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Pension and Postretirement Benefit Plans | 12 Months Ended
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Dec. 31, 2023
Retirement Benefits [Abstract] |
Pension and Postretirement Benefit Plans | PENSION AND POSTRETIREMENT BENEFIT PLANS The Company sponsors defined benefit pension plans covering certain employees, principally in the United Kingdom, the United States, Germany, Switzerland, Finland, France, Norway and Argentina. The Company also provides certain postretirement health care and life insurance benefits for certain employees, principally in the United States and Brazil. The Company also maintains an Executive Nonqualified Pension Plan (“ENPP”) that provides certain senior executives with retirement income for a period of 15 years or up to a lifetime annuity, if certain requirements are met. Benefits under the ENPP vest if the participant has attained age 50 and has at least ten years of service (including five years as a participant in the ENPP), but are not payable until the participant reaches age 65. The lifetime annuity benefit generally is available only to vested participants who retire on or after reaching age 65 and was eliminated during 2021 for participants reaching age 65 subsequent to December 31, 2022. The ENPP is an unfunded, nonqualified defined benefit pension plan. Net annual pension costs for the years ended December 31, 2023, 2022 and 2021 for the Company’s defined benefit pension plans and ENPP are set forth below (in millions):
Pension benefits |  | 2023 |  | 2022 |  | 2021
Service cost |  | $ | 9.6 |  |  | $ | 12.8 |  |  | $ | 15.0 |
Interest cost |  | 29.3 |  |  | 14.8 |  |  | 12.6 |
Expected return on plan assets |  | (30.4) |  |  | (16.9) |  |  | (31.3) |
Amortization of net actuarial losses |  | 9.4 |  |  | 8.7 |  |  | 16.5 |
Amortization of prior service cost |  | 1.5 |  |  | 0.1 |  |  | 0.7 |
Net (gain) loss recognized due to settlement |  | 0.4 |  |  | (0.4) |  |  | 0.1 |
Curtailment gain (1) |  | — |  |  | — |  |  | (1.2) |
Net annual pension cost |  | $ | 19.8 |  |  | $ | 19.1 |  |  | $ | 12.4 |
___________________________________ (1) During 2021, the Company amended its Executive Nonqualified Pension Plan (“ENPP”) to freeze the plan as of December 31, 2024 to future benefit accruals, and to eliminate a lifetime annuity feature for participants working to age 65 subsequent to December 31, 2022. This amendment resulted in a curtailment gain as well as a net prior service credit. The components of net periodic pension and postretirement benefits cost, other than the service cost component, are included in “Other expense, net” in the Company’s Consolidated Statements of Operations. The weighted average assumptions used to determine the net annual pension costs for the Company’s defined benefit pension plans and ENPP for the years ended December 31, 2023, 2022 and 2021 are as follows:
| 2023 |  | 2022 |  | 2021
All plans: |  |  |  |  |
Weighted average discount rate | 4.9 | % |  | 1.9 | % |  | 1.5 | %
Weighted average expected long-term rate of return on plan assets | 5.5 | % |  | 2.3 | % |  | 3.9 | %
Rate of increase in future compensation | 1.8%-5.0% |  | 1.5%-5.0% |  | 1.5%-5.0%
U.S.-based plans: |  |  |  |  |
Weighted average discount rate | 5.70 | % |  | 3.05 | % |  | 2.75 | %
Weighted average expected long-term rate of return on plan assets(1) | 5.8 | % |  | 4.3 | % |  | 5.0 | %
Rate of increase in future compensation(2) | 5.0 | % |  | 5.0 | % |  | 5.0 | %
___________________________________ (1) Applicable for U.S. funded, qualified plan. (2) Applicable for U.S. unfunded, nonqualified plan. Net annual postretirement benefit costs, and the weighted average discount rate used to determine them, for the years ended December 31, 2023, 2022 and 2021 are set forth below (in millions, except percentages):
Postretirement benefits |  | 2023 |  | 2022 |  | 2021
Service cost |  | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 0.1 |
Interest cost |  | 1.3 |  |  | 0.9 |  |  | 0.9 |
Amortization of net actuarial losses |  | — |  |  | — |  |  | 0.1 |
Amortization of prior service cost |  | 0.2 |  |  | 0.1 |  |  | 0.1 |
Net annual postretirement benefit cost |  | $ | 1.6 |  |  | $ | 1.1 |  |  | $ | 1.2 |
Weighted average discount rate |  | 6.6 | % |  | 4.1 | % |  | 3.8 | %
The following tables set forth reconciliations of the changes in benefit obligation, plan assets and funded status as of December 31, 2023 and 2022 (in millions):
|  | Pension and ENPP Benefits |  | Postretirement Benefits
Change in benefit obligation |  | 2023 |  | 2022 |  | 2023 |  | 2022
Benefit obligation at beginning of year |  | $ | 611.6 |  |  | $ | 904.8 |  |  | $ | 21.2 |  |  | $ | 22.6 |
Service cost |  | 9.6 |  |  | 12.8 |  |  | 0.1 |  |  | 0.1 |
Interest cost |  | 29.3 |  |  | 14.8 |  |  | 1.3 |  |  | 0.9 |
Plan participants’ contributions |  | 1.3 |  |  | 1.2 |  |  | — |  |  | — |
Actuarial losses (gains) |  | 21.6 |  |  | (227.2) |  |  | 1.7 |  |  | (0.9) |
Amendments |  | 0.1 |  |  | 25.5 |  |  | — |  |  | — |
Settlements |  | (4.9) |  |  | (5.0) |  |  | — |  |  | — |
Benefits paid |  | (46.1) |  |  | (44.0) |  |  | (1.8) |  |  | (1.7) |
Foreign currency exchange rate changes |  | 24.5 |  |  | (71.3) |  |  | 0.5 |  |  | 0.2 |
Benefit obligation at end of year |  | $ | 647.0 |  |  | $ | 611.6 |  |  | $ | 23.0 |  |  | $ | 21.2 |
|  | Pension and ENPP Benefits |  | Postretirement Benefits
Change in plan assets |  | 2023 |  | 2022 |  | 2023 |  | 2022
Fair value of plan assets at beginning of year |  | $ | 528.7 |  |  | $ | 815.6 |  |  | $ | — |  |  | $ | — |
Actual return on plan assets |  | 31.2 |  |  | (197.1) |  |  | — |  |  | — |
Employer contributions |  | 35.1 |  |  | 34.1 |  |  | 1.8 |  |  | 1.7 |
Plan participants’ contributions |  | 1.3 |  |  | 1.2 |  |  | — |  |  | — |
Benefits paid |  | (46.1) |  |  | (44.0) |  |  | (1.8) |  |  | (1.7) |
Settlements |  | (4.9) |  |  | (5.0) |  |  | — |  |  | — |
Foreign currency exchange rate changes |  | 26.7 |  |  | (76.1) |  |  | — |  |  | — |
Fair value of plan assets at end of year |  | $ | 572.0 |  |  | $ | 528.7 |  |  | $ | — |  |  | $ | — |
Funded status |  | $ | (75.0) |  |  | $ | (82.9) |  |  | $ | (23.0) |  |  | $ | (21.2) |
Amounts recognized in Consolidated Balance Sheets: |  |  |  |  |  |  |  |
Other long-term asset |  | $ | 85.0 |  |  | $ | 66.3 |  |  | $ | — |  |  | $ | — |
Other current liabilities |  | (7.4) |  |  | (7.0) |  |  | (1.6) |  |  | (1.6) |
Accrued expenses |  | (4.1) |  |  | (3.8) |  |  | — |  |  | — |
Pensions and postretirement health care benefits (noncurrent) |  | (148.5) |  |  | (138.4) |  |  | (21.4) |  |  | (19.6) |
Net amount recognized |  | $ | (75.0) |  |  | $ | (82.9) |  |  | $ | (23.0) |  |  | $ | (21.2) |
The following table summarizes the activity in accumulated other comprehensive loss related to the Company’s ENPP and defined pension and postretirement benefit plans during the years ended December 31, 2023 and 2022 (in millions):
|  | Before-Tax Amount |  | Income Tax |  | After-Tax Amount
Accumulated other comprehensive loss as of December 31, 2021 |  | $ | (302.4) |  |  | $ | (72.0) |  |  | $ | (230.4) |
Prior service (cost) credit arising during the year |  | (25.5) |  |  | (6.4) |  |  | (19.1) |
Net (gain) loss recognized due to settlement |  | (0.4) |  |  | — |  |  | (0.4) |
Net actuarial gain (loss) arising during the year |  | 15.0 |  |  | 2.7 |  |  | 12.3 |
Amortization of prior service cost |  | 0.2 |  |  | 0.2 |  |  | — |
Amortization of net actuarial losses |  | 8.7 |  |  | 2.3 |  |  | 6.4 |
Accumulated other comprehensive loss as of December 31, 2022 |  | $ | (304.4) |  |  | $ | (73.2) |  |  | $ | (231.2) |
Prior service (cost) credit arising during the year |  | — |  |  | — |  |  | — |
Net (gain) loss recognized due to settlement |  | 0.4 |  |  | — |  |  | 0.4 |
Net actuarial gain (loss) arising during the year |  | (21.5) |  |  | (5.4) |  |  | (16.1) |
Amortization of prior service cost |  | 1.7 |  |  | 0.4 |  |  | 1.3 |
Amortization of net actuarial losses |  | 9.4 |  |  | 2.4 |  |  | 7.0 |
Accumulated other comprehensive loss as of December 31, 2023 |  | $ | (314.4) |  |  | $ | (75.8) |  |  | $ | (238.6) |
The unrecognized net actuarial losses included in accumulated other comprehensive loss related to the Company’s defined benefit pension plans and ENPP as of December 31, 2023 and 2022 are set forth below (in millions):
| 2023 |  | 2022
Unrecognized net actuarial losses | $ | 280.2 |  |  | $ | 270.0 |
The increase in unrecognized net actuarial losses between years is primarily due to liability losses due to the total net impact of the changes in the assumptions, specifically the reduction in the discount rates, as well as the losses due to plan experience at December 31, 2023 compared to December 31, 2022. The unrecognized net actuarial losses will be impacted in future periods by actual asset returns, discount rate changes, currency exchange rate fluctuations, actual demographic experience and certain other factors. For some of the Company’s defined benefit pension plans, these losses, to the extent they exceed 10% of the greater of the plan’s liabilities or the fair value of assets (“the gain/loss corridor”), will be amortized on a straight-line basis over the periods discussed as follows. For the Company’s U.S. salaried, U.S. hourly and U.K. defined benefit pension plans, the population covered is predominantly inactive participants, and losses related to those plans, to the extent they exceed the gain/loss corridor, will be amortized over the average remaining lives of those participants while covered by the respective plan. For the Company’s ENPP, the population is predominantly active participants, and losses related to the plan will be amortized over the average future working lifetime of the active participants expected to receive benefits. As of December 31, 2023, the average amortization periods were as follows:
| ENPP |  | U.S. Plans |  | U.K. Plan
Average amortization period of losses related to defined benefit pension plans | 6 years |  | 13 years |  | 18 years
The following table summarizes the unrecognized prior service cost related to the Company’s defined benefit pension plans as of December 31, 2023 and 2022 (in millions):
| 2023 |  | 2022
Unrecognized prior service cost | $ | 31.4 |  |  | $ | 32.5 |
The decrease in the unrecognized prior service cost between years is due primarily to the amortization of unrecognized prior service cost related to prior plan amendments. The unrecognized prior service cost as of December 31, 2022 included a revision of approximately $25.5 million due to the Company updating its estimate of current assumptions, interpretations and approach affecting the Company’s defined benefit pension obligations related to certain defined benefit plans. The following table summarizes the unrecognized net actuarial gains included in the Company’s accumulated other comprehensive loss related to the Company’s U.S. and Brazilian postretirement health care benefit plans as of December 31, 2023 and 2022 (in millions):
| 2023 |  | 2022
Unrecognized net actuarial gains(1) | $ | (0.2) |  |  | $ | (2.0) |
___________________________________ (1) Includes a gain of approximately $1.2 million and $1.1 million, respectively, related to the Company’s U.S. postretirement benefit plans. The change in unrecognized net actuarial gains related to the Company’s U.S. and Brazilian postretirement benefit plans is primarily resulting from lower discount rates at December 31, 2023. The unrecognized net actuarial gains or losses will be impacted in future periods by discount rate changes, actual demographic experience, actual health care inflation and certain other factors. These gains or losses, to the extent they exceed the gain/loss corridor, will be amortized on a straight-line basis over the average remaining service period of active employees expected to receive benefits, or the average remaining lives of inactive participants, covered under the postretirement benefit plans. As of December 31, 2023, the gains or losses did not exceed the corridor for the Company’s U.S. postretirement benefit plan and therefore, there will be no amortization of unrecognized gains or losses during 2024. As of December 31, 2023 and 2022, the net prior service cost related to the Company’s Brazilian postretirement health care benefit plans was as follows (in millions):
| 2023 |  | 2022
Net prior service cost | $ | 3.0 |  |  | $ | 3.1 |
The following table summarizes the fair value of plan assets, aggregate projected benefit obligation and accumulated benefit obligation as of December 31, 2023 and 2022 for defined benefit pension plans, ENPP and other postretirement plans with accumulated benefit obligations in excess of plan assets (in millions):
| 2023 |  | 2022
All plans: |  |  |
Fair value of plan assets | $ | 37.3 |  |  | $ | 39.4 |
Projected benefit obligation | 220.2 |  |  | 209.8 |
Accumulated benefit obligation | 209.3 |  |  | 199.0 |
U.S.-based plans and ENPP: |  |  |
Fair value of plan assets | $ | — |  |  | $ | 3.3 |
Projected benefit obligation | 104.9 |  |  | 106.1 |
Accumulated benefit obligation | 104.1 |  |  | 103.4 |
The amounts for 2023 and 2022 disclosed above do not include the fair value of plan assets, the projected benefit obligation or the accumulated benefit obligation related to the Company’s U.K. plan. The Company’s U.K. plan’s fair value of plan assets was in excess of the plan’s accumulated benefit obligation as of December 31, 2023 and 2022. The Company’s defined benefit pension obligation has been reflected on the manner in which its defined benefit plans are being administered or expected to be administered in the future. The obligation and resulting liability or asset is calculated employing both actuarial and legal assumptions. These assumptions include, but are not limited to, future inflation, the return on pension assets, discount rates, life expectancy and potential salary increases. There are also assumptions related to the manner in which individual benefit plan benefits are calculated, some of which are legal in nature and include, but are not limited to, member eligibility, years of service, and the uniformity of both guaranteed minimum pension benefits and member normal retirement ages for men and women. Some of these assumptions also are subject to the outcome of certain legal cases, which are currently unknown. In the event that any of these assumptions or the administration approach are proven to be different from the Company’s current interpretations and approach, there could be material increases or decreases in the Company’s defined benefit pension obligation and related amounts such as prior service cost and actuarial gains and losses, as well as the related amount and timing of future contributions to be paid by the Company. As previously mentioned, during 2022, the Company updated its estimate of current assumptions, interpretations and approach affecting the Company’s defined benefit pension obligations related to certain defined benefit plans and recorded a revision of its estimate of prior service cost of approximately $25.5 million. The weighted average assumptions used to determine the benefit obligation for the Company’s defined benefit pension plans and ENPP as of December 31, 2023 and 2022 are as follows:
| 2023 |  | 2022
All plans: |  |  |
Weighted average discount rate | 4.5 | % |  | 4.9 | %
Rate of increase in future compensation | 1.70%-5.0% |  | 1.75%-5.0%
U.S.-based plans: |  |  |
Weighted average discount rate | 5.30 | % |  | 5.70 | %
Rate of increase in future compensation(1) | 5.00 | % |  | 5.00 | %
____________________________________ (1) Applicable for U.S. unfunded, nonqualified plan. The weighted average discount rate used to determine the benefit obligation for the Company’s postretirement benefit plans for the years ended December 31, 2023 and 2022 was 6.7% and 6.6%, respectively. For the years ended December 31, 2023, 2022 and 2021, the Company used a globally consistent methodology to set the discount rate in the countries where its largest benefit obligations exist. In the United States, the United Kingdom and the Euro Zone, the Company constructed a hypothetical bond portfolio of high-quality corporate bonds and then applied the cash flows of the Company’s benefit plans to those bond yields to derive a discount rate. The bond portfolio and plan-specific cash flows vary by country, but the methodology in which the portfolio is constructed is consistent. In the United States, the bond portfolio is large enough to result in taking a “settlement approach” to derive the discount rate, in which high-quality corporate bonds are assumed to be purchased and the resulting coupon payments and maturities are used to satisfy the Company’s U.S. pension plans’ projected benefit payments. Historically, the settlement approach was used for both the hourly and salaried plans and the ENPP. As a result of the termination of the Plan in 2023, the Company changed the discount rate methodology to align more closely with the expected termination liability of the Plan. The discount rate was derived using a "yield curve approach" consistent with the approach for the United Kingdom and Euro Zone as described below. The settlement approach used for the ENPP has not changed. In the United Kingdom and the Euro Zone, the discount rate is derived using a “yield curve approach,” in which an individual spot rate, or zero coupon bond yield, for each future annual period is developed to discount each future benefit payment and, thereby, determine the present value of all future payments. The Company uses a spot yield curve to determine the discount rate applicable in the United Kingdom to measure the U.K. pension plan’s service cost and interest cost. Under the settlement and yield curve approaches, the discount rate is set to equal the single discount rate that produces the same present value of all future payments. For measuring the expected U.S. postretirement benefit obligation at December 31, 2023, the Company assumed a 7.8% health care cost trend rate for 2024 decreasing to 5.0% by 2035. For measuring the expected U.S. postretirement benefit obligation at December 31, 2022, the Company assumed a 8.0% health care cost trend rate for 2023 decreasing to 5.0% by 2035. For measuring the Brazilian postretirement benefit plan obligation at December 31, 2023, the Company assumed a 10.2% health care cost trend rate for 2024, decreasing to 4.5% by 2034. For measuring the Brazilian postretirement benefit plan obligation at December 31, 2022, the Company assumed a 10.2% health care cost trend rate for 2023, decreasing to 4.5% by 2033. The Company currently estimates its minimum contributions and benefit payments to its U.S.-based underfunded defined benefit pension plans and unfunded ENPP for 2024 will aggregate approximately $5.0 million. The Company currently estimates its minimum contributions for underfunded plans and benefit payments for unfunded plans for 2024 to its non-U.S.-based defined benefit pension plans will aggregate approximately $24.4 million, of which approximately $13.9 million relates to its U.K. pension plan. The Company currently estimates its benefit payments for 2024 to its U.S.-based postretirement health care and life insurance benefit plans will aggregate approximately $1.6 million and its benefit payments for 2024 to its Brazilian postretirement health care benefit plans will aggregate less than $0.1 million. During 2023, approximately $51.0 million of benefit payments were made related to the Company’s defined benefit pension plans and ENPP. At December 31, 2023, the aggregate expected benefit payments for the Company’s defined benefit pension plans and ENPP are as follows (in millions):
2024 | $ | 50.1 |
2025 | 46.8 |
2026 | 47.3 |
2027 | 47.6 |
2028 | 47.2 |
2029 through 2033 | 256.5 |
| $ | 495.5 |
During 2023, approximately $1.8 million of benefit payments were made related to the Company’s U.S. and Brazilian postretirement benefit plans. At December 31, 2023, the aggregate expected benefit payments for the Company’s U.S. and Brazilian postretirement benefit plans are as follows (in millions):
2024 | $ | 1.7 |
2025 | 1.7 |
2026 | 1.7 |
2027 | 1.7 |
2028 | 1.8 |
2029 through 2033 | 8.6 |
| $ | 17.2 |
Investment Strategy and Concentration of Risk The weighted average asset allocation of the Company’s U.S. pension benefit plans as of December 31, 2023 and 2022 are as follows:
Asset Category |  | 2023 |  | 2022
Equity securities |  | — | % |  | 10 | %
Fixed income securities |  | 89 | % |  | 79 | %
Other investments |  | 11 | % |  | 11 | %
Total |  | 100 | % |  | 100 | %
The weighted average asset allocation of the Company’s U.K. pension benefit plans as of December 31, 2023 and 2022 are as follows:
Asset Category |  | 2023 |  | 2022
Equity securities |  | 11 | % |  | 11 | %
Fixed income securities |  | 82 | % |  | 80 | %
Other investments |  | 7 | % |  | 9 | %
Total |  | 100 | % |  | 100 | %
The Company categorizes its pension plan assets into one of three levels based on the assumptions used in valuing the asset. See Note 21 for a discussion of the fair value hierarchy as per the guidance in ASC 820, “Fair Value Measurements” (“ASC 820”). The Company’s valuation techniques are designed to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses the following valuation methodologies to measure the fair value of its pension plan assets: •Equity Securities: Equity securities are valued on the basis of the closing price per unit on each business day as reported on the applicable exchange. Equity funds are valued using the net asset value of the fund, which is based on the fair value of the underlying securities. •Fixed Income: Fixed income securities are valued using the closing prices in the active market in which the fixed income investment trades. Fixed income funds are valued using the net asset value of the fund, which is based on the fair value of the underlying securities. •Cash: These investments primarily consist of short-term investment funds which are valued using the net asset value. •Alternative Investments: These investments are reported at fair value as determined by the general partner of the alternative investment. The “market approach” valuation technique is used to value investments in these funds. The funds typically are open-end funds as they generally offer subscription and redemption options to investors. The frequency of such subscriptions or redemptions is dictated by each fund’s governing documents. The amount of liquidity provided to investors in a particular fund generally is consistent with the liquidity and risk associated with the underlying portfolio (i.e., the more liquid the investments in the portfolio, the greater the liquidity provided to investors). Liquidity of individual funds varies based on various factors and may include “gates,” “holdbacks” and “side pockets” imposed by the manager of the fund, as well as redemption fees that may also apply. Investments in these funds typically are valued utilizing the net asset valuations provided by their underlying investment managers, general partners or administrators. The funds consider subscription and redemption rights, including any restrictions on the disposition of the interest, in its determination of the fair value. •Insurance Contracts: Insurance contracts are valued using current prevailing interest rates. The fair value of the Company’s pension assets as of December 31, 2023 is as follows (in millions):
| Total |  | Level 1 |  | Level 2 |  | Level 3
Equity securities: |  |  |  |  |  |  |
Global equities | $ | 55.8 |  |  |  |  | $ | 55.8 |  |  | $ | — |
Total equity securities | 55.8 |  |  | — |  |  | 55.8 |  |  | — |
Fixed income: |  |  |  |  |  |  |
Aggregate fixed income | 437.1 |  |  | 437.1 |  |  | — |  |  | — |
Total fixed income share(1) | 437.1 |  |  | 437.1 |  |  | — |  |  | — |
Alternative investments: |  |  |  |  |  |  |
Private equity fund | 2.2 |  |  |  |  | — |  |  | 2.2 |
Hedge funds measured at net asset value(4) | 33.2 |  |  | — |  |  | — |  |  | — |
Total alternative investments(2) | 35.4 |  |  | — |  |  | — |  |  | 2.2 |
Miscellaneous funds(3) | 38.8 |  |  | — |  |  | — |  |  | 38.8 |
Cash and equivalents measured at net asset value(4) | 4.9 |  |  | — |  |  | — |  |  | — |
Total assets | $ | 572.0 |  |  | $ | 437.1 |  |  | $ | 55.8 |  |  | $ | 41.0 |
______________________________________ (1) 67% of “fixed income” securities are in government treasuries; 27% are in foreign securities; 4% are in investment-grade corporate bonds; 2% are in high-yield securities. (2) 53% of “alternative investments” are in relative value funds; 24% are in long-short equity funds; 8% are in event-driven funds; 9% are in credit funds; and 6% are distributed in hedged and non-hedged funds. (3) “Miscellaneous funds” is comprised of insurance contracts in Finland, Norway and Switzerland. (4) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The following is a reconciliation of Level 3 assets as of December 31, 2023 (in millions):
| Total |  | Alternative Investments |  | Miscellaneous Funds
Beginning balance as of December 31, 2022 | $ | 40.2 |  |  | $ | 2.4 |  |  | $ | 37.8 |
Actual return on plan assets: |  |  |  |  |
(a) Relating to assets still held at reporting date | 2.6 |  |  | (0.2) |  |  | 2.8 |
Purchases, sales and /or settlements | (3.0) |  |  | — |  |  | (3.0) |
Foreign currency exchange rate changes | 1.2 |  |  | — |  |  | 1.2 |
Ending balance as of December 31, 2023 | $ | 41.0 |  |  | $ | 2.2 |  |  | $ | 38.8 |
The fair value of the Company’s pension assets as of December 31, 2022 is as follows (in millions):
| Total |  | Level 1 |  | Level 2 |  | Level 3
Equity securities: |  |  |  |  |  |  |
Global equities | $ | 50.1 |  |  | $ | 8.7 |  |  | $ | 41.4 |  |  | $ | — |
U.S. large cap equities | 2.9 |  |  | 2.9 |  |  | — |  |  | — |
Total equity securities | 53.0 |  |  | 11.6 |  |  | 41.4 |  |  | — |
Fixed income: |  |  |  |  |  |  |
Aggregate fixed income | 394.1 |  |  | 394.1 |  |  | — |  |  | — |
Total fixed income share(1) | 394.1 |  |  | 394.1 |  |  | — |  |  | — |
Alternative investments: |  |  |  |  |  |  |
Private equity fund | 2.4 |  |  | — |  |  | — |  |  | 2.4 |
Hedge funds measured at net asset value(4) | 32.2 |  |  | — |  |  | — |  |  | — |
Total alternative investments(2) | 34.6 |  |  | — |  |  | — |  |  | 2.4 |
Miscellaneous funds(3) | 37.8 |  |  | — |  |  | — |  |  | 37.8 |
Cash and equivalents measured at net asset value(4) | 9.2 |  |  | — |  |  | — |  |  | — |
Total assets | $ | 528.7 |  |  | $ | 405.7 |  |  | $ | 41.4 |  |  | $ | 40.2 |
______________________________________ (1) 57% of “fixed income” securities are in government treasuries; 21% are in foreign securities; 14% are in investment-grade corporate bonds; 7% are in high-yield securities and 1% are in other various fixed income securities. (2) 51% of “alternative investments” are in relative value funds; 23% are in long-short equity funds; 11% are in event-driven funds; 9% are in credit funds; and 6% are distributed in hedged and non-hedged funds. (3) “Miscellaneous funds” is comprised of insurance contracts in Finland, Norway and Switzerland. (4) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The following is a reconciliation of Level 3 assets as of December 31, 2022 (in millions):
| Total |  | Alternative Investments |  | Miscellaneous Funds
Beginning balance as of December 31, 2021 | $ | 43.7 |  |  | $ | 3.5 |  |  | $ | 40.2 |
Actual return on plan assets: |  |  |  |  |
(a) Relating to assets still held at reporting date | (0.9) |  |  | (1.1) |  |  | 0.2 |
Purchases, sales and /or settlements | (0.2) |  |  | — |  |  | (0.2) |
Foreign currency exchange rate changes | (2.4) |  |  | — |  |  | (2.4) |
Ending balance as of December 31, 2022 | $ | 40.2 |  |  | $ | 2.4 |  |  | $ | 37.8 |
All tax-qualified pension fund investments in the United States are held in the AGCO Corporation Master Pension Trust. The Company’s global pension fund strategy is to diversify investments across broad categories of equity and fixed income securities with appropriate use of alternative investment categories to minimize risk and volatility. The primary investment objective of the Company’s pension plans is to secure participant retirement benefits. As such, the key objective in the pension plans’ financial management is to promote stability and, to the extent appropriate, growth in funded status. The investment strategy for the plans’ portfolio of assets balances the requirement to generate returns with the need to control risk. The asset mix is recognized as the primary mechanism to influence the reward and risk structure of the pension fund investments in an effort to accomplish the plans’ funding objectives. The overall investment strategies and target allocations of retirement fund investments for the Company’s U.S.-based pension plans and the non-U.S. based pension plans are as follows:
| U.S. Pension Plans |  | Non-U.S. Pension Plans(1)
Overall investment strategies:(2) |  |  |
Assets for the near-term benefit payments | 80.0 | % |  | 85.0 | %
Assets for longer-term growth | 20.0 | % |  | 15.0 | %
Total | 100.0 | % |  | 100.0 | %
Target allocations: |  |  |
Equity securities | 17.0 | % |  | 10.0 | %
Fixed income securities | 80.0 | % |  | 85.0 | %
Alternative investments | 3.0 | % |  | 5.0 | %
Total | 100.0 | % |  | 100.0 | %
_______________________________________ (1) The majority of the Company’s non-U.S. pension fund investments are related to the Company’s pension plan in the United Kingdom. (2) The overall U.S. and non-U.S. pension funds invest in a broad diversification of asset types. The Company has noted that over very long periods, this mix of investments would achieve an average return on its U.S.-based pension plans of approximately 5.80%. In arriving at the choice of an expected return assumption of 5.75% for its U.S. plans for the year ending December 31, 2024, the Company has tempered this historical indicator with lower expectations for returns and changes to investments in the future as well as the administrative costs of the plans. The Company has noted that over very long periods, this mix of investments would achieve an average return on its non-U.S. based pension plans of approximately 7.10%. In arriving at the choice of an expected return assumption of 5.75% for its U.K.-based plans for the year ending December 31, 2024, the Company has tempered this historical indicator with lower expectations for returns and changes to investments in the future as well as the administrative costs of the plans. Equity securities primarily include investments in large-cap and small-cap companies located across the globe. Fixed income securities include corporate bonds of companies from diversified industries, mortgage-backed securities, agency mortgages, asset-backed securities and government securities. Alternative and other assets include investments in hedge fund of funds that follow diversified investment strategies. To date, the Company has not invested pension funds in its own stock and has no intention of doing so in the future. Within each asset class, careful consideration is given to balancing the portfolio among industry sectors, geographies, interest rate sensitivity, dependence on economic growth, currency and other factors affecting investment returns. The assets are managed by professional investment firms, who are bound by precise mandates and are measured against specific benchmarks. Among asset managers, consideration is given, among others, to balancing security concentration, issuer concentration, investment style and reliance on particular active investment strategies. The Company participates in a small number of multiemployer plans in the Netherlands and Sweden. The Company has assessed and determined that none of the multiemployer plans which it participates in are individually, or in the aggregate, significant to the Company’s Consolidated Financial Statements. The Company does not expect to incur a withdrawal liability or expect to significantly increase its contributions over the remainder of the multiemployer plans’ contract periods. The Company maintains separate defined contribution plans covering certain employees and executives, primarily in the United States, the United Kingdom and Brazil. Under the plans, the Company contributes a specified percentage of each eligible employee’s compensation. The Company contributed approximately $21.1 million, $17.9 million and $16.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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