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Employee Benefits
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Employee Benefits EMPLOYEE BENEFITS
The Company has pension and/or other retirement benefit plans covering approximately one-fifth of active employees. In 2007, the Company amended its U.S. qualified and non-qualified pension plans under which accrual of future benefits was suspended for all participants that did not meet the rule of 70 (age plus years of service equal to at least 70 as of December 31, 2007). Pension benefits are generally based on years of service and compensation during the final years of employment. Plan assets consist primarily of equity securities and corporate and government fixed income securities. Substantially all pension benefit costs are funded as accrued; such funding is limited, where applicable, to amounts deductible for income tax purposes. Certain other retirement benefits are provided by general corporate assets.
The Company sponsors a qualified defined contribution plan covering substantially all U.S. employees. Under this plan, the Company matches 100% of participants’ contributions up to 4% of compensation and 75% of participants’ contributions from over 4% to 8%. Employees that are still eligible to accrue benefits under the pension plans are limited to a 50% match of up to 6% of the participants’ compensation.
In addition to pension benefits, certain health care and life insurance benefits are provided to qualifying U.S. employees upon retirement from IFF. Such coverage is provided through insurance plans with premiums based on benefits paid. The Company does not generally provide health care or life insurance coverage for retired employees of foreign subsidiaries; such benefits are provided in most foreign countries by government-sponsored plans, and the cost of these programs is not material.
The Company offers a non-qualified Deferred Compensation Plan ("DCP") for certain key employees and non-employee directors. Eligible employees and non-employee directors may elect to defer receipt of salary, incentive payments and Board of Directors’ fees into participant-directed investments which are generally invested by the Company in individual variable life insurance contracts it owns that are designed to informally fund savings plans of this nature. The cash surrender value of life insurance is based on the net asset values of the underlying funds available to plan participants. At December 31, 2020 and December 31, 2019, the Consolidated Balance Sheet reflects liabilities of $58.8 million and $50.9 million, respectively, related to the DCP in Other liabilities and $28.6 million and $28.2 million, respectively, included in Capital in excess of par value related to the portion of the DCP that will be paid out in IFF shares.
The total cash surrender value of life insurance contracts the Company owns in relation to the DCP and post-retirement life insurance benefits amounted to $49.4 million and $47.6 million at December 31, 2020 and 2019, respectively, and are recorded in Other assets in the Consolidated Balance Sheet.
The plan assets and benefit obligations of the defined benefit pension plans are measured at December 31 of each year. 
 U.S. PlansNon-U.S. Plans
(DOLLARS IN THOUSANDS)202020192018202020192018
Components of net periodic benefit cost
Service cost for benefits earned(1)
$1,283 $1,378 $1,971 $23,952 $19,319 $18,738 
Interest cost on projected benefit obligation(2)
17,261 21,954 19,393 12,767 17,775 17,704 
Expected return on plan assets(2)
(28,322)(27,927)(30,994)(45,919)(43,480)(50,546)
Net amortization of deferrals(2)
7,939 5,464 6,592 15,322 11,654 11,798 
Settlements and curtailments(2)
— — — 4,473 189 — 
Net periodic benefit cost(1,839)869 (3,038)10,595 5,457 (2,306)
Defined contribution and other retirement plans12,428 9,363 10,527 7,344 9,001 6,859 
Total expense$10,589 $10,232 $7,489 $17,939 $14,458 $4,553 
Changes in plan assets and benefit obligations recognized in OCI
Net actuarial (gain) loss$(1,204)$(3,140)$69,945 $61,865 
Recognized actuarial loss(7,883)(5,421)(20,437)(12,479)
Prior service cost102 — 367 — 
Recognized prior service (cost) credit(56)(43)642 636 
Currency translation adjustment— — 27,605 6,584 
Total (gain) loss recognized in OCI (before tax effects)$(9,041)$(8,604)$78,122 $56,606 
 _______________________ 
(1)Included as a component of Operating Profit.
(2)Included as a component of Other Income (Expense), net.
 Postretirement Benefits
(DOLLARS IN THOUSANDS)202020192018
Components of net periodic benefit cost
Service cost for benefits earned$603 $568 $755 
Interest cost on projected benefit obligation1,781 2,265 2,460 
Net amortization and deferrals(4,655)(4,919)(5,497)
Total credit$(2,271)$(2,086)$(2,282)
Changes in plan assets and benefit obligations recognized in OCI
Net actuarial loss $4,944 $3,941 
Recognized actuarial loss(1,309)(1,132)
Recognized prior service credit5,964 6,051 
Total recognized in OCI (before tax effects)$9,599 $8,860 
The weighted-average actuarial assumptions used to determine expense at December 31 of each year are: 
U.S. PlansNon-U.S. Plans
202020192018202020192018
Discount rate3.26 %4.31 %3.69 %1.49 %2.22 %2.15 %
Expected return on plan assets5.60 %5.60 %6.20 %4.62 %4.87 %5.19 %
Rate of compensation increase3.25 %3.25 %3.25 %2.46 %1.93 %1.98 %
Changes in the postretirement benefit obligation and plan assets, as applicable, are detailed in the following table:
 U.S. PlansNon-U.S. PlansPostretirement Benefits
(DOLLARS IN THOUSANDS)202020192020201920202019
Benefit obligation at beginning of year$620,654 $562,043 $1,099,084 $957,935 $64,174 $59,625 
Service cost for benefits earned1,283 1,378 23,952 19,319 603 568 
Interest cost on projected benefit obligation17,261 21,954 12,767 17,775 1,781 2,265 
Actuarial (gain) loss 76,749 68,839 108,945 119,891 4,944 3,941 
Plan amendments102 — 367 — — — 
Adjustments for expense/tax contained in service cost— — (1,293)(1,333)— — 
Plan participants’ contributions— — 2,848 2,803 374 437 
Benefits paid(34,402)(33,560)(27,822)(28,977)(3,241)(2,662)
Curtailments / settlements— — (11,125)(3,455)— — 
Translation adjustments— — 85,774 13,935 — — 
Other(24)— 747 1,191 — — 
Benefit obligation at end of year$681,623 $620,654 $1,294,244 $1,099,084 $68,635 $64,174 
Fair value of plan assets at beginning of year$602,408 $532,381 $1,005,283 $896,782 
Actual return on plan assets106,255 99,904 83,625 100,163 
Employer contributions3,710 3,683 21,123 20,031 
Participants’ contributions— — 2,848 2,803 
Benefits paid(34,402)(33,560)(27,822)(28,977)
Settlements— — (11,125)(3,455)
Translation adjustments— — 70,282 16,982 
Other58 — 748 954 
Fair value of plan assets at end of year$678,029 $602,408 $1,144,962 $1,005,283 
Funded status at end of year$(3,594)$(18,246)$(149,282)$(93,801)
The amounts recognized in the balance sheet are detailed in the following table:
U.S. PlansNon-U.S. Plans
(DOLLARS IN THOUSANDS)2020201920202019
Other assets$54,330 $35,239 $46,913 $50,418 
Other current liabilities(4,260)(4,193)(1,357)(1,179)
Retirement liabilities(53,664)(49,292)(194,838)(143,040)
Net amount recognized$(3,594)$(18,246)$(149,282)$(93,801)
The amounts recognized in AOCI are detailed in the following table:
U.S. PlansNon-U.S. PlansPostretirement Benefits
(DOLLARS IN THOUSANDS)202020192020201920202019
Net actuarial loss$133,741 $142,828 $454,420 $376,991 $19,071 $15,436 
Prior service cost (credit)154 108 (2,474)(3,087)(21,174)(27,138)
Total AOCI (before tax effects)$133,895 $142,936 $451,946 $373,904 $(2,103)$(11,702)
 U.S. PlansNon-U.S. Plans
(DOLLARS IN THOUSANDS)2020201920202019
Accumulated Benefit Obligation — end of year$679,957 $618,486 $1,243,461 $1,062,515 
Information for Pension Plans with an ABO in excess of Plan Assets:
Projected benefit obligation$60,313 $55,714 $813,026 $656,574 
Accumulated benefit obligation60,012 55,671 762,308 620,087 
Fair value of plan assets2,389 2,229 616,830 512,356 
Weighted-average assumptions used to determine obligations at December 31
Discount rate2.51 %3.26 %0.85 %1.50 %
Rate of compensation increase3.25 %3.25 %2.55 %2.48 %
(DOLLARS IN THOUSANDS)U.S. PlansNon-U.S. PlansPostretirement
Benefits
Estimated Future Benefit Payments
2021$38,308 $29,364 $3,737 
202238,888 29,406 3,748 
202339,373 30,150 3,735 
202439,761 31,243 3,840 
202539,552 32,774 3,900 
2026 - 2030192,040 180,230 19,351 
Contributions
Required Company Contributions in Following Year (2021)$4,364 $24,964 $3,737 
The Company considers a number of factors in determining and selecting assumptions for the overall expected long-term rate of return on plan assets. The Company considers the historical long-term return experience of its assets, the current and expected allocation of its plan assets and expected long-term rates of return. The Company derives these expected long-term rates of return with the assistance of its investment advisors. The Company bases its expected allocation of plan assets on a diversified portfolio consisting of domestic and international equity securities, fixed income, real estate and alternative asset classes. The asset allocation is monitored on an ongoing basis.
The Company considers a variety of factors in determining and selecting its assumptions for the discount rate at December 31. For the U.S. plans, the discount rate was based on the internal rate of return for a portfolio of high quality bonds rated Aa or higher by either Moody’s or Standard & Poor's with maturities that are consistent with the projected future benefit payment obligations of the plan. For the Non-U.S. Plans, the discount rates were determined by region and are based on high quality long-term corporate bonds. Consideration has been given to the duration of the liabilities in each plan when selecting the bonds to be used in determining the discount rate. The rate of compensation increase for all plans and the medical cost trend rate for the applicable U.S. plans are based on plan experience. 
The percentage of assets in the Company's pension plans, by type, is as follows:
 U.S. PlansNon-U.S. Plans
 2020201920202019
Cash and cash equivalents1 %1 %3 %1 %
Equities29 %13 %10 %14 %
Fixed income70 %86 %38 %37 %
Property— %— %8 %8 %
Alternative and other investments— %— %41 %40 %
With respect to the U.S. plans, the expected return on plan assets was determined based on an asset allocation model using the current target allocation, real rates of return by asset class and an anticipated inflation rate. The target investment allocation is 20% equity securities and 80% fixed income securities.
The expected annual rate of return for the non-U.S. plans employs a similar set of criteria adapted for local investments, inflation rates and in certain cases specific government requirements. The target asset allocation, for the non-U.S. plans, consists of approximately: 35% in fixed income securities; 35% in alternative investments; 15% in equity securities; and 15% in real estate.
The following tables present the Company's plan assets for the U.S. and non-U.S. plans using the fair value hierarchy as of December 31, 2020 and 2019. The plans’ assets were accounted for at fair value and are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and their placement within the fair value hierarchy levels. For more information on a description of the fair value hierarchy, see Note 17.
U.S. Plans for the Year Ended
 December 31, 2020
(DOLLARS IN THOUSANDS)Level 1Level 2Level 3Total
Cash Equivalents$— $3,799 $— $3,799 
Fixed Income Securities
Government & Government Agency Bonds— 19,002 — 19,002 
Corporate Bonds— 104,064 — 104,064 
Municipal Bonds— 6,480 — 6,480 
Assets measured at net asset value(1)
— — — 543,687 
Total$— $133,345 $— $677,032 
Receivables$997 
Total$678,029 
U.S. Plans for the Year Ended
 December 31, 2019
(DOLLARS IN THOUSANDS)Level 1Level 2Level 3Total
Cash Equivalents$— $4,431 $— $4,431 
Fixed Income Securities
Government & Government Agency Bonds— 19,427 — 19,427 
Corporate Bonds— 112,137 — 112,137 
Municipal Bonds— 8,460 — 8,460 
Assets measured at net asset value(1)
— — — 456,606 
Total$— $144,455 $— $601,061 
Receivables$1,347 
Total$602,408 
_______________________ 
(1)Investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table above are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheet. The total amount
measured at net asset value includes approximately $200.8 million and $80.4 million in pooled equity funds and $342.9 million and $376.0 million in fixed income mutual funds for the years ended December 31, 2020 and 2019, respectively.
Non-U.S. Plans for the Year Ended
 December 31, 2020
(DOLLARS IN THOUSANDS)Level 1Level 2Level 3Total
Cash$12,730 $18,864 $— $31,594 
Equity Securities
U.S. Large Cap57,461 7,557 — 65,018 
U.S. Mid Cap5 — — 5 
Non-U.S. Large Cap26,162 — — 26,162 
Non-U.S. Mid Cap1,213 — — 1,213 
Non-U.S. Small Cap872 — — 872 
Emerging Markets25,391 — — 25,391 
Fixed Income Securities
U.S. Treasuries/Government Bonds97 — — 97 
U.S. Corporate Bonds— 43,119 — 43,119 
Non-U.S. Treasuries/Government Bonds162,947 — — 162,947 
Non-U.S. Corporate Bonds33,596 138,920 — 172,516 
Non-U.S. Asset-Backed Securities— 50,717 — 50,717 
Non-U.S. Other Fixed Income2,636 — — 2,636 
Alternative Types of Investments
Insurance Contracts— 247,426 274 247,700 
Derivative Financial Instruments— 91,225 — 91,225 
Absolute Return Funds4,086 92,785 — 96,871 
Other11,191 2,565 18,837 32,593 
Real Estate
Non-U.S. Real Estate— — 94,286 94,286 
Total$338,387 $693,178 $113,397 $1,144,962 
Non-U.S. Plans for the Year Ended
 December 31, 2019
(DOLLARS IN THOUSANDS)Level 1Level 2Level 3Total
Cash$5,921 $— $— $5,921 
Equity Securities
U.S. Large Cap58,926 25,616 — 84,542 
Non-U.S. Large Cap24,720 — — 24,720 
Non-U.S. Mid Cap956 — — 956 
Non-U.S. Small Cap738 — — 738 
Emerging Markets27,374 — — 27,374 
Fixed Income Securities
U.S. Treasuries/Government Bonds108 — — 108 
U.S. Corporate Bonds— 32,013 — 32,013 
Non-U.S. Treasuries/Government Bonds117,890 — — 117,890 
Non-U.S. Corporate Bonds33,320 150,034 — 183,354 
Non-U.S. Asset-Backed Securities— 33,654 — 33,654 
Non-U.S. Other Fixed Income2,553 — — 2,553 
Alternative Types of Investments
Insurance Contracts— 152,025 266 152,291 
Derivative Financial Instruments— 65,016 — 65,016 
Absolute Return Funds3,431 154,463 — 157,894 
Other— 2,330 30,183 32,513 
Real Estate
Non-U.S. Real Estate— — 83,746 83,746 
Total$275,937 $615,151 $114,195 $1,005,283 
Cash and cash equivalents are primarily held in registered money market funds which are valued using a market approach based on the quoted market prices of identical instruments. Other cash and cash equivalents are valued daily by the fund using a market approach with inputs that include quoted market prices for similar instruments.
Equity securities are primarily valued using a market approach based on the quoted market prices of identical instruments. Pooled funds are typically common or collective trusts valued at their net asset values (NAVs).
Fixed income securities are primarily valued using a market approach with inputs that include broker quotes and benchmark yields.
Derivative instruments are valued by the custodian using closing market swap curves and market derived inputs.
Real estate values are primarily based on valuation of the underlying investments, which include inputs such as cost, discounted future cash flows, independent appraisals and market comparable data.
Hedge funds are valued based on valuation of the underlying securities and instruments within the funds. Quoted market prices are used when available and NAVs are used for unquoted securities within the funds.
Absolute return funds are actively managed funds mainly invested in debt and equity securities and are valued at their NAVs.
The following table presents a reconciliation of Level 3 non-U.S. plan assets held during the year ended December 31, 2020:
 Non-U.S. Plans
(DOLLARS IN THOUSANDS)Real
Estate		Hedge
Funds		Total
Ending balance as of December 31, 2019$84,013 $30,182 $114,195 
Actual return on plan assets8,677 1,658 10,335 
Purchases, sales and settlements1,871 (13,004)(11,133)
Ending balance as of December 31, 2020$94,561 $18,836 $113,397 
The following weighted average assumptions were used to determine the postretirement benefit expense and obligation for the years ended December 31:
 ExpenseLiability
 2020201920202019
Discount rate3.30 %4.30 %2.60 %3.30 %
Current medical cost trend rate7.25 %7.50 %7.00 %7.25 %
Ultimate medical cost trend rate4.75 %4.75 %4.75 %4.75 %
Medical cost trend rate decreases to ultimate rate in year2030203020302030
The following table presents the sensitivity of disclosures to changes in selected assumptions for the year ended December 31, 2020: 
(DOLLARS IN THOUSANDS)U.S. Pension PlansNon-U.S. Pension PlansPostretirement Benefit Plan
25 Basis Point Decrease in Discount Rate
Change in PBO18,716 69,107 N/A
Change in ABO18,657 66,092 2,180 
Change in pension expense(219)3,705 265 
25 Basis Point Decrease in Long-Term Rate of Return
Change in pension expense1,266 2,663 N/A
The Company contributed $21.1 million to its non-U.S. pension plans in 2020. No contributions were made to the Company's qualified U.S. pension plans in 2020. The Company made $3.6 million in benefit payments with respect to its non-qualified U.S. pension plan. In addition, $3.2 million of payments were made with respect to the Company's other postretirement plans.