Retirement Plans |
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Plans | Retirement Plans Our company and subsidiaries have various plans that cover a significant number of our employees. These plans include defined contribution plans, defined benefit plans, and other postretirement plans: -Our defined contribution plans provide retirement benefits in return for services rendered. These plans provide an individual account for each participant and have terms that specify how contributions to the participant’s account are to be determined rather than the amount of pension benefits the participant is to receive. Contributions to these plans are based on a percentage of pre-tax income, after-tax income, or discretionary amounts determined on an annual basis. Our expense for the defined contribution plans totaled $206 million in 2025, $182 million in 2024, and $181 million in 2023. The increase in expense from 2024 to 2025 was primarily driven by higher discretionary employer contributions, along with increases in employee headcount and employer contribution rates in certain foreign locations. -Our defined benefit plans, which include both overfunded and underfunded pension plans, define an amount of pension benefit to be provided, usually as a function of age, years of service and/or compensation. The underfunded obligations and net periodic benefit cost of our United States defined benefit plans were not material for the periods presented. -Our postretirement plans other than pensions are offered to specific eligible employees. The accumulated benefit obligations (ABO) and net periodic benefit cost for these plans were not material for the periods presented. - In 2024, the Trustees of the Company’s United Kingdom (U.K.) defined benefit plan executed an annuity buy-in with a third-party insurance company with no affiliation with the Company. All pension obligations will be funded by the insurer’s annuity payments. However, the plan retains full legal responsibility to pay the benefits to plan participants using the insurance payments. As the plan maintains full legal responsibility, and the insurance contract is considered an asset of the plan, accordingly, the arrangement did not meet the settlement criteria of ASC 715. The policy is carried at fair value within plan assets and presented as a level 3 in the fair value table below. Fair value is determined using a quote from an insurance company, reflecting prevailing market conditions for similar transactions. Changes in the fair value of the policy are reflected in actual return on plan assets. Funded status For our international pension plans, at December 31, 2025, the projected benefit obligation (PBO) was $783 million and the fair value of plan assets was $583 million, which resulted in an underfunded obligation of $200 million. At December 31, 2024, the PBO was $773 million and the fair value of plan assets was $594 million, which resulted in an underfunded obligation of $179 million. The ABO for our international plans was $698 million at December 31, 2025 and $694 million at December 31, 2024. Despite an increase in the Company’s weighted‑average discount rate, the localized actuarial changes in a few countries created upward pressure on pension obligations, resulting in a net increase in PBO and ABO compared to the prior year. The following table presents additional information about our international pension plans.
Fair value measurements of plan assets The fair value of our plan assets categorized within level 1 on the fair value hierarchy is based on quoted prices in active markets for identical assets. The fair value of our plan assets categorized within level 2 on the fair value hierarchy is based on significant observable inputs for similar assets. The fair value of our plan assets categorized within level 3 on the fair value hierarchy is based on significant unobservable inputs. The following table sets forth the fair values of assets held by our international pension plans by level within the fair value hierarchy.
Level 3 Rollforward The following presents our Level 3 Rollforward for buy-in annuity insurance contract for 2025 and 2024.
Risk management practices for these plans include diversification by issuer, industry, and geography, where permitted, as well as by asset classes and investment managers. Our U.K. pension plan, which constituted 72% of our international pension plans’ PBO at December 31, 2025, is no longer accruing service benefits and completed a pension buy-in transaction during 2024 entering into a bulk annuity contract with an insurance company. The bulk annuity contract effectively covers all benefit payments to members. The investments backing the contract are invested at the discretion of the insurance company, which assumes the investment risk associated with these assets. Net periodic benefit cost Net periodic benefit cost for our international pension plans was $57 million in 2025, $43 million in 2024, and $32 million in 2023. Actuarial assumptions Certain weighted-average actuarial assumptions used to determine benefit obligations of our international pension plans at December 31 were as follows:
Certain weighted-average actuarial assumptions used to determine net periodic benefit cost of our international pension plans for the years ended December 31 were as follows:
Assumed long-term rates of return on plan assets, discount rates for estimating benefit obligations, and rates of compensation increases vary by plan according to local economic conditions. Where possible, discount rates were determined based on the prevailing market rates of a portfolio of high-quality debt instruments with maturities matching the expected timing of the payment of the benefit obligations. Expected long-term rates of return on plan assets were determined based upon an evaluation of our plan assets and historical trends and experience, taking into account current and expected market conditions. Other information Contributions. Funding requirements for each plan are determined based on the local laws of the country where such plan resides. In certain countries the funding requirements are mandatory, while in other countries they are discretionary. We currently expect to contribute $1 million to our international pension plans in 2026. Benefit payments. Expected benefit payments over the next 10 years for our international pension plans are as follows: $46 million in 2026, $39 million in 2027, $42 million in 2028, $43 million in 2029, $45 million in 2030, and an aggregate $268 million in years 2031 through 2035. |
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