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PENSION PLANS
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
PENSION PLANS PENSION PLANS
Most of the Company’s employees participate in defined contribution plans, including 401(k), profit sharing, and other savings plans that provide retirement benefits.
Certain U.S. and non-U.S. employees participate in company-specific or statutorily required defined benefit plans. In general, the Company’s policy is to fund these plans based on legal requirements, required benefit payments, and other factors.
Net periodic pension expense and projected benefit obligations for the Company’s U.S defined benefit plans are not material for disclosure. Total defined contribution plan expense for the Company’s U.S plans was $11.9, $11.9, and $7.3 for the years ended December 31, 2022, 2021, and 2020, respectively.
Retirement plan expense for our non-U.S. plans includes the following components:
Non-U.S. Plans
December 31, 2022December 31, 2021December 31, 2020
Company defined benefit plans:
Service cost$2.9 $3.5 $3.1 
Interest cost2.4 2.0 2.1 
Expected return on plan assets(0.7)(0.8)(0.8)
Net amortization0.3 0.6 0.4 
Net periodic pension expense4.9 5.3 4.8 
Curtailment— (1.9)— 
Settlement(0.1)(0.1)— 
Defined contribution plans2.6 3.5 2.1 
Total$7.4 $6.8 $6.9 
Details of the changes in the actuarial present value of the projected benefit obligation and the fair value of plan assets for our non-U.S. defined benefit pension plans follow:
Non-U.S. Plans
December 31, 2022December 31, 2021
Projected benefit obligation, beginning$87.4 $103.5 
Service cost2.9 3.5 
Interest cost2.4 2.0 
Actuarial (gain) loss(14.9)(6.3)
Benefits paid(1.5)(2.6)
Participant contributions0.2 0.3 
Settlements(0.2)(2.2)
Curtailment— (2.5)
Plan Amendments— (0.4)
Acquisition/Divestiture— (1.3)
Foreign currency translation and other(8.4)(6.6)
Projected benefit obligation, ending$67.9 $87.4 
Fair value of plan assets, beginning13.8 15.5 
Actual return on plan assets(0.1)0.7 
Employer contributions2.7 2.6 
Participants’ contributions0.3 0.3 
Benefits paid(1.5)(2.6)
Settlements(0.2)(2.2)
Foreign currency translation and other(0.3)(0.5)
Fair value of plan assets, ending$14.7 $13.8 
Net amount recognized in the balance sheet$(53.2)$(73.6)
Amounts recognized in the balance sheet:
Noncurrent asset$0.3 $0.1 
Current liability(2.9)(2.9)
Noncurrent liability(50.6)(70.8)
Net amount recognized in the balance sheet$(53.2)$(73.6)
Pretax accumulated other comprehensive (income) loss$(4.4)$10.3 
As of December 31, 2022, non-U.S. plans were underfunded by $53.2. The non-U.S. status includes unfunded plans totaling $53.5. There are an insignificant amount of overfunded non-U.S. plans.
As of the plans’ December 31, 2022 and 2021 respective measurement dates, the total accumulated benefit obligation was $59.6 and $77.5, respectively. Also, as of the respective measurement dates, the total projected benefit obligation and accumulated benefit obligation were as follows:
December 31, 2022December 31, 2021
Projected benefit obligation$52.2 $71.3 
Accumulated benefit obligation46.0 64.0 
Future expected benefit payments are as follows:
Non-U.S. Plans
2023$3.9 
20243.6 
20253.8 
20264.0 
20274.8 
2028 through 203229.9 
Total future expected benefit payments$50.0 
The Company expects to contribute approximately $0.3 to its retirement plans in 2023. Company's defined benefit pension plan expense for 2023 is expected to be approximately $5.0, versus $4.9 in 2022.
The weighted-average assumptions used in the valuation of pension benefits are as follows:
Non-U.S. Plans
December 31, 2022December 31, 2021
Net pension expense
Discount rate2.96 %2.04 %
Expected return on plan assets5.12 %5.23 %
Rate of compensation increase3.83 %3.41 %
Benefit obligations
Discount rate5.29 %2.96 %
Rate of compensation increase4.03 %3.83 %
Actuarial developed yield curves are used to determine discount rates. The expected return on plan assets assumption is determined by reviewing the investment returns of the plans for the past 10 years plus longer-term historical returns of an asset mix approximating the Company’s asset allocation targets, and periodically comparing these returns to expectations of investment advisors and actuaries to determine whether long-term future returns are expected to differ significantly from the past.
The Company’s non-U.S. Plan asset allocations at December 31, 2022 and 2021 follow:
Non-U.S. Plans
December 31, 2022December 31, 2021
Equity securities— %21 %
Debt securities20 %35 %
Insurance arrangements1 %3 %
Cash38 %2 %
Other41 %39 %
Total100 %100 %
The Company did not have any U.S Plan assets at December 31, 2022 or 2021.
The primary objective for the investment of plan assets is to secure participant retirement benefits while earning a reasonable rate of return. Plan assets are invested consistent with the principles of prudence and diversification with a long-term investment horizon. The strategy for plan assets is to minimize concentrations of risk by investing primarily in companies in a diversified mix of industries worldwide, while targeting neutrality in exposure to market capitalization levels, growth versus value profile, global versus regional markets, fund types and fund managers.
The approach for debt securities emphasizes investment-grade corporate and government debt with maturities matching a portion of the longer duration pension liabilities. Leveraging techniques are not used and the use of derivatives in any fund is limited and inconsequential.
The fair values of defined benefit plan assets, organized by asset class and by the fair value hierarchy of ASC 820 as outlined in “Note 1 - Summary of Significant Accounting Policies” follow:
Level 1Level 2Level 3TotalPercentage
December 31, 2022
Debt securities$— $3.0 $— $3.0 20 %
Insurance arrangements— — 0.1 0.1 1 %
Cash5.6 — — 5.6 38 %
Other— 3.3 2.7 6.0 41 %
Total$5.6 $6.3 $2.8 $14.7 100 %
December 31, 2021
Equity securities$2.9 $— $— $2.9 21 %
Debt securities2.0 2.8 — 4.8 35 %
Insurance arrangements— — 0.4 0.4 3 %
Cash0.3 — — 0.3 2 %
Other— 2.8 2.6 5.4 39 %
Total$5.2 $5.6 $3.0 $13.8 100 %
Asset Classes
Global equities reflects companies domiciled in the U.S., including multi-national companies, as well as companies domiciled in developed nations outside the U.S. Corporate and government bonds represents investment-grade debt of issuers primarily outside the U.S. and insurance arrangements typically ensure no market losses or provide for a small minimum return guarantee and are primarily invested in bonds by the insurer. Other includes cash and general funds that invest primarily in equities, bank deposits and bonds with a guaranteed rate of return.
Fair Value Hierarchy Categories
Valuations of Level 1 assets for all classes are based on quoted closing market prices from the principal exchanges where the individual securities are traded. Cash is valued at cost, which approximates fair value. Equity securities categorized as Level 2 assets are primarily non-exchange traded commingled or collective funds where the underlying securities have observable prices available from active markets. Valuation is based on the net asset value of fund units held as derived from the fair value of the underlying assets. Debt securities categorized as Level 2 assets are generally valued based on independent broker/dealer bids or by comparison to other debt securities having similar durations, yields and credit ratings. Other Level 2 assets are valued based on a net asset value of fund units held, which is derived from either market-observed pricing for the underlying assets or broker/dealer quotation. U.S. equity securities classified as Level 3 are fund investments in private companies. Valuation techniques and inputs for these assets include discounted cash flow analysis, earnings multiple approaches, recent transactions, transfer restrictions, prevailing discount rates, volatilities, credit ratings and other factors. In the other class, interests in mixed assets funds are Level 2, and non-U.S. general fund investments and insurance arrangements are Level 3. The fair value of the insurance contracts is an estimate of the amount that would be received in an orderly sale to a market participant at the measurement date. The amount the plan would receive from the contract holder if the contracts were terminated is the primary input and is unobservable
Details of the changes in value for Level 3 assets are as follows:
20222021
Level 3, beginning balance January 1,$3.0 $2.9 
Gains (losses) on assets held(0.7)(0.1)
Purchases, sales and settlements, net0.5 0.2 
Level 3, ending balance December 31,$2.8 $3.0