Employee Benefit Plans

3 Months Ended

Oct. 31, 2020

Retirement Benefits, Description [Abstract]

Employee Benefit Plans

Employee Benefit PlansThe Company and certain of its international subsidiaries have defined benefit pension plans for many of their hourly and salaried employees. There are two types of U.S. plans. The first type of U.S. plan (Hourly Pension Plan) is a traditional defined benefit pension plan primarily for union production employees. The second plan (Salaried Pension Plan) is for some salaried and non-union production employees, and provides defined benefits pursuant to a cash balance feature whereby a participant accumulates a benefit comprised of a percentage of current salary that varies with years of service, interest credits and transition credits. The Company no longer allows entrants into the U.S. Salaried Pension Plan and the participating employees no longer accrue Company contribution credits under the plan. Instead, eligible employees receive a 3% annual retirement contribution to their 401(k) in addition to the Company’s normal 401(k) match. The non-U.S. plans consist of plans in Belgium, Germany, Mexico and the United Kingdom. These defined plans generally provide pension benefits based on years of service and compensation level. Components of net periodic benefit cost other than the service cost component are included in other expense (income), net on the Condensed Consolidated Statements of Earnings.

Net periodic benefit costs for the Company’s pension plans are as follows (in millions):

	Three Months Ended October 31,
	2020		2019
Net periodic benefit costs:
Service cost	$	2.2	$	1.6
Interest cost	2.4		3.4
Expected return on assets	(5.8)		(6.5)
Prior service cost amortization	0.1		0.2
Actuarial loss amortization	2.2		1.6
Curtailment charge	0.8		—
Net periodic benefit costs	$	1.9	$	0.3

The Company recorded a pension curtailment charge of $0.8 million as a result of freezing the pension benefit to certain employees in the Hourly Pension Plan. The corresponding remeasurement resulted in a decrease in the Company’s pension obligations and an adjustment to other comprehensive loss on the Condensed Consolidated Statements of Comprehensive Income of $4.0 million.

The Company’s general funding policy is to make at least the minimum required contributions as required by applicable regulations, plus any additional amounts that it determines to be appropriate.

For the three months ended October 31, 2020, the Company made required contributions of $0.9 million to its qualified U.S. pension plans and $1.1 million to its non-qualified U.S. pension plans. The estimated minimum funding requirement for the Company’s qualified U.S. plans for the plan year ending July 31, 2021 is $4.0 million. In November 2020, the Company contributed an additional $1.0 million to the qualified U.S. pension plans.

For the three months ended October 31, 2020, the Company made required contributions of $0.3 million to its non-U.S. pension plans. The estimated contributions, based upon the local government prescribed funding requirements for the Company’s non-U.S. pension plans for the plan year ending July 31, 2021 are $1.6 million.

Future estimates of the Company’s required pension plan contributions may change significantly depending on the actual rate of return on plan assets, discount rates and regulatory requirements.