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Pension | 6 Months Ended
--- | ---
Jun. 30, 2022
Retirement Benefits [Abstract] |
Pension | Note 15. PENSION The Company sponsors both funded and unfunded foreign defined benefit pension plans that cover a portion the Company's employees, and the largest plans are closed to new participants. The Company assumed the pension plans as part of the Chubb Acquisition on January 3, 2022, therefore, the plans used a January 3, 2022 measurement date to determine the Company's preliminary valuation of the pension plans in the purchase price allocation. Guidance under the Financial Accounting Standards Board ("FASB") ASC Topic 715: Compensation – Retirement Benefits requires balance sheet recognition of the overfunded or underfunded status of pension and postretirement benefit plans. Under this guidance, actuarial gains and losses, prior service costs or credits, and any remaining transition assets or obligations that have not been recognized under previous accounting standards must be recognized in other comprehensive income (loss), net of tax effects, until they are amortized as a component of net periodic benefit cost. Pension and post-retirement obligation balances and related costs reflected within the condensed consolidated balance sheets include costs directly attributable to plans dedicated to the Company.
| January 3, 2022 |
Plan assets | $ | 2,615 |
| January 3, 2022 |
Projected benefit obligation ("PBO") funded status |  |
Fair value of plan assets | $ | 2,615 |
Benefit obligations |  | (2,041 | )
Funded status of plans | $ | 574 |
Supplemental condensed consolidated balance sheets information related to pension is as follows:
| January 3, 2022 |
Pension and post-retirement benefits | $ | 626 |
Other accrued liabilities |  | — |
Other noncurrent liabilities |  | (52 | )
Net amount recognized | $ | 574 |
Information for pension plans with accumulated benefit obligations in excess of plan assets:
|  | January 3, 2022 |
PBO |  | $ | 78 |
Accumulated benefit obligation |  |  | 64 |
Fair value of plan assets |  |  | 26 |
Information for pension plans with projected benefit obligations in excess of plan assets:
|  | January 3, 2022 |
PBO |  | $ | 78 |
Accumulated benefit obligation |  |  | 64 |
Fair value of plan assets |  |  | 26 |
The components of the net periodic pension benefit for the defined benefit pension plans are as follows:
|  | Three Months Ended June 30, 2022 |  |  | Six Months Ended June 30, 2022 |
Service cost |  | $ | 4 |  |  | $ | 6 |
Interest cost |  |  | 8 |  |  |  | 17 |
Expected return on plan assets |  |  | (18 | ) |  |  | (38 | )
Net periodic pension benefit |  | $ | (6 | ) |  | $ | (15 | )
Major assumptions used in determining the benefit obligation and net periodic benefit cost for pension plans are presented in the following table as weighted averages:
| Three and Six Months Ended June 30, 2022 |
| Benefit Obligation |  |  | Net Periodic Benefit Cost |
Discount rates: |  |  |  |  |
PBO |  | 1.9 | % |  |  | 1.9 | %
Interest cost |  | — |  |  |  | 1.7 | %
Service cost |  | — |  |  |  | 2.2 | %
Salary scale |  | 2.9 | % |  |  | 2.9 | %
Expected return on plan assets |  | — |  |  |  | 3.1 | %
Non-U.S. pension plan assets are typically managed by decentralized fiduciary committees. The disclosure below of asset categories is presented in aggregate for 12 defined benefit plans in 7 countries; however, there is variation in asset allocation policy from country to country. Local regulations, local funding rules, and local financial and tax considerations are part of the funding and investment allocation process in each country. Each plan has its own strategic asset allocation. The asset allocations are reviewed periodically and rebalanced when necessary. The fair value of the pension plan assets by asset category are as follows:
| Quoted Prices in |  | Significant |  | Significant |  |  |  |  |
| Active Markets for |  | Observable |  | Unobservable |  | Not |  |  |
| Identical Assets |  | Inputs |  | Inputs |  | Subject to |  |  |
Asset Category | Level 1 |  | Level 2 |  | Level 3 |  | Leveling |  | Total |
Public equities: |  |  |  |  |  |  |  |  |  |
Global equity funds at net asset value 1 | $ | — |  | $ | — |  | $ | — |  | $ | 238 |  | $ | 238 |
Fixed income securities: |  |  |  |  |  |  |  |  |  |
Governments |  | — |  |  | 1,608 |  |  | — |  |  | 69 |  |  | 1,677 |
Corporate bonds |  | — |  |  | 638 |  |  | — |  |  | — |  |  | 638 |
Fixed income securities 1 |  | — |  |  | — |  |  | — |  |  | 106 |  |  | 106 |
Real estate 1,2 |  | — |  |  | — |  |  | — |  |  | 11 |  |  | 11 |
Other 1,3 |  | — |  |  | (212 | ) |  | — |  |  | 59 |  |  | (153 | )
Cash & cash equivalents 1,4 |  | — |  |  | 33 |  |  | — |  |  | 65 |  |  | 98 |
Subtotal | $ | — |  | $ | 2,067 |  | $ | — |  | $ | 548 |  | $ | 2,615 |
Other assets & liabilities 5 |  |  |  |  |  |  |  |  |  | — |
Total at January 3, 2022 |  |  |  |  |  |  |  |  | $ | 2,615 |
(1) In accordance with ASU 2015-07 Fair Value Measurement (Topic 820) certain investments that are measured at fair value using 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 this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension assets. (2) Represents investments in real estate, including commingled funds and directly held properties. (3) Represents insurance contracts and global risk balanced commingled funds consisting mainly of equity, bonds and some commodities. (4) Represents short-term commercial paper, bonds, and other cash or cash-like investments. (5) Represents trust receivables and payables that are not leveled. Derivatives in the plan are primarily used to manage risk and gain asset class exposure while still maintaining liquidity. Derivative instruments mainly consist of equity futures, interest rate futures, interest rate swaps and currency forward contracts. The plans review assets at least quarterly to ensure they are within the targeted asset allocation ranges and, if necessary, asset balances are adjusted back within target allocations. The plans generally employ a broadly diversified investment manager structure that includes diversification by active and passive management, style, capitalization, country, sector, industry and number of investment managers. Quoted market prices are used to value investments when available. Investments in securities traded on exchanges, including listed futures and options, are valued at the last reported sale prices on the last business day of the year or, if not available, the last reported bid prices. Fixed income securities are primarily measured using a market approach pricing methodology, where observable prices are obtained by market transactions involving identical or comparable securities of issuers with similar credit ratings. Mortgages have been valued on the basis of their future principal and interest payments discounted at prevailing interest rates for similar investments. Investment contracts are valued at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations. Real estate investments are valued on a quarterly basis using discounted cash flow models which consider long-term lease estimates, future rental receipts and estimated residual values. Valuation estimates are supplemented by third-party appraisals on an annual basis. Over-the-counter securities and government obligations are valued at the bid prices or the average of the bid and ask prices on the last business day of the year from published sources or, if not available, from other sources considered reliable, generally broker quotes. Temporary cash investments are stated at cost, which approximates fair value. The Company expects to make total contributions of approximately $33 to the global defined benefit pension plans in 2022, of which a one-time contribution of $27 was made during the first quarter of 2022. Contributions do not reflect benefits to be paid directly from corporate assets. Benefit payments, including amounts to be paid from the plans and corporate assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: $94 in 2022, $94 in 2023, $95 in 2024, $96 in 2025, $95 in 2026, and $502 from 2027 through 2030.

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