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Pensions and Postretirement Benefits
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Pensions and Postretirement Benefits Pensions and Postretirement Benefits
The Company and its subsidiaries have pension plans, principally noncontributory defined benefit or noncontributory defined contribution plans, covering substantially all employees. In addition, the Company has an unfunded postretirement benefit plan. One of its defined benefit plans, covering most U.S. employees not covered by collective bargaining agreements, utilizes a cash balance formula. Under a cash balance formula, a plan participant accumulates a retirement benefit consisting of pay credits that are based upon a percentage of current eligible earnings and current interest credits. For the remaining defined benefit plans, benefits are based on the employee’s years of service. For the defined contribution plans, the costs charged to operations and the amount funded are based upon a percentage of the covered employees’ compensation.
The Company's objectives for the pension plan are to monitor the funded ratio; create general investment goals with regard to acceptable risk and liquidity needs ensuring the long-term interests of participants and beneficiaries are considered; and manage risk by minimizing the short-term and long-term risk of actual expenses and contribution requirements.
The following tables set forth the changes in benefit obligation, plan assets, funded status and amounts recognized in the consolidated balance sheet for the defined benefit pension and postretirement benefit plans as of December 31, 2020 and 2019:
 Pension BenefitsPostretirement Benefits
 2020201920202019
Change in benefit obligation
Benefit obligation at beginning of year$79.4 $71.2 $8.0 $8.5 
Service cost4.1 3.8 — — 
Interest cost2.1 2.6 0.2 0.3 
Actuarial losses6.6 7.4 0.6 0.5 
Benefits and expenses paid(5.7)(5.6)(0.9)(1.3)
Benefit obligation at end of year$86.5 $79.4 $7.9 $8.0 
Change in plan assets
Fair value of plan assets at beginning of year$144.4 $128.2 $— $— 
Actual return on plan assets23.2 22.7 — — 
Company contributions— — 0.9 1.3 
Cash transfer to fund postretirement benefit payments(0.6)(0.9)— — 
Benefits and expenses paid(5.7)(5.6)(0.9)(1.3)
Fair value of plan assets at end of year$161.3 $144.4 $— $— 
Funded (underfunded) status of the plans$74.8 $65.0 $(7.9)$(8.0)
 
Amounts recognized in the consolidated balance sheets consist of:
 Pension BenefitsPostretirement Benefits
 2020201920202019
Pension assets$74.8 $65.0 $— $— 
Other current liabilities— — 0.8 0.9 
Other long-term liabilities— — 7.1 7.1 
$74.8 $65.0 $7.9 $8.0 
Amounts recognized in Accumulated other comprehensive loss
Net actuarial loss$21.3 $28.1 $3.0 $2.6 
Net prior service cost0.2 0.2 — — 
Accumulated other comprehensive loss$21.5 $28.3 $3.0 $2.6 
The pension plan weighted-average asset allocation at December 31, 2020 and 2019 and target allocation for 2021 are as follows:
  Plan Assets
 Target 202120202019
Asset Category
Equity securities
45-75%
61.5 %59.2 %
Debt securities
15-35%
20.0 %25.5 %
Other
    0-25%
18.5 %15.3 %
100%100 %100 %

The following table sets forth, by level within the fair value hierarchy, the pension plans assets:
 20202019
 Level 1TotalLevel 1Total
Common stock$30.7 $30.7 $40.0 $40.0 
Equity securities63.1 63.1 43.9 43.9 
Foreign stock6.8 6.8 7.0 7.0 
U.S. Government obligations8.5 8.5 8.6 8.6 
Fixed income securities6.4 6.4 11.5 11.5 
Corporate bonds16.0 16.0 14.2 14.2 
Cash and cash equivalents5.9 5.9 2.7 2.7 
Total$137.4 $127.9 
Investments measured at net asset value:
Common collective trusts3.2 — 
Hedge funds20.7 16.5 
Total assets at fair value$161.3 $144.4 
 
Valuation Methodologies: Following is a description of the valuation methodologies used for pension plan assets measured at fair value. There have been no changes in the methodologies used at December 31, 2020 and 2019.

Common stock, equity securities and foreign stock - These securities consist of direct investments in the stock of publicly-traded companies. Such investments are valued based on the closing price reported in an active market on which the individual securities are traded. As such, the direct investments are classified as Level 1.

U.S. Government obligations, fixed income securities and corporate bonds - Valued at the closing price of each security.

Cash equivalents - Consists of primarily money market funds and certificates of deposit, for which book value equals fair value.

Common collective trusts - Valued at the net unit value of units held by the trust at year end. The unit value is determined by the total value of fund assets divided by the total number of units of the fund owned. The equity investments in collective trusts are predominantly in index funds for which the underlying securities are actively traded in public markets based upon readily measurable prices. Common collective trusts are measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the total plan assets.

Hedge funds - Consists of direct investments in hedge funds through limited partnership interests. Net asset values are based on the estimated fair value of the ownership interest in the investment as determined by the general partner. The majority of the holdings of the hedge funds are in equity securities traded on public exchanges. The investment terms of the hedge funds allow capital to be redeemed quarterly given prior notice with certain limitations. Hedge funds measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the total plan assets.

For additional information regarding fair value measurements, see Note 1.

The following tables summarize the assumptions used in the valuation of pension and postretirement benefit obligations at December 31 and the measurement of the net periodic benefit cost in the following year. The Company used a spot rate approach by applying the specific spot rates along the yield curve to the relevant projected cash flows in the estimation of the service and interest components of benefit cost.
 Weighted-Average assumptions as of December 31,
 Pension BenefitsPostretirement Benefits
 202020192018202020192018
Assumptions used to determine benefit obligation at year-end
Discount rate2.40 %3.22 %4.24 %1.95 %2.94 %4.06 %
Rate of compensation increase3.00 %3.00 %3.00 %N/AN/AN/A
Health care cost trend rateN/AN/AN/A6.25 %6.25 %6.50 %
Ultimate health care cost trend rateN/AN/AN/A5.00 %5.00 %5.00 %
Year of ultimate trend rateN/AN/AN/A202820252025
Assumptions used to determine expense
Discount rate for benefit obligations3.22 %4.11 %3.51 %2.95 %4.06 %3.35 %
Discount rate for service costs3.25 %4.14 %3.60 %3.29 %4.34 %3.70 %
Discount rate for interest costs2.76 %3.72 %3.08 %2.56 %3.72 %2.92 %
Expected return on plan assets7.75 %8.25 %8.25 %N/AN/AN/A
Rate of compensation increase3.00 %3.00 %3.00 %N/AN/AN/A
Medical health care benefits rate increaseN/AN/AN/A6.25 %6.50 %6.50 %
Medical drug benefits rate increaseN/AN/AN/A6.25 %6.50 %6.50 %
Ultimate health care cost trend rateN/AN/AN/A5.00 %5.00 %5.00 %
Year of ultimate trend rateN/AN/AN/A202820252025
In determining its expected return on plan assets assumption for the year ended December 31, 2020, the Company considered historical experience, its asset allocation, expected future long-term rates of return for each major asset class, and an assumed long-term inflation rate. This assumption was supported by the asset return generation model, which projected future asset returns using simulation and asset class correlation.
 Pension BenefitsPostretirement Benefits
 202020192018202020192018
Components of net periodic benefit cost
Service costs$4.1 $3.8 $3.7 $— $— $— 
Interest costs2.1 2.6 2.2 0.2 0.3 0.3 
Expected return on plan assets(11.7)(10.9)(11.6)— — — 
Amortization of prior service cost (credit)— — — — (0.1)(0.1)
Recognized net actuarial loss1.9 2.2 0.3 0.2 0.3 0.1 
Benefit (income) costs$(3.6)$(2.3)$(5.4)$0.4 $0.5 $0.3 
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive (income) loss (“AOCI”)
AOCI at beginning of year$28.3 $35.0 $16.8 $2.6 $2.3 $2.0 
Net (loss) gain arising during the year(1.8)(2.2)(0.3)(0.2)(0.3)(0.1)
Recognition of prior service credit— — — — 0.1 0.1 
Recognition of actuarial loss(5.0)(4.5)18.5 0.6 0.5 0.3 
Total recognized in accumulated other comprehensive loss at end of year$21.5 $28.3 $35.0 $3.0 $2.6 $2.3 
Below is a table summarizing the Company’s expected future benefit payments and the expected payments due to Medicare subsidy over the next ten years:
  Postretirement Benefits
 Pension BenefitsGrossExpected
Medicare Subsidy		Net including
Medicare Subsidy
2021$5.9 $0.9 $0.1 $0.8 
20226.1 0.8 0.1 0.7 
20236.2 0.8 0.1 0.7 
20246.3 0.8 0.1 0.7 
20256.3 0.7 0.1 0.6 
2026 to 203031.4 2.8 0.2 2.6 
 
The Company expects to make no contributions to its defined benefit plans in 2021 and beyond, as pension benefits are expected to be paid out of plan assets and postretirement benefits are paid directly by the Company.
In January 2008, a Supplemental Executive Retirement Plan (“SERP”) for the Former CEO was approved by the Compensation Committee of the Board of Directors of the Company. The SERP provides an annual supplemental retirement benefit of up to $0.4 million upon the Former CEO’s termination of employment with the Company. The Former CEO is fully vested in the SERP, which has a balance of $2.3 million as of December 31, 2020.