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Pension | 12 Months Ended
--- | ---
Dec. 31, 2023
Retirement Benefits [Abstract] |
Pension |
14. | Pension
We have non-contributory defined benefit pension plans covering eligible employees in the United States, Mexico, Taiwan and several European countries. Salaried employees’ benefit payments are generally determined using a formula that is based on an employee’s compensation and length of service. We closed our defined benefit pension plan for new salaried employees in the United States who joined the Company after January 1, 2006, and, effective January 1, 2007, benefits were frozen for all salaried employees who were not age 40 or older as of December 31, 2006 and benefits for all remaining eligible salaried employees were frozen as of January 1, 2021. Benefits for hourly employees in the United States were frozen as of January 1, 2024. Certain of our employees also participate in voluntary contributory retirement savings plans for salaried and hourly employees maintained by us. Under these plans, eligible employees can receive matching contributions up to the first 6% of their eligible earnings. Certain employees hired prior to August 1st, 2016 are eligible to receive an additional 2% company contribution each year. We recorded $9.5 million, $8.6 million and $8.3 million in expenses in 2023, 2022 and 2021, respectively, for matching contributions under these plans. Our general funding policy for qualified defined benefit pension plans historically has been to contribute amounts that are at least sufficient to satisfy regulatory funding standards. In 2023, we contributed $5.5 million, in cash, to our U.S. pension plans. No contributions were made in 2022 or 2021. The contribution was made in 2023 in order to meet a funding level sufficient to avoid variable fees from the PBGC on the underfunded portion of our pension liability. We do not anticipate making contributions in 2024 to our U.S. defined benefit pension plans and we expect to make total contributions of approximately $1.0 million in 2024 to the foreign pension plans. The projected benefit obligation and fair value of plan assets for the defined benefit pension plans with projected benefit obligations in excess of plan assets were $7.7 million and $0.2 million at December 31, 2023, and $6.1 million and $0.2 million at December 31, 2022, respectively. The accumulated benefit obligation and fair value of plan assets for the defined benefit pension plans with accumulated benefit obligations in excess of plan assets were $5.3 million and $0.2 million at December 31, 2023, and $4.3 million and $0.2 million at December 31, 2022, respectively. The following table sets forth the changes in projected benefit obligations and plan assets of our defined benefit pension and other non-qualified and postretirement plans as of and for the years ended December 31, 2023 and 2022.
| 2023 |  | 2022 |  |  |  |
| (in millions)
Change in Projected Benefit Obligations |  |  |  |  |  |  |
Projected benefit obligations at beginning of year | $ | 247.6 |  |  | $ | 335.7 |  |  |  |  |
Service cost | 0.7 |  |  | 1.2 |  |  |  |  |
Interest cost | 13.6 |  |  | 9.8 |  |  |  |  |
Actuarial loss (gain) | 12.9 |  |  | (77.6) |  |  |  |  |
Benefits paid | (16.3) |  |  | (15.9) |  |  |  |  |
Curtailments | (0.3) |  |  | (1.0) |  |  |  |  |
Plan combination (acquisitions/divestitures) | — |  |  | (3.9) |  |  |  |  |
Other | 0.5 |  |  | (0.7) |  |  |  |  |
Projected benefit obligations at end of year | 258.7 |  |  | 247.6 |  |  |  |  |
Change in Plan Assets | 2023 |  | 2022 |  |  |  |
| (in millions)
Fair value of plan assets at beginning of year | 253.3 |  |  | 351.4 |  |  |  |  |
Actual return on plan assets | 24.1 |  |  | (81.5) |  |  |  |  |
Benefits paid | (16.3) |  |  | (15.9) |  |  |  |  |
Settlements | (0.3) |  |  | — |  |  |  |  |
Company contributions | 5.9 |  |  | 0.2 |  |  |  |  |
Plan combination (acquisitions/divestitures) | — |  |  | (0.8) |  |  |  |  |
Other | — |  |  | (0.1) |  |  |  |  |
Fair value of plan assets at end of year | 266.7 |  |  | 253.3 |  |  |  |  |
Funded Status at End of Year | $ | 8.0 |  |  | $ | 5.7 |  |  |  |  |
| 2023 |  | 2022 |  |  |  |
| (in millions)
Amounts Recognized in the Consolidated Balance Sheets |  |  |  |  |  |  |
Long-term assets | $ | 15.6 |  |  | $ | 11.7 |  |  |  |  |
Current liabilities | (0.6) |  |  | (0.5) |  |  |  |  |
Long-term liabilities | (7.0) |  |  | (5.5) |  |  |  |  |
| $ | 8.0 |  |  | $ | 5.7 |  |  |  |  |
Pre-tax charges recognized in accumulated other comprehensive loss as of December 31, 2023 and 2022 consist of:
| 2023 |  | 2022 |  |  |  |
| (in millions)
Net actuarial loss | $ | 60.7 |  |  | $ | 59.6 |  |  |  |  |
Prior service cost | 0.2 |  |  | 0.6 |  |  |  |  |
| $ | 60.9 |  |  | $ | 60.2 |  |  |  |  |
The accumulated benefit obligation for all defined benefit pension plans was $256.3 million and $245.9 million at December 31, 2023 and 2022, respectively. The following table sets forth the components of net periodic benefit cost and other changes in plan assets and benefit obligations recognized in other comprehensive income for our defined benefit pension plans for the years ended December 31, 2023, 2022 and 2021.
| Year Ended December 31, |  |
| 2023 |  | 2022 |  | 2021 |  |  |  |  |  |
| (in millions)
Net Periodic Benefit Cost |  |  |  |  |  |  |  |  |  |  |
Service cost | $ | 0.7 |  |  | $ | 1.2 |  |  | $ | 1.5 |  |  |  |  |  |  |
Interest cost | 13.6 |  |  | 9.8 |  |  | 9.0 |  |  |  |  |  |  |
Expected return on plan assets | (13.8) |  |  | (13.3) |  |  | (18.3) |  |  |  |  |  |  |
Amortization of prior service cost | (0.1) |  |  | 0.2 |  |  | 0.1 |  |  |  |  |  |  |
Amortization of net loss | 1.5 |  |  | 0.5 |  |  | 0.7 |  |  |  |  |  |  |
Curtailments | 0.3 |  |  | (1.0) |  |  | — |  |  |  |  |  |  |
Net periodic benefit cost (income) | $ | 2.2 |  |  | $ | (2.6) |  |  | $ | (7.0) |  |  |  |  |  |  |
| Year Ended December 31, |  |
| 2023 |  | 2022 |  | 2021 |  |  |  |  |  |
| (in millions)
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss |  |  |  |  |  |  |  |  |  |  |
Net loss (gain) | $ | 2.4 |  |  | $ | 17.2 |  |  | $ | (4.7) |  |  |  |  |  |  |
Prior service cost | — |  |  | — |  |  | 0.4 |  |  |  |  |  |  |
Amortization of net loss | (1.5) |  |  | (0.5) |  |  | (0.7) |  |  |  |  |  |  |
Amortization of prior service cost | 0.1 |  |  | (0.2) |  |  | (0.1) |  |  |  |  |  |  |
Curtailments | (0.3) |  |  | 1.0 |  |  | — |  |  |  |  |  |  |
Total recognized in other comprehensive income | 0.7 |  |  | 17.5 |  |  | (5.1) |  |  |  |  |  |  |
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income | $ | 2.9 |  |  | $ | 14.9 |  |  | $ | (12.1) |  |  |  |  |  |  |
| at December 31, |  |
| 2023 |  | 2022 |  | 2021 |  |  |  |  |  |
Weighted-Average Assumptions Used to Determine Benefit Obligations |  |  |  |  |  |  |  |  |  |  |
Discount rate | 5.125 | % |  | 5.625 | % |  | 3.000 | % |  |  |  |  |  |
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost |  |  |  |  |  |  |  |  |  |  |
Discount rate | 5.625 | % |  | 3.000 | % |  | 2.625 | % |  |  |  |  |  |
Expected long-term return on plan assets | 5.6 | % |  | 3.9 | % |  | 5.3 | % |  |  |  |  |  |
Rate of compensation increase | N/A |  | N/A |  | 3.0 | % |  |  |  |  |  |
The discount rate reflects the current rate at which the pension liabilities could be effectively settled at the end of the year. The discount rate was determined with a model that uses a theoretical portfolio of high quality corporate bonds specifically selected to produce cash flows closely related to how we would settle our retirement obligations. This produced a discount rate of 5.1% at December 31, 2023. As of the date of these financial statements, there are no known or anticipated changes in our discount rate assumption that will impact our pension expense in 2024. A 25 basis point decrease in our discount rate, holding constant our expected long-term return on plan assets and other assumptions, would increase pension expense by approximately $0.2 million per year. The overall expected long-term rate of return on assets was determined based upon weighted-average historical returns over an extended period of time for the asset classes in which the plans invest according to our current investment policy. We use the Pri-2012 base mortality table with the MP-2021 projection scale to value our domestic pension liabilities. Plan Assets The asset allocation for pension plans at the end of 2023 and 2022, and the targeted allocation for 2024, by asset category are as follows:
| Target Allocation |  | Plan Assets at December 31,
| 2024 |  | 2023 |  | 2022
Asset Category |  |  |  |  |
Equity securities | 20 | % |  | 21 | % |  | 22 | %
Fixed income | 80 | % |  | 79 | % |  | 78 | %
| 100 | % |  | 100 | % |  | 100 | %
Our investment goal is to maximize the return on assets, over the long term, by investing in equities and fixed income investments while diversifying investments within each asset class to reduce the impact of losses in individual securities. Equity investments include a mix of U.S. large capitalization equities, U.S. small capitalization equities and non-U.S. equities. Fixed income investments include a mix of treasury obligations and high-quality corporate bonds. The asset allocation policy is reviewed and any significant variation from the target asset allocation mix is rebalanced periodically. The plans have no direct investments in Enpro common stock. The plans invest exclusively in mutual funds whose holdings are marketable securities traded on recognized markets and, as a result, would be considered Level 1 assets. The investment portfolios of the various funds at December 31, 2023 and 2022 are summarized as follows:
| December 31,
| 2023 |  | 2022
| (in millions)
Mutual funds – U.S. equity | $ | 34.4 |  |  | $ | 32.6 |
Mutual funds – international equity | 22.8 |  |  | 22.3 |
Mutual funds - fixed income treasury and corporate bonds | 208.2 |  |  | 197.2 |
Cash equivalents | 1.3 |  |  | 1.2 |
| $ | 266.7 |  |  | $ | 253.3 |
Estimated Future Benefit Payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid in the following calendar years:
| Pension Benefits |  |
| (in millions)
2024 | $ | 17.4 |  |  |
2025 | $ | 17.9 |  |  |
2026 | $ | 18.0 |  |  |
2027 | $ | 18.3 |  |  |
2028 | $ | 19.6 |  |  |
Years 2029 – 2033 | $ | 97.9 |  |  |
Other Post-Employment Retirement Benefits We have liabilities related to other post-employment retirement benefits that were offered to certain employees of several legacy businesses owned by Enpro's predecessor as well as certain continuing operations. New employees are not offered these benefits and nearly all employees who were offered these benefits are retired. Disclosures related to these benefits are not included in the discussion and tables above. At December 31, 2023, we had $5.5 million of liabilities related to these benefits of which $1.8 million is a current liability.

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