Pension Plans and Other Postretirement Benefit Plans

6 Months Ended

Jun. 30, 2020

Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]

Pension Plans and Other Postretirement Benefit Plans

Pension Plans and Other Postretirement Benefit Plans

Pension Plans    

GCP sponsors defined benefit pension plans, primarily in the U.S. and the U.K., in which GCP employees and former employees participate. GCP records an asset or a liability to recognize the funded status of these pension plans in its accompanying unaudited Consolidated Balance Sheets.

The following table presents the funded status of GCP's overfunded, underfunded and unfunded defined pension plans:

(In millions)	June 30, 2020		December 31, 2019
Overfunded defined benefit pension plans	$	23.6	$	25.0
Underfunded defined benefit pension plans	(42.6)		(40.8)
Unfunded defined benefit pension plans	(26.1)		(26.7)
Total underfunded and unfunded defined benefit pension plans	(68.7)		(67.5)
Pension liabilities included in other current liabilities	(0.9)		(1.2)
Net funded status	$	(46.0)	$	(43.7)

Components of Net Periodic Benefit Cost

        The components of GCP's net periodic benefit cost for the three and six months ended June 30, 2020 and 2019 are as follows:

	Three Months Ended June 30,
	2020				2019
	Pension				Pension
(In millions)	U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	$	1.6	$	0.2	$	1.7	$	0.6
Interest cost	1.2		1.0		1.5		1.3
Expected return on plan assets	(1.7)		(1.1)		(1.6)		(1.5)
Amortization of prior service cost	—		0.1		—		—
Net periodic benefit cost (1)	$	1.1	$	0.2	$	1.6	$	0.4

	Six Months Ended June 30,
	2020				2019
	Pension				Pension
(In millions)	U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	$	3.1	$	0.4	$	3.2	$	1.3
Interest cost	2.5		2.1		2.9		2.7
Expected return on plan assets	(3.3)		(2.3)		(3.2)		(3.0)
Amortization of prior service cost	—		0.1		—		—
Net periodic benefit cost (1)	$	2.3	$	0.3	$	2.9	$	1.0

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⁽¹⁾Service cost component of net periodic benefit cost is included in "Selling, general and administrative expenses" and "Cost of goods sold" in the accompanying unaudited Consolidated Statements of Operations. All other components of net periodic benefit cost are presented in "Other income, net," within the accompanying unaudited Consolidated Statements of Operations.

Other Postretirement Benefit (OPEB) Plans

GCP provides postretirement health care benefits for certain qualifying retired employees. As of June 30, 2020 and December 31, 2019, the related long-term liability was $2.1 million and $2.2 million, respectively. As of June 30, 2020 and December 31, 2019, accumulated other comprehensive income was $0.6 million and $0.7 million, respectively, net of related tax impact of $0.2 million as of the end of each period. The net periodic postretirement benefit cost for the three and six months ended June 30, 2020 and 2019 was immaterial.

Plan Contributions and Funding

GCP intends to satisfy its funding obligations under the U.S. qualified pension plans and to comply with all of the requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). For ERISA purposes, funded status is calculated on a different basis than under GAAP. GCP made contributions of $0.6 million and $0.7 million, respectively, to the U.S. pension plans during the three and six months ended June 30, 2020. There were no contributions made to these plans during the three and six months ended June 30, 2019.

GCP intends to fund non-U.S. pension plans based on applicable legal requirements, as well as actuarial and trustee recommendations. During the three and six months ended June 30, 2020, GCP contributed $0.3 million and $0.8 million, respectively, to these non-U.S. plans. During the three and six months ended June 30, 2019, GCP contributed $0.6 million and $1.5 million, respectively, to these non-U.S. plans.

Defined Contribution Retirement Plan

GCP sponsors a defined contribution retirement plan for its employees in the U.S. which is a qualified plan under section 401(k) of the U.S. tax code. Under this plan, GCP contributes an amount equal to 100% of employee contributions, up to 6% of an individual employee's salary or wages. Effective January 1, 2018, GCP amended the defined contribution plan whereby GCP contributes up to an additional 2% of 100% of applicable employee compensation subject to a three year vesting requirement. Applicable employees include those beginning employment with GCP on or after January 1, 2018 who are not eligible to participate in the GCP Applied Technologies Inc. Retirement Plan for Salaried Employees, which closed to new hires effective January 1, 2018. GCP's costs related to this benefit plan amounted to $0.9 million and $2.2 million, respectively, during the three and six months ended June 30, 2020 and $1.2 million and $2.5 million, respectively, during the three and six months ended June 30, 2019. These costs are included in "Selling, general and administrative expenses" and "Cost of goods sold" in the accompanying unaudited Consolidated Statements of Operations.