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Pension, Postretirement, and Other Benefit Plans
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Pension, Postretirement, and Other Benefit Plans Pension, Postretirement, and Other Benefit Plans
Voluntary Savings Plan
The Company maintains a voluntary savings plan covering substantially all employees in the United States. The Plan, known as the Prosperity Plus Savings Plan, is a qualified plan under section 401(k) of the U.S. Internal Revenue Code. The Company matches, in the form of cash, between 50 percent and 100 percent of employee contributions up to a defined maximum. The investment of employee contributions to the plan is self-directed. The Company’s cost of the plan amounted to $7.3 million in 2023, $6.6 million in 2022, and $6.2 million in 2021.
The plan allows for discretionary matching contributions. The Company uses such discretion to provide profit sharing contributions to eligible plan participants. Such contributions are based on Company performance and vary from year to year and contributions are generally made in the first quarter following the Company’s fiscal year-end. The Company’s profit-sharing plan covers substantially all employees in the United States. After the close of each year, the Board of Directors reviews and approves the amount of the profit-sharing contribution. Company contributions to the plan are in the form of cash. The expense recorded for this plan was $4.9 million in 2023, $4.6 million in 2022, and $4.8 million in 2021.
Pension and Postretirement Plans
The Company has defined benefit pension and postretirement plans covering certain U.S. and non-U.S. employees. The eligibility, benefit formulas, and contribution requirements for plans vary by location.

As of December 31, 2023, U.S. benefit obligations exist through the U.S. Supplemental Executive Retirement Plan (“SERP”), a frozen unfunded pension plan, and the U.S. postretirement welfare plan ("PRW"), which provides various medical, dental, and life insurance benefits. The U.S. Pension Plus Plan, a qualified defined benefit pension plan was terminated in 2021 and settled during 2022, leading to charges totaling $49.1 million.
Outside the U.S., the Company sponsors defined benefit pension plans covering certain employees, including employees at our newly acquired Heimbach GmbH, and certain postretirement life insurance benefits to retired employees in Canada.
Accounting guidance requires the recognition of the funded status of each defined benefit and other postretirement benefit plan. Each overfunded plan is recognized as an asset and each underfunded plan is recognized as a liability. Company pension plan data for U.S. and non-U.S. plans has been combined for both 2023 and 2022, except where indicated below.
The Company’s pension and postretirement benefit costs and benefit obligations are based on actuarial valuations that are affected by many assumptions, the most significant of which are the assumed discount rate, expected rate of return on pension plan assets, and mortality. Each of the assumptions is reviewed and updated annually, as appropriate. The assumed rates of return for pension plan assets are determined for each major asset category based on historical rates of return for assets in that category and expectations of future rates of return based, in part, on simulated future capital market performance. The assumed discount rate is based on yields from a portfolio of currently available high-quality fixed-income investments with durations matching the expected future payments, based on the demographics of the plan participants and the plan provisions.
Gains and losses arise from changes in the assumptions used to measure the benefit obligations, and experience different from what had been assumed, including asset returns different than what had been expected. The Company amortizes gains and losses in excess of a “corridor” over the average future service of the plan’s current participants. The corridor is defined as 10 percent of the greater of the plan’s projected benefit obligation or market-related value of plan assets. The market-related value of plan assets is also used to determine the expected return on plan assets component of net periodic cost.
To the extent the Company’s unrecognized net losses and unrecognized prior service costs, including the amount recognized through accumulated other comprehensive income, are not reduced by future favorable plan experience, they will be recognized as a component of the net periodic cost in future years.
The following table sets forth the plan benefit obligations:
As of December 31, 2023As of December 31, 2022
(in thousands, except percentages)
Pension plans
Other
postretirement benefits
Pension plansOther postretirement benefits
Benefit obligation, beginning of year
$83,730 $35,658 $230,790 $44,884 
Service cost
1,478 60 1,371 114 
Interest cost
5,151 1,874 4,917 1,221 
Plan participants' contributions
281 — 132 — 
Actuarial (gain)/loss
6,317 (6,131)(46,995)(6,658)
Benefits paid
(6,388)(2,795)(7,946)(3,234)
Acquisitions
64,947 — — — 
Settlements and curtailments
— — (90,568)— 
Plan amendments and other
(1,985)(25)(605)
Foreign currency changes
4,792 18 (7,946)(64)
Benefit obligation, end of year
$158,323 $28,684 $83,730 $35,658 
Accumulated benefit obligation
$151,001 $— $78,153 $— 
Weighted average assumptions used to
determine benefit obligations, end of year:
Discount rate — U.S. plan
5.15 %5.21 %5.49 %5.55 %
Discount rate — non-U.S. plans
4.05 %4.70 %5.15 %5.20 %
Cash balance interest crediting rate - Switzerland pension plan1.30 %— 2.15 %— 
Compensation increase — U.S. plan
N/AN/AN/AN/A
Compensation increase — non-U.S. plans
2.89 %2.75 %3.08 %2.75 %
During 2023, pension benefit obligations increased by $74.6 million, largely related to the acquisition of Heimbach GmbH, which resulted in an increase of $64.9 million, in addition to net actuarial losses, which resulted in an increase of $6.3 million. Other postretirement benefit obligations decreased by $7.0 million in 2023, primarily driven by net actuarial gains and payments made by the Company to participants of the plan.
During 2022, pension benefit obligations decreased by $147 million, $91.6 million of which was related to the U.S. Pension Plus plan settlement and $47.0 million of which was driven by net actuarial gains, principally resulting from higher discount rates, in addition to employer contributions of $7.9 million. Other postretirement benefit obligations decreased by $9.2 million in 2022, primarily driven by net actuarial gains and payments made by the Company to participants of the plan.
The following sets forth information about plan assets:
As of December 31, 2023As of December 31, 2022
(in thousands)
Pension plans
Other postretirement benefits
Pension plans
Other postretirement benefits
Fair value of plan assets, beginning of year
$74,929 $— $225,327 $— 
Actual return on plan assets, net of expenses
6,285 — (57,868)— 
Employer contributions
3,629 2,795 15,071 3,234 
Plan participants' contributions
281 — 132 — 
Benefits paid
(6,388)(2,795)(7,946)(3,234)
Acquisitions
30,941 — — — 
Settlements
— — (90,568)— 
Other
(832)— — — 
Foreign currency changes
3,843 — (9,219)— 
Fair value of plan assets, end of year
$112,688 $— $74,929 $— 
The funded status of the plans was as follows:
As of December 31, 2023As of December 31, 2022
(in thousands)
Pension plansOther postretirement benefitsPension plansOther postretirement benefits
Fair value of plan assets
$112,688 $— $74,929 $— 
Benefit obligation
158,323 28,684 83,730 35,658 
Funded status
$(45,635)$(28,684)$(8,801)$(35,658)
Accrued benefit cost, end of year$(45,635)$(28,684)$(8,801)$(35,658)
Amounts recognized in the consolidated balance sheets consist of the following:
Noncurrent asset$19,296 $— $16,234 $— 
Current liability(5,500)(2,808)(1,974)(3,660)
Noncurrent liability(59,431)(25,876)(23,061)(31,998)
Net amount recognized
$(45,635)$(28,684)$(8,801)$(35,658)
Amounts recognized in accumulated other comprehensive income consist of:
Net actuarial loss$22,512 $1,991 $17,915 $8,958 
Prior service cost/(credit)(132)(484)(134)(4,574)
Net amount recognized
$22,380 $1,507 $17,781 $4,384 
The composition of the net pension plan funded status as of December 31, 2023 was as follows:
(in thousands)
U.S. planNon-U.S. plansTotal
Pension plans with pension assets
$— $19,296 $19,296 
Pension plans without pension assets
(3,799)(61,132)(64,931)
Total
$(3,799)$(41,836)$(45,635)
The underfunded balance in the U.S. relates to the Supplemental Executive Retirement Plan.
The composition of the net periodic benefit plan cost for the years ended December 31, 2023, 2022, and 2021, was as follows:
Pension plansOther postretirement benefits
(in thousands, except percentages)
202320222021202320222021
Components of net periodic benefit cost:
Service cost
$1,478 $1,371 $2,192 $60 $114 $132 
Interest cost
5,151 4,917 5,467 1,874 1,221 1,103 
Expected return on assets
(4,347)(5,979)(6,564)— — — 
Amortization of prior service cost/(credit)
(32)(8)13 (4,090)(4,488)(4,488)
Amortization of net actuarial loss
555 1,377 2,365 828 1,883 2,260 
Settlement
— 49,128 — — — — 
Curtailment (gain)/loss
— — — — — — 
Net periodic benefit cost
$2,805 $50,806 $3,473 $(1,328)$(1,270)$(993)
Weighted average assumptions used to determine net cost:
Discount rate — U.S. plan5.49 %2.63 %2.65 %5.55 %2.83 %2.38 %
Discount rate — non-U.S. plans5.15 %2.41 %1.91 %5.20 %3.05 %2.75 %
Cash balance interest crediting rate - Switzerland pension plan2.15 %0.25 %0.05 %— — — 
Expected return on plan assets — U.S. planN/A3.07 %2.74 %N/AN/AN/A
Expected return on plan assets — non-U.S. plans5.21 %3.31 %2.89 %N/AN/AN/A
Rate of compensation increase — U.S. planN/AN/AN/AN/AN/AN/A
Rate of compensation increase — non-U.S. plans3.08 %2.70 %2.71 %2.75 %2.75 %2.75 %
Pretax (gains)/losses on plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31, 2023, 2022, and 2021, was as follows:
Pension plansOther postretirement benefits
(in thousands)
202320222021202320222021
Settlements/curtailments
$— $(49,128)$— $— $— $— 
Asset/liability loss/(gain)
4,365 16,828 1,927 (6,131)(6,658)(995)
Amortization of actuarial (loss)
(554)(1,377)(2,365)(828)(1,883)(2,260)
Amortization of prior service cost/(credit)
32 8 (13)4,090 3,884 4,488 
Other— — — — — — 
Currency impact
757 (944)(612)(8)15 2 
Cost/(benefit) in Other comprehensive income
$4,600 $(34,613)$(1,063)$(2,877)$(4,642)$1,235 
Investment Strategy
Our investment strategy for pension assets differs for the various countries in which we have defined benefit pension plans. Some of our defined benefit plans do not require funded trusts and, in those arrangements, the Company funds the plans on a “pay as you go” basis. The largest of the funded defined benefit plans are in Canada and the United Kingdom.
For the countries in which the Company has funded pension trusts, the investment strategy may also be liability driven or, in other cases, to achieve a competitive, total investment return, achieving diversification between and within asset classes and managing other risks. Investment objectives for each asset class are determined based on specific risks and investment opportunities identified. Actual allocations to each asset class vary from target allocations due to periodic investment strategy changes, market value fluctuations, the length of time it takes to fully implement investment allocation positions, and the timing of benefit payments and contributions.
Fair-Value Measurements
The following tables present plan assets as of December 31, 2023, and 2022, using the fair-value hierarchy, which has three levels based on the reliability of inputs used, as described in Note 18, Fair-Value Measurements, of the Notes to the Consolidated Financial Statements. Certain investments that are measured at fair value using net asset value ("NAV") as a practical expedient are not required to be categorized in the fair value hierarchy table. The total fair value of these investments is included in the table below to permit reconciliation of the fair value hierarchy to amounts presented in the funded status table above. As of December 31, 2023 and 2022, there were no investments expected to be sold at a value materially different than NAV.
Assets at Fair Value as of December 31, 2023
(in thousands)Quoted prices in active markets Level 1Significant other observable inputs Level 2Significant 
unobservable inputs Level 3		Total
Common Stocks and equity funds$— $4,159 $— $4,159 
Debt securities— 56,838 — 56,838 
Insurance contracts— — 3,478 3,478 
Real Estate
— — 3,451 3,451 
Hedge Funds
— — 668 668 
Cash and short-term investments5,740 — — 5,740 
Total investments in the fair value hierarchy$5,740 $60,997 $7,597 74,334 
Investments at net asset value:
Common Stocks and equity funds12,608 
Fixed income funds25,746 
Limited partnerships— 
Total plan assets$112,688 
Assets at Fair Value as of December 31, 2022
(in thousands)
Quoted prices in active markets Level 1Significant other observable inputs Level 2Significant unobservable inputs Level 3Total
Common Stocks and equity funds
$— $— $— $— 
Debt securities
— 37,234 — 37,234 
Insurance contracts
— — 2,418 2,418 
Real Estate
— — — — 
Hedge Funds
— — — — 
Cash and short-term investments
548 — — 548 
Total investments in the fair value hierarchy
$548 $37,234 $2,418 40,200 
Investments at net asset value:
Common Stocks and equity funds
13,069 
Fixed income funds
21,660 
Limited partnerships
— 
Total plan assets
$74,929 

The following tables present a reconciliation of Level 3 assets held during the years ended December 31, 2023 and 2022:
(in thousands)
December 31, 2022Net realized gainsNet unrealized gainsNet purchases, issuances
and settlements		Net transfers (out of) Level 3December 31, 2023
Insurance contracts -
total level 3 assets
$2,418 $— $18 $5,161 $— $7,597 
(in thousands)
December 31, 2021Net realized gainsNet unrealized gainsNet purchases, issuances
and settlements		Net transfers (out of) Level 3December 31, 2022
Insurance contracts -
total level 3 assets
$3,861 $— $20 $(1,463)$— $2,418 

The asset allocation for the Company’s U.S. and non-U.S. pension plans for 2023 and 2022, and the target allocation, by asset category, are as follows:
United States PlanNon-U.S. Plans
Target
Allocation		Percentage of plan assets at plan measurement dateTarget
Allocation		Percentage of plan assets at plan measurement date
Asset category2023202220232022
Equity securities
N/AN/AN/A14 %13 %15 %
Debt securities
N/AN/AN/A71 %73 %76 %
Real estate
N/AN/AN/A3 %3 %1 %
Other(1)
N/AN/AN/A12 %11 %8 %
— %— %— %100 %100 %100 %
(1)Other includes hedged equity and absolute return strategies, as well as private equity. The Company has procedures to closely monitor the performance of these investments and compares asset valuations to audited financial statements of the funds.
The targeted plan asset allocation is based on an analysis of the actuarial liabilities, a review of viable asset classes, and an analysis of the expected rate of return, risk, and other investment characteristics of various investment asset classes.
At the end of 2023 and 2022, the projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with projected benefit obligation and an accumulated benefit obligation in excess of plan assets were as follows:
Plans with projected
benefit obligation in
excess of plan assets
(in thousands)
20232022
Projected benefit obligation
$81,972 $28,458 
Fair value of plan assets
17,041 3,422 

Plans with accumulated
benefit obligation in
excess of plan assets
(in thousands)20232022
Accumulated benefit obligation$77,688 $25,941 
Fair value of plan assets17,041 3,422 
Information about expected cash flows for the pension and other benefit obligations are as follows:
(in thousands)
Pension plansOther postretirement benefits
Expected employer contributions and direct employer payments in the next fiscal year
$6,335 $2,808 
Expected benefit payments
2024 10,716 2,808 
2025 10,972 2,714 
2026 10,938 2,626 
2027 10,089 2,538 
2028 10,333 2,448 
2029 to 203350,314 10,873