Employee Benefit Plans

12 Months Ended

May 31, 2022

Retirement Benefits [Abstract]

Employee Benefit Plans

EMPLOYEE BENEFIT PLANS

Pension Plans

The Company has a defined benefit pension plan (the “UK Pension Plan”) that covers certain employees located in the United Kingdom who meet various eligibility requirements. Benefits are based on years of service and on a percentage of compensation near retirement. The UK Pension Plan is funded by contributions from the Company. The Company’s UK Pension Plan has a measurement date of May 31.

Postretirement Benefits

The Company provides postretirement benefits to eligible retired United States-based employees (the “US Postretirement Benefits”) consisting of certain healthcare and life insurance benefits. Employees became eligible for these benefits after completing certain minimum age and service requirements. Effective June 1, 2009, the Company modified the terms of the Postretirement Benefits, effectively excluding a large percentage of employees from the plan. The Company’s postretirement benefit plan has a measurement date of May 31.

In the second quarter of fiscal 2021, the Company made a change in benefits for certain US postretirement benefit plan participants. Beginning January 1, 2021, the plan established Health Reimbursement Accounts (HRAs) to provide these participants with additional flexibility to choose healthcare options based on individual needs. As a result of this change, the Company remeasured its US Postretirement Benefits obligation as of November 30, 2020, and recognized a reduction of $7.6 to its benefit obligation and a reduction to its accumulated comprehensive loss of $7.6 in the second quarter of fiscal 2021. The related prior service credit is being amortized as a Component of net periodic benefit (cost) over the average remaining life expectancy of plan participants of approximately 12.0 years.

The Medicare Prescription Drug, Improvement and Modernization Act (the “Medicare Act”) introduced a prescription drug benefit under Medicare (“Medicare Part D”) as well as a Federal subsidy of 28% to sponsors of retiree health care benefit plans providing a benefit that is at least actuarially equivalent to Medicare Part D. The Company has determined that the US Postretirement Benefits provided to its retiree population are in aggregate the actuarial equivalent of the benefits under Medicare Part D. As a result, in fiscal 2022, 2021 and 2020, the Company recognized a cumulative reduction of its accumulated postretirement benefit obligation of $0.2, $0.2 and $1.2, respectively, due to the Federal subsidy under the Medicare Act.

The following table sets forth the weighted average actuarial assumptions utilized to determine the benefit obligations for the UK Pension Plan and the US Postretirement Benefits at May 31:

	UK Pension Plan						US Postretirement Benefits
	2022		2021		2020		2022		2021		2020
Weighted average assumptions used to determine benefit obligations:
Discount rate	3.5	%	2.0	%	1.7	%	4.3	%	2.5	%	2.7	%
Rate of compensation increase	4.1	%	4.1	%	3.6	%	—		—		—
Weighted average assumptions used to determine net periodic benefit cost:
Discount rate	1.6	%	2.1	%	2.4	%	1.7	%	1.5	%	3.2	%
Expected long-term return on plan assets	3.1	%	2.2	%	3.1	%	—		—		—
Rate of compensation increase	4.1	%	3.6	%	4.1	%	—		—		—

To develop the expected long-term rate of return on plan assets assumption for the UK Pension Plan, the Company considers historical returns and future expectations. Considering this information and the potential for lower future returns due to a generally lower interest rate environment, the Company selected an assumed weighted average long-term rate of return on plan assets of 3.1% for the UK Pension Plan.

The following table sets forth the change in benefit obligation for the UK Pension Plan and US Postretirement Benefits at May 31: 

	UK Pension Plan				US Postretirement Benefits
	2022		2021		2022		2021
Change in benefit obligation:
Benefit obligation at beginning of year	$	47.0	$	41.7	$	12.1	$	20.8
Interest cost		0.8		0.7		0.2		0.3
Plan participants’ contributions		—		—		0.1		0.1
Actuarial losses (gains)		(9.6)		(0.3)		(1.9)		0.3
Foreign currency translation		(5.3)		6.4		—		—
Plan amendments		—		—		—		(7.6)
Benefits paid, including expenses		(1.0)		(1.5)		(1.1)		(1.8)
Benefit obligation at end of year	$	31.9	$	47.0	$	9.4	$	12.1

The net actuarial gain included in the projected benefit obligation for the UK Pension in fiscal 2022 was primarily due to a significant increase in the discount rate. The net actuarial gain in fiscal 2021 was primarily due to the inflation-linked revaluation of deferred pensions and escalation of current pensions, coupled with an increase in the discount rate.

The net actuarial gain included in the projected benefit obligation for the US Postretirement Benefits in fiscal 2022 was primarily due to updated census data and a significant increase in the discount rate. There were no significant actuarial gains or losses included in the projected benefit obligation for the US Postretirement Benefits in fiscal 2021.

The following table sets forth the change in plan assets for the UK Pension Plan at May 31:

	UK Pension Plan
	2022		2021
Change in plan assets:
Fair value of plan assets at beginning of year	$	40.8	$	36.6
Actual return on plan assets		(6.2)		(0.8)
Employer contributions		1.6		1.1
Benefits paid, including expenses		(1.1)		(1.5)
Foreign currency translation		(4.7)		5.4
Fair value of plan assets at end of year	$	30.4	$	40.8

The following table sets forth the net funded status of the UK Pension Plan and US Postretirement Benefits and the related amounts recognized on the Company’s Consolidated Balance Sheets at May 31:

	UK Pension Plan				US Postretirement Benefits
	2022		2021		2022		2021
Current liabilities	$	—	$	—	$	(1.1)	$	(1.3)
Non-current liabilities		(1.5)		(6.2)		(8.3)		(10.8)
Net funded balance	$	(1.5)	$	(6.2)	$	(9.4)	$	(12.1)

The following amounts were recognized in Accumulated other comprehensive income (loss) for the UK Pension Plan and US Postretirement Benefits on the Company’s Consolidated Balance Sheets at May 31:

	2022							2021
		UK Pension Plan		US Postretirement Benefits		Total		UK Pension Plan		US Postretirement Benefits		Total
Actuarial gain (loss)		$	(7.4)	$	0.4	$	(7.0)	$	(10.4)	$	(1.4)	$	(11.8)
Prior service credit (cost)			0.0		8.4		8.4		(0.0)		9.2		9.2
Amount recognized in  Accumulated comprehensive  income (loss) net of tax			(7.4)		6.6		(0.8)		(10.4)		5.8		(4.6)

Income tax expense of $2.2, income tax expense of $2.0 and income tax benefit of $0.1 were recognized in Accumulated other comprehensive loss at May 31, 2022, 2021 and 2020, respectively.

The following table sets forth the projected benefit obligations, accumulated benefit obligations and the fair value of plan assets with respect to the UK Pension Plan as of May 31:

	UK Pension Plan
	2022		2021
Projected benefit obligations	$	31.9	$	47.0
Accumulated benefit obligations		31.6		46.5
Fair value of plan assets		30.4		40.8

The following table sets forth the net periodic benefit (cost) for the UK Pension Plan and US Postretirement Benefits for the fiscal years ended May 31:

	UK Pension Plan						US Postretirement Benefits
	2022		2021		2020		2022		2021		2020
Components of net (benefit) cost:
Interest cost		0.8		0.7		0.9		0.2		0.3		0.6
Expected return on assets		(1.2)		(0.9)		(1.0)		—		—		—
Amortization of prior service (credit) loss		0.0		0.0		0.0		(0.8)		(0.6)		(0.2)
Amortization of net actuarial (gain) loss		0.9		0.6		1.0		0.0		—		—
Net periodic (benefit) cost	$	0.5	$	0.4	$	0.9	$	(0.6)	$	(0.3)	$	0.4

Actuarial gains and losses are amortized using a corridor approach. The gain or loss corridor is equal to 10% of the greater of the projected benefit obligation and the market-related value of assets. Gains and losses in excess of the corridor are amortized over the future working lifetime.

Plan Assets

The Company’s investment policy with regard to the assets in the UK Pension Plan is to actively manage, within acceptable risk parameters, certain asset classes where the potential exists to outperform the broader market.

The following table sets forth the total weighted average asset allocations for the UK Pension Plan by asset category at May 31:

	UK Pension Plan
	2022		2021
Equity securities	56.1	%	47.1	%
Cash and cash equivalents	1.1	%	2.3	%
Liability-driven instruments	23.2	%	31.8	%
Real estate	5.7	%	4.2	%
Other	13.9	%	14.6	%
	100.0	%	100.0	%

The following table sets forth the targeted weighted average asset allocations for the UK Pension Plan included in the Company’s investment policy:    

	UK Pension Plan
Equity securities	56	%
Cash and cash equivalents	1	%
Liability-driven instruments	23	%
Real estate	6	%
Other	14	%
Total	100	%

The fair values of the Company’s Pension Plan assets are measured using Level 1, Level 2 and Level 3 fair value measurements.

The following table sets forth the measurement of the Company’s Pension Plan assets at fair value by asset category at the respective dates:

	Assets at Fair Value as of May 31, 2022
	UK Pension Plan
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	0.3	$	—	$	—	$	0.3
Equity securities:
U.S. (1)		2.4		—		—		2.4
International (2)		14.7		—		—		14.7
Pooled, Common and Collective Funds (3) (4)		—		7.1		—		7.1
Annuities		—		—		4.2		4.2
Real estate (5)		1.7		—		—		1.7
Total	$	19.1	$	7.1	$	4.2	$	30.4

	Assets at Fair Value as of May 31, 2021
	UK Pension Plan
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	0.9	$	—	$	—	$	0.9
Equity securities:
U.S. (1)		4.7		—		—		4.7
International (2)		14.5		—		—		14.5
Pooled, Common and Collective Funds (3) (4)		—		13.0		—		13.0
Annuities		—		—		6.0		6.0
Real estate (5)		1.7		—		—		1.7
Total	$	21.8	$	13.0	$	6.0	$	40.8

(1)    Funds which invest in a diversified portfolio of publicly traded U.S. common stocks of large-cap, medium-cap and small-cap

    companies. There are no restrictions on these investments.

(2)    Funds which invest in a diversified portfolio of publicly traded common stocks of non-U.S. companies, primarily in Europe and

    Asia. There are no restrictions on these investments.

(3)    Funds which invest in UK government bonds and bond index-linked investments and interest rate and inflation swaps. There are

    no restrictions on these investments.

(4)    Funds which invest in bond index funds available to certain qualified retirement plans but not traded openly on any

public exchanges. There are no restrictions on these investments.

(5)    Represents assets of a non-U.S. entity plan invested in a fund whose underlying investments are comprised of properties. The

    fund has publicly available quoted market prices and there are no restrictions on these investments.

The Company has purchased annuities to service fixed payments to certain retired plan participants in the UK. These annuities are purchased from investment grade counterparties. These annuities are not traded on open markets and are therefore valued based upon the actuarial determined valuation, and related assumptions, of the underlying projected benefit obligation, a Level 3 valuation technique. The fair value of these assets was $4.2 and $6.0 at May 31, 2022 and May 31, 2021, respectively. 

The following table summarizes the changes in fair value of these Level 3 assets for the fiscal years ended May 31, 2022 and 2021:

Balance at May 31, 2020	$	5.6
Actual Return on Plan Assets:
Relating to assets still held at May 31, 2021		(0.4)
Relating to assets sold during the year		—
Purchases, sales and settlements, net		—
Transfers in and/or out of Level 3		—
Foreign currency translation		0.8
Balance at May 31, 2021	$	6.0
Actual Return on Plan Assets:
Relating to assets still held at May 31, 2022		(1.2)
Relating to assets sold during the year		—
Purchases, sales and settlements, net		—
Transfers in and/or out of Level 3		—
Foreign currency translation		(0.6)
Balance at May 31, 2022	$	4.2

Contributions

In fiscal 2023, the Company expects to make contributions of $1.2 to the UK Pension Plan.

Estimated future benefit payments

The following table sets forth the expected future benefit payments under the UK Pension Plan and the US Postretirement Benefits by fiscal year:

	UK Pension Plan		US Postretirement Benefits
	Pension benefits		Benefit payments		Medicare subsidy receipts
2023	$	0.9	$	1.2	$	0.1
2024		1.3		1.1		0.0
2025		1.5		1.0		0.0
2026		1.5		0.9		0.0
2027		1.5		0.9		0.0
2028 - 2032		7.7		3.5		0.1

Assumed health care cost trend rates at May 31:

	2022		2021
Health care cost trend rate assumed for the next fiscal year	5.8	%	6.0	%
Rate to which the cost trend is assumed to decline (the ultimate trend rate)	5.0	%	5.0	%
Year that the rate reaches the ultimate trend rate	2026		2026

Defined contribution plans

The Company also provides defined contribution plans for certain eligible employees. In the United States, the Company sponsors a 401(k) retirement plan and has contributed $7.2, $6.0 and $6.7 for fiscal years 2022, 2021 and 2020, respectively.