Employee Benefit Plans

12 Months Ended

Dec. 31, 2022

Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]

Employee Benefit Plans

5. Employee Benefit Plans

Defined Benefit Plans — Oshkosh and certain of its subsidiaries sponsor multiple defined benefit pension plans for certain employees providing services to Oshkosh, Oshkosh Defense, Airport Products, Oshkosh Commercial and Pierce. The benefits provided are based primarily on average compensation, years of service and date of birth. Hourly plans are generally based on years of service and a benefit dollar multiplier. The Company periodically amends the plans, including changing the benefit dollar multipliers and other revisions. In December 2012, salaried participants in the pension plans no longer receive credit, other than for vesting purposes, for eligible earnings. In December 2013, the Pierce pension plan was amended to close participation in the plan for new production employees. In October 2016, the Oshkosh Defense hourly defined benefit pension plan was closed to new production employees.

On July 27, 2021, the Company’s Board of Directors approved a plan to terminate and settle the defined benefit plan related to salaried participants. In the fourth quarter of fiscal 2022, the Company transferred plan assets to an insurance company that will provide for and pay the remaining benefits to participants. The Company incurred a charge of $33.6 million associated with the settlement of this plan. The pre-tax balance in Accumulated Other Comprehensive Income associated with the plan, along with costs related to the settlement, were recorded as a component of “Miscellaneous, net”, with the related income tax effects recorded in “Provision for income taxes”, in the Consolidated Statements of Income.

Determination of defined benefit pension and postretirement plan obligations and their associated expenses requires the use of actuarial valuations to estimate the benefits that employees earn while working, as well as the present value of those benefits. The Company uses the services of independent actuaries to assist with these calculations. The Company determines the discount rate used each year based on the rate of return currently available on a portfolio of high-quality fixed-income investments with a maturity that is consistent with the projected benefit payout period. The Company’s long-term rate of return on assets is based on consideration of historical and forward-looking returns and the current asset allocation strategy. The plans’ expected return on assets is based on the plans’ historical returns and expected returns for the asset classes in which the plans are invested.

Supplemental Executive Retirement Plans (SERP) — The Company maintains defined benefit and defined contribution SERPs for certain executive officers of Oshkosh and its subsidiaries. In fiscal 2013, the Oshkosh defined benefit SERP was amended to freeze benefits under the plan and executive officers in the defined benefit SERP at that time became eligible for the new Oshkosh defined contribution SERP. At the same time, the Company established the Trust to fund obligations under the Oshkosh SERPs. As of December 31, 2022, the Trust held assets of $13.8 million. The Trust assets are subject to claims of the Company’s creditors. The Trust assets are included in “Other current assets” and “Other long-term assets” in the Consolidated Balance Sheets. The Company recognized income of $0.5 million in fiscal 2022, expense of $0.4 million in the three months ended December 31, 2021, expense of $2.6 million in the year ended September 30, 2021 and expense of $1.6 million in the year ended September 30, 2020, related to the Oshkosh defined contribution SERP.

Postretirement Medical Plans — Oshkosh and certain of its subsidiaries sponsor multiple postretirement benefit plans for Oshkosh Defense, JLG, and Kewaunee hourly employees, retirees and their spouses. The plans generally provide health benefits based on years of service and date of birth. These plans are unfunded.

Changes in benefit obligations and plan assets, as well as the funded status of the Company’s defined benefit pension plans were as follows (in millions):

	Year Ended December 31,			Three Months Ended December 31, (transition period)			Year Ended September 30,
	2022			2021			2021
Accumulated benefit obligation at end of period	$	327.9		$	602.3		$	594.2
Change in projected benefit obligation
Benefit obligation at beginning of period	$	611.8		$	604.2		$	613.6
Service cost		10.3			2.6			11.5
Interest cost		17.0			4.3			16.4
Actuarial loss (gain)		(148.5	)		5.1			(22.6	)
Settlement		(135.4	)		—			—
Benefits paid		(18.2	)		(4.6	)		(16.4	)
Currency translation adjustments		(3.8	)		0.2			1.7
Benefit obligation at end of period	$	333.2		$	611.8		$	604.2
Change in plan assets
Fair value of plan assets at beginning of period	$	533.0		$	515.9		$	437.3
Actual return on plan assets		(102.2	)		23.5			71.3
Company contributions		28.6			0.5			25.2
Settlement		(135.4	)		—			—
Expenses paid		(2.9	)		(2.5	)		(2.9	)
Benefits paid		(18.2	)		(4.6	)		(16.4	)
Currency translation adjustments		(4.2	)		0.2			1.4
Fair value of plan assets at end of period	$	298.7		$	533.0		$	515.9
Funded status of plan - at end of period	$	(34.5	)	$	(78.8	)	$	(88.3	)
Recognized in consolidated balance sheet at end of period
Prepaid benefit cost (long-term asset)	$	6.2		$	2.9		$	2.1
Accrued benefit liability (current liability)		(2.0	)		(2.0	)		(2.0	)
Accrued benefit liability (long-term liability)		(38.7	)		(79.7	)		(88.4	)
	$	(34.5	)	$	(78.8	)	$	(88.3	)

Recognized in accumulated other comprehensive income (loss) as of end of period (net of taxes)
Net actuarial loss	$	27.8		$	(18.9	)	$	(29.0	)
Prior service (cost) benefit		(9.6	)		(11.2	)		(11.6	)
	$	18.2		$	(30.1	)	$	(40.6	)

Weighted-average assumptions as of end of period
Discount rate	5.09	%	2.83	%	2.91	%
Expected return on plan assets	6.50	%	4.31	%	4.46	%

Pension benefit plans with accumulated benefit obligations in excess of plan assets consisted of the following (in millions):

	December 31,				September 30,
	2022		2021		2021
Projected benefit obligation	$	316.0	$	571.6	$	565.7
Accumulated benefit obligation		310.8		562.0		555.7
Fair value of plan assets		275.4		489.9		475.4

Changes in benefit obligations and plan assets, as well as the funded status of the Company’s postretirement benefit plans were as follows (in millions):

	Year Ended December 31,			Three Months Ended December 31, (transition period)			Year Ended September 30,
	2022			2021			2021
Accumulated benefit obligation at end of period	$	44.6		$	55.7		$	53.3
Change in projected benefit obligation
Benefit obligation at beginning of period	$	55.7		$	53.3		$	53.3
Service cost		2.2			0.5			2.2
Interest cost		1.4			0.3			1.2
Actuarial loss (gain)		(12.0	)		2.2			(1.1	)
Benefits paid		(2.7	)		(0.6	)		(2.3	)
Benefit obligation at end of period	$	44.6		$	55.7		$	53.3
Change in plan assets
Company contributions	$	2.7		$	0.7		$	2.3
Benefits paid		(2.7	)		(0.7	)		(2.3	)
Fair value of plan assets at end of period	$	—		$	—		$	—
Funded status of plan - at end of period	$	(44.6	)	$	(55.7	)	$	(53.3	)
Recognized in consolidated balance sheet at end of period
Accrued benefit liability (current liability)	$	(2.2	)	$	(2.6	)	$	(2.4	)
Accrued benefit liability (long-term liability)		(42.4	)		(53.1	)		(50.9	)
	$	(44.6	)	$	(55.7	)	$	(53.3	)

Recognized in accumulated other comprehensive income (loss) as of end of period (net of taxes)
Net actuarial loss	$	2.7	$	(6.7	)	$	(5.1	)
Prior service (cost) benefit		10.2		11.3			11.5
	$	12.9	$	4.6		$	6.4

Weighted-average assumptions as of end of period
Discount rate		4.95	%		2.62	%		2.61	%
Expected return on plan assets	n/a			n/a			n/a

The components of net periodic benefit cost were as follows (in millions):

	Pension Benefits
	Year Ended December 31,			Three Months Ended December 31, (transition period)			Year Ended September 30,
	2022			2021			2021			2020
Components of net periodic benefit cost
Service cost	$	10.3		$	2.6		$	11.5		$	10.1
Interest cost		17.0			4.3			16.4			17.1
Expected return on plan assets		(20.6	)		(5.3	)		(19.8	)		(20.6	)
Amortization of prior service cost		2.2			0.6			2.3			1.6
Settlement		33.6			—			—			—
Curtailment		—			—			—			0.1
Amortization of net actuarial (gain) loss		1.0			0.2			4.9			3.3
Expenses paid		3.0			2.5			3.0			4.0
Net periodic benefit cost	$	46.5		$	4.9		$	18.3		$	15.6
Other changes in plan assets and benefit obligations recognized in other comprehensive income
Net actuarial (gain) loss	$	(26.2	)	$	(13.0	)	$	(74.1	)	$	29.4
Prior service cost		—			—			—			9.8
Amortization of prior service cost		(2.2	)		(0.6	)		(2.3	)		(1.6	)
Settlement		(33.6	)		—			—			—
Amortization of net actuarial gain (loss)		(1.0	)		(0.2	)		(4.9	)		(3.3	)
	$	(63.0	)	$	(13.8	)	$	(81.3	)	$	34.3
Weighted-average assumptions
Discount rate	2.83%			2.91%			2.71%			3.17%
Expected return on plan assets	4.31%			4.46%			4.89%			5.49%

	Postretirement Health and Other
	Year Ended December 31,			Three Months Ended December 31, (transition period)			Year Ended September 30,
	2022			2021			2021			2020
Components of net periodic benefit cost
Service cost	$	2.2		$	0.5		$	2.2		$	3.5
Interest cost		1.4			0.4			1.2			1.6
Amortization of prior service cost		(1.4	)		(0.4	)		(1.4	)		(0.9	)
Amortization of net actuarial (gain) loss		0.3			0.1			0.3			(0.2	)
Net periodic benefit cost	$	2.5		$	0.6		$	2.3		$	4.0
Other changes in plan assets and benefit obligations recognized in other comprehensive income
Net actuarial (gain) loss	$	(12.0	)	$	2.2		$	(1.1	)	$	5.5
Prior service cost		—			—			—			(6.5	)
Amortization of prior service cost		1.4			0.4			1.4			0.9
Amortization of net actuarial gain (loss)		(0.3	)		(0.1	)		(0.3	)		0.2
	$	(10.9	)	$	2.5		$	—		$	0.1
Weighted-average assumptions
Discount rate	2.62%			2.61%			2.36%			3.10%
Expected return on plan assets	n/a			n/a			n/a			n/a

Components of net periodic benefit cost other than “Service cost” and “Expenses paid” are included in “Miscellaneous, net” in the Consolidated Statements of Income.

Amounts expected to be recognized in pension and supplemental employee retirement plan net periodic benefit costs during fiscal 2023 included in “Accumulated other comprehensive loss” in the Consolidated Balance Sheet at December 31, 2022 are prior service costs of $1.9 million ($1.4 million net of tax) and unrecognized net actuarial losses of $2.4 million ($1.8 million net of tax).

The Company’s policy is to fund the pension plans in amounts that comply with contribution limits imposed by law. The Company does not expect to make contributions to its pension plans in fiscal 2023.

The Company’s Board of Directors has appointed an Investment Committee (Committee), which consists of members of management, to manage the investment of the Company’s pension plan assets. The Committee has established and operates under an Investment Policy. The Committee determines the asset allocation and target ranges based upon periodic asset/liability studies and capital market projections. The Committee retains external investment managers to invest the assets and an adviser to monitor the performance of the investment managers. The Investment Policy prohibits certain investment transactions, such as commodity contracts, margin transactions, short selling and investments in Company securities, unless the Committee gives prior approval.

The weighted-average of the Company’s pension plan asset allocations and target allocations at December 31, 2022 by asset category, were as follows:

	Target %	Actual
Asset Category
Fixed income	40% - 50%		40	%
Large-cap equity	25% - 35%		30	%
Mid-cap equity	5% - 15%		15	%
Small-cap equity	5% - 15%		12	%
Global equity	0% - 5%		0	%
Other	0% - 5%		3	%
			100	%

The Company’s pension plan investment strategy is based on an expectation that, over time, equity securities will provide higher returns than debt securities. The plans primarily minimize the risk of larger losses under this strategy through diversification of investments by asset class, by investing in different styles of investment management within the classes and using several investment managers.

The fair value of plan assets by major category and level within the fair value hierarchy was as follows (in millions):

	Quoted Prices for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2022
Common stocks
U.S. companies (a)	$	80.3	$	0.1	$	—	$	80.4
International companies (b)		—		5.5		—		5.5
Mutual funds (a)		82.9		—		—		82.9
Government and agency bonds (c)		—		15.4		—		15.4
Corporate bonds and notes (d)		—		5.7		—		5.7
Money market funds (e)		8.5		—		—		8.5
Other		—		—		0.5		0.5
	$	171.7	$	26.7	$	0.5		198.9
Investments measured at net asset value (NAV) (f)								99.8
							$	298.7

	Quoted Prices for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2021
Common stocks
U.S. companies (a)	$	102.8	$	8.2	$	—	$	111.0
International companies (b)		—		14.8		—		14.8
Mutual funds (a)		105.6		—		—		105.6
Government and agency bonds (c)		—		14.3		—		14.3
Corporate bonds and notes (d)		—		9.0		—		9.0
Money market funds (e)		22.8		—		—		22.8
Other		—		—		0.9		0.9
	$	231.2	$	46.3	$	0.9		278.4
Investments measured at net asset value (NAV) (f)								254.6
							$	533.0

	Quoted Prices for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
September 30, 2021
Common stocks
U.S. companies (a)	$	94.7	$	7.6	$	—	$	102.3
International companies (b)		—		13.9		—		13.9
Mutual funds (a)		100.4		—		—		100.4
Government and agency bonds (c)		—		12.7		—		12.7
Corporate bonds and notes (d)		—		8.9		—		8.9
Money market funds (e)		24.5		—		—		24.5
Other		—		—		0.9		0.9
	$	219.6	$	43.1	$	0.9		263.6
Investments measured at net asset value (NAV) (f)								252.3
							$	515.9

(a)Primarily valued using a market approach based on the quoted market prices of identical instruments that are actively traded on public exchanges.

(b)Valuation model looks at underlying security “best” price, exchange rate for underlying security’s currency against the U.S. dollar and ratio of underlying security to American depository receipt.

(c)These investments consist of debt securities issued by the U.S. Treasury, U.S. government agencies and U.S. government-sponsored enterprises and have a variety of structures, coupon rates and maturities. These investments are considered to have low default risk as they are guaranteed by the U.S. government. Fixed income securities are primarily valued using a market approach with inputs that include broker quotes, benchmark yields, base spreads and reported trades.

(d)These investments consist of debt obligations issued by a variety of private and public corporations. These are investment grade securities which historically have provided a steady stream of income. Fixed income securities are primarily valued using a market approach with inputs that include broker quotes, benchmark yields, base spreads and reported trades.

(e)These investments largely consist of short-term investment funds and are valued using a market approach based on the quoted market prices of identical instruments.

(f)These investments consist of privately placed funds that are valued based on NAV. NAV of the funds is based on the fair value of each fund’s underlying investments. In accordance with ASC Subtopic 820-10, certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The following table sets forth additional disclosures for the fair value measurement of the fair value of pension plans assets that are in common collective trusts that calculate fair value based on NAV per share practical expedient (in millions):

	Fair Value		Unfunded  Commitments		Redemption Frequency (if Currently Eligible)	Redemption Notice Period (1)
December 31, 2022	$	99.8	$	—	N/A	15 days
December 31, 2021	$	254.6	$	—	N/A	15 days
September 30, 2021	$	252.3	$	—	N/A	15 days

(1)Represents the maximum redemption period. A portion of the investment does not have any redemption period restrictions.

The Company’s estimated future benefit payments under Company sponsored plans were as follows (in millions):

	Pension Benefits				Postretirement Health
Year Ending December 31,	Qualified		Non-Qualified		and Other
2023	$	12.0	$	2.0	$	2.2
2024		13.2		2.0		2.8
2025		14.5		2.0		3.3
2026		15.9		2.0		4.0
2027		17.1		2.0		4.6
2028-2031		100.1		10.4		21.9

Multi-Employer Pension Plans — The Company participates in the Boilermaker-Blacksmith National Pension Trust (Employer Identification Number 48-6168020), a multi-employer defined benefit pension plan related to collective bargaining employees at the Company’s Kewaunee facility. The Company’s contributions and pension benefits payable under the plan and the administration of the plan are determined by the terms of the related collective-bargaining agreement, which expires on May 1, 2027. The multi-employer plan poses different risks to the Company than single-employer plans in the following respects:

1.The Company’s contributions to the multi-employer plan may be used to provide benefits to all participating employees of the program, including employees of other employers.

2.In the event that another participating employer ceases contributions to the multi-employer plan, the Company may be responsible for any unfunded obligations along with the remaining participating employers.

3.If the Company chooses to withdraw from the multi-employer plan, the Company may be required to pay a withdrawal liability based on the underfunded status of the plan at that time.

As of November 2022, the plan-certified zone status as defined by the Pension Protection Act of 2006 was Yellow and accordingly the plan has implemented a financial improvement plan. The Company’s contributions to the multi-employer plan did not exceed 5% of the total plan contributions. The Company made contributions to the plan of $1.2 million in fiscal 2022, $0.3 million in the three months ended December 31, 2021, $1.4 million in the year ended September 30, 2021 and $1.5 million in the year ended September 30, 2020.

401(k) and Defined Contribution Pension Replacement Plans — The Company has defined contribution 401(k) plans for substantially all domestic employees. The plans allow employees to defer 2% to 100% of their income on a pre-tax basis. Each employee who elects to participate is eligible to receive Company matching contributions, which are based on employee contributions to the plans, subject to certain limitations. For pension replacement plans, the Company contributes between 2% and 6% of an employee’s base pay, depending on age. Amounts expensed for Company matching and discretionary contributions were $50.2 million in fiscal 2022, $11.8 million in the three months ended December 31, 2021, $45.5 million in the year ended September 30, 2021 and $39.5 million in the year ended September 30, 2020.