Employee Benefit Plans

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

Employee Benefit Plans

17. Employee Benefit Plans

The Company offers defined contribution retirement plans which cover the majority of its U.S. employees, as well as employees in certain other countries. The Company’s expense relating to defined contribution plans was $57,543, $59,719 and $52,629 for the years ended December 31, 2022, 2021 and 2020, respectively.

The Company sponsors qualified defined benefit pension plans covering certain employees of the Company and its subsidiaries. The plans' benefits are generally based on years of service and employee compensation. The Company also provides to certain management employees, through non-qualified plans, supplemental retirement benefits in excess of qualified plan limits imposed by federal tax law.

In July 2013, the Company announced that, after December 31, 2013, the U.S. qualified and non-qualified defined benefit plans would be closed to new employees. All pension-eligible employees as of December 31, 2013 will continue to earn a pension benefit through December 31, 2023 as long as they remain employed by the Company participating in the impacted plans. The Company also announced that effective January 1, 2024, the plans would be frozen to any future benefit accruals.

The Company also maintains other post-retirement benefit plans. These plans are closed to new entrants and are not considered to be significant. The supplemental and other post-retirement benefit plans are supported by the general assets of the Company.

Obligations and Funded Status

The following tables summarize the change in benefit obligations, change in plan assets, and funded status associated with the Company's significant defined benefit plans and the amounts recognized in the consolidated balance sheets at December 31, 2022 and 2021:

	Qualified Defined Benefits								Non-Qualified Supplemental Benefits
	U.S. Plan				Non-U.S. Plans
	2022		2021		2022		2021		2022		2021
Change in benefit obligation:
Benefit obligation at beginning of year	$	478,346	$	524,181	$	314,715	$	340,829	$	42,905	$	51,194
Service cost	5,703		7,134		4,675		5,749		1,426		1,561
Interest cost	13,745		13,605		5,220		3,590		1,215		1,232
Plan participants' contributions	—		—		2,186		2,009		—		—
Benefits paid	(17,680)		(18,221)		(9,756)		(7,519)		(3,831)		(5,331)
Actuarial gains(1)	(126,985)		(19,393)		(72,977)		(20,766)		(9,596)		(4,568)
Amendments	—		—		(2,291)		1,828		384		—
Settlements and curtailments	(33,228)		(28,960)		(8,849)		(3,517)		—		(1,183)
Currency translation and other	—		—		(17,606)		(7,488)		—		—
Benefit obligation at end of year	319,901		478,346		215,317		314,715		32,503		42,905
Change in plan assets:
Fair value of plan assets at beginning of year	573,100		606,896		219,677		212,748		—		—
Actual return on plan assets	(125,011)		13,385		(48,147)		10,664		—		—
Company contributions	—		—		9,059		8,121		3,831		6,262
Plan participants' contributions	—		—		2,186		2,009		—		—
Benefits paid	(17,680)		(18,221)		(9,756)		(7,519)		(3,831)		(5,331)
Settlements and curtailments	(36,356)		(28,960)		(8,640)		(2,287)		—		(931)
Currency translation and other	—		—		(11,519)		(4,059)		—		—
Fair value of plan assets at end of year	394,053		573,100		152,860		219,677		—		—
Funded (Unfunded) status	$	74,152	$	94,754	$	(62,457)	$	(95,038)	$	(32,503)	$	(42,905)
Amounts recognized in the consolidated balance sheets consist of:
Assets and Liabilities:
Other assets and deferred charges	$	74,152	$	94,754	$	1,863	$	1,575	$	—	$	—
Accrued compensation and employee benefits	—		—		(1,774)		(1,729)		(7,243)		(4,776)
Other liabilities (deferred compensation)	—		—		(62,546)		(94,884)		(25,260)		(38,129)
Total assets (liabilities)	74,152		94,754		(62,457)		(95,038)		(32,503)		(42,905)
Accumulated Other Comprehensive Loss (Earnings):
Net actuarial losses (gains)	55,227		33,545		31,607		50,878		(28,304)		(20,724)
Prior service cost (credit)	—		110		(3,006)		(1,303)		1,874		2,980
Tax (benefit) expense	(11,474)		(6,686)		(6,434)		(11,836)		5,768		3,840
Total accumulated other comprehensive loss (earnings), net of tax	43,753		26,969		22,167		37,739		(20,662)		(13,904)
Net amount recognized at December 31,	$	117,905	$	121,723	$	(40,290)	$	(57,299)	$	(53,165)	$	(56,809)
Accumulated benefit obligations	$	318,275	$	471,871	$	210,259	$	302,929	$	31,523	$	41,110

(1) The actuarial gains were primarily due to discount rate fluctuations.

The Company's net unfunded status at December 31, 2022 and 2021 includes net liabilities of $62,457 and $95,038, respectively, relating to the Company's significant international qualified plans, some in locations where it is not economically advantageous to pre-fund the plans due to local regulations. The majority of the international obligations relate to defined pension plans operated by the Company's businesses in Germany, France, the United Kingdom, and Italy.

The accumulated benefit obligation for all defined benefit pension plans was $560,057 and $815,910 at December 31, 2022 and 2021, respectively.

Non-U.S. pension plans with accumulated benefit obligations in excess of plan assets consist of the following at December 31, 2022 and 2021:

	2022		2021
Accumulated benefit obligation	$	124,082	$	193,710
Fair value of plan assets	64,112		106,519

Non-U.S. pension plans with projected benefit obligations in excess of plan assets consist of the following at December 31, 2022 and 2021:

	2022		2021
Projected benefit obligation	$	200,671	$	292,701
Fair value of plan assets	136,351		196,088

The Company has adjusted the prior year amounts for projected benefit obligations in excess of plan assets in the table above.

Net Periodic Benefit Cost

The operating expense component of net periodic benefit cost (service cost) is reported with similar compensation costs in the Company's consolidated statement of earnings. The non-operating components (all other components of net periodic benefit expense, including interest cost, amortization of prior service cost, curtailments and settlements, etc.) are reported outside of operating income in other income, net in the consolidated statement of earnings.

Components of the net periodic benefit cost were as follows: 

Defined Benefit Plans

	Qualified Defined Benefits												Non-Qualified Supplemental Benefits
	U.S. Plan						Non-U.S. Plans
	2022		2021		2020		2022		2021		2020		2022		2021		2020
Service cost	$	5,703	$	7,134	$	6,824	$	4,675	$	5,749	$	5,345	$	1,426	$	1,561	$	1,272
Interest cost	13,745		13,605		16,272		5,220		3,590		3,697		1,215		1,232		1,765
Expected return on plan assets	(29,104)		(28,980)		(31,475)		(7,191)		(7,188)		(6,837)		—		—		—
Amortization of:
Prior service cost (credit)	110		212		227		(526)		(453)		(493)		1,490		1,531		1,695
Recognized actuarial loss (gain)	2,300		10,012		7,536		1,747		3,938		3,047		(2,016)		(1,672)		(1,857)
Settlement and curtailment loss (gain)	6,276		2,031		—		(393)		194		25		—		(743)		—
Net periodic (benefit) expense	$	(970)	$	4,014	$	(616)	$	3,532	$	5,830	$	4,784	$	2,115	$	1,909	$	2,875

Assumptions

The Company determines actuarial assumptions on an annual basis. The weighted average assumptions used in determining the benefit obligations were as follows:

	Qualified Defined Benefits								Non-Qualified Supplemental Benefits
	U.S. Plan				Non-U.S. Plans
	2022		2021		2022		2021		2022		2021
Discount rate	5.55	%	2.95	%	3.57	%	1.18	%	5.50	%	2.90	%
Average wage increase	4.00	%	4.00	%	1.70	%	1.53	%	4.50	%	4.50	%

The weighted average assumptions used in determining the net periodic benefit cost were as follows:

	Qualified Defined Benefits												Non- Qualified Supplemental Benefits
	U.S. Plan						Non-U.S. Plans
	2022		2021		2020		2022		2021		2020		2022		2021		2020
Discount rate	2.95	%	2.65	%	3.40	%	1.18	%	0.79	%	1.18	%	2.90	%	2.45	%	3.20	%
Average wage increase	4.00	%	4.00	%	4.00	%	1.53	%	1.51	%	1.80	%	4.50	%	4.50	%	4.50	%
Expected return on plan assets	5.60	%	5.60	%	6.30	%	3.47	%	3.40	%	3.69	%	na		na		na

The Company's discount rate assumption is determined by developing a yield curve based on high quality corporate bonds with maturities matching the plans' expected benefit payment streams. The plans' expected cash flows are then discounted by the resulting year-by-year spot rates.

Plan Assets

The primary financial objective of the plans is to secure participant retirement benefits. Accordingly, the key objective in the plans' financial management is to promote stability and, to the extent appropriate, growth in the funded status. Related and supporting financial objectives are established in conjunction with a review of current and projected plan financial requirements.

As it relates to the funded defined benefit pension plans, the Company's funding policy is consistent with the funding requirements of the Employment Retirement Income Security Act ("ERISA") and applicable international laws. The Company is responsible for overseeing the management of the investments of the plans' assets and otherwise ensuring that the plans' investment programs are in compliance with ERISA, other relevant legislation and the related plan documents. Where relevant, the Company has retained professional investment managers to manage the plans' assets and implement the investment process. The investment managers, in implementing their investment processes, have the authority and responsibility to select appropriate investments in the asset classes specified by the terms of their applicable prospectus or investment manager agreements with the plans.

The assets of the plans are invested to achieve an appropriate return for the plans consistent with a prudent level of risk. The plans' long-term investment objective is to generate investment returns that provide adequate assets to meet all benefit obligations in accordance with applicable regulations. The expected return on assets assumption used for net periodic benefit cost is developed through analysis of historical and forecasted market returns, statistical analysis, current market conditions and the past experience of plan asset investments.

The Company's actual and target weighted average asset allocation for our U.S. Qualified Defined Benefits Plan was as follows:

	2022		2021		Current Target
Return-seeking investments	27	%	29	%	30	%
Liability hedging investments	73	%	69	%	70	%
Other	—	%	2	%	—	%
Total	100	%	100	%	100	%

Return-seeking investments include diversified foreign and domestic equities, U.S. high yield fixed income investments, and emerging market debt. Liability hedging investments primarily include a diversified portfolio of U.S. long duration fixed income assets. While the non-U.S. investment policies are different for each country, the long-term objectives are generally the same as for the U.S. pension assets.

The fair values of both U.S. and non-U.S. pension plan assets by asset category within the fair value hierarchy (as defined in Note 13 — Financial Instruments) were as follows:

	U.S. Qualified Defined Benefits Plan
	12/31/2022						12/31/2021
	Level 1		Level 2		Total Fair Value		Level 1		Level 2		Total Fair Value
Corporate bonds	$	—	$	201,203	$	201,203	$	—	$	316,367	$	316,367
Government securities	—		56,978		56,978		—		73,115		73,115
Interest-bearing cash and short-term investments	2,900		—		2,900		3,227		—		3,227
Total investments at fair value	2,900		258,181		261,081		3,227		389,482		392,709
Investments measured at net asset value*
Collective funds	—		—		106,273		—		—		167,551
Short-term investment funds	—		—		26,699		—		—		12,840
Total investments	$	2,900	$	258,181	$	394,053	$	3,227	$	389,482	$	573,100

	Non-U.S. Plans
	12/31/2022								12/31/2021
	Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3		Total Fair Value
Common stocks	$	46,618	$	—	$	—	$	46,618	$	58,054	$	—	$	—	$	58,054
Fixed income investments	—		25,168		—		25,168		—		27,034		—		27,034
Mutual funds	20,031		—		—		20,031		30,675		—		—		30,675
Cash and cash equivalents	909		—		—		909		3,634		—		—		3,634
Other	—		996		16,294		17,290		—		2,877		20,252		23,129
Total investments at fair value	67,558		26,164		16,294		110,016		92,363		29,911		20,252		142,526
Investments measured at net asset value*
Collective funds	—		—		—		39,675		—		—		—		72,235
Other	—		—		—		3,169		—		—		—		4,916
Total investments	$	67,558	$	26,164	$	16,294	$	152,860	$	92,363	$	29,911	$	20,252	$	219,677

* In accordance with Fair Value Measurement Topic 820 (Subtopic 820-10), certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient were not classified in the fair value hierarchy. These are included to permit reconciliation of the fair value hierarchy to the aggregate pension plan assets.

Common stocks represent investments in domestic and foreign equities, which are publicly traded on active exchanges and are valued based on quoted market prices.

Fixed income investments include bonds and notes, which are valued based on quoted market prices, as well as investments in other government and municipal securities and corporate bonds, which are valued based on yields currently available on comparable securities of issuers with similar credit ratings.

Mutual funds are categorized as either Level 1, 2 or Net Asset Value ("NAV") as a practical expedient depending on the nature of the observable inputs. Collective funds and short-term investment funds are valued using NAV as a practical expedient as of the last business day of the year. The NAV is based on the underlying value of the assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The availability of observable data is monitored by plan management to assess appropriate classification of financial instruments within the fair value hierarchy. Depending upon the availability of such inputs, specific securities may transfer between levels. In such instances, the transfer is reported at the end of the reporting period.

The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2021 and 2022, due to the following:

	Level 3
Balance at December 31, 2020	$	21,276
Actual return on plan assets:
Relating to assets still held at December 31, 2021	48
Relating to assets sold during the period	—
Purchases	1,664
Sales and settlements	(2,158)
Foreign currency translation	(578)
Balance at December 31, 2021	20,252
Actual return on plan assets:
Relating to assets still held at December 31, 2022	(382)
Relating to assets sold during the period	—
Purchases	1,852
Sales and settlements	(4,808)
Foreign currency translation	(620)
Balance at December 31, 2022	$	16,294

Future Estimates

Benefit Payments

Estimated future benefit payments to retirees, which reflect expected future service except to the extent frozen, are as follows:

	Qualified Defined Benefits				Non-Qualified Supplemental Benefits
	U.S. Plan		Non-U.S. Plans
2023	$	25,946	$	10,677	$	7,440
2024	27,511		10,969		5,231
2025	26,121		10,800		2,312
2026	25,567		11,859		4,599
2027	25,307		14,156		1,800
2028 - 2032	122,304		68,857		14,348

Contributions

In 2023, the Company expects to make payments of approximately $7.1 million to its non-US plans and $7.4 million to its non-qualified U.S. plan. No payments are expected for the qualified U.S. plan in 2023.