Pension and Other Benefits

12 Months Ended

Dec. 31, 2020

Retirement Benefits [Abstract]

Pension and Other Benefits

Pension Benefits — The Company's Pension Plan is a frozen, non-contributory funded plan under which no new service or compensation credits are accrued by the plan participants. Cash accumulation accounts continue to be credited with interest credits until participants withdraw their money from the Pension Plan. It is the Company's policy to fund at least the minimum required contribution each year plus additional discretionary amounts as available and necessary to minimize expenses of the plan.

Supplemental Executive Retirement Plans — The Company has obligations under various SERPs, which are unfunded non-qualified defined benefit pension plans providing postretirement income to their participants. As of December 31, 2020, all benefit accruals under the SERPs are frozen with the exception of one plan for which service is frozen but future pay increases are reflected for active participants. It is the Company's policy to fund the SERPs as benefits are paid.

The Company's Pension Plan and SERPs are collectively referred to as our "Pension."

Postretirement Benefits Other Than Pensions — The Company has an unfunded defined benefit postretirement plan ("Postretirement Benefits") that provides medical and life insurance for its participants. The Company amended the Postretirement Benefits to close it to new participants as of December 31, 2009. Effective July 1, 2011, the Postretirement Benefits was amended to eliminate eligibility for participants eligible for Medicare coverage. As a result of this plan amendment, the Company no longer receives the Medicare retiree drug subsidy. The Company's funding policy is to make contributions to the Postretirement Benefits as benefits are paid.

Actuarial Valuation Assumptions — The measurement date for the Company's Pension and Postretirement Benefits is December 31. The following table is a summary of the weighted-average actuarial assumptions used in calculating net periodic benefit expense (income) and the benefit obligation for the years ended and as of December 31:

	Pension Plan						SERPs						Postretirement Benefits
	2020		2019		2018		2020		2019		2018		2020		2019		2018
Net periodic benefit expense (income):
Discount rate for benefit obligation	3.23	%	3.57	%	3.58	%	3.18	%	4.32	%	3.65	%	3.33	%	4.41	%	3.72	%
Discount rate for interest cost	2.83	%	3.09	%	3.13	%	2.70	%	3.88	%	3.20	%	2.77	%	3.91	%	3.20	%
Expected return on plan assets	2.07	%	2.91	%	4.59	%	—		—		—		—		—		—
Cash balance interest crediting rate	1.73	%	2.75	%	2.08	%	—		—		—		—		—		—
Rate of compensation increase	—		—		—		5.75	%	5.75	%	5.75	%	—		—		—
Medical trend rate:
Pre-65 initial healthcare cost trend rate	—		—		—		—		—		—		6.79	%	7.25	%	7.75	%
Post-65 initial healthcare cost trend rate	—		—		—		—		—		—		7.51	%	8.25	%	7.75	%
Pre and post-65 ultimate healthcare cost trend rate	—		—		—		—		—		—		4.50	%	4.50	%	4.50	%
Year ultimate healthcare cost trend rate is reached for pre/post-65, respectively	—		—		—		—		—		—		2027		2025		2025/ 2027
Benefit obligation:
Discount rate	2.51	%	3.23	%	4.25	%	2.41	%	3.18	%	4.32	%	2.64	%	3.33	%	4.41	%
Cash balance interest crediting rate	1.36	%	1.73	%	2.75	%	—		—		—		—		—		—
Rate of compensation increase	—		—		—		5.75	%	5.75	%	5.75	%	—		—		—
Medical trend rate:
Pre-65 initial healthcare cost trend rate	—		—		—		—		—		—		6.46	%	6.79	%	7.25	%
Post-65 initial healthcare cost trend rate	—		—		—		—		—		—		7.08	%	7.51	%	8.25	%
Pre and post-65 ultimate healthcare cost trend rate	—		—		—		—		—		—		4.50	%	4.50	%	4.50	%
Year ultimate healthcare cost trend rate is reached for pre/post-65	—		—		—		—		—		—		2028		2027		2025

The Company utilizes a building-block approach in determining the long-term expected rate of return on plan assets. The expected return on plan assets is calculated using a calculated value of plan assets that is determined each year by adjusting the previous year's value by expected returns, benefit payments and contributions. Asset gains and losses are reflected as equal adjustments over a three-year period. Historical markets are studied and long-term historical relationships between equity securities and fixed income securities are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors, such as inflation and interest rates, are evaluated before long-term capital market assumptions are determined. The long-term portfolio return also takes proper consideration of diversification and rebalancing. Peer data and historical returns are reviewed for reasonableness and appropriateness.

Actuarial gains and losses are amortized using the Corridor approach, by amortizing the balance exceeding 10% of the greater of the benefit obligation or the fair value of plan assets. The amortization period is primarily based on the average remaining expected life of plan participants for the Pension and the average remaining expected life of plan participants for the Postretirement Benefits. The Company estimated the interest cost components utilizing a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to their underlying projected cash flows.

Pension Assets — The Company employs a liability-driven investment approach whereby a mix of equity and fixed income securities are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed income securities. Furthermore, equity securities are diversified across large and small capitalized securities and international securities. Other assets, such as real estate and high yield bonds, are used to further diversify equity allocations. Fixed income securities are primarily invested in a mix of investment grade corporate bonds, government bonds and a smaller allocation to non-investment grade debt. The Company uses a dynamic strategy to determine the allocation of return-seeking assets driven by the Pension Plan's funded ratio so that when the funded status increases above prescribed levels, the allocation to equities will decrease and fixed income increase proportionally. Investment risk is measured and monitored on an ongoing basis, including quarterly investment portfolio reviews and periodic liability measurements.

As of December 31, 2020, the Pension assets consisted of approximately 8% in equity securities, 81% in fixed income and 11% in real estate.

The Company records its Pension Plan's assets at fair value as described in Note 5 — Fair Value Measurement. The following is a description of the Pension Plan's investments at fair value and valuation methodologies:

•Common/collective trusts — The fair values of the underlying funds in the common/collective trusts are valued based on the unit value established for each fund at each valuation date. The unit value of a collective investment fund is calculated by dividing the fund's net asset value on the calculation date by the number of units of the fund that are outstanding on the calculation date, which is derived from observable purchase and redemption activity in the collective investment fund. The Company's common/collective trusts are categorized in Level 2 to the extent that they are readily redeemable at their net asset value.

•Real estate — The Pension Plan trust holds an investment in a real estate development project that the Company considers to be a Level 3 asset for valuation purposes because it requires the use of unobservable inputs in its fair value measurement. The fair value of this investment represents the estimated fair value of the plan's related ownership percentage in the project based upon an appraisal of the underlying real property as of each balance sheet date. The fund investment strategy for this asset is long-term capital appreciation.

The following table is a summary of the Pension Plan's financial assets recorded at fair value, by hierarchy level:

(Amounts in millions)	Level 2		Level 3		Total
December 31, 2020
Common/collective trusts
Short-term investment fund	$	0.9	$	—	$	0.9
Equity securities:
Large cap	2.0		—		2.0
Small cap	0.5		—		0.5
International	1.2		—		1.2
Fixed income securities	36.3		—		36.3
Real estate	—		5.3		5.3
Total investments in the fair value hierarchy	$	40.9	$	5.3	$	46.2
December 31, 2019
Common/collective trusts
Short-term investment fund	$	1.9	$	—	$	1.9
Equity securities:
Large cap	1.4		—		1.4
Small cap	0.3		—		0.3
International	0.9		—		0.9
Fixed income securities	30.9		—		30.9
Real estate	—		5.1		5.1
Total investments in the fair value hierarchy	$	35.4	$	5.1	$	40.5

The Company does not have participant redemption restrictions for its common/collective trust investments. The following table sets forth additional disclosures for the Pension Plan assets fair value estimated using net asset value per share:

(Amounts in millions)	Fair Value		Redemptions Frequency (if currently eligible)	Redemption Notice Period
December 31, 2020	$	40.9	Daily	15 Days
December 31, 2019	$	35.4	Daily	15 Days

Plan Financial Information — Net periodic benefit expense for the Pension includes the following components for the years ended December 31:

	Pension						Postretirement Benefits
(Amounts in millions)	2020		2019		2018		2020		2019		2018
Settlement charge	$	—	$	31.3	$	—	$	—	$	—	$	—
Interest cost	3.1		5.4		6.3		—		—		—
Expected return on plan assets	(0.8)		(2.7)		(5.0)		—		—		—
Amortization of net actuarial loss	2.0		2.6		4.3		0.1		0.1		0.1
Amortization of prior service cost	0.1		0.1		0.1		—		—		—
Net periodic benefit expense	$	4.4	$	36.7	$	5.7	$	0.1	$	0.1	$	0.1

Net periodic benefit expense for the Pension and Postretirement Benefits is recorded within "Other non-operating expense (income)" on the Consolidated Statements of Operations.

In June 2019, the Company paid an insurance company $1.2 million to assume a portion of its Pension Plan liability, without recourse. As a result of the sale, the Company reduced its Pension Plan liability by $74.3 million and recognized a non-cash charge of $31.3 million that represents a corresponding portion of the Pension Plan accumulated other comprehensive loss. The transfer of the Pension obligations was completed exclusively with the use of Pension assets and did not impact the Company's cash balance or liquidity position.

The following tables are a summary of the amounts recognized in other comprehensive income (loss) and net periodic benefit expense for the years ended December 31:

(Amounts in millions)	Pension		Postretirement Benefits
2020
Net actuarial loss (gain)	$	4.5	$	(0.1)
Amortization of net actuarial loss	(2.0)		(0.1)
Amortization of prior service cost	(0.1)		—
Total recognized in other comprehensive income	2.4		(0.2)
Total recognized in net periodic benefit expense	4.4		0.1
Total recognized in other comprehensive income and net periodic benefit expense	$	6.8	$	(0.1)
2019
Settlement charge	$	(31.3)	$	—
Net actuarial loss	8.5		0.1
Amortization of net actuarial loss	(2.6)		(0.1)
Amortization of prior service cost	(0.1)		—
Total recognized in other comprehensive income	(25.5)		—
Total recognized in net periodic benefit expense	36.7		0.1
Total recognized in other comprehensive income and net periodic benefit expense	$	11.2	$	0.1
2018
Net actuarial gain	$	(7.8)	$	(0.1)
Amortization of net actuarial loss	(4.3)		(0.1)
Amortization of prior service cost	(0.1)		—
Total recognized in other comprehensive loss	(12.2)		(0.2)
Total recognized in net periodic benefit expense	5.7		0.1
Total recognized in other comprehensive loss and net periodic benefit expense	$	(6.5)	$	(0.1)

The following tables are a summary of the benefit obligation and plan assets, changes to the benefit obligation and plan assets, and the unfunded status of the Pension and Postretirement Benefits as of and for the years ended December 31:

	Pension				Postretirement Benefits
(Amounts in millions)	2020		2019		2020		2019
Change in benefit obligation:
Benefit obligation at the beginning of the year	$	117.3	$	191.3	$	0.7	$	0.6
Settlement impact	—		(75.5)		—		—
Interest cost	3.1		5.4		—		—
Actuarial loss (gain)	7.2		17.1		(0.1)		0.1
Benefits paid	(7.5)		(21.0)		—		—
Benefit obligation at the end of the year	$	120.1	$	117.3	$	0.6	$	0.7
Change in plan assets:
Fair value of plan assets at the beginning of the year	$	40.5	$	115.3	$	—	$	—
Settlement impact	—		(75.5)		—		—
Actual return on plan assets	3.5		11.4		—		—
Employer contributions	9.7		10.3		—		—
Benefits paid	(7.5)		(21.0)		—		—
Fair value of plan assets at the end of the year	$	46.2	$	40.5	$	—	$	—
Unfunded status at the end of the year	$	73.9	$	76.8	$	0.6	$	0.7

In 2020, the net actuarial loss of $7.2 million affecting the benefit obligation of the Pension was due to the decrease in discount rate and the net actuarial gain of $0.1 million affecting the benefit obligation of the Postretirement Benefits was due to the decrease in liability resulting from participant deaths partially offset by the decrease in the discount rate.

In 2019, the net actuarial losses of $17.1 million and $0.1 million affecting the benefit obligation of the Pension and the Postretirement Benefits, respectively, was due to the decrease in the discount rate.

In October 2020, the Society of Actuaries issued updated mortality projection scales. The Company adopted the updated mortality projection scales on its measurement date, which decreased the Pension Plan benefit obligation. The unfunded status of the Pension Plan was $5.3 million and $8.9 million at December 31, 2020 and 2019, respectively, and the unfunded status of the SERPs was $68.6 million and $67.9 million at December 31, 2020 and 2019, respectively.

The following table summarizes the components recognized in the Consolidated Balance Sheets relating to the Pension and Postretirement Benefits as of December 31:

	Pension				Postretirement Benefits				Total
(Amounts in millions)	2020		2019		2020		2019		2020		2019
Pension and other postretirement benefits liability	$	73.9	$	76.8	$	0.6	$	0.7	$	74.5	$	77.5
Accumulated other comprehensive loss:
Net actuarial loss, net of tax	$	38.2	$	36.5	$	0.4	$	0.4	$	38.6	$	36.9
Prior service cost, net of tax	0.1		0.1		—		—		0.1		0.1
Total	$	38.3	$	36.6	$	0.4	$	0.4	$	38.7	$	37.0

The following table summarizes the benefit obligation and accumulated benefit obligation for the Pension Plan, SERPs and Postretirement Benefits fair value of plan assets as of December 31:

	Pension Plan				SERPs				Postretirement Benefits
(Amounts in millions)	2020		2019		2020		2019		2020		2019
Benefit obligation	$	51.5	$	49.2	$	68.6	$	67.9	$	0.6	$	0.7
Accumulated benefit obligation	51.5		49.2		68.6		67.9		—		—
Fair value of plan assets	46.2		40.5		—		—		—		—

The following table summarizes the estimated future benefit payments for the Pension and Postretirement Benefits for the years ended December 31:

(Amounts in millions)	2021		2022		2023		2024		2025		2026-2030
Pension	$	8.5	$	7.9	$	7.9	$	7.1	$	7.0	$	33.0
Postretirement benefits	—		—		—		—		—		0.1

Although the Company has no minimum required contribution for the Pension Plan in 2021, we expect to contribute $4.0 million to the Pension Plan in 2021. The Company will continue to make contributions to the SERPs and the Postretirement Benefits to the extent benefits are paid. Aggregate benefits paid for the unfunded plans are expected to be $5.7 million in 2021.

Employee Savings Plan — The Company has an employee savings plan that qualifies under Section 401(k) of the Internal Revenue Code of 1986, as amended. Contributions to, and costs of, the 401(k) defined contribution plan totaled $3.7 million, $4.5 million and $4.4 million in 2020, 2019 and 2018, respectively.

International Benefit Plans — The Company's international subsidiaries have certain defined contribution plans. Contributions to, and costs related to, international plans were $2.0 million, $1.6 million and $2.5 million for 2020, 2019 and 2018, respectively.