XML 54 R46.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
PENSION AND POSTRETIREMENT PLANS Pension and Postretirement Plans (Tables)
 12 Months Ended
Dec. 31, 2019
Postemployment Benefits [Abstract]  
Schedule of UK Plans Target Asset Allocations [Table Text Block] Assets for the U.K. Plans are generally invested within the target ranges as follows:
 
 
Legacy U.K. Plans
 
Envigo Plan
Equity securities
 
60.0%
to
70.0%
 
20.0
%
to
30.0
%
Debt securities
 
10.0%
to
20.0%
 
60.0
%
to
70.0
%
Annuities
 
10.0%
to
20.0%
 
—
%
to
—
%
Real estate
 
—%
to
10.0%
 
5.0
%
to
15.0
%
Other
 
—%
to
5.0%
 
—
%
to
5.0
%
Schedule of Weighted Average Asset Allocation for UK Pension Plans by Asset Category [Table Text Block]
The weighted average asset allocation of the U.K. Pension Plans as of December 31, 2019, by asset category is as follows:
 
 
December 31, 2019
 
 
Legacy U.K. Plans
 
Envigo Plan
Equity securities
 
64.0
%
 
25.0
%
Debt securities
 
21.0
%
 
65.0
%
Annuities
 
10.0
%
 
—
%
Real estate
 
4.0
%
 
9.0
%
Other
 
1.0
%
 
1.0
%
Schedule of Amounts Recognized in Accumulated Other Comprehensive Income for UK Plans and Germany Plan [Table Text Block]
The amounts recognized in accumulated other comprehensive income for the year ended December 31, 2019, and December 31, 2018, is as follows:
 
 
U.K. Plans
 
 
2019
 
2018
Net actuarial loss
 
$
24.4

 
$
10.1

Less: Tax benefit (deferred tax asset)
 
(4.2
)
 
(1.7
)
Accumulated other comprehensive income impact
 
$
20.2

 
$
8.4

 
 
 
 
 
Assumptions used to determine benefit obligations:
 
 
 
 
Discount rate
 
2.0
%
 
2.9
%
Salary increases (excludes Envigo plan at 0%)
 
3.5
%
 
3.6
%
 
 
German Plan
 
 
2019
 
2018
Net actuarial loss/(gain)
 
$
7.1

 
$
(1.0
)
Less: Tax expense (deferred tax liability)
 
(2.2
)
 
0.3

Accumulated other comprehensive income impact
 
$
4.9

 
$
(0.7
)
 
 
 
 
 
Assumptions used to determine benefit obligations:
 
 
 
 
Discount rate
 
0.9
%
 
1.9
%
Salary increases
 
2.0
%
 
2.0
%
Assumed Benefit Payments By Year [Text Block]
The following assumed benefit payments under the Company's post-retirement benefit plan, which reflect expected future service, as appropriate, and which were used in the calculation of projected benefit obligations, are expected to be paid as follows:
2020
$
0.8

2021
0.8

2022
0.8

2023
0.7

2024
0.7

Years 2025 and thereafter
1.9
Defined Benefit Plan Fair Value Of Plan Assets By Category [Table Text Block] The weighted average expected long-term rate of return for the Company Plan’s assets is as follows:
 
Target
Allocation
 
Weighted Average Expected
Long-Term Rate of Return
Equity securities
50.0
%
 
3.3
%
Fixed income securities
43.0
%
 
2.8
%
Other assets
7.0
%
 
0.4
%



The fair values of the Company Plan’s assets at December 31, 2019, and 2018, by asset category are as follows:
 
 
 
Fair Value Measurements as of
 
 
 
December 31, 2019
 
Fair Value as of December 31, 2019
 
Using Fair Value Hierarchy
Asset Category
 
Level 1
 
Level 2
 
Level 3
Cash
$
4.3

 
$
4.3

 
$
—

 
$
—

Equity securities:
 

 
 

 
 

 
 

U.S. large cap - blend (a)
61.1

 
—

 
61.1

 
—

U.S. mid cap - blend (b)
23.8

 
—

 
23.8

 
—

U.S. small cap - blend (c)
8.5

 
—

 
8.5

 
—

International equity - blend (d)
40.6

 
—

 
40.6

 
—

Real estate (e)
12.7

 
—

 
12.7

 
—

Fixed income securities:
 

 
 

 
 

 
 

U.S. fixed income (f)
111.1

 
—

 
111.1

 
—

U.S inflation protection income (g)
—

 
—

 
—

 
—

Total fair value of the Company Plan’s assets
$
262.1

 
$
4.3

 
$
257.8

 
$
—

 
 
 
Fair Value Measurements as of
 
 
 
December 31, 2018
 
Fair Value as of December 31, 2018
 
Using Fair Value Hierarchy
Asset Category
 
Level 1
 
Level 2
 
Level 3
Cash
$
7.8

 
$
7.8

 
$
—

 
$
—

Equity securities:
 

 
 

 
 

 
 

U.S. large cap - blend (a)
54.2

 
—

 
54.2

 
—

U.S. mid cap - blend (b)
20.4

 
—

 
20.4

 
—

U.S. small cap - blend (c)
6.4

 
—

 
6.4

 
—

International equity - blend (d)
36.4

 
—

 
36.4

 
—

Commodities index (h)
11.8

 
—

 
11.8

 
—

Fixed income securities:
 

 
 

 
 

 
 

U.S. fixed income (f)
103.5

 
—

 
103.5

 
—

U.S inflation protection income (g)
6.4

 
—

 
6.4

 
—

Total fair value of the Company Plan’s assets
$
246.9

 
$
7.8

 
$
239.1

 
$
—

a)
This category represents an equity index fund not actively managed that tracks the S&P 500 Index.
b)
This category represents an equity index fund not actively managed that tracks the S&P mid-cap 400 Index.
c)
This category represents an equity index fund not actively managed that tracks the Russell 2000 Index.
d)
This category represents an equity index fund not actively managed that tracks the MSCI ACWI ex USA Index.
e)
This category represents a real estate index fund not actively managed that tracks the Vanguard REIT Index.
f)
This category primarily represents bond index funds not actively managed that track the Northern Trust U.S. Aggregate Index as well as an actively managed strategy which utilizes the Metropolitan West Total Return Bond Index as its primary prospectus benchmark.
g)
This category primarily represents a bond index fund not actively managed that tracks the Northern Trust U.S. TIPS Index.
h)
This category represents a commodities index fund not actively managed that tracks the Dow Jones - UBS Commodity Index.
The fair value of the Company’s U.K. Plans' assets as of December 31, 2019, and December 31, 2018, by asset category, are as follows:
 
 
 
Fair Value Measurements as of
 
 
 
December 31, 2019
 
December 31,
2019
 
Using Fair Value Hierarchy
Asset Category
 
Level 1
 
Level 2
 
Level 3
Cash
$
2.6

 
$
2.6

 
$
—

 
$
—

Mutual funds (a)
458.5

 
—

 
458.5

 
—

Annuities (b)
30.6

 
—

 
—

 
30.6

Total fair value of the Company Plan’s assets
$
491.7

 
$
2.6

 
$
458.5

 
$
30.6

 
 
 
Fair Value Measurements as of
 
 
 
December 31, 2018
 
December 31,
2018
 
Using Fair Value Hierarchy
Asset Category
 
Level 1
 
Level 2
 
Level 3
Cash
$
0.7

 
$
0.7

 
$
—

 
$
—

Mutual funds (a)
226.6

 
—

 
226.6

 
—

Annuities (b)
27.3

 
—

 
—

 
27.3

Total fair value of the Company Plan’s assets
$
254.6

 
$
0.7

 
$
226.6

 
$
27.3

a)
Mutual funds represent pooled investment vehicles offered by investment managers, which are generally comprised of investments in equities, bonds, property and cash. The plans’ trustees hold units in these funds, the value of which is determined by the number of units held multiplied by the unit price calculated by the investment managers. That unit price is derived based on the market value of the securities that comprise the fund, which are determined by quoted prices in active markets. No element of the valuation is based on inputs made by the plans’ trustees.
b)
Annuities represent annuity buy-in insurance policies, whereby the insurer pays the pension payments for the lifetime of the members covered. The annuities are assets of the plan and payments from the insurer are made to the plans’ trustees, who then use those proceeds to pay the pensioners. The cash flows from the annuities are intended to effectively match the payments to the pensioners covered by the policy. As such, these assets are valued actuarially based upon the value of the liabilities with which they are associated. As the valuation of these assets is judgmental, and there are no observable inputs associated with the valuation, these assets are classified as Level 3 in the fair value hierarchy.
Fair Value Measurement of Level 3 Pension Assets
 
Annuities
Balance at January 1, 2018
 
$
31.5

Actual return on plan assets
 
(4.2
)
Balance at December 31, 2018
 
27.3

Actual return on plan assets
 
3.3

Balance at December 31, 2019
 
$
30.6
Schedule of Changes in Fair Value of Plan Assets [Table Text Block]
A summary of the changes in the fair value of plan assets follows:
 
2019
 
2018
Fair value of plan assets at beginning of year
$
246.9

 
$
263.7

Actual return on plan assets
43.4

 
(14.3
)
Employer contributions
2.2

 
31.4

Benefits and administrative expenses paid
(30.4
)
 
(33.9
)
Fair value of plan assets at end of year
$
262.1

 
$
246.9



Change in Fair Value of Assets:
 
U.K. Plans
 
 
2019
 
2018
Balance at beginning of year
 
$
254.6

 
$
281.9

Plan assets of acquired subsidiary at acquisition date
 
168.3

 
—

Company contributions
 
11.4

 
6.5

Participant contributions
 
1.3

 
1.3

Actual return on assets
 
48.8

 
(13.6
)
Benefits paid
 
(11.3
)
 
(6.3
)
Foreign currency exchange rate changes
 
18.6

 
(15.2
)
Fair value of plan assets at end of year
 
$
491.7

 
$
254.6
Schedule of Defined Benefit Plans Disclosures [Table Text Block]
Change in Projected Benefit Obligation:
 
U.K. Plans
 
 
2019
 
2018
Balance at beginning of year
 
$
260.1

 
$
303.4

Balance of acquired subsidiary at acquisition date
 
215.4

 
—

Service cost
 
4.6

 
4.8

Interest cost
 
10.3

 
7.4

Actuarial (gain) loss
 
64.1

 
(34.9
)
Benefits paid
 
(11.3
)
 
(6.3
)
Plan amendments
 
—

 
1.4

Foreign currency exchange rate changes
 
20.8

 
(15.7
)
Plan curtailment
 
(16.1
)
 
—

Balance at end of year
 
$
547.9

 
$
260.1

Change in Projected Benefit Obligation:
 
German Plan
 
 
2019
 
2018
Balance at beginning of year
 
$
34.0

 
$
35.7

Service cost
 
1.1

 
1.2

Interest cost
 
0.6

 
0.6

Actuarial (gain) loss
 
8.2

 
(1.7
)
Benefits paid
 
(0.3
)
 
(0.2
)
Foreign currency exchange rate changes
 
(0.8
)
 
(1.6
)
Balance at end of year
 
$
42.8

 
$
34.0


 
Year ended December 31,
 
2019
 
2018
 
2017
Service cost for benefits earned
$
—

 
$
—

 
$
—

Interest cost on benefit obligation
0.3

 
0.3

 
0.3

Net amortization and deferral
0.4

 
(1.3
)
 
(6.7
)
Post-retirement medical plan costs
$
0.7

 
$
(1.0
)
 
$
(6.4
)

The components of the defined-benefit plan costs for these plans for 2019 and 2018 are as follows:
 
 
U.K. Plans
 
 
Year Ended December 31, 2019
 
Year Ended December 31, 2018
Service cost
 
$
4.6

 
$
4.8

Interest cost
 
10.3

 
7.4

Expected return on plan assets
 
(15.0
)
 
(12.6
)
Expected participant contributions
 
(1.2
)
 
(1.3
)
Defined-benefit plan costs
 
$
(1.3
)
 
$
(1.7
)
 
 
 
 
 
Assumptions used to determine defined-benefit plan cost (Excluding Envigo Plan):
 
 
 
 
Discount rate
 
2.9
%
 
2.5
%
Expected return on assets
 
4.4
%
 
4.5
%
Salary increases
 
3.6
%
 
3.6
%
 
 
 
 
 
Assumptions used to determine defined-benefit plan cost (Envigo Plan):
 
 
 
 
Discount rate
 
2.3
%
 
 
Expected return on assets
 
3.9
%
 
 
 
 
German Plan
 
 
Year Ended December 31, 2019
 
Year Ended December 31, 2018
Service cost
 
$
1.1

 
$
1.2

Interest cost
 
0.6

 
0.6

Defined-benefit plan costs
 
$
1.7

 
$
1.8

 
 
 
 
 
Assumptions used to determine defined-benefit plan cost:
 
 
 
 
Discount rate
 
1.9
%
 
1.7
%
Expected return on assets
 
N/A

 
N/A

Salary increases
 
2.0
%
 
2.0
%

The effect on operations for both the Company Plan and the PEP are summarized as follows:
 
Year ended December 31,
 
2019
 
2018
 
2017
Service cost for benefits earned
$
4.1

 
$
5.2

 
$
5.5

Interest cost on benefit obligation
13.9

 
13.0

 
14.4

Expected return on plan assets
(15.1
)
 
(16.5
)
 
(16.3
)
Net amortization and deferral
10.9

 
11.7

 
11.0

Settlements
—

 
7.5

 
—

Defined-benefit plan costs
$
13.8

 
$
20.9

 
$
14.6


A summary of the changes in the projected benefit obligations of the Company Plan and the PEP are summarized as follows:
 
2019
 
2018
Balance at January 1
$
334.6

 
$
368.0

Service cost
4.1

 
5.2

Interest cost
13.9

 
13.0

Actuarial (gain) loss
33.3

 
(21.9
)
Benefits and administrative expenses paid
(30.4
)
 
(33.9
)
Merger of Covance SERP
—

 
4.2

Balance at December 31
$
355.5

 
$
334.6


A summary of the changes in the accumulated post-retirement benefit obligation follows:
 
2019
 
2018
Balance at January 1
$
6.9

 
$
8.6

Interest cost on benefit obligation
0.3

 
0.3

Actuarial loss
—

 
(1.2
)
Benefits paid
(0.7
)
 
(0.8
)
Balance at December 31
$
6.5

 
$
6.9

 
 
 
 
Recorded as:
 
 
 
   Accrued expenses and other
$
0.8

 
$
0.9

   Other liabilities
5.7

 
6.0

 
$
6.5

 
$
6.9
Schedule of Net Funded Status [Table Text Block]
 
 
U.K. Plans
 
 
2019
 
2018
Funded status
 
$
56.3

 
$
5.6

Recorded as:
 
 
 
 
Other liabilities
 
56.3

 
5.6

 
 
$
56.3

 
$
5.6

 
 
German Plan
 
 
2019
 
2018
Funded status
 
$
42.8

 
$
34.0

Recorded as:
 
 
 
 
Accrued expenses and other
 
$
0.5

 
$
0.3

Other liabilities
 
42.3

 
33.7

 
 
$
42.8

 
$
34.0


he net funded status of the Company Plan and the PEP at December 31:
 
2019
 
2018
Funded status
$
93.4

 
$
87.6

 
 
 
 
Recorded as:
 
 
 
Accrued expenses and other
$
2.2

 
$
2.1

Other liabilities
91.2

 
85.5

 
$
93.4

 
$
87.6
Defined Benefit Plan, Assumptions [Table Text Block]
Weighted average assumptions used in the accounting for the Company Plan and the PEP are summarized as follows:
 
2019
 
2018
 
2017
Discount rate for the Company Plan
3.3
%
 
4.4
%
 
3.7
%
Discount rate for the PEP
3.4
%
 
4.4
%
 
3.7
%
Expected long term rate of return for the Company Plan
6.5
%
 
6.5
%
 
6.8
%
Schedule of Expected Benefit Payments [Table Text Block]
The following estimated benefit payments under the Company Plan and PEP, which were used in the calculation of projected benefit obligations, are expected to be paid as follows:
2020
$
27.6

2021
27.2

2022
26.8

2023
25.9

2024
25.2

Years 2025 and thereafter
115.1


 
 
U.K. Plans
 
German Plan
2020
 
$
13.7

 
$
0.5

2021
 
14.9

 
0.5

2022
 
16.1

 
0.6

2023
 
16.7

 
0.6

2024
 
18.0

 
0.7

Years 2025 and thereafter
 
95.7

 
3.6