XML 34 R19.htm IDEA: XBRL DOCUMENT v3.22.0.1
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefit Plans
The Company’s defined benefit pension plans cover employees in the U.S., Canada, and Europe who meet eligibility requirements. The plan covering U.S. employees is noncontributory, and the Company implemented a hard freeze for the U.S. qualified defined benefit plan as of December 31, 2013. No further benefits were provided after this date for additional credited service or earnings, and all participants became fully vested as of December 31, 2013. The Canadian plan is contributory, and benefits are based on career average compensation. The Company’s funding policy is to contribute an amount equal to the minimum required contribution under applicable pension legislation. For the plans in the U.S. and Canada, the Company may increase its contribution above the minimum, if appropriate to its tax and cash position and the plans’ funded position. The European plans are funded in accordance with local regulations.
The Company also sponsors supplemental retirement plans covering employees in the U.S. and Canada. The Company uses a measurement date of December 31 for its pension and supplemental retirement plans.
Several assumptions are used to determine the benefit obligations, plan assets, and net periodic income. The discount rate for the U.S. pension plan is calculated using a bond matching approach to select specific bonds that would satisfy the projected benefit payments. The bond matching approach reflects the process that would be used to settle the pension obligations. The discount rate for non U.S. plans are set by using Willis Towers Watson's RATE:Link model. For each plan, this approach reflects yields available on high quality corporate bonds that would generate the cash flow necessary to pay the plan's benefits when due. The expected return on plan assets is based on a calculated market-related value of plan assets, where gains and losses on plan assets are amortized over a five year period and accumulate in other comprehensive income. Other non-investment unrecognized gains and losses are amortized in future net income based on a “corridor” approach, where the corridor is equal to 10% of the greater of the benefit obligation or the market-related value of plan assets at the beginning of the year. The unrecognized gains and losses in excess of the corridor criteria are amortized over the average future lifetime or service of plan participants, depending on the plan. These assumptions are updated at each annual measurement date.
Changes in benefit obligations for the years ended December 31, 2021 and 2020 were:
20212020
Changes in benefit obligation
Benefit obligation at beginning of year$2,678,966 $2,496,600 
Service cost12,218 12,105 
Interest cost71,693 83,732 
Plan participants’ contributions1,908 1,864 
Actuarial (gain) loss(87,966)218,534 
Foreign currency exchange rate changes(1,184)9,394 
Gross benefits paid(142,327)(144,508)
Curtailments(80)(472)
Settlements(255)— 
Acquired plans— 1,717 
Benefit obligation at end of year$2,532,973 $2,678,966 
The benefit obligations for the Company’s U.S. pension plans included in the above were $2,245,669 and $2,373,884 at December 31, 2021 and 2020, respectively. The total accumulated benefit obligation for the Company’s defined benefit pension plans in the U.S., Canada, and Europe was approximately $2,500,595 and $2,649,418 at December 31, 2021 and 2020, respectively.
For the U.S. pension plan, there was a net actuarial liability gain of $73,200 and an asset gain of $173,300. The liability gain was comprised primarily of a $69,000 gain due to discount rate changes. For the U.S. supplemental retirement plan, there was a net actuarial liability loss of $5,500 comprised primarily of a $14,000 loss for participant demographic experience offset by a $9,600 gain due to discount rate changes.
In 2019, the Company recorded $42,757 in special termination costs related to benefits provided through the Company's defined benefit plans to employees that accepted the voluntary retirement program (“VRP”) as part of the Company's 2019 Cost Savings Plan. Refer to the restructuring footnote for more information.
The assumptions used to measure the pension benefit obligations for the plans at December 31, 2021 and 2020, were:
20212020
Weighted average discount rate3.04 %2.72 %
Rate of increase in future compensation levels3.13 %3.11 %
Changes in plan assets for the years ended December 31, 2021 and 2020 were:
20212020
Changes in plan assets
Fair value of plan assets at beginning of year$2,545,359 $2,311,227 
Actual return on plan assets330,402 347,560 
Foreign currency exchange rate changes80 7,451 
Employer contributions21,635 21,765 
Plan participants’ contributions1,908 1,864 
Benefits paid(142,327)(144,508)
Settlements(254)— 
Fair value of plan assets at end of year$2,756,803 $2,545,359 
The fair values of plan assets for the Company’s U.S. pension plans included in the above were $2,457,907 and $2,258,246 at December 31, 2021 and 2020, respectively.

For the years ended December 31, 2021 and 2020, the aggregate projected benefit obligation and aggregate fair value of plan assets for plans with projected benefit obligations in excess of plan assets were as follows:
20212020
Aggregate projected benefit obligation$323,593 $328,517 
Aggregate fair value of plan assets$47,445 $45,728 
For the years ended December 31, 2021 and 2020, the aggregate accumulated benefit obligation and aggregate fair value of plan assets for plans with accumulated benefit obligations in excess of plan assets were as follows:
20212020
Aggregate accumulated benefit obligation$247,277 $290,271 
Aggregate fair value of plan assets$— $34,164 
The asset allocations for the Company’s funded pension plans at December 31, 2021 and 2020, and the target allocation for 2022, by asset category were:
 Target AllocationPercentage of Plan Assets at December 31
 202220212020
Asset Category
Equity securities58 %57 %70 %
Debt securities42 %43 %30 %
100 %100 %100 %
The Company’s benefit plan committees in the U.S. and Canada establish investment policies and strategies and regularly monitor the performance of the funds. The plans in Europe are unfunded and, therefore, there are no plan assets. The pension plan strategy implemented by the Company’s management is to achieve long-term objectives and invest the pension assets in accordance with the applicable pension legislation in the U.S. and Canada as well
as fiduciary standards. The long-term primary investment objectives for the pension plans are to provide for a reasonable amount of long-term growth of capital, without undue exposure to risk, protect the assets from erosion of purchasing power, and provide investment results that meet or exceed the pension plans’ actuarially assumed long-term rates of return. The Company’s investment strategy with respect to pension plan assets is to generate a return in excess of the passive portfolio benchmark (38% US Large-cap stocks, 9% US Mid-cap stocks, 10% International stocks, 3% Emerging Market stocks and 40% Barclays U.S. Gov/Credit Index).
The fair values of the plan assets as of December 31, 2021 and 2020, by asset category, are shown in the tables below. Various inputs are considered when determining the value of the Company’s pension plan assets. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. Level 1 represents observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 represents other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.). Level 3 represents significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments). Certain investments are measured at fair value using the net asset value ("NAV") per share as a practical expedient and have not been classified in the fair value hierarchy.   
The valuation methods 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. Equity securities are valued at the closing price reported on the active market on which the individual securities are traded on the last day of the calendar plan year. Debt securities including corporate bonds, U.S. Government securities, and asset-backed securities are valued using price evaluations reflecting the bid and/or ask sides of the market for an investment as of the last day of the calendar plan year.
 2021
TotalAssets Measured at NAVQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Observable Inputs
 (Level 2)		Significant Unobservable Inputs
(Level 3)
Equity Securities
Common stocks — mutual funds — equity$388,591 $64,669 $323,922 $— $— 
Genuine Parts Company common stock210,510 — 210,510 — — 
Other stocks971,020 — 971,020 — — 
Debt Securities
Short-term investments46,815 — 46,815 — — 
Cash and equivalents22,084 — 22,084 — — 
Government bonds425,877 — 350,706 75,171 — 
Corporate bonds598,216 — — 598,216 — 
Asset-backed and mortgage-backed securities12,894 — — 12,894 — 
Other-international61,008 — 46,133 14,875 — 
Municipal bonds19,621 — — 19,621 — 
Other
Options and Futures167 — 167 — — 
Total$2,756,803 $64,669 $1,971,357 $720,777 $— 
 2020
TotalAssets Measured at NAVQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
Equity Securities
Common stocks — mutual funds — equity$586,196 $204,303 $381,893 $— $— 
Genuine Parts Company common stock202,711 — 202,711 — — 
Other stocks989,258 — 989,258 — — 
Debt Securities
Short-term investments30,746 — 30,746 — — 
Cash and equivalents18,631 — 18,631 — — 
Government bonds257,221 — 192,288 64,933 — 
Corporate bonds393,450 — — 393,450 — 
Asset-backed and mortgage-backed securities10,161 — — 10,161 — 
Other-international39,992 — 37,041 2,951 — 
Municipal bonds14,724 — — 14,724 — 
Other
Cash surrender value of life insurance policies2,269 — — — 2,269 
Total$2,545,359 $204,303 $1,852,568 $486,219 $2,269 

Equity securities include Genuine Parts Company common stock in the amounts of $210,510 (8% of total plan assets) and $202,711 (8% of total plan assets) at December 31, 2021 and 2020, respectively. Dividend payments received by the plan on Company stock totaled approximately $4,895 and $6,378 in 2021 and 2020, respectively. Fees paid during the year for services rendered by parties in interest were based on customary and reasonable rates for such services.
The changes in the fair value measurement of plan assets using significant unobservable inputs (Level 3) during 2021 and 2020 were not material.
Based on the investment policy for the pension plans, as well as an asset study that was performed based on the Company’s asset allocations and future expectations, the Company’s expected rate of return on plan assets for measuring 2022 pension income is 6.34% for the plans. The asset study forecasted expected rates of return for the approximate duration of the Company’s benefit obligations, using capital market data and historical relationships.
The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheets at December 31:
20212020
Other long-term asset$499,978 $149,182 
Other current liability(12,546)(17,572)
Pension and other post-retirement liabilities(263,602)(265,216)
$223,830 $(133,606)
Amounts recognized in accumulated other comprehensive loss consist of:
20212020
Net actuarial loss$625,339 $939,290 
Prior service cost 7,958 8,648 
$633,297 $947,938 
The following table reflects the total benefits expected to be paid from the pension plans’ or the Company’s assets. Of the pension benefits expected to be paid in 2022, approximately $12,548 is expected to be paid from employer assets. Expected employer contributions below reflect amounts expected to be contributed to funded plans. Information about the expected cash flows for the pension plans follows:
Employer contribution
2022 (expected)$4,389 
Expected benefit payments:
2022$132,803 
2023$136,456 
2024$139,632 
2025$143,008 
2026$145,490 
2026 through 2030$739,272 
Net periodic benefit income included the following components:
202120202019
Service cost$12,218 $12,105 $9,558 
Interest cost71,693 83,732 97,441 
Expected return on plan assets(153,822)(154,111)(154,137)
Amortization of prior service cost (credit)690 692 (67)
Amortization of actuarial loss49,897 39,613 31,000 
Net periodic benefit income$(19,324)$(17,969)$(16,205)
Service cost is recorded in selling, administrative and other expenses in the consolidated statements of income while all other components except for special termination costs are recorded within other non-operating (income) expenses. The special termination costs incurred in connection with the 2019 Cost Savings Plan are presented on their own line within non-operating (income) expenses. Pension benefits also include amounts related to supplemental retirement plans.
Other changes in plan assets and benefit obligations recognized in other comprehensive income are as follows:
202120202019
Current year actuarial (gain) loss$(264,547)$24,613 $(33,677)
Recognition of actuarial loss(49,897)(39,613)(31,000)
Current year prior service cost— — 3,327 
Recognition of prior service (cost) credit(690)(692)67 
Recognition of curtailment (loss) gain(5)435 (155)
Other(29)— (50)
Total recognized in other comprehensive loss$(315,168)$(15,257)$(61,488)
Total recognized in net periodic benefit income and other comprehensive (loss) income$(334,492)$(33,226)$(77,693)
The assumptions used in measuring the net periodic benefit income for the plans follow:
202120202019
Weighted average discount rate2.72 %3.43 %4.36 %
Rate of increase in future compensation levels3.11 %3.13 %3.14 %
Expected long-term rate of return on plan assets6.88 %7.11 %7.12 %
The Company has one defined contribution plan in the U.S. that covers substantially all of its domestic employees. Employees receive a matching contribution of 100% of the first 5% of the employees’ salary. Total plan expense was approximately $59,545 in 2021, $54,885 in 2020, and $64,990 in 2019.
The Company has a defined contribution plan that covers full-time Canadian employees after six months of employment and part-time employees upon meeting provincial minimum standards. Employees receive a matching contribution of 100% of the first 5% of the employees’ salary. Total plan expense was approximately $5,196 in 2021 and $4,486 in 2020.