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Postretirement Plans (Tables) | 12 Months Ended
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Jan. 02, 2021
Retirement Benefits [Abstract] |
Summary of Change in Benefit Obligation | The status of Snap-on’s pension plans as of 2020 and 2019 year end is as follows:
(Amounts in millions) |  | 2020 |  | 2019
Change in projected benefit obligation: |  |  |  |
Benefit obligation at beginning of year |  | $ | 1,565.6 |  |  | $ | 1,386.9 |
Service cost |  | 27.0 |  |  | 23.5 |
Interest cost |  | 48.7 |  |  | 56.4 |
Plan participant contributions |  | 0.4 |  |  | 0.5 |
Plan amendments |  | 0.1 |  |  | — |
Benefits paid |  | (72.1) |  |  | (73.0) |
Actuarial loss |  | 122.8 |  |  | 169.5 |
Foreign currency impact |  | 17.5 |  |  | 1.8 |
Benefit obligation at end of year |  | $ | 1,710.0 |  |  | $ | 1,565.6 |
The status of Snap-on’s U.S. postretirement health care plans as of 2020 and 2019 year end is as follows:
(Amounts in millions) |  | 2020 |  | 2019
Change in accumulated postretirement benefit obligation: |  |  |  |
Benefit obligation at beginning of year |  | $ | 49.2 |  |  | $ | 46.8 |
Interest cost |  | 1.5 |  |  | 1.9 |
Plan participant contributions |  | 0.2 |  |  | 0.3 |
Benefits paid |  | (3.6) |  |  | (4.2) |
Actuarial loss |  | 3.3 |  |  | 4.4 |
Benefit obligation at end of year |  | $ | 50.6 |  |  | $ | 49.2 |
Summary of Change in Fair Value of Plan Assets |
Change in plan assets: |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 1,455.5 |  |  | $ | 1,215.6 |
Actual gain on plan assets |  | 227.9 |  |  | 258.7 |
Employer contributions |  | 10.4 |  |  | 50.8 |
Plan participant contributions |  | 0.4 |  |  | 0.4 |
Benefits paid |  | (72.1) |  |  | (73.0) |
Foreign currency impact |  | 10.3 |  |  | 3.0 |
Fair value of plan assets at end of year |  | $ | 1,632.4 |  |  | $ | 1,455.5 |
Unfunded status at end of year |  | $ | (77.6) |  |  | $ | (110.1) |
Change in plan assets: |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 12.8 |  |  | $ | 12.1 |
Actual return on plan assets |  | 1.4 |  |  | 1.5 |
Employer contributions |  | 2.5 |  |  | 3.1 |
Plan participant contributions |  | 0.2 |  |  | 0.3 |
Benefits paid |  | (3.6) |  |  | (4.2) |
Fair value of plan assets at end of year |  | $ | 13.3 |  |  | $ | 12.8 |
Unfunded status at end of year |  | $ | (37.3) |  |  | $ | (36.4) |
Summary of Amounts Recognized in Consolidated Balance Sheets | Amounts recognized in the Consolidated Balance Sheets as of 2020 and 2019 year end are as follows:
(Amounts in millions) |  | 2020 |  | 2019
Other assets |  | $ | 54.2 |  |  | $ | 17.3 |
Accrued benefits |  | (4.7) |  |  | (5.3) |
Pension liabilities |  | (127.1) |  |  | (122.1) |
Net liability |  | $ | (77.6) |  |  | $ | (110.1) |
Amounts recognized in the Consolidated Balance Sheets as of 2020 and 2019 year end are as follows:
(Amounts in millions) |  | 2020 |  | 2019
Accrued benefits |  | $ | (2.8) |  |  | $ | (2.8) |
Retiree health care benefits |  | (34.5) |  |  | (33.6) |
Net liability |  | $ | (37.3) |  |  | $ | (36.4) |
Schedule of Net Periodic Benefit Costs in AOCI | Amounts included in Accumulated OCI on the accompanying Consolidated Balance Sheets as of 2020 and 2019 year end are as follows:
(Amounts in millions) |  | 2020 |  | 2019
Net loss, net of tax of $95.4 million and $104.8 million, respectively |  | $ | (302.2) |  |  | $ | (333.8) |
Prior service cost, net of tax of ($0.2) million and ($0.1) million, respectively |  | (0.7) |  |  | (0.6) |
Total amount included in Accumulated OCI |  | $ | (302.9) |  |  | $ | (334.4) |
Amounts included in Accumulated OCI on the accompanying Consolidated Balance Sheets as of 2020 and 2019 year end are as follows:
(Amounts in millions) |  | 2020 |  | 2019
Net gain, net of tax of $0.5 million and $1.1 million, respectively |  | $ | 1.3 |  |  | $ | 3.2 |
Summary of Components of Net Periodic Benefit Costs and Other Amounts Recognized in Other Comprehensive Income (Loss) | The components of net periodic benefit cost and changes recognized in “Other comprehensive income (loss)” (“OCI”) are as follows:
(Amounts in millions) |  | 2020 |  | 2019 |  | 2018
Net periodic benefit cost: |  |  |  |  |  |
Service cost |  | $ | 27.0 |  |  | $ | 23.5 |  |  | $ | 25.1 |
Interest cost |  | 48.7 |  |  | 56.4 |  |  | 52.8 |
Expected return on plan assets |  | (94.7) |  |  | (91.5) |  |  | (88.6) |
Amortization of unrecognized loss |  | 34.5 |  |  | 25.2 |  |  | 32.7 |
Amortization of prior service credit |  | — |  |  | (0.9) |  |  | (1.2) |
Net periodic benefit cost |  | $ | 15.5 |  |  | $ | 12.7 |  |  | $ | 20.8 |
Changes in benefit obligations recognized in OCI, net of tax: |  |  |  |  |  |
Net (gain) loss |  | $ | (31.6) |  |  | $ | 31.9 |  |  | $ | 35.2 |
Prior service cost |  | 0.1 |  |  | 0.4 |  |  | 1.7 |
Total recognized in OCI |  | $ | (31.5) |  |  | $ | 32.3 |  |  | $ | 36.9 |
The components of net periodic benefit cost and changes recognized in OCI are as follows:
(Amounts in millions) |  | 2020 |  | 2019 |  | 2018
Net periodic benefit cost: |  |  |  |  |  |
Interest cost |  | $ | 1.5 |  |  | $ | 1.9 |  |  | $ | 1.8 |
Expected return on plan assets |  | (0.6) |  |  | (0.7) |  |  | (0.8) |
Amortization of unrecognized gain |  | — |  |  | (0.8) |  |  | (0.4) |
Net periodic benefit cost |  | $ | 0.9 |  |  | $ | 0.4 |  |  | $ | 0.6 |
Changes in benefit obligations recognized in OCI, net of tax: |  |  |  |  |  |
Net (gain) loss |  | $ | 1.9 |  |  | $ | 2.4 |  |  | $ | (1.4) |
Summary of Weighted-Average Assumptions Used to Determine Full-Year Pension Costs | The worldwide weighted-average assumptions used to determine Snap-on’s full-year pension costs are as follows:
|  | 2020 |  | 2019 |  | 2018
Discount rate |  | 3.2% |  | 4.2% |  | 3.7%
Expected return on plan assets |  | 7.0% |  | 7.1% |  | 7.1%
Rate of compensation increase |  | 3.4% |  | 3.4% |  | 3.4%
The worldwide weighted-average assumptions used to determine Snap-on’s projected benefit obligation as of 2020 and 2019 year end are as follows:
|  | 2020 |  | 2019
Discount rate |  | 2.5% |  | 3.2%
Rate of compensation increase |  | 3.4% |  | 3.4%
Interest crediting rate - U.S. cash balance plan |  | 3.8% |  | 3.8%
The weighted-average discount rate used to determine Snap-on’s postretirement health care expense is as follows:
|  | 2020 |  | 2019 |  | 2018
Discount rate |  | 3.1% |  | 4.2% |  | 3.6%
The weighted-average discount rate used to determine Snap-on’s accumulated benefit obligation is as follows:
|  | 2020 |  | 2019
Discount rate |  | 2.3% |  | 3.1%
Summary of Expected Benefit Payments | The following benefit payments, which reflect expected future service, are expected to be paid as follows:
(Amounts in millions) | Amount
Year: |
2021 | $ | 81.6 |
2022 | 93.3 |
2023 | 88.9 |
2024 | 91.9 |
2025 | 93.9 |
2025-2029 | 493.8 |
The following benefit payments, which reflect expected future service, are expected to be paid as follows:
(Amounts in millions) |  | Amount
Year: |  |
2021 |  | $ | 3.6 |
2022 |  | 3.7 |
2023 |  | 3.7 |
2024 |  | 3.8 |
2025 |  | 3.8 |
2025-2029 |  | 19.0 |
Schedule of Allocation of Plan Assets | Snap-on’s domestic pension plans’ target allocation and actual weighted-average asset allocation by asset category and fair value of plan assets as of 2020 and 2019 year end are as follows:
|  | Target |  | 2020 |  | 2019
Asset category: |  |  |  |  |  |
Equity securities |  | 54% |  | 54% |  | 51%
Debt securities and cash and cash equivalents |  | 41% |  | 41% |  | 40%
Real estate and other real assets |  | — |  | — |  | 1%
Hedge funds |  | 5% |  | 5% |  | 8%
Total |  | 100% |  | 100% |  | 100%
Fair value of plan assets (Amounts in millions) |  |  |  | $1,401.0 |  | $1,260.5
The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of Snap-on’s domestic pension plans’ assets as of 2020 year end:
(Amounts in millions) |  | Quoted Prices for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Investments Measured at NAV |  | Total
Asset category: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 30.3 |  |  | $ | — |  |  | $ | — |  |  | $ | 30.3 |
Equity securities: |  |  |  |  |  |  |  |
Domestic |  | 111.8 |  |  | — |  |  | — |  |  | 111.8 |
Foreign |  | 62.4 |  |  | — |  |  | — |  |  | 62.4 |
Commingled funds – domestic |  | — |  |  | — |  |  | 312.9 |  |  | 312.9 |
Commingled funds – foreign |  | — |  |  | — |  |  | 248.5 |  |  | 248.5 |
Private equity partnerships |  | — |  |  | — |  |  | 14.7 |  |  | 14.7 |
Debt securities: |  |  |  |  |  |  |  |
Government |  | 161.7 |  |  | 2.9 |  |  | — |  |  | 164.6 |
Corporate bonds |  | — |  |  | 377.9 |  |  | — |  |  | 377.9 |
Real estate and other real assets |  | — |  |  | — |  |  | 4.3 |  |  | 4.3 |
Hedge funds |  | — |  |  | — |  |  | 73.6 |  |  | 73.6 |
Total |  | $ | 366.2 |  |  | $ | 380.8 |  |  | $ | 654.0 |  |  | $ | 1,401.0 |
The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of Snap-on’s domestic pension plans’ assets as of 2019 year end:
(Amounts in millions) |  | Quoted Prices for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Investments Measured at NAV |  | Total
Asset category: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 25.6 |  |  | $ | — |  |  | $ | — |  |  | $ | 25.6 |
Equity securities: |  |  |  |  |  |  |  |
Domestic |  | 95.1 |  |  | — |  |  | — |  |  | 95.1 |
Foreign |  | 58.4 |  |  | — |  |  | — |  |  | 58.4 |
Commingled funds – domestic |  | — |  |  | — |  |  | 263.6 |  |  | 263.6 |
Commingled funds – foreign |  | — |  |  | — |  |  | 209.4 |  |  | 209.4 |
Private equity partnerships |  | — |  |  | — |  |  | 17.4 |  |  | 17.4 |
Debt securities: |  |  |  |  |  |  |  |
Government |  | 144.0 |  |  | 2.7 |  |  | — |  |  | 146.7 |
Corporate bonds |  | — |  |  | 327.7 |  |  | — |  |  | 327.7 |
Real estate and other real assets |  | — |  |  | — |  |  | 8.8 |  |  | 8.8 |
Hedge funds |  | — |  |  | — |  |  | 107.8 |  |  | 107.8 |
Total |  | $ | 323.1 |  |  | $ | 330.4 |  |  | $ | 607.0 |  |  | $ | 1,260.5 |
Snap-on’s foreign pension plans’ target allocation and actual weighted-average asset allocation by asset category and fair value of plan assets as of 2020 and 2019 year end are as follows:
|  | Target |  | 2020 |  | 2019
Asset category: |  |  |  |  |  |
Equity securities* |  | 46% |  | 46% |  | 46%
Debt securities* and cash and cash equivalents |  | 40% |  | 40% |  | 40%
Insurance contracts and hedge funds |  | 14% |  | 14% |  | 14%
Total |  | 100% |  | 100% |  | 100%
Fair value of plan assets (Amounts in millions) |  |  |  | $231.4 |  | $195.0
* Includes commingled funds - multi-strategy |  |  |
The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of Snap-on’s foreign pension plans’ assets as of 2020 year end:
(Amounts in millions) |  | Quoted Prices for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Investments Measured at NAV |  | Total
Asset category: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1.0 |  |  | $ | — |  |  | $ | — |  |  | $ | 1.0 |
Commingled funds – multi-strategy |  | — |  |  | — |  |  | 162.4 |  |  | 162.4 |
Debt securities: |  |  |  |  |  |  |  |
Government |  | 12.0 |  |  | — |  |  | — |  |  | 12.0 |
Corporate bonds |  | — |  |  | 23.8 |  |  | — |  |  | 23.8 |
Insurance contracts |  | — |  |  | 32.2 |  |  | — |  |  | 32.2 |
Total |  | $ | 13.0 |  |  | $ | 56.0 |  |  | $ | 162.4 |  |  | $ | 231.4 |
The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of Snap-on’s foreign pension plans’ assets as of 2019 year end:
(Amounts in millions) |  | Quoted Prices for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Investments Measured at NAV |  | Total
Asset category: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 0.9 |  |  | $ | — |  |  | $ | — |  |  | $ | 0.9 |
Commingled funds – multi-strategy |  | — |  |  | — |  |  | 135.5 |  |  | 135.5 |
Debt securities: |  |  |  |  |  |  |  |
Government |  | 10.1 |  |  | — |  |  | — |  |  | 10.1 |
Corporate bonds |  | — |  |  | 21.4 |  |  | — |  |  | 21.4 |
Insurance contracts |  | — |  |  | 27.1 |  |  | — |  |  | 27.1 |
Total |  | $ | 11.0 |  |  | $ | 48.5 |  |  | $ | 135.5 |  |  | $ | 195.0 |
Snap-on’s VEBA plan target allocation and actual weighted-average asset allocation by asset category and fair value of plan assets as of 2020 and 2019 year end are as follows:
|  | Target |  | 2020 |  | 2019
Asset category: |  |  |  |  |  |
Debt securities and cash and cash equivalents |  | 46% |  | 46% |  | 51%
Equity securities |  | 29% |  | 35% |  | 31%
Hedge funds |  | 25% |  | 19% |  | 18%
Total |  | 100% |  | 100% |  | 100%
Fair value of plan assets (Amounts in millions) |  |  |  | $13.3 |  | $12.8
The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of the VEBA plan assets as of 2020 year end:
(Amounts in millions) |  | Quoted Prices for Identical Assets (Level 1) |  | Investments Measured at NAV |  | Total
Asset category: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 0.3 |  |  | $ | — |  |  | $ | 0.3 |
Debt securities |  | 5.9 |  |  | — |  |  | 5.9 |
Equity securities |  | — |  |  | 4.6 |  |  | 4.6 |
Hedge fund |  | — |  |  | 2.5 |  |  | 2.5 |
Total |  | $ | 6.2 |  |  | $ | 7.1 |  |  | $ | 13.3 |
The following is a summary, by asset category, of the fair value and the level within the fair value hierarchy of the VEBA plan assets as of 2019 year end:
(Amounts in millions) |  | Quoted Prices for Identical Assets (Level 1) |  | Investments Measured at NAV |  | Total
Asset category: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 0.5 |  |  | $ | — |  |  | $ | 0.5 |
Debt securities |  | 6.0 |  |  | — |  |  | 6.0 |
Equity securities |  | — |  |  | 4.0 |  |  | 4.0 |
Hedge fund |  | — |  |  | 2.3 |  |  | 2.3 |
Total |  | $ | 6.5 |  |  | $ | 6.3 |  |  | $ | 12.8 |

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- Definition Tabular disclosure of the reconciliation of beginning and ending balances of the fair value of plan assets of pension plans and/or other employee benefit plans showing separately, if applicable, the effects during the period attributable to each of the following: actual return on plan assets, foreign currency exchange rate changes, contributions by the employer, contributions by plan participants, benefits paid, business combinations, divestitures, and settlements. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920 + Details
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