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Postretirement Plans (Tables) | 12 Months Ended
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Jan. 01, 2022
Retirement Benefits [Abstract] |
Summary of Change in Benefit Obligation | The status of Snap-on’s pension plans as of 2021 and 2020 year end is as follows:
(Amounts in millions) |  | 2021 |  | 2020
Change in projected benefit obligation: |  |  |  |
Benefit obligation at beginning of year |  | $ | 1,710.0 |  |  | $ | 1,565.6 |
Service cost |  | 28.8 |  |  | 27.0 |
Interest cost |  | 42.3 |  |  | 48.7 |
Plan participant contributions |  | 0.5 |  |  | 0.4 |
Plan amendments |  | — |  |  | 0.1 |
Benefits paid |  | (75.6) |  |  | (72.1) |
Actuarial (gain) loss |  | (30.2) |  |  | 122.8 |
Foreign currency impact |  | (8.7) |  |  | 17.5 |
Benefit obligation at end of year |  | $ | 1,667.1 |  |  | $ | 1,710.0 |
The status of Snap-on’s U.S. postretirement health care plans as of 2021 and 2020 year end is as follows:
(Amounts in millions) |  | 2021 |  | 2020
Change in accumulated postretirement benefit obligation: |  |  |  |
Benefit obligation at beginning of year |  | $ | 50.6 |  |  | $ | 49.2 |
Interest cost |  | 1.1 |  |  | 1.5 |
Plan participant contributions |  | 0.2 |  |  | 0.2 |
Benefits paid |  | (3.6) |  |  | (3.6) |
Actuarial (gain) loss |  | (0.8) |  |  | 3.3 |
Benefit obligation at end of year |  | $ | 47.5 |  |  | $ | 50.6 |
Summary of Change in Fair Value of Plan Assets |
Change in plan assets: |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 1,632.4 |  |  | $ | 1,455.5 |
Actual gain on plan assets |  | 146.3 |  |  | 227.9 |
Employer contributions |  | 10.7 |  |  | 10.4 |
Plan participant contributions |  | 0.5 |  |  | 0.4 |
Benefits paid |  | (75.6) |  |  | (72.1) |
Foreign currency impact |  | (3.4) |  |  | 10.3 |
Fair value of plan assets at end of year |  | $ | 1,710.9 |  |  | $ | 1,632.4 |
Funded (unfunded) status at end of year |  | $ | 43.8 |  |  | $ | (77.6) |
Change in plan assets: |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 13.3 |  |  | $ | 12.8 |
Actual return on plan assets |  | 1.1 |  |  | 1.4 |
Employer contributions |  | 2.7 |  |  | 2.5 |
Plan participant contributions |  | 0.2 |  |  | 0.2 |
Benefits paid |  | (3.6) |  |  | (3.6) |
Fair value of plan assets at end of year |  | $ | 13.7 |  |  | $ | 13.3 |
Unfunded status at end of year |  | $ | (33.8) |  |  | $ | (37.3) |
Summary of Amounts Recognized in Consolidated Balance Sheets | Amounts recognized in the Consolidated Balance Sheets as of 2021 and 2020 year end are as follows:
(Amounts in millions) |  | 2021 |  | 2020
Other assets |  | $ | 160.7 |  |  | $ | 54.2 |
Accrued benefits |  | (12.0) |  |  | (4.7) |
Pension liabilities |  | (104.9) |  |  | (127.1) |
Net asset (liability) |  | $ | 43.8 |  |  | $ | (77.6) |
Amounts recognized in the Consolidated Balance Sheets as of 2021 and 2020 year end are as follows:
(Amounts in millions) |  | 2021 |  | 2020
Accrued benefits |  | $ | (2.7) |  |  | $ | (2.8) |
Retiree health care benefits |  | (31.1) |  |  | (34.5) |
Net liability |  | $ | (33.8) |  |  | $ | (37.3) |
Schedule of Net Periodic Benefit Costs in AOCI | Amounts included in Accumulated OCI on the accompanying Consolidated Balance Sheets as of 2021 and 2020 year end are as follows:
(Amounts in millions) |  | 2021 |  | 2020
Net loss, net of tax of $68.1 million and $95.4 million, respectively |  | $ | (209.4) |  |  | $ | (302.2) |
Prior service cost, net of tax of ($0.2) million and ($0.2) million, respectively |  | (0.6) |  |  | (0.7) |
Total amount included in Accumulated OCI |  | $ | (210.0) |  |  | $ | (302.9) |
Amounts included in Accumulated OCI on the accompanying Consolidated Balance Sheets as of 2021 and 2020 year end are as follows:
(Amounts in millions) |  | 2021 |  | 2020
Net gain, net of tax of $0.8 million and $0.5 million, respectively |  | $ | 2.3 |  |  | $ | 1.3 |
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) |  | 2021 |  | 2020 |  | 2019
Net periodic benefit cost: |  |  |  |  |  |
Service cost |  | $ | 28.8 |  |  | $ | 27.0 |  |  | $ | 23.5 |
Interest cost |  | 42.3 |  |  | 48.7 |  |  | 56.4 |
Expected return on plan assets |  | (94.4) |  |  | (94.7) |  |  | (91.5) |
Amortization of unrecognized loss |  | 36.3 |  |  | 34.5 |  |  | 25.2 |
Amortization of prior service cost (credit) |  | 0.1 |  |  | — |  |  | (0.9) |
Net periodic benefit cost |  | $ | 13.1 |  |  | $ | 15.5 |  |  | $ | 12.7 |
Changes in benefit obligations recognized in OCI, net of tax: |  |  |  |  |  |
Net (gain) loss |  | $ | (92.8) |  |  | $ | (31.6) |  |  | $ | 31.9 |
Prior service cost (credit) |  | (0.1) |  |  | 0.1 |  |  | 0.4 |
Total recognized in OCI |  | $ | (92.9) |  |  | $ | (31.5) |  |  | $ | 32.3 |
The components of net periodic benefit cost and changes recognized in OCI are as follows:
(Amounts in millions) |  | 2021 |  | 2020 |  | 2019
Net periodic benefit cost: |  |  |  |  |  |
Interest cost |  | $ | 1.1 |  |  | $ | 1.5 |  |  | $ | 1.9 |
Expected return on plan assets |  | (0.6) |  |  | (0.6) |  |  | (0.7) |
Amortization of unrecognized gain |  | — |  |  | — |  |  | (0.8) |
Net periodic benefit cost |  | $ | 0.5 |  |  | $ | 0.9 |  |  | $ | 0.4 |
Changes in benefit obligations recognized in OCI, net of tax: |  |  |  |  |  |
Net (gain) loss |  | $ | (1.0) |  |  | $ | 1.9 |  |  | $ | 2.4 |
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:
|  | 2021 |  | 2020 |  | 2019
Discount rate |  | 2.5% |  | 3.2% |  | 4.2%
Expected return on plan assets |  | 6.5% |  | 7.0% |  | 7.1%
Rate of compensation increase |  | 3.4% |  | 3.4% |  | 3.4%
Interest crediting rate - U.S. cash balance plan |  | 3.8% |  | 3.8% |  | 3.8%
The worldwide weighted-average assumptions used to determine Snap-on’s projected benefit obligation as of 2021 and 2020 year end are as follows:
|  | 2021 |  | 2020
Discount rate |  | 2.8% |  | 2.5%
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:
|  | 2021 |  | 2020 |  | 2019
Discount rate |  | 2.3% |  | 3.1% |  | 4.2%
The weighted-average discount rate used to determine Snap-on’s accumulated benefit obligation is as follows:
|  | 2021 |  | 2020
Discount rate |  | 2.7% |  | 2.3%
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: |
2022 | $ | 92.4 |
2023 | 87.6 |
2024 | 91.5 |
2025 | 92.6 |
2026 | 94.5 |
2027-2031 | 493.9 |
The following benefit payments, which reflect expected future service, are expected to be paid as follows:
(Amounts in millions) |  | Amount
Year: |  |
2022 |  | $ | 3.5 |
2023 |  | 3.5 |
2024 |  | 3.6 |
2025 |  | 3.6 |
2026 |  | 3.6 |
2027-2031 |  | 18.2 |
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 2021 and 2020 year end are as follows:
|  | Target |  | 2021 |  | 2020
Asset category: |  |  |  |  |  |
Equity securities |  | 54% |  | 52% |  | 54%
Debt securities and cash and cash equivalents |  | 41% |  | 42% |  | 41%
Hedge funds |  | 5% |  | 6% |  | 5%
Total |  | 100% |  | 100% |  | 100%
Fair value of plan assets (Amounts in millions) |  |  |  | $1,464.7 |  | $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 2021 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 |  | $ | 23.7 |  |  | $ | — |  |  | $ | — |  |  | $ | 23.7 |
Equity securities: |  |  |  |  |  |  |  |
Domestic |  | 109.4 |  |  | — |  |  | — |  |  | 109.4 |
Foreign |  | 59.1 |  |  | — |  |  | — |  |  | 59.1 |
Commingled funds – domestic |  | — |  |  | — |  |  | 311.7 |  |  | 311.7 |
Commingled funds – foreign |  | — |  |  | — |  |  | 261.4 |  |  | 261.4 |
Private equity partnerships |  | — |  |  | — |  |  | 14.5 |  |  | 14.5 |
Debt securities: |  |  |  |  |  |  |  |
Government |  | 180.0 |  |  | 0.7 |  |  | — |  |  | 180.7 |
Corporate bonds |  | — |  |  | 414.3 |  |  | — |  |  | 414.3 |
Real estate and other real assets |  | — |  |  | — |  |  | 2.7 |  |  | 2.7 |
Hedge funds |  | — |  |  | — |  |  | 87.2 |  |  | 87.2 |
Total |  | $ | 372.2 |  |  | $ | 415.0 |  |  | $ | 677.5 |  |  | $ | 1,464.7 |
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 |
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 2021 and 2020 year end are as follows:
|  | Target |  | 2021 |  | 2020
Asset category: |  |  |  |  |  |
Equity securities* |  | 44% |  | 43% |  | 46%
Debt securities* and cash and cash equivalents |  | 44% |  | 45% |  | 40%
Insurance contracts and hedge funds |  | 12% |  | 12% |  | 14%
Total |  | 100% |  | 100% |  | 100%
Fair value of plan assets (Amounts in millions) |  |  |  | $246.2 |  | $231.4
* 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 2021 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 |  | $ | 1.8 |  |  | $ | — |  |  | $ | — |  |  | $ | 1.8 |
Commingled funds – multi-strategy |  | — |  |  | — |  |  | 172.5 |  |  | 172.5 |
Debt securities: |  |  |  |  |  |  |  |
Government |  | 13.9 |  |  | — |  |  | — |  |  | 13.9 |
Corporate bonds |  | — |  |  | 28.1 |  |  | — |  |  | 28.1 |
Insurance contracts |  | — |  |  | 29.9 |  |  | — |  |  | 29.9 |
Total |  | $ | 15.7 |  |  | $ | 58.0 |  |  | $ | 172.5 |  |  | $ | 246.2 |
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 |
Snap-on’s VEBA plan target allocation and actual weighted-average asset allocation by asset category and fair value of plan assets as of 2021 and 2020 year end are as follows:
|  | Target |  | 2021 |  | 2020
Asset category: |  |  |  |  |  |
Debt securities and cash and cash equivalents |  | 46% |  | 44% |  | 46%
Equity securities |  | 29% |  | 34% |  | 35%
Hedge funds |  | 25% |  | 22% |  | 19%
Total |  | 100% |  | 100% |  | 100%
Fair value of plan assets (Amounts in millions) |  |  |  | $13.7 |  | $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 2021 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 |  | 5.8 |  |  | — |  |  | 5.8 |
Equity securities |  | — |  |  | 4.6 |  |  | 4.6 |
Hedge fund |  | — |  |  | 3.0 |  |  | 3.0 |
Total |  | $ | 6.1 |  |  | $ | 7.6 |  |  | $ | 13.7 |
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 |

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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=123447040&loc=d3e1928-114920 + Details
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