PENSION AND POSTRETIREMENT PLANS

12 Months Ended

Dec. 31, 2022

Postemployment Benefits [Abstract]

PENSION AND POSTRETIREMENT PLANS

PENSION AND POSTRETIREMENT PLANS

Defined Contribution Retirement Plans

The Company has various U.S. defined contribution retirement plans (401K Plans). Under these 401K Plans, employees can contribute a portion of their salary to the plan and the Company makes minimum non-elective contributions, discretionary contributions, and matching contributions, depending on the terms of the specific plan. On January 1, 2021, all of the 401K Plans were modified to provide for 100% match of employee contributions up to 5% of their salary. Total expense, for the years ended December 31, 2022, 2021, and 2020, was $183.1, $168.9 and $141.8, respectively.

Defined Benefit Pension Plans

The Company sponsors both funded and unfunded defined benefit pension plans which provide benefits based on various criteria such as years of service and salary. The Company maintained two plans in the United States, three plans in the United Kingdom and one in Germany.

The two plans in the United States (U.S. Plans) were closed to new entrants and the accrual of service credits at the end of 2009. The U.K. pension plans were closed to new entrants and the accrual of service credits for one plan as of December 31, 2002, and the accrual of service credits for the other two plans as of December 31, 2019. The German plan was closed to new entrants on December 31, 2009 but participants continue to accrue service credits. The U.K. and German plans are aggregated for disclosure as the Non-U.S. Plans.

Net Periodic Benefit Costs

The components of the net periodic benefit costs for the defined benefit pension plans are as follows:

	U. S. Plans						Non-U.S. Plans
	Year ended December 31,
	2022		2021		2020		2022	2021	2020
Service cost for benefits earned	$	2.8	$	3.9	$	5.1	2.6	2.4	2.1
Interest cost on benefit obligation	9.1		8.3		11.1		10.1	8.1	10.9
Expected return on plan assets	(12.9)		(17.3)		(14.9)		(18.0)	(16.3)	(16.6)
Net amortization and deferral	4.6		10.0		9.7		0.9	2.1	0.4
Expected participant contributions	—		—		—		—	—	(0.1)
Settlements	4.1		3.7		—		(1.1)	—	—
Defined-benefit plan costs	$	7.7	$	8.6	$	11.0	(5.5)	(3.7)	(3.3)

Service costs are the only component of net periodic benefit costs recorded within Operating income. For the year ended December 31, 2022, the Company recognized a partial plan settlement charge of $3.0 as a component of Other, net.

The amounts recognized in accumulated other comprehensive earnings are as follows:

	U. S. Plans				Non-U.S. Plans
	Year ended December 31,
	2022		2021		2022		2021
Net actuarial loss in accumulated other comprehensive earnings	$	60.9	$	66.9	$	22.0	$	58.8

Change in Projected Benefit Obligation

The change in the projected benefit obligation as of December 31, 2022, and December 31, 2021, is as follows:

	U.S. Plans				Non-U.S. Plans
	Year Ended December 31,
	2022		2021		2022		2021
Balance at beginning of the year	$	333.3	$	369.8	$	633.8	$	690.1
Service cost	2.8		3.9		2.6		2.4
Interest cost	9.1		8.3		10.1		8.1
Actuarial (gain) loss	(58.4)		(18.0)		(212.0)		(34.7)
Benefits and administrative expenses paid	(27.3)		(30.7)		(21.5)		(22.2)
Foreign currency exchange rate changes	—		—		(60.4)		(9.9)
Balance at end of the year	$	259.5	$	333.3	$	352.6	$	633.8

The accumulated benefit obligation as of December 31, 2022 and 2021 was $259.5 and $333.3, respectively for the U.S. Plans and $352.6 and $633.8, respectively for the Non-U.S. Plans.

Change in Fair Value of Plan Assets    

The change in plan assets as of December 31, 2022, and December 31, 2021, is as follows:

	U.S. Plans				Non-U.S. Plans
	Year Ended December 31,
	2022		2021		2022		2021
Balances at beginning of the year	$	299.9	$	300.9	$	544.6	$	535.6
Company contributions	—		—		15.7		14.3
Actual return on plan assets	(48.2)		27.5		(157.5)		22.3
Benefits and administrative expenses paid	(24.9)		(28.5)		(16.9)		(21.7)
Foreign currency exchange rate changes	—		—		(54.0)		(5.9)
Fair value of plan assets at end of year	$	226.8	$	299.9	$	331.9	$	544.6

Change in Funded Status and Reconciliation of Amounts Recorded in the Balance Sheet

The change in the funded status of the plan and a reconciliation of such funded status to the amounts reported in the consolidated balance sheet as of December 31, 2022, and December 31, 2021, is as follows:

	U.S. Plans				Non-U.S. Plans
	Year Ended December 31,
	2022		2021		2022		2021
Funded status	$	32.7	$	33.4	$	20.7	$	89.2
Recorded as:
Other assets	$	2.2	$	13.4	$	7.0	$	—
Accrued expenses and other	2.4		2.4		0.6		0.6
Other liabilities	32.5		44.4		27.1		88.6

Assumptions

Weighted average assumptions used to determine net periodic benefit costs are as follows:

	U. S. Plans						Non-U.S. Plans
	Year ended December 31,
	2022		2021		2020		2022		2021		2020
Discount rate	2.8	%	2.4	%	3.3	%	2.1	%	1.1	%	1.7	%
Salary increases	N/A		N/A		N/A		2.0	%	2.0	%	3.1	%
Expected long term rate of return	4.5	%	6.0	%	6.0	%	3.7	%	3.1	%	3.5	%
Cash balance interest credit rate	4.0	%	4.0	%	4.0	%	N/A		N/A		N/A

A one percentage point decrease or increase in the discount rate would have resulted in a respective increase or decrease in 2022 retirement plan expense of $0.8 for the U.S. Plans. A one percentage point decrease or increase in the discount rate would have resulted in a respective increase or decrease in 2022 retirement plan expense of $2.8 for the Non-U.S. Plans.

Weighted average assumptions used to determine net periodic benefit obligations are as follows:

	U. S. Plans				Non-U.S. Plans
	Year ended December 31,
	2022		2021		2022		2021
Discount rate	5.5	%	2.8	%	4.8	%	1.8	%
Salary increases	N/A		N/A		2.0	%	2.0	%

The discount rate is determined using the weighted-average yields on high-quality fixed income securities that have maturities consistent with the timing of benefit payments. Lower discount rates increase the size of the benefit obligation and generally increase pension expense in the following year; higher discount rates reduce the size of the benefit obligation and generally reduce subsequent-year pension expense.

The expected return on plan assets is the estimated long-term rate of return that will be earned on the investments used to fund the pension obligations. To determine this rate, the Company considers the composition of plan investments, historical returns earned, and expectations about the future. Actual asset over/under performance compared to expected returns will respectively decrease/increase unrecognized loss. The change in the unrecognized loss will change amortization cost in upcoming periods. A one percentage point increase or decrease in the expected return on plan assets would have resulted in a corresponding change in 2022 pension expense of $3.0 for the U.S. Plans. A one percentage point increase or decrease in the expected return on plan assets would have resulted in a corresponding change in 2022 pension expense of $5.0 for the Non-U.S. Plans.

The salary increase assumptions are used to estimate the annual rate at which pay of plan participants will grow. If the rate of growth assumed increases, the size of the pension obligations will increase, as will the amount recorded in Accumulated other comprehensive income (loss) in the Company's Consolidated Statement of Financial Position and amortized into earnings in subsequent periods.

The Company evaluates other assumptions periodically, such as retirement age, mortality and turnover, and updates them as necessary to reflect the Company's actual experience and expectations for the future. Differences between actual results and assumptions utilized are recorded in Accumulated other comprehensive income each period. These differences are amortized into earnings over the remaining average future service of active participating employees or the expected life of inactive participants, as applicable.

Plan Assets

The fair values of the assets at December 31, 2022, and 2021, by asset category are as follows:

Asset Category	Level of Valuation Input	Fair Value		Investments valued using NAV per share		Total
U.S Plans
Cash and cash equivalents	Level 1	$	3.9	$	—	$	3.9
U.S. equity index funds		—		39.6		39.6
International equity index funds		—		17.0		17.0
Real estate		—		5.0		5.0
General bond index funds		—		161.3		161.3
Total fair value		$	3.9	$	222.9	$	226.8
Non U.S. Plans
Cash and cash equivalents	Level 1	$	3.4	$	—	$	3.4
Annuities	Level 3	60.1		—		60.1
Pooled investment funds		—		268.4		268.4
Total fair value		$	63.5	$	268.4	$	331.9

Asset Category	Level of Valuation Input	Fair Value		Investments valued using NAV per share		Total
U.S Plans
Cash and cash equivalents	Level 1	$	4.3	$	—	$	4.3
U.S. equity index funds		—		52.5		52.5
International equity index funds		—		22.1		22.1
Real estate index fund		—		7.6		7.6
General bond index funds		—		213.4		213.4
Total fair value		$	4.3	$	295.6	$	299.9
Non U.S. Plans
Cash and cash equivalents	Level 1	$	19.5	$	—	$	19.5
Annuities	Level 3	97.9		—		97.9
Pooled investment funds		—		427.2		427.2
Total fair value		$	117.4	$	427.2	$	544.6

The fair market value of index funds and pooled investment funds are valued using the net asset value (NAV) unit price provided by the fund administrator. The NAV is based on the value of the underlying assets owned by the fund. The fair value of annuity investments are based on discounted cash flow techniques using unobservable valuation inputs such as discount rates and actuarial mortality tables.

Fair Value Measurement of Level 3 Pension Assets	Annuities
Balance at January 1, 2021	$	58.7
Actual return on plan assets	39.2
Balance at December 31, 2021	97.9
Actual return on plan assets	(37.8)
Balance at December 31, 2022	$	60.1

Investment Policies

Plan fiduciaries of various plans set investment policies and strategies, based on consultation with professional advisors, and oversee investment allocation, which includes selecting investment managers and setting long-term strategic targets. The primary strategic investment objectives are balancing investment risk and return and monitoring the plan’s liquidity position in order to meet the near-term benefit payment and other cash needs. Target allocation percentages are established at an asset class level by plan fiduciaries. Target allocation ranges are guidelines, not limitations, and occasionally plan fiduciaries will approve allocations above or below a target range.

The weighted average asset allocation of the plan assets as of December 31, 2022, by asset category is as follows:

	December 31, 2022
	U.S. Plans		Non-U.S. Plans
Equity securities	24.5	%	43.4	%
Debt securities	71.0	%	33.9	%
Annuities	—	%	18.1	%
Real estate	2.5	%	3.6	%
Other	2.0	%	1.0	%

The weighted average target asset allocation of the plan assets is as follows:

	U.S. Plans					Non U.S. Plans
Equity securities	17.0%		to	32.5	%	35.0%	to	45.0%
Debt securities	61.0%		to	81.0	%	30.0%	to	40.0%
Annuities	—	%	to	—	%	10.0%	to	20.0%
Real estate	0.5	%	to	4.3	%	—%	to	10.0%
Other	—	%	to	5.0	%	—%	to	5.0%

Pension Funding and Cash Flows

The Company expects to make approximately $18.2 in required contributions to its defined benefit pension plans during 2023. The Company targets funding the minimum required contributions but may make additional contributions into the pension plans in 2023, depending upon factors such as how the funded status of those plans change or to reduce the administrative costs of the plan.

The estimated benefit payments, which were used in the calculation of projected benefit obligations, are expected to be paid as follows:

	U. S. Plans		Non-U. S. Plans
2023	$	25.7	$	14.8
2024	25.4		16.1
2025	25.4		16.0
2026	24.5		17.1
2027	23.6		17.9
Years 2028 to 2037	106.6		95.3

Post-employment Retiree Health and Welfare Plan

The Company sponsors a post-employment retiree health and welfare plan for the benefit of eligible employees at certain U.S. subsidiaries who retire after satisfying service and age requirements. This plan is funded on a pay-as-you-go basis and the cost of providing these benefits is shared with the retirees.

Post-retirement Medical Plan

The Company assumed obligations under a subsidiary's post-retirement medical plan. Coverage under this plan is restricted to a limited number of existing employees of the subsidiary. This plan is unfunded and the Company’s policy is to fund benefits as claims are incurred. The effect on operations of the post-retirement medical plan is shown in the following table:

	Year ended December 31,
	2022		2021		2020
Interest cost on benefit obligation	$	0.1	$	0.1	$	0.2
Net amortization and deferral	0.2		0.3		0.4
Post-retirement medical plan costs	$	0.3	$	0.4	$	0.6

Amounts included in accumulated other comprehensive earnings consist of unamortized net (income) loss of $(0.2) and $0.8.

A summary of the changes in the accumulated post-retirement benefit obligation follows:

	2022		2021
Balance at January 1	$	5.2	$	6.2
Interest cost on benefit obligation	0.1		0.1
Actuarial loss	(0.9)		(0.5)
Benefits paid	(0.5)		(0.6)
Balance at December 31	$	3.9	$	5.2
Recorded as:
Accrued expenses and other	$	0.6	$	0.7
Other liabilities	3.3		4.5
	$	3.9	$	5.2

The weighted-average discount rates used in the calculation of the accumulated post-retirement benefit obligation were 5.5% and 2.7% as of December 31, 2022, and 2021, respectively. The healthcare cost trend rate was removed due to the expectation of future funding to be at the same level as the previous year's funding.

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:

2023	$	0.6
2024	0.6
2025	0.5
2026	0.4
2027	0.3
Years 2028 and thereafter	1.1

Deferred Compensation Plan

The Company has Deferred Compensation Plans (DCP) under which certain of its executives may elect to defer up to 100.0% of their annual cash incentive pay and/or up to 50.0% of their annual base salary and/or eligible commissions subject to annual limits established by the U.S. government. The DCP provides executives a tax efficient strategy for retirement savings and capital accumulation without significant cost to the Company. The Company makes no contributions to the DCP. Amounts deferred by a participant are credited to a bookkeeping account maintained on behalf of each participant, which is used for measurement and determination of amounts to be paid to a participant, or his or her designated beneficiary, pursuant to the terms of the DCP. The amounts accrued under these plans were $96.9 and $104.4 at December 31, 2022, and 2021, respectively. Deferred amounts are the Company's general unsecured obligations and are subject to claims by the Company's creditors. The Company's general assets may be used to fund obligations and pay DCP benefits.