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Employee Benefit And Retirement Plans | 12 Months Ended
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Nov. 30, 2024
Retirement Benefits, Description [Abstract] |
Employee Benefit And Retirement Plans | EMPLOYEE BENEFIT AND RETIREMENT PLANS We sponsor defined benefit pension plans in the U.S. and certain foreign locations. In addition, we sponsor defined contribution plans in the U.S. We contribute to defined contribution plans in locations outside the U.S., including government-sponsored retirement plans. We also currently provide postretirement medical and life insurance benefits to certain U.S. employees and retirees. We previously froze the accrual of certain defined benefit pension plans in the U.S., the United Kingdom and Canada with effective dates of the plan being frozen occurring between December 31, 2016 and November 30, 2019. Although those plans have been frozen, employees who are participants in the plans retained benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plans. Included in our consolidated balance sheet as of November 30, 2024 on the line entitled "Accumulated other comprehensive loss" was $127.2 million ($99.7 million net of tax) related to net unrecognized actuarial losses that have not yet been recognized in net periodic pension or postretirement benefit cost. Defined Benefit Pension Plans The significant assumptions used to determine benefit obligations are as follows as of November 30:
| United States | International
| 2024 | 2023 | 2024 | 2023
Discount rate—funded plans | 5.3 | % | 6.0 | % | 4.7 | % | 5.1 | %
Discount rate—unfunded plan | 5.3 | % | 6.0 | % | — | % | — | %
Salary scale | — | % | — | % | 2.9 | % | 2.9 | %
The significant assumptions used to determine pension expense for the years ended November 30 are as follows:
| United States | International
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022
Discount rate—funded plans | 6.0 | % | 5.4 | % | 2.9 | % | 5.1 | % | 4.5 | % | 2.1 | %
Discount rate—unfunded plan | 6.0 | % | 5.4 | % | 2.8 | % | — | % | — | % | — | %
Salary scale | — | % | — | % | — | % | 2.9 | % | 2.9 | % | 2.9 | %
Expected return on plan assets | 6.3 | % | 6.8 | % | 6.8 | % | 5.2 | % | 4.9 | % | 3.7 | %
Annually, we undertake a process, with the assistance of our external investment consultants, to evaluate the appropriate projected rates of return to use for our pension plans’ assumptions. We engage our investment consultants' research teams to develop capital market assumptions for each asset category in our plans to project investment returns into the future. The specific methods used to develop expected return assumptions vary by asset category. We adjust the outcomes for the fact that plan assets are invested with actively managed funds and subject to tactical asset reallocation. Our pension expense (income) for the years ended November 30 was as follows:
| United States | International
(millions) | 2024 | 2023 | 2022 | 2024 | 2023 | 2022
Service cost | $ | 1.5 |  | $ | 2.0 |  | $ | 3.6 |  | $ | 0.6 |  | $ | 0.6 |  | $ | 0.9 |
Interest costs | 37.3 |  | 36.1 |  | 26.3 |  | 10.6 |  | 9.9 |  | 7.0 |
Expected return on plan assets | (39.6) |  | (42.3) |  | (42.8) |  | (16.1) |  | (15.1) |  | (12.3) |
Amortization of prior service costs | 0.5 |  | 0.5 |  | 0.5 |  | 0.1 |  | 0.1 |  | 0.1 |
Amortization of net actuarial loss (gain) | (0.4) |  | 0.2 |  | 8.6 |  | (0.3) |  | (0.1) |  | 1.3 |
Settlement loss | — |  | — |  | — |  | — |  | — |  | 0.3 |
Total pension expense (income) | $ | (0.7) |  | $ | (3.5) |  | $ | (3.8) |  | $ | (5.1) |  | $ | (4.6) |  | $ | (2.7) |
A roll forward of the benefit obligation, fair value of plan assets and a reconciliation of the pension plans’ funded status as of November 30, the measurement date, follows:
| United States | International
(millions) | 2024 | 2023 | 2024 | 2023
Change in benefit obligation: |  |  |  |
Benefit obligation at beginning of year | $ | 645.3 |  | $ | 687.5 |  | $ | 214.0 |  | $ | 220.1 |
Service cost | 1.5 |  | 2.0 |  | 0.6 |  | 0.6 |
Interest costs | 37.3 |  | 36.1 |  | 10.6 |  | 9.9 |
Plan settlements | — |  | — |  | — |  | (0.1) |
Actuarial (gain) loss | 56.3 |  | (34.7) |  | 7.8 |  | (11.1) |
Benefits paid | (45.4) |  | (45.6) |  | (13.5) |  | (13.3) |
Foreign currency impact | — |  | — |  | (2.6) |  | 7.9 |
Benefit obligation at end of year | $ | 695.0 |  | $ | 645.3 |  | $ | 216.9 |  | $ | 214.0 |
Change in fair value of plan assets: |  |  |  |
Fair value of plan assets at beginning of year | $ | 630.7 |  | $ | 657.7 |  | $ | 267.0 |  | $ | 275.1 |
Actual return on plan assets | 76.2 |  | 10.3 |  | 21.1 |  | (5.3) |
Employer contributions | 9.2 |  | 8.3 |  | 0.8 |  | 0.9 |
Benefits paid | (45.4) |  | (45.6) |  | (13.5) |  | (13.3) |
Foreign currency impact | — |  | — |  | (3.0) |  | 9.6 |
Fair value of plan assets at end of year | $ | 670.7 |  | $ | 630.7 |  | $ | 272.4 |  | $ | 267.0 |
Funded status | $ | (24.3) |  | $ | (14.6) |  | $ | 55.5 |  | $ | 53.0 |
Pension plans in which accumulated benefit obligation exceeded plan assets |  |  |  |
Projected benefit obligation | $ | 116.3 |  | $ | 109.1 |  | $ | 14.7 |  | $ | 14.0 |
Accumulated benefit obligation | 113.3 |  | 105.5 |  | 12.3 |  | 11.7 |
Fair value of plan assets | 38.0 |  | 32.7 |  | 1.8 |  | 1.6 |
The accumulated benefit obligation is the present value of pension benefits (whether vested or unvested) attributed to employee service rendered before the measurement date and based on employee service and compensation prior to that date. The accumulated benefit obligation differs from the projected benefit obligation in that it includes no assumption about future compensation or service levels. The accumulated benefit obligation for the U.S. pension plans was $692.0 million and $641.8 million as of November 30, 2024 and 2023, respectively. The accumulated benefit obligation for the international pension plans was $214.5 million and $211.8 million as of November 30, 2024 and 2023, respectively. Included in the U.S. in the preceding table is a benefit obligation of $75.1 million and $72.7 million for 2024 and 2023, respectively, related to our Supplemental Executive Retirement Plan (SERP). The assets related to this plan, which totaled $73.1 million and $70.2 million as of November 30, 2024 and 2023, respectively, are held in a rabbi trust and accordingly have not been included in the preceding table. Amounts recorded in the balance sheet for all defined benefit pension plans as of November 30 consist of the following:
| United States | International
(millions) | 2024 | 2023 | 2024 | 2023
Non-current pension asset | $ | 54.0 |  | $ | 61.7 |  | $ | 68.4 |  | $ | 65.3 |
Accrued pension liability | 78.3 |  | 76.4 |  | 12.9 |  | 12.4 |
Deferred income tax assets | 28.6 |  | 23.3 |  | 3.8 |  | 3.3 |
Accumulated other comprehensive loss, net of tax | 84.8 |  | 70.4 |  | 31.1 |  | 28.6 |
Our defined benefit pension plans investment strategy is subject to the asset/liability profiles of the plans in each individual country. The investment objectives of the defined benefit pension plans are to provide assets to meet the current and future obligations of the plans at a reasonable cost to us. Our goal is to optimize the long-term return on plan assets at a moderate level of risk. The investment policy specifies the type of investment vehicles appropriate for the plans, asset allocation guidelines, criteria for the selection of investment managers, procedures to monitor overall investment performance as well as investment manager performance. Higher-returning assets include mutual, co-mingled and other funds comprised of equity securities, utilizing both active and passive investment styles. These more volatile assets are balanced with less volatile assets, primarily mutual, co-mingled and other funds comprised of fixed income securities. Professional investment firms are engaged to provide advice on the selection and monitoring of investment funds, and to provide advice on the allocation of plan assets across the various fund managers. This advice is based in part on the duration of each plan’s liability. The allocations of U.S. pension plan assets as of November 30, by asset category, were as follows:
| Actual | 2024
Asset Category | 2024 | 2023 | Target
Equity securities | 22.1 | % | 34.3 | % | 25.3 | %
Fixed income securities | 69.9 | % | 53.0 | % | 69.2 | %
Other | 8.0 | % | 12.7 | % | 5.5 | %
Total | 100.0 | % | 100.0 | % | 100.0 | %
The allocations of the international pension plans’ assets as of November 30, by asset category, were as follows:
| Actual | 2024
Asset Category | 2024 | 2023 | Target
Equity securities | 7.9 | % | 11.3 | % | 7.3 | %
Fixed income securities | 86.4 | % | 83.0 | % | 86.8 | %
Other | 5.7 | % | 5.7 | % | 5.9 | %
Total | 100.0 | % | 100.0 | % | 100.0 | %
The following tables set forth by level, within the fair value hierarchy as described in Note 8, pension plan assets at their fair value as of November 30 for the United States and international plans:
As of November 30, 2024 | United States
(millions) | Total fair value | Level 1 | Level 2
Cash and cash equivalents | $ | 4.4 |  | $ | 4.4 |  | $ | — |
Equity securities: |  |  |
U.S. equity securities(a) | 81.2 |  | — |  | 81.2 |
International equity securities(b) | 50.3 |  | — |  | 50.3 |
Fixed income securities: |  |  |
U.S. government/corporate bonds(c) | 417.0 |  | — |  | 417.0 |
High yield bonds(d) | 42.9 |  | — |  | 42.9 |
Insurance contracts(f) | 1.2 |  | — |  | 1.2 |
Total | $ | 597.0 |  | $ | 4.4 |  | $ | 592.6 |
Investments measured at net asset value(i) |  |  |
Hedge funds(j) | 29.6 |  |  |
Private equity funds(k) | 16.8 |  |  |
Private debt funds(l) | 8.0 |  |  |
Real estate (m) | 19.3 |  |  |
Total investments | $ | 670.7 |  |  |
As of November 30, 2024 | International
(millions) | Total fair value | Level 1 | Level 2
Cash and cash equivalents | $ | 6.4 |  | $ | 6.4 |  | $ | — |
International equity securities(b) | 21.6 |  | — |  | 21.6 |
Fixed income securities: |  |  |
International/government/corporate bonds(e) | 220.7 |  | — |  | 220.7 |
Insurance contracts(f) | 14.7 |  | — |  | 14.7 |
Real estate(g) | 9.0 |  | — |  | 9.0 |
Total investments | $ | 272.4 |  | $ | 6.4 |  | $ | 266.0 |
As of November 30, 2023 | United States
(millions) | Total fair value | Level 1 | Level 2
Cash and cash equivalents | $ | 14.2 |  | $ | 14.2 |  | $ | — |
Equity securities: |  |  |
U.S. equity securities(a) | 108.5 |  | 35.5 |  | 73.0 |
International equity securities(b) | 87.5 |  | — |  | 87.5 |
Fixed income securities: |  |  |
U.S./government/ corporate bonds(c) | 275.2 |  | 88.6 |  | 186.6 |
High yield bonds(d) | 49.5 |  | — |  | 49.5 |
Insurance contracts(f) | 1.1 |  | — |  | 1.1 |
Other types of investments: |  |  |
Real estate (g) | 1.6 |  | — |  | 1.6 |
Natural resources (h) | 0.4 |  | — |  | 0.4 |
Total | $ | 538.0 |  | $ | 138.3 |  | $ | 399.7 |
Investments measured at net asset value(i) |  |  |
Hedge funds(j) | 49.3 |  |  |
Private equity funds(k) | 8.2 |  |  |
Private debt funds(l) | 20.4 |  |  |
Real estate (m) | 14.8 |  |  |
Total investments | $ | 630.7 |  |  |
As of November 30, 2023 |  | International |
(millions) | Total fair value | Level 1 | Level 2
Cash and cash equivalents | $ | 10.6 |  | $ | 10.6 |  | $ | — |
International equity securities(b) | 30.2 |  | — |  | 30.2 |
Fixed income securities: |  |  |
International/government/corporate bonds(e) | 207.7 |  | — |  | 207.7 |
Insurance contracts(f) | 13.9 |  | — |  | 13.9 |
Real estate (g) | 4.6 |  |  | 4.6 |
Total investments | $ | 267.0 |  | $ | 10.6 |  | $ | 256.4 |
(a)This category comprises equity funds and collective equity trust funds that most closely track the S&P index and other equity indices. (b)This category comprises international equity funds with varying benchmark indices. (c)This category comprises funds consisting of U.S. government and U.S. corporate bonds and other fixed income securities. An appropriate benchmark is the Barclays Capital Aggregate Bond Index. (d)This category comprises funds consisting of a variety of fixed income securities with varying benchmark indices. (e)This category comprises funds consisting of international government/corporate bonds and other fixed income securities with varying benchmark indices. (f)This category comprises insurance contracts, the majority of which have a guaranteed investment return. (g)This category comprises funds investing in real estate investment trusts (REIT). Appropriate benchmarks are the MSCI U.S. REIT Index and the MSCI REALPAC Canada Property Index, for the U.S. and International holdings, respectively. (h)This category comprises funds investing in natural resources. An appropriate benchmark is the Alerian master limited partnership (MLP) Index. (i)Certain investments that are valued using the net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. These are included to permit reconciliation of the fair value hierarchy to the aggregate pension plan assets. (j)This category comprises hedge funds investing in strategies represented in various HFRI Fund Indices. The net asset value is generally based on the valuation of the underlying investment. Limitations exist on the timing from notice by the plan of its intent to redeem and actual redemptions of these funds and generally range from a minimum of one month to several months. (k)This category comprises private equity, venture capital and limited partnerships. The net asset is based on valuation models of the underlying securities as determined by the general partner or general partner's designee. These valuation models include unobservable inputs that cannot be corroborated using verifiable observable market data. These funds typically have redemption periods of approximately 10 years. (l)This category comprises limited partnerships funds investing in senior loans, mezzanine and distressed debt. The net asset is based on valuation models of the underlying securities as determined by the general partner or general partner's designee. These valuation models include unobservable inputs that cannot be corroborated using verifiable observable market data. These funds typically have redemption periods of approximately 10 years. (m)This category comprises private real estate funds. The net asset is based on valuation models of the underlying securities as determined by the general partner or general partner's designee. These valuation models include unobservable inputs that cannot be corroborated using verifiable observable market data. These funds have no redemption restrictions. For the plans’ hedge funds, private equity funds and private debt funds, we engage an independent advisor to compare the funds’ returns to other funds with similar strategies. Each fund is required to have an annual audit by an independent accountant, which is provided to the independent advisor. This provides a basis of comparability relative to similar assets. As of November 30, 2023, equity securities in the U.S. pension plans included McCormick stock with a fair value of $35.5 million (0.6 million shares and 5.4% of total U.S. pension plan assets). Dividends paid on these shares were $0.8 million and $0.9 million in 2024 and 2023, respectively. Pension benefit payments in our most significant plans are made from assets of the pension plans. It is anticipated that future benefit payments for the U.S. and international plans for the next 10 fiscal years will be as follows:
(millions) | United States | International
2025 | $ | 49.7 |  | $ | 12.5 |
2026 | 50.6 |  | 11.8 |
2027 | 51.4 |  | 13.1 |
2028 | 51.8 |  | 12.4 |
2029 | 52.4 |  | 13.6 |
2030-2035 | 257.6 |  | 71.0 |
U.S. Defined Contribution Retirement Plans For our U.S. qualified and non-qualified defined contribution retirement plans, we match 100% of a participant’s contribution up to the first 3% of the participant’s eligible compensation, and 66.7% of the next 3% of the participant’s salary. In addition, we make contributions of 3% of the participant's eligible compensation for all U.S. employees who are employed on December 31 of each year. Some of our smaller subsidiaries sponsor separate 401(k) retirement plans. Our contributions charged to expense under all U.S. defined contribution retirement plans were $34.7 million, $29.7 million and $30.5 million in 2024, 2023, and 2022, respectively. At the participants' election, 401(k) retirement plans held 2.1 million shares of McCormick stock, with a fair value of $159.5 million, at November 30, 2024. Dividends paid on the shares held in the 401(k) retirement plans in 2024 and 2023 were $3.6 million and $3.8 million, respectively. Postretirement Benefits Other Than Pensions We currently provide postretirement medical and life insurance benefits to certain U.S. employees who were covered under the active employees’ plan and retire after age 55 with at least five years of service. The subsidy provided under these plans is based primarily on age at date of retirement. These benefits are not pre-funded but paid as incurred. Employees hired after December 31, 2008 are not eligible for a company subsidy. They are eligible for coverage on an access-only basis. Our other postretirement benefit expense for the years ended November 30 follows:
(millions) | 2024 | 2023 | 2022
Service cost | $ | 0.8 |  | $ | 1.3 |  | $ | 1.8 |
Interest costs | 2.4 |  | 2.6 |  | 1.6 |
Amortization of prior service credits | (0.3) |  | (0.3) |  | (0.3) |
Amortization of actuarial gains | (2.7) |  | (2.2) |  | (0.3) |
Postretirement benefit expense | $ | 0.2 |  | $ | 1.4 |  | $ | 2.8 |
Roll forwards of the benefit obligation, fair value of plan assets and a reconciliation of the plans’ funded status at November 30, the measurement date, follow:
(millions) | 2024 | 2023
Change in benefit obligation: |  |
Benefit obligation at beginning of year | $ | 47.1 |  | $ | 52.9 |
Service cost | 0.8 |  | 1.3 |
Interest costs | 2.4 |  | 2.6 |
Participant contributions | 2.8 |  | 2.5 |
Actuarial (gain) loss | (1.1) |  | (5.6) |
Benefits paid | (7.0) |  | (6.6) |
Benefit obligation at end of year | $ | 45.0 |  | $ | 47.1 |
Change in fair value of plan assets: |  |
Fair value of plan assets at beginning of year | $ | — |  | $ | — |
Employer contributions | 4.2 |  | 4.1 |
Participant contributions | 2.8 |  | 2.5 |
Benefits paid | (7.0) |  | (6.6) |
Fair value of plan assets at end of year | $ | — |  | $ | — |
Other postretirement benefit liability | $ | 45.0 |  | $ | 47.1 |
Estimated future benefit payments (net of employee contributions) for the next 10 fiscal years are as follows:
(millions) | Retiree medical | Retiree life insurance | Total
2025 | $ | 3.2 |  | $ | 1.4 |  | $ | 4.6 |
2026 | 3.1 |  | 1.4 |  | 4.5 |
2027 | 3.0 |  | 1.3 |  | 4.3 |
2028 | 2.9 |  | 1.3 |  | 4.2 |
2029 | 2.8 |  | 1.2 |  | 4.0 |
2030-2035 | 13.0 |  | 5.5 |  | 18.5 |
The assumed discount rate in determining the benefit obligation was 5.2% and 5.4% for 2024 and 2023, respectively. For 2024, the assumed annual rate of increase in the cost of covered health care benefits is 7.6% (8.5% last year). It is assumed to decrease gradually to 4.5% in the year 2034 (4.5% in 2034 last year) and remain at that level thereafter.

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