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Retirement Plans and Postretirement Benefits | 12 Months Ended
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Dec. 31, 2024
Retirement Benefits [Abstract] |
Retirement Plans and Postretirement Benefits | RETIREMENT PLANS AND POSTRETIREMENT BENEFITS Company-Sponsored Defined Contribution 401(k) Plan We have a defined contribution 401(k) plan and trust covering substantially all full-time team members. Contributions of $46.1 million, $44.0 million, and $29.9 million were recognized for the years ended December 31, 2024, 2023, and 2022, respectively. Team members may contribute to the plan if they meet certain eligibility requirements. Executive Management Non-Qualified Deferred Compensation and Supplemental Executive Retirement Plan We offer a non-qualified deferred compensation and supplemental executive retirement plan (SERP) to provide certain team members the ability to accumulate assets for retirement on a tax deferred basis. We may, depending on position, also make discretionary contributions to the SERP. These discretionary contributions could vest immediately or over a period of up to five years based on the team member’s age. Additionally, a participant may defer a portion of his or her compensation and receive the deferred amount upon certain events, including termination or retirement. The following is a summary related to our SERP:
| Year Ended December 31,
($ in millions) | 2024 |  | 2023 |  | 2022
Compensation expense | $ | 1.2 |  |  | $ | 1.3 |  |  | $ | 1.1 |
Total discretionary contribution | $ | 1.4 |  |  | $ | 1.7 |  |  | $ | 1.0 |
Guaranteed annual return | 5.15 | % |  | 5.00 | % |  | 5.00 | %
As of December 31, 2024 and 2023, the balance due to participants was $77.7 million and $72.5 million, respectively, and was included as a component of other long-term liabilities in the Consolidated Balance Sheets. Company-Sponsored Defined Benefit Pension Plan In January 2024, we acquired the Pendragon Group Pension Scheme, a company-sponsored defined benefit pension of U.K.-based Pendragon PLC, applicable to a portion of the salaried present and past team members. This plan is in addition to the Jardine Motors Group UK Pension Scheme acquired in 2023. Both pension plans are closed to future accrual. The following table shows the changes in the benefit obligation, plan assets, and funded status for the pension benefit plans:
| Year Ended December 31,
($ in millions) | 2024 |  | 2023
Change in projected benefit obligation: |  |  |
Benefit obligation at beginning of year | $ | 170.0 |  |  | $ | — |
Interest cost | 29.3 |  |  | 6.2 |
Benefit payments | (31.8) |  |  | (6.6) |
Net transfer in (including the effect of any business combinations/divestitures) | 465.7 |  |  | 172.8 |
Actuarial gain | (44.5) |  |  | (3.3) |
Exchange rate changes | 33.2 |  |  | 0.9 |
Benefit obligation at end of year | $ | 621.9 |  |  | $ | 170.0 |
Change in plan assets: |  |  |
Fair value of plan assets at beginning of year | $ | 185.3 |  |  | $ | — |
Actual return on plan assets | (10.3) |  |  | (2.2) |
Employer contributions | 18.9 |  |  | 35.6 |
Benefit payments | (31.8) |  |  | (6.6) |
Net transfer in (including effect of any business combinations/divestitures) | 466.4 |  |  | 157.5 |
Exchange rate changes | 34.3 |  |  | 1.0 |
Fair value of plan assets at end of year | 662.8 |  |  | 185.3 |
Funded status at end of year | $ | 40.9 |  |  | $ | 15.3 |
Amounts recognized in Consolidated Balance Sheets: |  |  |
Other non-current assets | $ | 40.9 |  |  | $ | 15.3 |
Net amount recognized | $ | 40.9 |  |  | $ | 15.3 |
Amounts recognized in accumulated other comprehensive income (loss) (pre-tax): |  |  |
Net actuarial loss | $ | (5.7) |  |  | $ | (7.6) |
The benefit obligation for our pension benefit is the projected benefit obligation based upon credited service as of the measurement date. The December 31, 2024 pension funded status was favorably affected by employer contributions during the period together with an increase in the discount rate, partially offset by lower than expected asset returns. Net Periodic (Benefit) Cost Interest cost represents the increase in the projected benefit obligation, which is a discounted amount, due to the passage of time. The expected return on plan assets reflects the computed amount of current-year earnings from the investment of plan assets using an estimated long-term rate of return.
| Year Ended December 31,
($ in millions) | 2024 |  | 2023 |  |
Interest cost | $ | 29.3 |  |  | $ | 6.2 |  |  |
Expected return on plan assets | (31.9) |  |  | (8.8) |  |  |
Net periodic (benefit) cost | $ | (2.6) |  |  | $ | (2.6) |  |  |
The components of net periodic pension (benefits) cost are included in other income (expense) in the Consolidated Statements of Operations. Actuarial Assumptions The weighted-average assumptions used to determine the benefit obligation and net periodic pension cost of our pension plan were as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  |
Actuarial assumption used to determine benefit obligation: |  |  |  |  |
Discount rate | 5.50 | % |  | 4.78 | % |  |
Actuarial assumption used to determine net periodic pension cost: |  |  |  |  |
Jardine Motors Group UK Pension Scheme |  |  |  |  |
Discount rate | 4.78 | % |  | 4.86 | % |  |
Expected return on plan assets | 5.42 | % |  | 6.79 | % |  |
Pendragon Group Pension Scheme |  |  |  |  |
Discount rate | 4.85 | % |  | N/A |  |
Expected return on plan assets | 4.85 | % |  | N/A |  |
The discount rates used in the determination of pension benefit obligation and pension expense we determined based on a review of long-term high-grade bonds of appropriate duration. The expected return on plan assets assumption is based upon an analysis of historical long-term returns for various investment categories, as measured by appropriate indices and forward looking expectations of returns. These indices are weighted based upon the extent to which plan assets are invested in the particular categories in arriving at our determination of a composite expected return. The expected rate of return on assets has been set in line with the Trustee’s target return. Plan Assets There have been no changes in the methodologies used since the assumption of our pension plans. Factors used in determining the fair value of our plan assets are summarized into three broad categories: •Level 1 - the unadjusted quoted price in an active market for identical assets or liabilities which the entity can access at the measurement date; •Level 2 - inputs other than quoted prices included within Level 1 which are observable (i.e. developed using market data) for the asset or liability; and •Level 3 - inputs which are unobservable (i.e. for which market data is unavailable) for the asset or liability. The following tables set forth by level, within the fair value hierarchy, the investments at fair value for our company-sponsored defined benefit pension plans:
| As of December 31,
| 2024 |  | 2023
($ in millions) | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Diversified Growth Funds | $ | — |  |  | $ | 84.5 |  |  | $ | — |  |  | $ | 84.5 |  |  | $ | — |  |  | $ | 32.4 |  |  | $ | — |  |  | $ | 32.4 |
Liability Driven Instrument | — |  |  | 226.4 |  |  | — |  |  | 226.4 |  |  | — |  |  | 113.7 |  |  | — |  |  | 113.7 |
Property | — |  |  | — |  |  | 28.1 |  |  | 28.1 |  |  | — |  |  | — |  |  | — |  |  | — |
Credit | — |  |  | 92.3 |  |  | — |  |  | 92.3 |  |  | — |  |  | — |  |  | — |  |  | — |
Private Markets | — |  |  | — |  |  | 37.8 |  |  | 37.8 |  |  | — |  |  | — |  |  | — |  |  | — |
Equity | — |  |  | 26.1 |  |  | — |  |  | 26.1 |  |  | — |  |  | — |  |  | — |  |  | — |
Fixed Income Funds | — |  |  | — |  |  | 17.4 |  |  | 17.4 |  |  | — |  |  | — |  |  | — |  |  | — |
Cash and Cash Equivalents | 109.6 |  |  | 40.6 |  |  | — |  |  | 150.2 |  |  | 39.2 |  |  | — |  |  | — |  |  | 39.2 |
Total | $ | 109.6 |  |  | $ | 469.9 |  |  | $ | 83.3 |  |  | $ | 662.8 |  |  | $ | 39.2 |  |  | $ | 146.1 |  |  | $ | — |  |  | $ | 185.3 |
We have formal investment policy guidelines for our company-sponsored pension plans. These guidelines were set by our pension plan Trustees. The Trustees have appointed investment managers (Fiduciary Managers) to manage the pension plans’ assets on a discretionary basis and to provide investment advisory services to the Trustees. The balance within and between these investments will be determined from time-to-time at the discretion of the Fiduciary Managers, with the objective of maximizing the probability of achieving the pension plans’ investment strategy set by the Trustees, subject to maintaining risk within a limit agreed by the Trustees. The Trustees’ duties include periodically reviewing and modifying those investment policy guidelines as necessary and ensuring that the policies are adhered to and the investment objectives are met. The Trustees’ investment objectives include the acquisition of suitable assets of appropriate liquidity which will generate an overall level of return that is sufficient to meet all liabilities as and when they fall due, and to ensure the security, quality, and profitability of the portfolio as a whole; to limit the risk of the assets failing to meet the liabilities, both over the long-term and on a shorter-term basis; and to minimize the long-term costs of the pension plans by maximizing the return on the assets while having regard to the investment objectives. The investment strategies make use of various types of investments: •a range of low-risk instruments that provide a broad match to changes in liability values (including high-quality corporate bonds); •a portfolio of secure income assets; and •a diversified portfolio of return-seeking assets (including equities, listed real assets, diversifying strategies, hedge funds, private markets, alternative credit and downside protection). The pension plans will hold assets in cash and other money market instruments from time to time as may be deemed appropriate. The long-term asset allocation targets adopted by the Fiduciary Managers are set out below:
| Pendragon Group Pension Scheme |  | Jardine Motors Group UK Pension Scheme
Credit | 19 | % |  | — | %
Diversified | 5 | % |  | 54 | %
Equities | 5 | % |  | — | %
Illiquids | 10 | % |  | — | %
Liability matching | 57 | % |  | 38 | %
Secure income | — | % |  | 8 | %
Special purpose investment vehicle | 5 | % |  | — | %
Periodically, the Trustees reviews the target allocations to determine what adjustments should be made based on changing economic and market conditions and specific liquidity requirements. We anticipate making pension plan cash contributions of $8.0 million in 2025. Estimated future benefit payments are as follows for the years indicated:
($ in millions) | Pension Benefit Plans
2025 | $ | 36.1 |
2026 | 37.8 |
2027 | 39.2 |
2028 | 40.2 |
2029 | 40.6 |
2030 - 2034 | 213.6 |
Total estimated future benefit payments | 407.5 |

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