excess of projected benefit obligations		-		-		-		-
Plans with assets in excess of accumulated benefit obligations		-		-		-		-
	Non-U.S. Plans
	2021				2020
(In thousands)	Benefit Obligation		Plan Assets		Benefit Obligation		Plan Assets
Plans with projected benefit obligations in excess of plan assets	$	45,294	$	30,421	$	163,589	$	134,791
Plans with accumulated benefit obligations in excess of plan assets		43,522		30,421		150,478		134,598
Plans with assets in excess of projected benefit obligations		186,734		209,432		46,689		60,083
Plans with assets in excess of accumulated benefit obligations		173,490		209,432		46,689		60,276

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)	2021			2020			2021			2020
Net actuarial loss	$	(250,317	)	$	(341,179	)	$	(30,045	)	$	(48,090	)
Prior service (costs) credits		(12	)		(20	)		1,023			1,098
Total recognized in accumulated other comprehensive    income not affecting retained earnings	$	(250,329	)	$	(341,199	)	$	(29,022	)	$	(46,992	)

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)		2021			2020			2021			2020
Changes in plan assets and benefit obligations recognized in other    comprehensive income:
	Prior service cost	$	-		$	-		$	-		$	(893	)
	Net loss (gain) arising during the year		(60,857	)		109,409			(21,838	)		(70	)
	Effect of exchange rates on amounts included in AOCI		-			-			6,465			(922	)
Amounts recognized as a component of net periodic benefit cost:
	Amortization or curtailment recognition of prior service (cost) benefit		(8	)		(9	)		150			36
	Amortization or settlement recognition of net (loss)		(30,005	)		(18,516	)		(2,748	)		(2,115	)
	Total recognized in other comprehensive loss (income)	$	(90,870	)	$	90,884		$	(17,971	)	$	(3,964	)

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	2021			2020			2021			2020
Discount rate		2.75	%		2.77	%		2.72	%		2.49	%
Rate of compensation increase		3.19	%		3.19	%		2.91	%		2.86	%

	U.S. Plans									Non-U.S. Plans
Net Periodic Pension Cost	2021			2020			2019			2021			2020			2019
Discount rate		2.78	%		3.65	%		4.12	%		2.49	%		2.61	%		3.09	%
Expected return on plan assets		7.00	%		7.40	%		7.40	%		3.30	%		3.91	%		4.30	%
Rate of compensation increase		3.19	%		3.80	%		3.80	%		2.86	%		2.86	%		2.85	%

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, 2021			2021		2020
Equity securities		55	%	$	387.1	$	261.0
Fixed income securities		25	%		112.0		106.4
Multi-class		20	%		150.8		118.2
Cash (1)					22.3		30.8
Other					0.2		0.2
Total assets		100	%	$	672.4	$	516.6
	Non-U.S. Plans
	Target Allocation			Actual Asset Allocation
(Dollars in millions)	as of May 31, 2021			2021		2020
Equity securities		37	%	$	103.4	$	79.3
Fixed income securities		47	%		108.2		88.2
Cash					0.1		0.1
Property and other		16	%		28.2		27.3
Total assets		100	%	$	239.9	$	194.9

(1) The larger than target cash position at May 31, 2021 results from our February 2021 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, 2021 and 2020:

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, 2021
U.S. Treasury and other government	$	-	$	20,752	$	-	$	20,752
State and municipal bonds		-		767		-		767
Foreign bonds		-		1,068		-		1,068
Mortgage-backed securities		-		17,628		-		17,628
Corporate bonds		-		42,370		-		42,370
Stocks - large cap		40,332		-		-		40,332
Mutual funds - equity		-		346,790		-		346,790
Mutual funds - multi-class		-		150,838		-		150,838
Mutual funds - fixed		-		29,440		-		29,440
Cash and cash equivalents		22,224		-		-		22,224
Limited partnerships		-		-		168		168
Total	$	62,556	$	609,653	$	168	$	672,377

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, 2021
Pooled equities	$	-	$	101,975	$	-	$	101,975
Pooled fixed income		-		107,457		-		107,457
Foreign bonds		-		717		-		717
Insurance contracts		-		-		28,230		28,230
Mutual funds		-		1,397		-		1,397
Cash and cash equivalents		77		-		-		77
Total	$	77	$	211,546	$	28,230	$	239,853

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

Activity that Occurred for Level Three Assets

The following table includes the activity that occurred during the years ended May 31, 2021 and 2020 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, 2021	$	27,437		455			-		506	$	28,398
Year ended May 31, 2020		28,015		(691	)		-		113		27,437

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