Certain eligible U.S. retirees have been provided with an account for the reimbursement of qualifying medical expenses during retirement. Upon achieving specific age and service requirements, certain active associates are eligible for this account upon retirement from the company. Snap-on maintains other health care benefit plans for certain retired U.S. employees.

Snap-on has a Voluntary Employees Beneficiary Association (“VEBA”) trust for the funding of existing postretirement health care benefits for certain union retirees in the United States; all other retiree health care plans are unfunded.


(Amounts in millions)	2025		2024
Change in accumulated postretirement benefit obligation:
Benefit obligation at beginning of year	$	33.5	$	35.8
Interest cost	1.8		1.8
Plan participant contributions	—		0.1
Benefits paid	(3.8)		(3.6)
Actuarial (gain) loss	1.0		(0.6)
Benefit obligation at end of year	32.5		33.5
Change in plan assets:
Fair value of plan assets at beginning of year	11.6		11.4
Return on plan assets	1.6		1.0
Employer contributions	3.0		2.7
Plan participant contributions	—		0.1
Benefits paid	(3.8)		(3.6)
Fair value of plan assets at end of year	12.4		11.6
Unfunded status at end of year	$	(20.1)	$	(21.9)


(Amounts in millions)	2025		2024		2023
Net periodic benefit cost (credit):
Interest cost	$	1.8	$	1.8	$	1.9
Expected return on plan assets	(0.7)		(0.6)		(0.6)
Amortization of unrecognized gain	(1.2)		(1.2)		(1.1)
Net periodic benefit cost (credit)	$	(0.1)	$	—	$	0.2

Changes in benefit obligations recognized in OCI, net of tax:
Net loss	$	1.0	$	0.1	$	0.2

The components of net periodic benefit cost (credit), other than the service cost component, are included in “Other income (expense) – net” on the accompanying Consolidated Statements of Earnings. See Note 17 for additional information on Other income (expense) – net.

The methodology for selecting the year-end 2025 and 2024 weighted-average discount rate for the company’s domestic postretirement plans was to match the plans’ yearly projected cash flows for benefits and service costs to those of hypothetical bond portfolios using high-quality, AA rated or better, corporate bonds from either Moody’s Investors Service or Standard & Poor’s credit rating agencies available at the measurement date. As a practical expedient, Snap-on uses the calendar year end as the measurement date for its plans.

For 2026, the actuarial calculations assume a pre-65 health care cost trend rate of 6.6% and a post-65 health care cost trend rate of 7.0%, both decreasing gradually to 4.0% in 2050 and thereafter.

The objective of the VEBA trust is to achieve net of expense returns that meet or exceed the 5.8% long-term return on plan assets assumption used for reporting purposes. Investments are diversified to attempt to minimize the risk of large losses. Since asset allocation is a key determinant of expected investment returns, assets are periodically rebalanced to the targeted allocation to correct significant deviations from the asset allocation policy that are caused by market fluctuations and cash flow.

The process for determining the overall expected long-term return on plan assets begins by establishing long-term assumptions for core economic variables such as GDP growth and inflation, and long-term assumptions for market variables such as interest rates, credit spreads, earnings growth, and equity valuations. When developing these variables, economic relationships and market histories are applied to a forecast of future conditions. In addition to this valuation component, the total return calculation also factors in fundamentals such as coupons, dividend yields and earnings growth, among others by each respective asset class. The asset return assumption is also adjusted by any expected outperformance related to active investment management and an implicit expense load for estimated administrative and investment-related expenses. Risk and correlation assumptions are developed based on historical analysis as well as an assessment of future conditions.


	Target	2025		2024
Asset category:
Debt securities and cash and cash equivalents	46%	42%		45%
Equity securities	29%	31%		28%
Hedge funds	25%	27%		27%
Total	100%	100%		100%

Fair value of plan assets (Amounts in millions)		$	12.4	$	11.6

The fair value measurement hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority (Level 1) to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority (Level 3) to unobservable inputs. Fair value measurements primarily based on observable market information are given a Level 2 priority.

Debt securities are valued at quoted per share or unit market prices for which an official close or last trade pricing on an active exchange is available and are categorized as Level 1 in the fair value hierarchy.

Equity securities are valued at the NAV per share or unit multiplied by the number of shares or units held as of the measurement date, as reported by the fund managers. The share or unit price is quoted on a private market and is based on the value of the underlying investments, which are primarily based on observable inputs; such investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

Hedge funds are stated at the NAV per share or unit (based on the estimated fair market value of the underlying investments) multiplied by the number of shares or units held as of the measurement date, as reported by the fund managers. These investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy.

The company regularly reviews fund performance directly with its investment advisor and the fund managers, and performs qualitative analysis to corroborate the reasonableness of the reported NAVs. For funds for which the company did not receive a year-end NAV, the company recorded an estimate of the change in fair value for the latest period based on return estimates and other fund activity obtained from the fund managers.

The columns labeled “Investments Measured at NAV” in the following tables are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit a reconciliation of the fair value hierarchy to the VEBA plan assets.


(Amounts in millions)	Quoted Prices for Identical Assets (Level 1)		Investments Measured at NAV		Total
Asset category:
Cash and cash equivalents	$	0.1	$	—	$	0.1
Debt securities	5.1		—		5.1
Equity securities	—		3.9		3.9
Hedge fund	—		3.3		3.3
Total	$	5.2	$	7.2	$	12.4


(Amounts in millions)	Quoted Prices for Identical Assets (Level 1)		Investments Measured at NAV		Total
Asset category:
Cash and cash equivalents	$	0.2	$	—	$	0.2
Debt securities	5.0		—		5.0
Equity securities	—		3.3		3.3
Hedge fund	—		3.1		3.1
Total	$	5.2	$	6.4	$	11.6