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Pensions and Postretirement Benefits Other Than Pensions
 12 Months Ended
Dec. 31, 2024
Retirement Benefits, Description [Abstract]  
Pensions and Postretirement Benefits Other Than Pensions PENSIONS AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company sponsors several U.S. defined benefit and defined contribution plans covering substantially all of the Company's U.S. employees. Additionally, the Company has many non-U.S. defined benefit and defined contribution plans covering eligible current and retired non-U.S. employees. Postretirement benefits other than pensions (OPEB) provide healthcare benefits and, in some instances, life insurance benefits for certain eligible current and retired employees.
Pension Plans
The non-contributory defined benefit pension plans covering non-collectively bargained U.S. employees provide benefits on a final average pay formula while plans for most collectively bargained U.S. employees provide benefits on a flat dollar benefit formula or a percentage of pay formula. The non-U.S. pension plans generally provide benefits based on earnings and years of service. The Company also maintains additional other supplemental plans for officers and other key or highly compensated employees.
The following table details information regarding the Company's pension plans at December 31:
In millions20242023
Change in benefit obligations:
Benefit obligation at beginning of year$2,412.5 $2,386.1 
Service cost32.1 34.4 
Interest cost112.9 119.6 
Employee contributions1.0 1.0 
Actuarial (gains) losses (1)
(94.5)63.7 
Benefits paid(179.3)(187.9)
Currency translation(19.4)22.0 
Curtailments, settlements and special termination benefits(7.0)(2.4)
Other, including expenses paid(19.2)(24.0)
Benefit obligation at end of year$2,239.1 $2,412.5 
Change in plan assets:
Fair value at beginning of year$2,145.7 $2,051.6 
Actual return on assets26.7 192.2 
Company contributions58.9 93.5 
Employee contributions1.0 1.0 
Benefits paid(179.3)(187.9)
Currency translation(16.1)22.9 
Settlements(7.0)(2.4)
Other, including expenses paid(19.7)(25.2)
Fair value of assets end of year$2,010.2 $2,145.7 
Net unfunded liability$(228.9)$(266.8)
Amounts included in the balance sheet:
Other noncurrent assets$65.2 $52.5 
Accrued compensation and benefits(15.6)(10.8)
Postemployment and other benefit liabilities(278.5)(308.5)
Net amount recognized$(228.9)$(266.8)
(1) Actuarial (gains) losses primarily resulted from changes in discount rates.
It is the Company's objective to contribute to the pension plans to ensure adequate funds, and no less than required by law, are available in the plans to make benefit payments to plan participants and beneficiaries when required. However, certain plans are not or cannot be funded due to either legal, accounting, or tax requirements in certain jurisdictions. As of December 31, 2024, approximately seven percent of the Company's projected benefit obligation relates to plans that cannot be funded.
The pretax amounts recognized in Accumulated other comprehensive income (loss) were as follows:
In millionsPrior service benefit (cost)Net actuarial gains (losses)Total
December 31, 2023$(18.0)$(485.8)$(503.8)
Current year changes recorded to AOCI— 3.2 3.2 
Amortization reclassified to earnings3.0 15.0 18.0 
Settlements/curtailments reclassified to earnings— 1.0 1.0 
Currency translation and other0.2 1.9 2.1 
December 31, 2024$(14.8)$(464.7)$(479.5)
Weighted-average assumptions used to determine the benefit obligation at December 31 were as follows:
20242023
Discount rate:
U.S. plans5.62 %5.16 %
Non-U.S. plans4.75 %4.18 %
Rate of compensation increase:
U.S. plans4.03 %4.02 %
Non-U.S. plans4.08 %4.07 %
The accumulated benefit obligation for all defined benefit pension plans was $2,201.3 million and $2,372.2 million at December 31, 2024 and 2023, respectively. The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with accumulated benefit obligations more than plan assets were $1,833.3 million, $1,808.8 million and $1,541.5 million, respectively, as of December 31, 2024, and $1,928.6 million, $1,902.3 million and $1,611.0 million, respectively, as of December 31, 2023.
Pension benefit payments are expected to be paid as follows:
In millions
2025$191.9 
2026190.3 
2027207.5 
2028178.1 
2029172.5 
2030-2034864.5 
The components of the Company's net periodic pension benefit costs for the years ended December 31 include the following:
In millions202420232022
Service cost$32.1 $34.4 $47.5 
Interest cost112.9 119.6 70.3 
Expected return on plan assets(117.8)(120.3)(103.8)
Net amortization of:
Prior service costs (benefits)3.0 3.6 3.9 
Plan net actuarial (gains) losses15.0 16.2 23.3 
Net periodic pension benefit cost45.2 53.5 41.2 
Net curtailment and settlement losses1.0 1.4 15.0 
Net periodic pension benefit cost after net curtailment and settlement losses$46.2 $54.9 $56.2 
Amounts recorded in continuing operations:
   Operating income$28.0 $29.6 $43.2 
   Other income/(expense), net11.5 18.6 9.2 
Amounts recorded in discontinued operations6.7 6.7 3.8 
Total$46.2 $54.9 $56.2 
Pension benefit cost for 2025 is projected to be approximately $53 million.
Weighted-average assumptions used to determine net periodic pension cost for the years ended December 31 were as follows:
202420232022
Discount rate:
U.S. plans
Service cost5.12 %5.48 %3.06 %
Interest cost5.08 %5.35 %2.36 %
Non-U.S. plans
Service cost4.38 %4.82 %2.07 %
Interest cost4.18 %4.65 %1.62 %
Rate of compensation increase:
U.S. plans4.02 %4.25 %4.00 %
Non-U.S. plans4.07 %4.23 %4.00 %
Expected return on plan assets:
U.S. plans6.00 %6.25 %4.00 %
Non-U.S. plans4.69 %5.02 %2.50 %
The expected long-term rate of return on plan assets reflects the average rate of returns expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The expected long-term rate of return on plan assets is based on what is achievable given the plan's investment policy, the types of assets held and target asset allocations. The expected long-term rate of return is determined as of the measurement date. The Company reviews each plan and its historical returns and target asset allocations to determine the appropriate expected long-term rate of return on plan assets to be used.
The Company's objective in managing its defined benefit plan assets is to ensure that all present and future benefit obligations are met as they come due. It seeks to achieve this goal while trying to mitigate volatility in plan funded status, contribution, and expense by better matching the characteristics of the plan assets to that of the plan liabilities. The Company utilizes a dynamic approach to asset allocation whereby a plan's allocation to fixed income assets increases as the plan's funded status improves. The Company monitors plan funded status and asset allocation regularly in addition to investment manager performance.
The fair values of the Company's pension plan assets at December 31, 2024 by asset category were as follows:
 Fair value measurementsNet asset valueTotal
fair value
In millionsLevel 1Level 2Level 3
Cash and cash equivalents$6.5 $30.0 $— $— $36.5 
Equity investments:
Registered mutual funds – equity specialty— — — 73.7 73.7 
Commingled funds – equity specialty— — — 244.2 244.2 
— — — 317.9 317.9 
Fixed income investments:
U.S. government and agency obligations— 384.1 — — 384.1 
Corporate and non-U.S. bonds— 1,001.9 — — 1,001.9 
Asset-backed and mortgage-backed securities— 14.9 — — 14.9 
Registered mutual funds – fixed income specialty— — — 91.7 91.7 
Commingled funds – fixed income specialty— — — 81.0 81.0 
Other fixed income(a)
— — 31.5 — 31.5 
— 1,400.9 31.5 172.7 1,605.1 
Derivatives— (0.5)— — (0.5)
Other(b)
— — 86.2 — 86.2 
Total assets at fair value$6.5 $1,430.4 $117.7 $490.6 $2,045.2 
Receivables and payables, net(35.0)
Net assets available for benefits   $2,010.2 
The fair values of the Company's pension plan assets at December 31, 2023 by asset category were as follows:
 Fair value measurementsNet asset valueTotal
fair value
In millionsLevel 1Level 2Level 3
Cash and cash equivalents$4.7 $43.9 $— $— $48.6 
Equity investments:
Registered mutual funds – equity specialty— — — 78.7 78.7 
Commingled funds – equity specialty— — — 262.4 262.4 
— — — 341.1 341.1 
Fixed income investments:
U.S. government and agency obligations— 355.7 — — 355.7 
Corporate and non-U.S. bonds— 1,079.5 — — 1,079.5 
Asset-backed and mortgage-backed securities— 12.5 — — 12.5 
Registered mutual funds – fixed income specialty— — — 96.1 96.1 
Commingled funds – fixed income specialty— — — 75.0 75.0 
Other fixed income(a)
— — 31.2 — 31.2 
— 1,447.7 31.2 171.1 1,650.0 
Derivatives— 5.9 — — 5.9 
Other(b)
— — 89.7 — 89.7 
Total assets at fair value$4.7 $1,497.5 $120.9 $512.2 $2,135.3 
Receivables and payables, net10.4 
Net assets available for benefits   $2,145.7 
(a)This class includes group annuity and guaranteed interest contracts.
(b)This investment comprises the Company's non-significant, non-US pension plan assets. It primarily includes insurance contracts.
Cash equivalents are valued using a market approach with inputs including quoted market prices for either identical or similar instruments. Fixed income securities are valued through a market approach with inputs including, but not limited to, benchmark yields, reported trades, broker quotes and issuer spreads. Commingled funds are valued at their daily net asset value (NAV) per share or the equivalent. NAV per share or the equivalent is used for fair value purposes as a practical expedient. NAVs are calculated by the investment manager or sponsor of the fund. Refer to Note 9, "Fair Value Measurements" for additional information related to the fair value hierarchy. There have been no significant transfers between levels of the fair value hierarchy.
The Company made required and discretionary contributions to its pension plans of $58.9 million in 2024, $93.5 million in 2023, and $90.5 million in 2022 and currently projects that it will contribute approximately $30 million to its plans worldwide in 2025. The Company's policy allows it to fund an amount, which could be in excess of or less than the pension cost expensed, subject to the limitations imposed by current tax regulations. However, the Company anticipates funding the plans in 2025 in accordance with contributions required by funding regulations or the laws of each jurisdiction.
Most of the Company's U.S. employees are covered by defined contribution plans. Employer contributions are determined based on criteria specific to the individual plans and amounted to approximately $188 million, $165 million and $138 million in 2024, 2023 and 2022, respectively. The Company's contributions relating to non-U.S. defined contribution plans and other non-U.S. benefit plans were $38.6 million, $30.9 million and $33.8 million in 2024, 2023 and 2022, respectively.
Multiemployer Pension Plans
The Company also participates in a number of multiemployer defined benefit pension plans related to collectively bargained U.S. employees of Trane. The Company's contributions are determined by the terms of the related collective-bargaining agreements. These multiemployer plans pose different risks to the Company than single-employer plans, including:
1.The Company's contributions to multiemployer plans may be used to provide benefits to all participating employees of the plan, including employees of other employers.
2.In the event that another participating employer ceases contributions to a plan, the Company, together with other remaining participating employers, may be responsible for any unfunded obligations of the employer that ceased making contributions.
3.If the Company chooses to withdraw from any of the multiemployer plans or if a partial withdrawal occurs, the Company may be required to pay a withdrawal liability, based on the underfunded status of the plan.
As of December 31, 2024, the Company does not participate in any multiemployer plans that are individually significant.
Postretirement Benefits Other Than Pensions
The Company sponsors several postretirement plans that provide healthcare benefits and, in some instances, life insurance benefits for eligible current and retired employees. These plans are unfunded and have no plan assets; instead they are funded by the Company on a pay-as-you-go basis in the form of direct benefit payments. Generally, postretirement health benefits are contributory, with contributions adjusted annually. Life insurance plans for retirees are primarily non-contributory.
The following table details changes in the Company's postretirement plan benefit obligations for the years ended December 31:
In millions20242023
Benefit obligation at beginning of year$241.3 $266.4 
Service cost1.2 1.4 
Interest cost11.5 13.3 
Actuarial (gains) losses(5.6)(7.4)
Benefits paid, net of Medicare Part D subsidy(25.3)(32.4)
Benefit obligations at end of year$222.7 $241.3 

The benefit plan obligations are reflected in the Consolidated Balance Sheets as follows:
In millionsDecember 31, 2024December 31, 2023
Accrued compensation and benefits$(27.9)$(29.3)
Postemployment and other benefit liabilities(194.8)(212.0)
Total$(222.7)$(241.3)
The pre-tax amounts recognized in Accumulated other comprehensive income (loss) were as follows:
In millionsPrior service benefit (cost)Net actuarial gains (losses)Total
Balance at December 31, 2023$(2.7)$114.9 $112.2 
Current year changes recorded to AOCI— 5.6 5.6 
Amortization reclassified to earnings0.6 (13.2)(12.6)
Balance at December 31, 2024$(2.1)$107.2 $105.1 
The components of net periodic postretirement benefit cost for the years ended December 31 were as follows:
In millions202420232022
Service cost$1.2 $1.4 $1.8 
Interest cost11.5 13.3 6.9 
Net amortization of:
Prior service costs (benefits)0.6 0.6 — 
Plan net actuarial (gains) losses
(13.2)(13.0)(5.6)
Net periodic postretirement benefit cost$0.1 $2.3 $3.1 
Amounts recorded in continuing operations:
   Operating income$1.2 $1.4 $1.8 
   Other income/(expense), net0.1 1.4 1.4 
Amounts recorded in discontinued operations(1.2)(0.5)(0.1)
Total$0.1 $2.3 $3.1 
Net periodic postretirement benefit cost (credit) for 2025 is projected to be $(0.3) million. The amount expected to be recognized in net periodic postretirement benefits cost in 2025 for net actuarial gains is approximately $13 million.
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31 were as follows:
202420232022
Discount rate:
Benefit obligations at December 315.57 %5.17 %5.51 %
Net periodic benefit cost
Service cost5.19 %5.54 %2.82 %
Interest cost5.12 %5.38 %2.33 %
Assumed health-care cost trend rates at December 31:
Current year medical inflation6.51 %6.28 %6.50 %
Ultimate inflation rate5.00 %5.00 %5.00 %
Year that the rate reaches the ultimate trend rate203020292028
Benefit payments for postretirement benefits, which are net of expected plan participant contributions and Medicare Part D subsidy, are expected to be paid as follows:
In millions
2025$28.5 
202626.8 
202725.1 
202823.7 
202922.0 
2030—203488.3