XML 39 R26.htm IDEA: XBRL DOCUMENT
v3.22.1

Pension and Employee Benefit Plans | 12 Months Ended
--- | ---
Mar. 31, 2022
Pension and Employee Benefit Plans [Abstract] |
Pension and Employee Benefit Plans | Note 18: Pension and Employee Benefit Plans Defined Contribution Employee Benefit Plans The Company maintains a domestic 401(k) plan that allows employees to contribute a portion of their salary to help them save for retirement. The Company currently matches employee contributions up to 4.5 percent of their compensation. During fiscal 2021, as part of its response to the negative impacts of the COVID-19 pandemic, the Company suspended matching employee contributions for part of the year. The Company’s expense for defined contribution employee benefit plans during fiscal 2022, 2021, and 2020 was $6.4 million, $3.0 million, and $6.6 million, respectively. In addition, the Company maintains non-qualified deferred compensation plans for eligible employees, and various non-U.S. subsidiaries have government-required defined contribution plans in place, under which they contribute a percentage of employee earnings into accounts, consistent with local laws. Statutory Termination Plans Certain non-U.S. subsidiaries have statutory termination indemnity plans covering eligible employees. The benefits under these plans are based upon years of service and final average compensation levels or a monthly retirement benefit amount. These programs are substantially unfunded in accordance with local laws. Pension Plans The Company maintains non-contributory defined benefit pension plans that cover eligible domestic employees. These plans are closed to new participants. The primary domestic plans cover most domestic employees hired on or before December 31, 2003 and provide benefits based primarily upon years of service and average compensation for salaried and some hourly employees. Benefits for other hourly employees are based upon a monthly retirement benefit amount. Currently, the Company’s domestic pension plans do not include increases in annual earnings or future service in calculating the average annual earnings and years of credited service under the pension plan benefit formula. Certain non-U.S. subsidiaries of the Company also have legacy defined benefit plans which cover a smaller number of active employees and are substantially unfunded. The primary non-U.S. plans are maintained in Germany and Italy and are closed to new participants. The Company previously maintained a pension plan in Austria that conveyed to the buyer of the air-cooled automotive business during fiscal 2022; see Note 1 for additional information. The Company contributed $3.5 million, $19.3 million, and $3.5 million to its U.S. pension plans during fiscal 2022, 2021, and 2020, respectively. In addition, the Company contributed $1.5 million, $2.2 million, and $2.3 million to its non-U.S. pension plans during fiscal 2022, 2021, and 2020, respectively. These contributions are reported in the change in other liabilities in the consolidated statements of cash flows. Postretirement Plans The Company provides selected healthcare and life insurance benefits for eligible retired domestic employees. The Company periodically amends these unfunded plans to change the contribution rate of retirees and the amounts and forms of coverage. An annual limit on the Company’s cost is defined for the majority of these plans. The Company’s net periodic income for its postretirement plans in each of fiscal 2022, 2021, and 2020 was $0.3 million. Measurement Date The Company uses March 31 as the measurement date for its pension and postretirement plans. Changes in benefit obligations and plan assets, as well as the funded status of the Company’s global pension plans, were as follows:
|  | Years ended March 31, |
|  | 2022 |  |  | 2021 |
Change in benefit obligation: |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 260.6 |  |  | $ | 264.7 |
Service cost |  |  | 0.3 |  |  |  | 0.4 |
Interest cost |  |  | 7.3 |  |  |  | 7.9 |
Actuarial (gain) loss |  |  | (16.5 | ) |  |  | 2.7 |
Benefits paid |  |  | (16.0 | ) |  |  | (17.1 | )
Disposition of air-cooled automotive business |  |  | (5.5 | ) |  |  | - |
Curtailment gains (a) |  |  | - |  |  |  | (0.1 | )
Effect of exchange rate changes |  |  | (1.6 | ) |  |  | 2.1 |
Benefit obligation at end of year |  | $ | 228.6 |  |  | $ | 260.6 |
Change in plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 183.3 |  |  | $ | 131.1 |
Actual return on plan assets |  |  | 7.6 |  |  |  | 47.8 |
Benefits paid |  |  | (16.0 | ) |  |  | (17.1 | )
Employer contributions |  |  | 5.0 |  |  |  | 21.5 |
Fair value of plan assets at end of year |  | $ | 179.9 |  |  | $ | 183.3 |
Funded status at end of year |  | $ | (48.7 | ) |  | $ | (77.3 | )
Amounts recognized in the consolidated balance sheets: |  |  |  |  |  |  |  |
Current liability |  | $ | (1.5 | ) |  | $ | (0.9 | )
Noncurrent liability |  |  | (47.2 | ) |  |  | (58.6 | )
Liabilities held for sale (b) |  |  | - |  |  |  | (17.8 | )
|  | $ | (48.7 | ) |  | $ | (77.3 | )
(a) | The curtailment gains in fiscal 2021 are associated with headcount reductions in Europe within the Automotive segment. See Note 6 for additional information on the Company’s restructuring activities.
(b) | At March 31, 2021, the Company classified the liabilities for pension plans in Germany and Austria within the liquid- and air-cooled automotive businesses as held for sale. See Note 2 for additional information.
As of March 31, 2022, 2021, and 2020, the benefit obligation associated with the Company’s non-U.S. pension plans totaled $26.5 million, $36.4 million, and $35.7 million respectively. The $9.9 million decrease in the benefit obligation associated with non-U.S. pension plans as of March 31, 2022, compared with the prior year, was primarily due to the sale of the air-cooled automotive business in Austria, which resulted in a $5.5 million decrease. In addition, net actuarial gains during the year, the impact of foreign currency exchange rate changes, and employer contributions for benefits paid to plan participants decreased the obligation by $1.9 million, $1.6 million, and $1.5 million, respectively. The decreases were partially offset by service and interest cost totaling $0.6 million. In fiscal 2021, the $0.7 million increase was primarily due to a $2.2 million impact of foreign currency exchange rate changes and service and interest cost totaling $0.7 million, partially offset by employer contributions of $2.2 million for benefits paid to plan participants during the year. The accumulated benefit obligation for pension plans was $228.1 million and $258.9 million as of March 31, 2022 and 2021, respectively. The net actuarial loss related to the pension plans recognized in accumulated other comprehensive loss was $131.5 million and $151.1 million as of March 31, 2022 and 2021, respectively. Costs for the Company’s global pension plans included the following components:
|  | Years ended March 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
Components of net periodic benefit cost: |  |  |  |  |  |  |  |  |
Service cost |  | $ | 0.3 |  |  | $ | 0.4 |  |  | $ | 0.4 |
Interest cost |  |  | 7.3 |  |  |  | 7.9 |  |  |  | 9.1 |
Expected return on plan assets |  |  | (12.9 | ) |  |  | (11.5 | ) |  |  | (12.0 | )
Amortization of net actuarial loss |  |  | 6.9 |  |  |  | 6.9 |  |  |  | 6.0 |
Settlements (a) |  |  | - |  |  |  | 0.2 |  |  |  | 0.2 |
Net periodic benefit cost |  | $ | 1.6 |  |  | $ | 3.9 |  |  | $ | 3.7 |
Other changes in benefit obligation recognized in other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |
Net actuarial gain (loss) |  | $ | 11.4 |  |  | $ | 33.8 |  |  | $ | (38.7 | )
Amortization of net actuarial loss (b) |  |  | 8.6 |  |  |  | 7.1 |  |  |  | 6.2 |
Total recognized in other comprehensive income (loss) |  | $ | 20.0 |  |  | $ | 40.9 |  |  | $ | (32.5 | )
(a) | The settlement charges resulted from activity associated with the Company’s non-U.S. pension plans.
(b) | The fiscal 2022 amount includes $1.7 million of net actuarial losses written-off as a result of the sale of the air-cooled automotive business. See Note 1 for additional information.
The Company amortized $8.6 million, $7.1 million, and $6.2 million of net actuarial loss in fiscal 2022, 2021, and 2020, respectively. Exclusive of the $1.7 million written-off in fiscal 2022 upon the sale of the air-cooled automotive business referenced above, less than $1.0 million of the amortization was attributable to the Company’s non-U.S. pension plans in each of these years. The Company used a discount rate of 3.9% and 3.2% as of March 31, 2022 and 2021, respectively, for determining its benefit obligations under its U.S. pension plans. The Company used a weighted-average discount rate of 1.8% and 1.0% as of March 31, 2022 and 2021, respectively, for determining its benefit obligations under its non-U.S. pension plans. The Company used a discount rate of 3.2%, 3.4%, and 4.0% to determine its costs under its U.S. pension plans for fiscal 2022, 2021, and 2020, respectively. The Company used a weighted-average discount rate of 1.6%, 1.4%, and 1.7% to determine its costs under its non-U.S. pension plans for fiscal 2022, 2021, and 2020, respectively. The Company determined the discount rates used for its U.S. pension plans by modeling a portfolio of high-quality corporate bonds, with appropriate consideration given to expected defined benefit payment terms and duration of the respective pension obligations. The Company used a similar process to determine the discount rate for its non-U.S. pension obligations. Plan assets in the Company’s U.S. pension plans comprise 100 percent of the Company’s world-wide pension plan assets. The Company’s U.S. pension plan weighted-average asset allocations at the measurement dates of March 31, 2022 and 2021 were as follows:
|  | Target allocation |  |  | Plan assets |
|  |  |  |  | 2022 |  |  | 2021 |
Equity securities |  |  | 76 | % |  |  | 74 | % |  |  | 73 | %
Debt securities |  |  | 18 | % |  |  | 17 | % |  |  | 17 | %
Real estate investments |  |  | 5 | % |  |  | 8 | % |  |  | 9 | %
Cash and cash equivalents |  |  | 1 | % |  |  | 1 | % |  |  | 1 | %
|  |  | 100 | % |  |  | 100 | % |  |  | 100 | %
Due to market conditions and other factors, including timing of benefit payments and other transactions, actual asset allocation may vary from the target allocation outlined above. The Company periodically rebalances the assets to the target allocations. As of March 31, 2022 and 2021, the Company’s pension plans did not directly own shares of Modine common stock. The Company employs a total return investment approach, whereby a mix of investments are used to maximize the long-term growth of principal, while avoiding excessive risk. The Company has established pension plan guidelines based upon an evaluation of market conditions, tolerance for risk and cash requirements for benefit payments. The Company measures and monitors investment risk on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements and periodic asset/liability studies. The expected rate of return on U.S. plan assets is based upon historical return experience and forward-looking return expectations for major asset class categories. For fiscal 2022, 2021, and 2020 U.S. pension plan expense, the expected rate of return on plan assets was 7.5 percent. For fiscal 2023 U.S. pension plan expense, the Company has assumed a rate of return on plan assets of 7.0 percent. The Company’s funding policy for its U.S. pension plans is to contribute annually, at a minimum, the amount necessary on an actuarial basis to provide for benefits in accordance with applicable laws and regulations. As a result of funding relief provisions within the American Rescue Plan Act of 2021, the Company does not expect to make cash contributions to its U.S. plans during fiscal 2023. Estimated pension benefit payments for the next ten fiscal years are as follows:
Fiscal Year |  | Estimated Pension Benefit Payments |
2023 |  | $ | 15.7 |
2024 |  |  | 15.9 |
2025 |  |  | 16.0 |
2026 |  |  | 15.8 |
2027 |  |  | 15.7 |
2028-2032 |  |  | 75.0 |

X
- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -URI http://asc.fasb.org/topic&trid=2197446 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI http://asc.fasb.org/topic&trid=2127225 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
Name: | us-gaap_CompensationAndEmployeeBenefitPlansTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration