We historically sponsored several defined benefit pension plans covering most employees not covered by union-administered plans, including certain employees in foreign countries. These plans generally provided participants with benefits based on years of service and career-average compensation levels.

In past years, we made amendments to defined benefit retirement plans that froze the retirement benefits for non-grandfathered and certain non-union employees in the U.S., Canada and the United Kingdom (U.K.). As a result of these amendments, non-grandfathered plan participants ceased accruing benefits under the plans as of the respective amendment effective date and began receiving an enhanced benefit under a defined contribution plan. All retirement benefits earned as of the amendment effective date were fully preserved and will be paid in accordance with the plan and legal requirements. The funding policy for these plans is to make contributions based on annual service costs plus amortization of unfunded past service liability, but not greater than the maximum allowable contribution deductible for federal income tax purposes. We may, from time to time, make voluntary contributions to our pension plans, which exceed the amount required by statute. The majority of the plans’ assets are invested in a master trust that, in turn, is invested primarily in commingled funds whose investments are listed stocks and bonds.

We also have a non-qualified supplemental pension plan covering certain U.S. employees, which provides for incremental pension payments from our funds so that total pension payments equal the amounts that would have been payable from our principal pension plans if it were not for limitations imposed by income tax regulations. The accrued pension liability related to this plan was $58 million and $53 million as of December 31, 2019 and 2018, respectively.



	Years ended December 31,
	2019			2018			2017
	(In thousands)
Company-administered plans:
Service cost	$	11,007		$	12,108		$	12,345
Interest cost	84,960			78,234			86,431
Expected return on plan assets	(91,034		)	(101,980		)	(91,062		)
Pension settlement expense	34,974			3,061			—
Amortization of:
Net actuarial loss	30,708			28,593			32,987
Prior service cost	711			550			579
	71,326			20,566			41,280
Union-administered plans	10,582			9,326			15,553
Net pension expense	$	81,908		$	29,892		$	56,833

Company-administered plans:
U.S.	$	75,936		$	28,043		$	43,717
Foreign	(4,610		)	(7,477		)	(2,437		)
	71,326			20,566			41,280
Union-administered plans	10,582			9,326			15,553
	$	81,908		$	29,892		$	56,833

Non-operating pension costs include the amortization of net actuarial loss and prior service cost, interest cost and expected return on plan assets components of pension and postretirement benefit costs, as well as any significant charges for settlements or curtailments. During 2019, we offered approximately 4,500 vested former employees in our U.S. defined benefit plan a one-time option to receive a lump sum distribution of their benefits. Approximately 1,700 former employees, or 38% of

those that were offered the distribution, accepted the offer. In December 2019, we made payments of approximately $80 million from the U.S. defined benefit plan assets, which resulted in a settlement of $90 million, representing approximately 4% of our U.S. pension plan obligations. We recognized a settlement loss of $32 million of the pro-rata share of the unrecognized actuarial losses existing at the time of the settlement.



	U.S. Plans Years ended December 31,			Foreign Plans Years ended December 31,
	2019	2018	2017	2019	2018	2017
Discount rate	4.35%	3.70%	4.20%	3.04%	2.70%	3.90%
Rate of increase in compensation levels	3.00%	3.00%	3.00%	3.08%	3.08%	3.10%
Expected long-term rate of return on plan assets	5.40%	5.40%	5.40%	5.36%	5.50%	5.48%
Gain and loss amortization period (years)	22	21	21	24	26	26

The return on plan assets assumption reflects the weighted-average of the expected long-term rates of return for the broad categories of investments held in the plans. The expected long-term rate of return is adjusted when there are fundamental changes in expected returns or in asset allocation strategies of the plan assets.

The following table sets forth the benefit obligations, assets and funded status associated with our pension plans:




	2019			2018
	(In thousands)
Change in benefit obligations:
Benefit obligations at January 1	$	2,135,143		$	2,298,902
Service cost	11,007			12,108
Interest cost	84,960			78,234
Actuarial (gain) loss	274,456			(120,934		)
Pension settlement	(102,905		)	—
Benefits paid	(96,290		)	(104,560		)
Foreign currency exchange rate changes	17,709			(28,607		)
Benefit obligations at December 31	2,324,080			2,135,143

Change in plan assets:
Fair value of plan assets at January 1	1,725,543			1,941,330
Actual return on plan assets	348,354			(108,386		)
Employer contribution	72,202			27,741
Benefits paid	(96,290		)	(104,560		)
Pension settlement	(93,049		)	—
Foreign currency exchange rate changes	21,948			(30,582		)
Fair value of plan assets at December 31	1,978,708			1,725,543
Funded status	$	(345,372	)	$	(409,600	)
Funded percent	85		%	81		%



	U.S. Plans December 31,				Foreign Plans December 31,				Total December 31,
	2019		2018		2019		2018		2019		2018
	(In thousands)
Total accumulated benefit obligations	$	1,812,813	$	1,685,270	$	489,135	$	429,640	$	2,301,948	$	2,114,910
Plans with pension obligations in excess of plan assets:
PBO	1,832,786		1,703,847		8,693		6,912		1,841,479		1,710,759
ABO	1,812,813		1,685,270		7,025		5,788		1,819,838		1,691,058
Fair value of plan assets	1,423,787		1,250,032		—		—		1,423,787		1,250,032

Our pension investment strategy is to reduce the effects of future volatility on the fair value of our pension assets relative to our pension obligations. We increase our allocation of high quality, longer-term fixed income securities and reduce our allocation of equity investments as the funded status of the plans improve. The plans utilize several investment strategies, including actively and passively managed equity and fixed income strategies. The investment policy establishes targeted allocations for each asset class that incorporate measures of asset and liability risks. Deviations between actual pension plan asset allocations and targeted asset allocations may occur as a result of investment performance and changes in the funded status from time to time. Rebalancing of our pension plan asset portfolios is evaluated periodically and rebalanced if actual allocations exceed an acceptable range. U.S. plans account for approximately 72% of our total pension plan assets. Equity securities primarily include investments in both domestic and international common collective trusts and publicly traded equities. Fixed income securities primarily include domestic collective trusts and corporate bonds. Other types of investments

The following table presents the fair value of each major category of pension plan assets and the level of inputs used to measure fair value as of December 31, 2019 and 2018:



	Fair Value Measurements at December 31, 2019
Asset Category	Total		Level 1		Level 2		Level 3
	(In thousands)
Equity securities:
U.S. common collective trusts	$	384,739	$	—	$	384,739	$	—
Foreign common collective trusts	379,717		—		379,717		—
Fixed income securities:
Corporate bonds	84,519		—		84,519		—
Common collective trusts	1,011,515		—		1,011,515		—
Private equity and hedge funds	118,218		—		—		118,218
Total	$	1,978,708	$	—	$	1,860,490	$	118,218



	Fair Value Measurements at December 31, 2018
Asset Category	Total		Level 1		Level 2		Level 3
	(In thousands)
Equity securities:
U.S. common collective trusts	$	315,741	$	—	$	315,741	$	—
Foreign common collective trusts	352,040		—		352,040		—
Fixed income securities:
Corporate bonds	79,155		—		79,155		—
Common collective trusts	856,771		—		856,771		—
Private equity and hedge funds	121,836		—		—		121,836
Total	$	1,725,543	$	—	$	1,603,707	$	121,836

Equity securities — These investments include common and preferred stocks and index common collective trusts that track U.S. and foreign indices. The common collective trusts were valued at the unit prices established by the funds’ sponsors based on the fair value of the assets underlying the funds. Since the units of the funds are not actively traded, the fair value measurements have been classified within Level 2 of the fair value hierarchy.

Fixed income securities — These investments include investment grade bonds of U.S. issuers from diverse industries, government issuers, index common collective trusts that track the Barclays Aggregate Index and other fixed income investments (primarily mortgage-backed securities). Fair values for the corporate bonds were valued using third-party pricing services. These sources determine prices utilizing market income models which factor in, where applicable, transactions of similar assets in active markets, transactions of identical assets in infrequent markets, interest rates, bond or credit default swap spreads and volatility. Since the corporate bonds are not actively traded, the fair value measurements have been classified within Level 2 of the fair value hierarchy. The common collective trusts were valued at the unit prices established by the funds’ sponsors based on the fair value of the assets underlying the funds. Since the units of the funds are not actively traded, the fair value measurements have been classified within Level 2 of the fair value hierarchy. The other investments are not actively traded and fair values are estimated using bids provided by brokers, dealers or quoted prices of similar securities with similar characteristics or pricing models. Therefore, the other investments have been classified within Level 2 of the fair value hierarchy.



	2019			2018
	(In thousands)
Beginning balance at January 1	$	121,836		$	114,593
Return on plan assets:
Relating to assets still held at the reporting date	5,752			6,762
Relating to assets sold during the period	(44		)	(38		)
Purchases, sales, settlements and expenses	(9,326		)	519
Ending balance at December 31	$	118,218		$	121,836

We participate in multi-employer plans that provide defined benefits to certain employees covered by collective-bargaining agreements. Such plans are usually administered by a board of trustees comprised of the management of the participating companies and labor representatives. The net pension cost of these plans is equal to the annual contribution determined in accordance with the provisions of negotiated labor contracts. Assets contributed to such plans are not segregated or otherwise restricted to provide benefits only to our employees. The risks of participating in these multi-employer plans are different from single-employer plans in the following respects: 1) assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees and former employees of other participating employers; 2) if a participating employer is no longer able to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers at annual contribution rates under the collective bargaining agreements; 3) if there is a mass withdrawal of substantially all employers from the plan, we may be required to pay the plan an annual contribution based on historical contribution levels as prescribed by federal statute; and 4) if we choose to stop participating in some of our multi-employer plans, we may be required to pay those plans an amount based on the underfunded status of the plan, which is referred to as a withdrawal liability.

Our participation in these plans is outlined in the table below. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2019 and 2018 is for the plan years ended December 31, 2018 and December 31, 2017, respectively. The zone status is based on information that we received from the plan. Among other factors, plans in the red zone are generally less than sixty-five percent funded, plans in the yellow zone are less than eighty percent funded, and plans in the green zone are at least eighty percent funded.



		Pension Protection Act Zone Status			Ryder Contributions								Expiration Date(s) of Collective-Bargaining Agreement(s)
Pension Fund	Employer Identification Number	2019	2018	FIP/RP Status Pending/ Implemented ⁽¹⁾	2019		2018			2017		Surcharge Imposed	Expiration Date(s) of Collective-Bargaining Agreement(s)
					(In thousands)
Western Conference Teamsters ⁽²⁾	91-6145047	Green	Green	No	$	3,971	$	3,488		$	3,245	No	01/12/18 to 03/31/21
IAM National ⁽³⁾	51-6031295	Red	Green	RP Adopted	4,148		3,953			3,891		Yes	10/01/19 to 09/14/23
Automobile Mechanics Local No. 701	36-6042061	Yellow	Yellow	FIP Adopted	1,494		1,435			2,048		Yes	06/01/19 to 05/31/22
Other funds					969		931			915
Total contributions					10,582		9,807			10,099
Pension settlement (benefit) charges					—		(481		)	5,454
Union-administered plans					$	10,582	$	9,326		$	15,553

Employees who do not actively participate in pension plans and are not covered by union-administered plans are generally eligible to participate in enhanced savings plans. These plans provide for (i) a company contribution even if employees do not make contributions for employees hired before January 1, 2016, (ii) a company match of employee contributions of eligible pay, subject to tax limits and (iii) a discretionary company match. Savings plan costs totaled $39 million, $40 million and $39 million in 2019, 2018 and 2017, respectively.

We have deferred compensation plans that permit eligible U.S. employees, officers and directors to defer a portion of their compensation. The deferred compensation liability, including Ryder matching amounts and accumulated earnings, totaled $71 million and $60 million as of December 31, 2019 and 2018, respectively.

We have established grantor trusts (Rabbi Trusts) to provide funding for benefits payable under the supplemental pension plan, deferred compensation plans and long-term incentive compensation plans. The assets held in the trusts were $72 million and $60 million as of December 31, 2019 and 2018, respectively. The Rabbi Trusts’ assets consist of short-term cash investments and a managed portfolio of equity securities, including our common stock. These assets, except for the investment in our common stock, are included in “Sales-type leases and other assets” because they are available to our general creditors in the event of insolvency. The equity securities are classified as trading securities and stated at fair value. Both realized and unrealized gains and losses are included in “Miscellaneous income, net.” The Rabbi Trusts’ investments of $1 million in our common stock as of both December 31, 2019 and 2018, are reflected at historical cost and included in shareholders’ equity.

We sponsor plans that provide retired U.S. and Canadian employees with certain healthcare and life insurance benefits. Substantially all U.S. and Canadian employees not covered by union-administered health and welfare plans are eligible for the healthcare benefits. The postretirement medical plan was closed to non-grandfathered participants in 2013. Healthcare benefits for our principal plan are generally provided to qualified retirees under age 65 and eligible dependents. This plan requires employee contributions that vary based on years of service and include provisions that limit our contributions. The benefit obligation was $22 million and $19 million as of December 31, 2019 and 2018, respectively. The amount of postretirement benefit expense was not material for 2019, 2018 and 2017.