Annual report pursuant to Section 13 and 15(d)

BENEFIT PLANS (Tables)

v3.22.0.1
BENEFIT PLANS (Tables)
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Reconciliation of Projected Benefit Obligations, Plan Assets and Funded Status of Plans A reconciliation of the projected benefit obligations, plan assets and funded status of the plans is as follows:
  Pension Benefits Other Benefits
  2021 2020 2021 2020
  (In millions)
Change in projected benefit obligation        
Benefit obligation at January 1, $ 766.5  $ 720.0  $ 20.7  $ 18.7 
Service cost 1.4  1.7  0.2  0.2 
Interest cost 19.0  23.5  0.5  0.6 
Plan participants’ contributions —  —  1.3  1.2 
Amendments —  —  (2.2) — 
Actuarial loss (gain) (12.5) 63.2  (1.5) 2.7 
Foreign currency exchange rate changes 0.1  1.3  —  — 
Benefits paid (42.6) (43.2) (1.9) (2.7)
Projected benefit obligation at December 31, 731.9  766.5  17.1  20.7 
Change in plan assets    
Fair value of plan assets at January 1, 638.4  603.2  15.8  15.4 
Actual return on plan assets (5.2) 70.5  —  1.8 
Employer contributions 9.7  6.7  1.5  1.5 
Plan participants’ contributions —  —  1.3  1.2 
Foreign currency exchange rate changes 0.2  1.2  —  — 
Other disbursements —  —  (0.8) (1.4)
Benefits paid (42.6) (43.2) (2.8) (2.7)
Fair value of plan assets at December 31, 600.5  638.4  15.0  15.8 
Funded status of plan $ (131.4) $ (128.1) $ (2.1) $ (4.9)
Net Amount Recognized, or Funded Status of Pension and Other Postretirement Benefit Plans
The following table represents the net amounts recognized, or the funded status of our pension and other postretirement benefit plans, in our Consolidated Balance Sheets at December 31, 2021 and 2020:
  Pension Benefits Other Benefits
2021 2020 2021 2020
(In millions)
Amounts recognized in the statements of financial position consist of:        
Current liabilities (6.8) (6.8) (0.1) (0.1)
Long-term liabilities (124.6) (121.3) (2.0) (4.8)
Net amount recognized $ (131.4) $ (128.1) $ (2.1) $ (4.9)
Components of Net Periodic Benefit Cost
  Pension Benefits Other Benefits
  2021 2020 2019 2021 2020 2019
  (In millions)
Service cost $ 1.4  $ 1.7  $ 2.8  $ 0.2  $ 0.2  $ 0.3 
Interest cost 19.0  23.5  28.3  0.5  0.6  0.9 
Expected return on plan assets (28.7) (37.7) (34.3) (0.7) (1.0) (0.9)
Amortization of prior service cost (1.8) (1.7) 0.5  (0.1) (0.2) (1.0)
Recognized actuarial loss (gain) - mark to market 21.0  30.4  0.2  (0.8) 1.8  (5.0)
Total net periodic benefit cost (income) $ 10.9  $ 16.2  $ (2.5) $ (0.9) $ 1.4  $ (5.7)
Weighted-Average Assumptions used to Determine Benefit Obligations and Net Periodic Benefit Cost
Weighted-Average Assumptions
Weighted-average assumptions used to determine benefit obligations at December 31, Pension Benefits Other Benefits
2021 2020 2021 2020
Discount rate 2.85  % 2.56  % 2.86  % 2.47  %
Rate of compensation increase 6.00  % 5.97  % N/A N/A
 
Weighted-average assumptions used to determine net periodic benefit cost at December 31, Pension Benefits Other Benefits
2021 2020 2019 2021 2020 2019
Discount rate 2.56  % 3.38  % 4.39  % 2.47  % 3.26  % 4.30  %
Expected return on plan assets 4.65  % 6.46  % 6.46  % 4.80  % 6.50  % 6.70  %
Rate of compensation increase 6.00  % 4.37  % 4.93  % N/A N/A N/A
Estimated Future Benefits Payable for Retirement and Postretirement Plans
We estimate that the future benefits payable for our retirement and postretirement plans are as follows at December 31, 2021:
Years ending December 31, U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Other Benefit Plans
  (In millions)
2022 $ 42.2  $ 66.6  $ 1.7 
2023 $ 42.3  $ —  $ 1.7 
2024 $ 42.4  $ —  $ 1.5 
2025 $ 41.8  $ —  $ 1.4 
2026 $ 41.2  $ —  $ 1.4 
Next five fiscal years to December 31, 2031 $ 194.2  $ —  $ 6.0 
Fair Value of Plan Assets The fair value of the pension assets at December 31, 2021 and 2020, are as follows:
    Fair Value Measurements at Reporting Date Using:
  Fair Value at December 31, 2021 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
    (In millions)
U.S. Equity
(1)
 $ 44.8  $ 44.8  $ —  $ — 
International Equity
(2)
 36.5  —  36.5  — 
Fixed Income
(2)
 475.8  —  475.8  — 
Private Equity
(3)
 16.1  —  —  16.1 
Hedge Funds
(4)
 0.1  —  —  0.1 
Real Assets
(5)
 4.4  —  —  4.4 
Cash
(1)
 22.8  22.8  —  — 
Total   $ 600.5  $ 67.6  $ 512.3  $ 20.6 
 
      Fair Value Measurements at Reporting Date Using:
  Fair Value at December 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
    (In millions)
U.S. Equity
(1)
 $ 38.5  $ 38.5  $ —  $ — 
International Equity
(2)
 42.4  —  42.4  — 
Fixed Income
(2)
 489.8  —  489.8  — 
Private Equity
(3)
 9.8  —  —  9.8 
Hedge Funds
(4)
 15.3  —  —  15.3 
Real Assets
(5)
 16.3  —  —  16.3 
Cash
(1)
 26.3  26.3  —  — 
Total   $ 638.4  $ 64.8  $ 532.2  $ 41.4 

(1)Fair value is based on observable market prices for the assets.

(2)For the portion of this asset class categorized as Level 2, fair value is determined using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.

(3)Private equity investments are initially valued at cost. Fund managers periodically review the valuations utilizing subsequent company-specific transactions or deterioration in the company’s financial performance to determine if fair value adjustments are necessary. Private equity investments are typically viewed as long term, less liquid investments with return of capital coming via cash distributions from the sale of underlying fund assets. The Plan intends to hold these investments through each fund’s normal life cycle and wind down period. As of December 31, 2021 and 2020, we had $17.5 million and $21.9 million, respectively, of remaining commitments related to these private equity investments.

(4)Fair value is reported by the fund manager based on observable market prices for actively traded assets within the funds, as well as financial models, comparable financial transactions or other factors relevant to the specific asset for assets with no observable market. These investments are redeemable quarterly with a range of 30 – 90 days notice.

(5)The fair value of Real Assets are reported by the fund manager based on a combination of the following valuation approaches: current replacement cost less deterioration and obsolescence, a discounted cash flow model of income streams and comparable market sales. As of December 31, 2021 and 2020, we had $0.3 million and $0.1 million, respectively, of remaining commitments related to the real asset investments.
The fair value of the postretirement assets at December 31, 2021 and 2020, are as follows:
    Fair Value Measurements at Reporting Date Using:
Description Fair Value at December 31, 2021 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
    (In millions)
U.S. Equity
(1)
 1.2  1.2  —  — 
International Equity
(2)
 1.0  —  1.0  — 
Fixed Income
(2)
 12.1  —  12.1  — 
Private Equity
(3)
 0.5  —  —  0.5 
Hedge Funds
(4)
 —  —  —  — 
Real Assets
(5)
 0.1  —  —  0.1 
Cash
(1)
 0.1  0.1  —  — 
Total   $ 15.0  $ 1.3  $ 13.1  $ 0.6 
    Fair Value Measurements at Reporting Date Using:
Description Fair Value at December 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
    (In millions)
U.S. Equity
(1)
 $ 1.0  $ 1.0  $ —  $ — 
International Equity
(2)
 0.9  —  0.9  — 
Fixed Income
(2)
 12.2  —  12.2  — 
Private Equity
(3)
 0.3  —  —  0.3 
Hedge Funds
(4)
 0.4  —  —  0.4 
Real Assets
(5)
 0.4  —  —  0.4 
Cash
(1)
 0.6  0.6  —  — 
Total   $ 15.8  $ 1.6  $ 13.1  $ 1.1 
(1)Fair value is based on observable market prices for the assets.

(2)For the portion of this asset class categorized as Level 2, fair value is determined using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.

(3)Private equity investments are initially valued at cost. Fund managers periodically review the valuations utilizing subsequent company-specific transactions or deterioration in the company’s financial performance to determine if fair value adjustments are necessary. Private equity investments are typically viewed as long term, less liquid investments with return of capital coming via cash distributions from the sale of underlying fund assets. The Plan intends to hold these investments through each fund’s normal life cycle and wind down period.

(4)Fair value is reported by the fund manager based on observable market prices for actively traded assets within the funds, as well as financial models, comparable financial transactions or other factors relevant to the specific asset for assets with no observable market. These investments are redeemable quarterly with a range of 30 – 90 days notice.

(5)The fair value of Real Assets are reported by the fund manager based on a combination of the following valuation approaches: current replacement cost less deterioration and obsolescence, a discounted cash flow model of income streams and comparable market sales.
Reconciliation of Beginning and Ending Balances for Plan Assets Valued using Significant Unobservable Inputs The following table shows a reconciliation of the beginning and ending balances for assets valued using significant unobservable inputs for the years ended December 31, 2021 and 2020:
  Private Equity Hedge Funds Real Assets
  (In millions)
Balance at December 31, 2019 $ 12.9  $ 36.3  $ 18.9 
Return on plan assets:
Unrealized (0.1) —  (0.1)
Realized (1.0) (1.3) 0.1 
Purchases 0.1  —  0.1 
Sales (2.1) (19.7) (2.7)
Balance at December 31, 2020 $ 9.8  $ 15.3  $ 16.3 
Return on plan assets:
Unrealized $ 3.4  $ (2.1) $ (0.6)
Realized 2.2  2.1  0.2 
Purchases 4.8  —  0.1 
Sales (4.1) (15.2) (11.6)
Balance at December 31, 2021 $ 16.1  $ 0.1  $ 4.4 
Asset Allocation Ranges and Actual Allocations The following asset allocation ranges and actual allocations were in effect as of December 31, 2021 and 2020: 
  Range Actual
USRIP 2021 2020 2021 2020
U.S. Equity
0% - 20%
0% - 20%
 8.1  % 6.6  %
International Equity
0% - 10%
0% - 10%
 6.6  % 5.8  %
Private Equity
0% - 10%
0% - 10%
 2.9  % 1.7  %
Hedge Funds
0% - 10%
0% - 10%
 0.1  % 2.6  %
Real Assets
0% - 10%
0% - 10%
 0.8  % 2.8  %
Fixed Income
65% - 100%
65% - 100%
 80.6  % 76.7  %
Cash
0% - 15%
0% - 15%
 0.9  % 3.8  %
The following specifies the asset allocation ranges and actual allocation as of December 31, 2021 and 2020:
  Range Actual
CRIP 2021 2020 2021 2020
Public Equities
0% - 10%
0% - 40%
 —  % 16.3  %
Fixed Income
0% - 100%
60% - 100%
 63.6  % 75.8  %
Cash
0% - 100%
0% - 10%
 36.4  % 7.9  %