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Pension Plans (Tables)

12 Months Ended

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 Benefit Obligations in Excess of Fair Value of Plan Assets

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for Snap-on’s pension plans as of 2020 and 2019 year end are as follows:

(Amounts in millions)						2020						2019
Pension plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligation						$	266.3					$	231.0
Fair value of plan assets						152.6						126.5
Pension plans with projected benefit obligations in excess of plans assets:
Projected benefit obligation						$	284.4					$	1,336.9
Fair value of plan assets						152.6						1,209.5

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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