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Retirement Benefits | 12 Months Ended
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Dec. 31, 2023
Retirement Benefits [Abstract] |
Retirement Benefits | Retirement Benefits The Company sponsors several qualified and nonqualified defined benefit and defined contribution pension plans as well as other post-retirement plans for its employees. The Company uses a measurement date of December 31 for its defined benefit pension plans and post-retirement medical plans. The Company employs the measurement date provisions of ASC 715, Compensation-Retirement Benefits, which require the measurement date of plan assets and liabilities to coincide with the sponsor’s year end. During the year ended December 31, 2021, the Company settled its remaining obligations under the IDEX Corporation Retirement Plan (“Plan”), a U.S. defined benefit plan which was terminated in May 2020, through a combination of lump-sum payments to eligible participants who elected them, and through the purchase of annuities from Legal and General, an A rated third-party insurer. The Company recognized a net loss of $9.7 million, which was recorded within Other expense (income) - net. The net loss consisted of $10.7 million related to previously deferred pension related costs, partially offset by $1.0 million related to an increase in plan assets remaining after the settlement. The following table provides a reconciliation of the changes in the benefit obligation and fair value of plan assets over the two-year period ended December 31, 2023 and a statement of the funded status at December 31 for both years.
| Pension Benefits |  | Other Benefits
| 2023 |  | 2022 |  | 2023 |  | 2022
| U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S. |  |  |  |
CHANGE IN BENEFIT OBLIGATION
Obligation at January 1 | $ | 8.3 |  |  | $ | 75.7 |  |  | $ | 10.6 |  |  | $ | 104.3 |  |  | $ | 16.4 |  |  | $ | 23.6 |
Service cost | 0.1 |  |  | 1.2 |  |  | 0.1 |  |  | 1.8 |  |  | 0.4 |  |  | 0.7 |
Interest cost | 0.4 |  |  | 2.8 |  |  | 0.2 |  |  | 1.0 |  |  | 0.8 |  |  | 0.5 |
Plan amendments | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Benefits paid | (0.7) |  |  | (1.4) |  |  | (0.6) |  |  | (0.8) |  |  | (0.9) |  |  | (1.0) |
Actuarial loss (gain) | 0.4 |  |  | 6.2 |  |  | (2.0) |  |  | (27.8) |  |  | 0.5 |  |  | (7.3) |
Currency translation | — |  |  | 5.2 |  |  | — |  |  | (6.1) |  |  | — |  |  | (0.1) |
Settlements | — |  |  | (3.0) |  |  | — |  |  | (0.1) |  |  | — |  |  | — |
Curtailments | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Acquisition/Divestiture | — |  |  | 1.0 |  |  | — |  |  | 2.7 |  |  | — |  |  | — |
Other | 0.4 |  |  | 0.8 |  |  | — |  |  | 0.7 |  |  | — |  |  | — |
Obligation at December 31 | $ | 8.9 |  |  | $ | 88.5 |  |  | $ | 8.3 |  |  | $ | 75.7 |  |  | $ | 17.2 |  |  | $ | 16.4 |
CHANGE IN PLAN ASSETS |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at January 1 | $ | 4.7 |  |  | $ | 37.8 |  |  | $ | 17.0 |  |  | $ | 46.1 |  |  | $ | — |  |  | $ | — |
Actual return on plan assets | (0.3) |  |  | 0.9 |  |  | (2.0) |  |  | (10.5) |  |  | — |  |  | — |
Employer contributions | 0.4 |  |  | 3.3 |  |  | 0.4 |  |  | 2.8 |  |  | 0.9 |  |  | 1.0 |
Benefits paid | (0.7) |  |  | (1.4) |  |  | (0.6) |  |  | (0.8) |  |  | (0.9) |  |  | (1.0) |
Currency translation | — |  |  | 3.2 |  |  | — |  |  | (2.5) |  |  | — |  |  | — |
Settlements | — |  |  | (3.0) |  |  | — |  |  | (0.1) |  |  | — |  |  | — |
Acquisition/Divestiture | — |  |  | — |  |  | — |  |  | 2.0 |  |  | — |  |  | — |
Other | 0.2 |  |  | 0.9 |  |  | (10.1) |  |  | 0.8 |  |  | — |  |  | — |
Fair value of plan assets at December 31 | $ | 4.3 |  |  | $ | 41.7 |  |  | $ | 4.7 |  |  | $ | 37.8 |  |  | $ | — |  |  | $ | — |
Funded status at December 31 | $ | (4.6) |  |  | $ | (46.8) |  |  | $ | (3.6) |  |  | $ | (37.9) |  |  | $ | (17.2) |  |  | $ | (16.4) |
COMPONENTS ON THE CONSOLIDATED BALANCE SHEETS
Other current assets | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Other noncurrent assets | — |  |  | 1.5 |  |  | — |  |  | 0.5 |  |  | — |  |  | — |
Current liabilities | (0.7) |  |  | (1.7) |  |  | (0.7) |  |  | (1.5) |  |  | (1.1) |  |  | (1.1) |
Other noncurrent liabilities | (3.9) |  |  | (46.6) |  |  | (2.9) |  |  | (36.9) |  |  | (16.1) |  |  | (15.3) |
Net asset (liability) at December 31 | $ | (4.6) |  |  | $ | (46.8) |  |  | $ | (3.6) |  |  | $ | (37.9) |  |  | $ | (17.2) |  |  | $ | (16.4) |
The pension benefits actuarial loss in 2023 was primarily driven by the decrease in the discount rates from 2022 to 2023. The increase in the Eurozone inflation rate contributed further to the reported Non-U.S. pension actuarial loss. The other benefits actuarial loss in 2023 was primarily driven by the decrease in the discount rates from 2022 to 2023 with additional losses from the updated medical trend assumptions for the U.S. plans, partially offset by gains from updated participants data. The accumulated benefit obligation for all defined benefit pension plans was $94.6 million and $81.9 million at December 31, 2023 and 2022, respectively. The weighted average assumptions used in the measurement of the Company’s benefit obligation at December 31, 2023 and 2022 were as follows:
| U.S. Plans |  | Non-U.S. Plans |  | Other Benefits
| 2023 |  | 2022 |  | 2023 |  | 2022 |  | 2023 |  | 2022
Discount rate | 4.93 | % |  | 5.17 | % |  | 3.01 | % |  | 3.75 | % |  | 4.90 | % |  | 5.21 | %
Rate of compensation increase | — | % |  | — | % |  | 2.55 | % |  | 2.44 | % |  | — | % |  | — | %
Cash balance interest credit rate | — | % |  | — | % |  | 1.43 | % |  | 2.42 | % |  | — | % |  | — | %
The pretax amounts recognized in Accumulated other comprehensive loss on the Consolidated Balance Sheets as of December 31, 2023 and 2022 were as follows:
| Pension Benefits |  | Other Benefits
| 2023 |  | 2022 |  | 2023 |  | 2022
| U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S. |  |  |  |
Prior service cost (credit) | $ | 0.2 |  |  | $ | (0.4) |  |  | $ | 0.1 |  |  | $ | (0.5) |  |  | $ | (0.3) |  |  | $ | (0.4) |
Net loss (gain) | 2.7 |  |  | 1.8 |  |  | 1.9 |  |  | (5.5) |  |  | (8.6) |  |  | (9.9) |
Total | $ | 2.9 |  |  | $ | 1.4 |  |  | $ | 2.0 |  |  | $ | (6.0) |  |  | $ | (8.9) |  |  | $ | (10.3) |
The components of the net periodic cost (benefit) for the plans in 2023, 2022 and 2021 are as follows:
| Pension Benefits
| 2023 |  | 2022 |  | 2021
| U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S.
Service cost | $ | 0.1 |  |  | $ | 1.2 |  |  | $ | 0.1 |  |  | $ | 1.8 |  |  | $ | 0.1 |  |  | $ | 2.0 |
Interest cost | 0.4 |  |  | 2.8 |  |  | 0.2 |  |  | 1.0 |  |  | 0.3 |  |  | 0.7 |
Expected return on plan assets | (0.2) |  |  | (1.6) |  |  | (0.2) |  |  | (1.3) |  |  | (0.9) |  |  | (1.0) |
Settlement (gain) loss recognized | — |  |  | (0.1) |  |  | — |  |  | — |  |  | 10.5 |  |  | — |
Net amortization | 0.1 |  |  | (0.6) |  |  | 0.3 |  |  | 0.6 |  |  | 0.4 |  |  | 2.1 |
Net periodic cost | $ | 0.4 |  |  | $ | 1.7 |  |  | $ | 0.4 |  |  | $ | 2.1 |  |  | $ | 10.4 |  |  | $ | 3.8 |
| Other Benefits
| 2023 |  | 2022 |  | 2021
Service cost | $ | 0.4 |  |  | $ | 0.7 |  |  | $ | 0.7 |
Interest cost | 0.8 |  |  | 0.5 |  |  | 0.4 |
Curtailment gain recognized | — |  |  | — |  |  | (2.0) |
Net amortization | (0.9) |  |  | (0.5) |  |  | (0.6) |
Net periodic cost (benefit) | $ | 0.3 |  |  | $ | 0.7 |  |  | $ | (1.5) |
The Company recognizes the service cost component in both Cost of sales and Selling, general and administrative expenses in the Consolidated Statements of Income depending on the functional area of the underlying employees and the interest cost, expected return on plan assets and net amortization components in Other expense (income) - net in the Consolidated Statements of Income. The assumptions used in determining the net periodic cost (benefit) were as follows:
| U.S. Plans |  | Non-U.S. Plans
| 2023 |  | 2022 |  | 2021 |  | 2023 |  | 2022 |  | 2021
Discount rate | 5.17 | % |  | 2.52 | % |  | 2.14 | % |  | 3.75 | % |  | 1.25 | % |  | 0.95 | %
Expected return on plan assets | 4.65 | % |  | 2.63 | % |  | 2.40 | % |  | 4.17 | % |  | 2.87 | % |  | 2.41 | %
Rate of compensation increase | — | % |  | — | % |  | — | % |  | 2.44 | % |  | 2.31 | % |  | 2.32 | %
| Other Benefits
| 2023 |  | 2022 |  | 2021
Discount rate | 5.21 | % |  | 2.70 | % |  | 2.20 | %
Expected return on plan assets | — | % |  | — | % |  | — | %
Rate of compensation increase | — | % |  | — | % |  | — | %
The pretax change recognized in Accumulated other comprehensive loss on the Consolidated Balance Sheet in 2023 is as follows:
| Pension Benefits |  | Other Benefits
| U.S. |  | Non-U.S. |  |
Net loss in current year | $ | (0.9) |  |  | $ | (6.9) |  |  | $ | (0.4) |
Prior service cost | (0.1) |  |  | — |  |  | — |
Amortization of prior service credit | — |  |  | (0.1) |  |  | (0.1) |
Amortization of net loss (gain) | 0.1 |  |  | (0.5) |  |  | (0.9) |
Exchange rate effect on amounts in other comprehensive income | — |  |  | 0.1 |  |  | — |
Total | $ | (0.9) |  |  | $ | (7.4) |  |  | $ | (1.4) |
The discount rates for the Company’s plans are derived by matching the plan’s cash flows to a yield curve that provides the equivalent yields on zero-coupon bonds for each maturity. The discount rate selected is the rate that produces the same present value of cash flows. In selecting the expected rate of return on plan assets, the Company considers the historical returns and expected returns on plan assets. The expected returns are evaluated using asset return class, variance and correlation assumptions based on the plan’s target asset allocation and current market conditions. Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation or the market value of assets are amortized over the average remaining service period of active participants. Costs of defined contribution plans were $16.8 million, $16.1 million and $12.8 million for 2023, 2022 and 2021, respectively. The Company, through its subsidiaries, participates in a multi-employer pension plan covering approximately 211 participants under U.S. collective bargaining agreements. None of these plans are considered individually significant to the Company as contributions to these plans totaled $0.9 million, $0.8 million, and $1.0 million for 2023, 2022 and 2021, respectively. For measurement purposes, a 6.23% weighted average annual rate of increase in the per capita cost of covered health care benefits was assumed for 2023. The rate was assumed to decrease gradually each year to a rate of 4.00% for 2040, and remain at that level thereafter. Plan Assets The Company’s pension plan weighted average asset allocations at December 31, 2023 and 2022, by asset category, were as follows:
| U.S. Plans |  | Non-U.S. Plans
| 2023 |  | 2022 |  | 2023 |  | 2022
Equity securities | 9 | % |  | 9 | % |  | 10 | % |  | 13 | %
Fixed income securities | 79 | % |  | 84 | % |  | 22 | % |  | 19 | %
Cash/Commingled Funds/Other (1) | 12 | % |  | 7 | % |  | 68 | % |  | 68 | %
Total | 100 | % |  | 100 | % |  | 100 | % |  | 100 | %
The basis used to measure the defined benefit plans’ assets at fair value at December 31, 2023 and 2022 is summarized as follows:
| Basis of Fair Value Measurement
| Outstanding Balances |  | Level 1 |  | Level 2 |  | Level 3
As of December 31, 2023 |
Equity |  |  |  |  |  |  |
U.S. Large Cap | $ | 0.2 |  |  | $ | 0.2 |  |  | $ | — |  |  | $ | — |
U.S. Small / Mid Cap | 2.1 |  |  | — |  |  | 2.1 |  |  | — |
International | 2.4 |  |  | 0.8 |  |  | 1.6 |  |  | — |
Fixed Income |  |  |  |  |  |  |
U.S. Intermediate | 2.5 |  |  | — |  |  | 2.5 |  |  | — |
U.S. Long Term | 3.3 |  |  | — |  |  | 3.3 |  |  | — |
U.S. High Yield | 0.5 |  |  | — |  |  | 0.5 |  |  | — |
International | 6.4 |  |  | 0.2 |  |  | 6.2 |  |  | — |
Other Commingled Funds(1) | 25.8 |  |  | — |  |  | — |  |  | 25.8 |
Cash and Equivalents | 1.1 |  |  | 0.6 |  |  | 0.5 |  |  | — |
Other | 1.7 |  |  | — |  |  | 1.7 |  |  | — |
| $ | 46.0 |  |  | $ | 1.8 |  |  | $ | 18.4 |  |  | $ | 25.8 |
(1)Other commingled funds represent pooled institutional investments in non-U.S. plans.
| Basis of Fair Value Measurement
| Outstanding Balances |  | Level 1 |  | Level 2 |  | Level 3
As of December 31, 2022 |
Equity |  |  |  |  |  |  |
U.S. Large Cap | $ | 0.2 |  |  | $ | 0.2 |  |  | $ | — |  |  | $ | — |
U.S. Small / Mid Cap | 2.5 |  |  | — |  |  | 2.5 |  |  | — |
International | 2.5 |  |  | 0.8 |  |  | 1.7 |  |  | — |
Fixed Income |  |  |  |  |  |  |
U.S. Intermediate | 1.6 |  |  | — |  |  | 1.6 |  |  | — |
U.S. Long Term | 3.8 |  |  | — |  |  | 3.8 |  |  | — |
U.S. High Yield | 0.4 |  |  | — |  |  | 0.4 |  |  | — |
International | 5.4 |  |  | 0.2 |  |  | 5.2 |  |  | — |
Other Commingled Funds(1) | 23.7 |  |  | — |  |  | — |  |  | 23.7 |
Cash and Equivalents | 1.0 |  |  | 0.4 |  |  | 0.6 |  |  | — |
Other | 1.4 |  |  | — |  |  | 1.4 |  |  | — |
| $ | 42.5 |  |  | $ | 1.6 |  |  | $ | 17.2 |  |  | $ | 23.7 |
(1)Other commingled funds represent pooled institutional investments in non-U.S. plans. Equities that are valued using quoted prices are valued at the published market prices. Equities in a common collective trust or a registered investment company that are valued using significant other observable inputs are valued at the net asset value (“NAV”) provided by the fund administrator. The NAV is based on the value of the underlying assets owned by the fund minus its liabilities. Fixed income securities that are valued using significant other observable inputs are valued at prices obtained from independent financial service industry-recognized vendors. Investment Policies and Strategies The investment objective of the U.S. plan, consistent with prudent standards for preservation of capital and maintenance of liquidity, is to earn the highest possible total rate of return consistent with the plan’s tolerance for risk. The general asset allocation guidelines for plan assets are that “equities” will constitute 10% and “fixed income” obligations, including cash, will constitute 90% of the market value of total fund assets. The investment objective of the UK plan, consistent with prudent standards for preservation of capital and maintenance of liquidity, is to earn a target return of UK Gilts plus approximately 2.6% per year. The general asset allocation guidelines for plan assets are that “equities” will constitute from 35% to 45% of the market value of total fund assets with a target of 40%, and “fixed income” obligations, including cash, will constitute from 55% to 65% with a target of 60%. The UK plan also has a framework in place such that if the funding position (which is monitored daily) improves to a certain level, the asset allocation will switch out of equities into fixed income assets in order to lower the level of risk of the investments. The term “equities” includes common stock, while the term “fixed income” includes obligations with contractual payments and a specific maturity date. Diversification of assets is employed to ensure that adverse performance of one security or security class does not have an undue detrimental impact on the portfolio as a whole. Diversification is interpreted to include diversification by type, characteristic and number of investments as well as by investment style of designated investment fund managers. No restrictions are placed on the selection of individual investments by the investment fund managers. The total fund performance and the performance of the investment fund managers is reviewed on a regular basis using an appointed professional independent advisor. As of December 31, 2023, there were no shares of the Company’s stock held in plan assets. Cash Flows The Company expects to contribute approximately $3.6 million to its defined benefit plans and $1.1 million to its other postretirement benefit plans in 2024. The Company also expects to contribute approximately $17.3 million to its defined contribution plan and $13.5 million to its 401(k) savings plan in 2024 using cash on hand. Estimated Future Benefit Payments The future estimated benefit payments for the next five years and the five years thereafter are as follows:
Estimated Future Benefits |  |
2024 |  | $ | 6.9 |
2025 |  | 6.6 |
2026 |  | 6.6 |
2027 |  | 6.6 |
2028 |  | 6.6 |
2029 to 2033 |  | 33.0 |
Total Estimated Future Benefit Payments |  | $ | 66.3 |

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