Employee Benefit Plans

12 Months Ended

Dec. 31, 2025

Retirement Benefits [Abstract]

Employee Benefit Plans

15.     Employee Benefit Plans

All of the pension plans as discussed below pertain to the Company’s European subsidiaries, which were acquired as part of the Business Combination (Refer to Note 5, Business Combination).

U.K. Pension Plan

Two of the Company’s subsidiaries in the United Kingdom (“U.K.”) provide pension benefits to certain retirees and eligible dependents. Employees eligible for participation included all full-time regular employees who were more than three years from retirement prior to October 2001. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants at the earlier of two dates, the participant’s leaving the Company or March 31, 2015. The expected rate of return assumptions for plan assets relate solely to the UK plan and are based mainly on historical performance achieved over a long period of time (15 to 20 years) encompassing many business and economic cycles.

German Pension Plan

XBP Global’s subsidiary in Germany, Exela Technologies ECM Solutions GmbH, provides pension benefits to certain retirees. Employees eligible for participation include all employees who started working for the Company or its predecessors prior to September 30, 1987 and have finished a qualifying period of at least 10 years. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. The German pension plan is an unfunded plan and therefore has no plan assets. No new employees are registered under this plan and the participants who are already eligible to receive benefits under this plan are no longer employees of the Company.

Norway Pension Plan

The Company’s subsidiary in Norway provides pension benefits to eligible retirees and eligible dependents. Employees eligible for participation include all employees who were more than three years from retirement prior to March 2018. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants at the earlier of two dates, the participants leaving the Company’s subsidiary or April 30, 2018.

Asterion Pension Plan

In 2018, Exela Technologies Holding GmbH acquired the obligation to provide pension benefits to eligible retirees and eligible dependents. Employees eligible for participation included all full-time regular employees who were more than three years from retirement prior to July 2003. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants at the earlier of two dates, the participant’s leaving the Company or April 10, 2018.

Funded Status

The change in benefit obligations, the change in the fair value of the plan assets and the funded status of the Company’s pension plans (except for the German pension plan which is unfunded) and the amounts recognized in the Company’s consolidated financial statements are as follows:

	Successor
	Consolidated
	Period from August 1, 2025 through December 31, 2025
Change in Benefit Obligation:
Benefit obligation at August 1, 2025	$	60,233
Service cost		78
Interest cost		1,395
Actuarial gain		713
Plan amendments		130
Plan participants’ contributions		35
Benefits paid		(1,976)
Foreign-exchange rate changes		1,039
Benefit obligation at end of year	$	61,647
Change in Plan Assets:
Fair value of plan assets at August 1, 2025	$	52,382
Actual return on plan assets		2,835
Employer contributions		1,180
Benefits paid		(1,907)
Foreign-exchange rate changes		916
Fair value of plan assets at end of year		55,406
Funded status at end of year	$	(6,241)
Net amount recognized in the Consolidated Balance Sheets:
Pension liability, net (a)	$	6,241
Amounts recognized in accumulated other comprehensive loss, net of tax consist of:
Net actuarial gain (loss)		1,718
Net amount recognized in accumulated other comprehensive loss, net of tax	$	1,718
Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate projected benefit obligation	$	61,647
Aggregate accumulated benefit obligation	$	61,647
Aggregate fair value of plan assets	$	55,406

(a) Consolidated balance of $6.2 million as of December 31, 2025 includes pension liabilities (assets) of $3.4 million, $1.4 million, $1.3 million and $(0.5) million under U.K., Asterion, German and Norway pension plans, respectively, and minimum regulatory benefit for a Philippines legal entity of $0.6 million.

Tax Effect on Accumulated Other Comprehensive Loss

As of December 31, 2025, the Company recorded $1.7 million of actuarial gain.

Pension and Postretirement Expense

The components of the net periodic benefit cost for the period August 1, 2025 to December 31, 2025 (Successor) are as follows:

	Successor
	Consolidated
	Period from August 1, 2025 through December 31,
	2025
Service cost	$	78
Interest cost		1,395
Expected return on plan assets		(1,484)
Plan amendments		130
Amortization:
Amortization of net loss		858
Net periodic (benefit) cost	$	977

The Company records pension interest cost within interest expense, net. Expected return on plan assets, plan amendments, and amortization of net losses are recorded within other expense (income), net. Service cost is recorded within cost of revenue in the consolidated statements of operations.

Valuation

The Company uses the corridor approach and projected unit credit method in the valuation of its defined benefit plans for the U.K., Germany, and Norway. The corridor approach defers all actuarial gains and losses resulting from variances between actual results and economic estimates or actuarial assumptions. For defined benefit pension plans, these unrecognized gains and losses are amortized when the net gains and losses exceed 10% of the greater of the market-related value of plan assets or the projected benefit obligation at the beginning of the year. The amount in excess of the corridor is amortized over 15 years. Similarly, the Company used the Projected Unit Credit Method for the Germany plan, and evaluated the assumptions used to derive the related benefit obligations consisting primarily of financial and demographic assumptions including commencement of employment, biometric decrement tables, retirement age, staff turnover. The projected unit credit method determines the present value of the Company’s defined benefit obligations and related service costs by taking into account each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately in building up the final obligation. Benefit is attributed to periods of service using the plan’s benefit formula, unless an employee’s service in later years will lead to a materially higher of benefit than in earlier years, in which case a straight-line basis is used.

The following tables set forth the principal actuarial assumptions used to determine benefit obligation and net periodic benefit costs:

	Successor
	Consolidated
	December 31, 2025
	UK		Germany		Norway		Asterion
Weighted-average assumptions used to determine benefit obligations:
Discount rate	5.60	%	3.90	%	3.90	%	3.90	%
Rate of compensation increase	N/A		N/A		4.00	%	N/A
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate	5.60	%	3.90	%	3.90	%	3.90	%
Expected asset return	6.82	%	N/A	%	5.10	%	3.90	%
Rate of compensation increase	N/A		N/A		4.00	%	N/A

The Germany plan is an unfunded plan and therefore has no plan assets. The expected rate of return assumptions for plan assets are based mainly on historical performance achieved over a long period of time (10 to 20 years) encompassing many business and economic cycles. Adjustments, upward and downward, may be made to those historical returns to reflect future capital market expectations; these expectations are typically derived from expert advice from the investment community and surveys of peer company assumptions.

The Company assumed a weighted average expected long-term rate of return on plan assets for the U.K. scheme of 6.82%. The Company long-term expected rate of return on cash is determined by reference to U.K. government 10-year bond yields at the balance sheet dates. The long-term expected return on bonds is determined by reference to corporate bond yields at the balance sheet dates. The long-term expected rate of return on equities and diversified growth funds is based on the rate of return on U.K. long dated government bonds with an allowance for out-performance. The long-term expected rate of return on the liability driven investments holdings is determined by reference to U.K. government 20-year bond yields at the balance sheet dates.

The discount rate assumption was developed considering the current yield on an investment grade non-gilt index with an adjustment to the yield to match the average duration of the index with the average duration of the plan’s liabilities. The index utilized reflected the market’s yield requirements for these types of investments.

The inflation rate assumption was developed considering the difference in yields between a long-term government stocks index and a long-term index-linked stocks index. This difference was modified to consider the depression of the yield on index-linked stocks due to the shortage of supply and high demand, the premium for inflation above the expectation built into the yield on fixed-interest stocks and the government’s target rate for inflation (CPI) at 2.4%. The assumptions used are the best estimates chosen from a range of possible actuarial assumptions which, due to the time scale covered, may not necessarily be borne out in practice.

Plan Assets

The investment objective for the U.K. plan is to earn, over moving fifteen to twenty year periods, the long-term expected rate of return, net of investment fees and transaction costs, to satisfy the benefit obligations of the plan, while at the same time maintaining sufficient liquidity to pay benefit obligations and proper expenses, and meet any other cash needs, in the short-to medium-term.

The Company’s investment policy related to the U.K. defined benefit plan is to continue to maintain investments in government gilts and highly rated bonds as a means to reduce the overall risk of assets held in the fund.

No specific targeted allocation percentages have been set by category, but are set at the direction and discretion of the plan trustees. The weighted average allocation of plan assets by asset category is as follows:

	Successor
	Consolidated
	December 31,
	2025
U.K. and other international equities	33.6	%
U.K. government and corporate bonds	3.9
Diversified growth fund	21.4
Liability driven investments	35.6
Multi-asset credit fund	5.5
Total	100.0	%

The following tables set forth, by category and within the fair value hierarchy, the fair value of the Company’s pension assets at December 31, 2025 (Successor):

	Successor
	Consolidated
	December 31, 2025
	Total		Level 1		Level 2		Level 3
Asset Category:
Cash	$	1,784	$	1,784	$	—	$	—
Equity funds:
U.K. and other international		16,801		—		16,801		—
Fixed income securities:
Corporate bonds / U.K. Gilts		2,177		—		2,177		—
Other investments:
Diversified growth fund		11,846		—		11,846		—
Liability driven investments		19,728		—		19,728		—
Multi-asset credit fund		3,070		—		3,070		—
Total fair value	$	55,406	$	1,784	$	53,622	$	—

The plan assets are categorized as follows, as applicable:

Level 1: Any asset for which a unit price is available and used without adjustment, cash balances, etc.

Level 2: Any asset for which the amount disclosed is based on market data, for example a fair value measurement based on a present value technique (where all calculation inputs are based on data).

Level 3: Other assets. For example, any asset value with a fair value adjustment made not based on available indices or data.

Employer Contributions

XBP Global’s funding of employer contributions is based on governmental requirements and differs from those methods used to recognize pension expense. The Company made contributions of $0.5 million to its pension plans for the period August 1, 2025 to December 31, 2025 (Successor). The Company expects to fund the pension plans with the required contributions for 2026 based on current plan provisions.

Estimated Future Benefit Payments

The estimated future pension benefit payments expected to be paid to plan participants are as follows:

	Estimated
	Benefit
	Payments
Year ended December 31,
2026	$	2,811
2027		3,187
2028		3,521
2029		3,401
2030		3,578
2031 – 2035		19,232
Total	$	35,730