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Employee benefit plans | 12 Months Ended
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Dec. 31, 2022
Retirement Benefits [Abstract] |
Employee benefit plans | Employee benefit plans Retirement plans and retiree health and life insurance plans The Company provides non-contributory defined benefit pension plans for certain of its employees in the United States, Mexico, Belgium, Germany, Greece, France, and Turkey. The Company also sponsors contributory defined benefit pension plans covering certain of its employees in the United Kingdom, Canada and the Netherlands, and provides postretirement healthcare and life insurance benefits to a limited number of its retirees and their dependents in the United States and Canada, based on certain age and/or service eligibility requirements. The components of net periodic benefit cost include the following:
| 2022 |  | 2021 |  | 2020
Retirement Plans |  |  |  |  |
Service cost | $ | 3,304 |  |  | $ | 3,916 |  |  | $ | 3,969 |
Interest cost | 10,562 |  |  | 24,186 |  |  | 51,297 |
Expected return on plan assets | (10,302) |  |  | (22,888) |  |  | (50,733) |
Amortization of prior service cost | 913 |  |  | 900 |  |  | 1,006 |
Amortization of net actuarial loss | 6,240 |  |  | 16,503 |  |  | 28,833 |
Effect of settlement loss | 479 |  |  | 550,706 |  |  | 854 |
Effect of curtailment loss | 43 |  |  | — |  |  | 32 |
Net periodic benefit cost | $ | 11,239 |  |  | $ | 573,323 |  |  | $ | 35,258 |
Retiree Health and Life Insurance Plans |  |  |  |  |
Service cost | $ | 320 |  |  | $ | 374 |  |  | $ | 358 |
Interest cost | 258 |  |  | 197 |  |  | 336 |
Expected return on plan assets | (439) |  |  | (444) |  |  | (371) |
Amortization of prior service credit | — |  |  | — |  |  | (279) |
Amortization of net actuarial gain | (681) |  |  | (744) |  |  | (834) |
Net periodic benefit income | $ | (542) |  |  | $ | (617) |  |  | $ | (790) |
The following tables set forth the Plans’ obligations and assets at December 31:
| Retirement Plans |  | Retiree Health and Life Insurance Plans
| 2022 |  | 2021 |  | 2022 |  | 2021
Change in Benefit Obligation |  |  |  |  |  |  |
Benefit obligation at January 1 | $ | 514,633 |  |  | $ | 2,092,297 |  |  | $ | 13,745 |  |  | $ | 14,880 |
Service cost | 3,304 |  |  | 3,916 |  |  | 320 |  |  | 374 |
Interest cost | 10,562 |  |  | 24,186 |  |  | 258 |  |  | 197 |
Plan participant contributions | 50 |  |  | 14 |  |  | — |  |  | — |
Plan amendments | 665 |  |  | 608 |  |  | — |  |  | — |
Actuarial gain | (124,982) |  |  | (138,157) |  |  | (1,825) |  |  | (939) |
Benefits paid | (22,268) |  |  | (66,641) |  |  | (1,224) |  |  | (768) |
Impact of foreign exchange rates | (27,273) |  |  | (4,999) |  |  | (30) |  |  | 1 |
Effect of settlements | (1,736) |  |  | (1,396,494) |  |  | — |  |  | — |
Effect of curtailments | (112) |  |  | (97) |  |  | — |  |  | — |
Benefit obligation at December 31 | $ | 352,843 |  |  | $ | 514,633 |  |  | $ | 11,244 |  |  | $ | 13,745 |
| Retirement Plans |  | Retiree Health and Life Insurance Plans
| 2022 |  | 2021 |  | 2022 |  | 2021
Change in Plan Assets |  |  |  |  |  |  |
Fair value of plan assets at January 1 | $ | 417,105 |  |  | $ | 1,799,109 |  |  | $ | 13,942 |  |  | $ | 14,026 |
Actual return on plan assets | (119,714) |  |  | (46,148) |  |  | (532) |  |  | (84) |
Company contributions | 14,677 |  |  | 140,226 |  |  | 652 |  |  | 768 |
Plan participant contributions | 50 |  |  | 14 |  |  | — |  |  | — |
Benefits paid | (22,268) |  |  | (66,641) |  |  | (1,224) |  |  | (768) |
Impact of foreign exchange rates | (33,800) |  |  | (4,630) |  |  | — |  |  | — |
Effect of settlements | (1,736) |  |  | (1,396,494) |  |  | — |  |  | — |
Expenses paid | (1,189) |  |  | (8,331) |  |  | (88) |  |  | — |
Fair value of plan assets at December 31 | $ | 253,125 |  |  | $ | 417,105 |  |  | $ | 12,750 |  |  | $ | 13,942 |
Funded Status of the Plans | $ | (99,718) |  |  | $ | (97,528) |  |  | $ | 1,506 |  |  | $ | 197 |
| Retirement Plans |  | Retiree Health and Life Insurance Plans
| 2022 |  | 2021 |  | 2022 |  | 2021
Total Recognized Amounts in the Consolidated Balance Sheets |  |  |  |  |  |
Noncurrent assets | $ | 30,322 |  |  | $ | 70,221 |  |  | $ | 2,919 |  |  | $ | 1,758 |
Current liabilities | (9,478) |  |  | (10,375) |  |  | (1,049) |  |  | (1,055) |
Noncurrent liabilities | (120,562) |  |  | (157,374) |  |  | (364) |  |  | (506) |
Net (liability)/asset | $ | (99,718) |  |  | $ | (97,528) |  |  | $ | 1,506 |  |  | $ | 197 |
Items not yet recognized as a component of net periodic benefit cost that are included in Accumulated Other Comprehensive Loss as of December 31, 2022 and 2021, are as follows:
| Retirement Plans |  | Retiree Health and Life Insurance Plans
| 2022 |  | 2021 |  | 2022 |  | 2021
Net actuarial loss/(gain) | $ | 109,558 |  |  | $ | 111,481 |  |  | $ | (6,437) |  |  | $ | (6,357) |
Prior service cost | 6,053 |  |  | 6,288 |  |  | — |  |  | — |
| $ | 115,611 |  |  | $ | 117,769 |  |  | $ | (6,437) |  |  | $ | (6,357) |
The amounts recognized in Other Comprehensive Loss/(Income) include the following:
| Retirement Plans |  | Retiree Health and Life Insurance Plans
| 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Adjustments arising during the period: |  |  |  |  |  |  |  |  |  |  |
Net actuarial loss/(gain) | $ | 4,839 |  |  | $ | (63,684) |  |  | $ | 12,452 |  |  | $ | (761) |  |  | $ | (412) |  |  | $ | (468) |
Prior service cost/(credit) | $ | 678 |  |  | $ | 837 |  |  | $ | 1,229 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Net settlements/curtailments | $ | (522) |  |  | $ | (550,706) |  |  | $ | (886) |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Amortization recognized during the period: |  |  |  |  |  |  |  |  |  |  |
Net actuarial (loss)/gain | $ | (6,240) |  |  | $ | (16,503) |  |  | $ | (28,833) |  |  | $ | 681 |  |  | $ | 744 |  |  | $ | 834 |
Prior service (cost)/credit | $ | (913) |  |  | $ | (900) |  |  | $ | (1,006) |  |  | $ | — |  |  | $ | — |  |  | $ | 279 |
Total recognized in other comprehensive loss/(income) | $ | (2,158) |  |  | $ | (630,956) |  |  | $ | (17,044) |  |  | $ | (80) |  |  | $ | 332 |  |  | $ | 645 |
Total recognized in net periodic benefit cost and other comprehensive loss/(income) | $ | 9,081 |  |  | $ | (57,633) |  |  | $ | 18,214 |  |  | $ | (622) |  |  | $ | (285) |  |  | $ | (145) |
The accumulated benefit obligation for all defined benefit plans was $347,608 and $504,944 at December 31, 2022 and 2021, respectively. The projected benefit obligation (PBO), accumulated benefit obligation (ABO) and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were, $176,702, $171,705 and $48,277, respectively, as of December 31, 2022, and $228,127, $223,657 and $61,686, respectively, as of December 31, 2021. Plan termination, settlements, changes and amendments In July 2019, the Company's Board of Directors approved a resolution to terminate the Sonoco Pension Plan for Inactive Participants (the "Inactive Plan"), a tax-qualified defined benefit plan, effective September 30, 2019. Following completion of a limited lump sum offering in April 2021, the Company settled all remaining liabilities under the Inactive Plan in June 2021 through the purchase of annuities. The Company made additional net contributions of $124,432 to the Inactive Plan in 2021 in order to be fully funded on a termination basis at the time of the annuity purchase. Non-cash, pretax settlement charges totaling $538,722 were recognized in 2021 as the lump sum payouts and annuity purchases were made. The termination of the Inactive Plan applied to participants who had separated service from Sonoco and to non-union active employees who no longer accrued pension benefits. There was no change in the cumulative benefit previously earned by the approximately 11,000 participants affected by these actions. The Company continues to manage and support the Active Plan, comprised of approximately 700 active participants who continue to accrue benefits in accordance with a flat-dollar multiplier formula. Additional settlement charges totaling $479 and $11,984 were recognized in 2022 and 2021, respectively, primarily as a result of activity in our Canadian plans, including settlement charges in 2021 from the annuitization of the Trenton Union Plan in Ontario, Canada. This plan was terminated in June 2020 and the participants were fully annuitized in December 2021. Settlements in 2022 resulted from lump-sum payments to certain participants of the Company's other Canadian pension plans who elected a lump-sum distribution option upon retirement. Projected benefit payments The following table sets forth the Company’s projected benefit payments for the next ten years:
Year | Retirement Plans |  | Retiree Health and Life Insurance Plans
2023 | $ | 21,712 |  |  | $ | 1,172 |
2024 | $ | 22,129 |  |  | $ | 1,167 |
2025 | $ | 23,259 |  |  | $ | 1,149 |
2026 | $ | 24,859 |  |  | $ | 1,130 |
2027 | $ | 24,359 |  |  | $ | 1,080 |
2028-2032 | $ | 119,072 |  |  | $ | 4,912 |
Assumptions The following tables set forth the major actuarial assumptions used in determining the benefit obligation and net periodic benefit cost:
Weighted-average assumptions used to determine benefit obligations at December 31 | U.S. Retirement Plans |  | U.S. Retiree Health and Life Insurance Plans |  | Foreign Plans
Discount Rate |  |  |  |  |
2022 | 5.01 | % |  | 4.92 | % |  | 4.97 | %
2021 | 2.77 | % |  | 2.48 | % |  | 2.22 | %
Rate of Compensation Increase |  |  |  |  |
2022 | — | % |  | 2.99 | % |  | 3.29 | %
2021 | — | % |  | 3.01 | % |  | 3.21 | %
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31 | U.S. Retirement Plans |  | U.S. Retiree Health and Life Insurance Plans |  | Foreign Plans
Discount Rate |  |  |  |  |
2022 | 2.77 | % |  | 2.48 | % |  | 2.22 | %
2021 | 2.32 | % |  | 2.04 | % |  | 1.70 | %
2020 | 2.87 | % |  | 2.89 | % |  | 2.28 | %
Expected Long-term Rate of Return |  |  |  |  |
2022 | 3.27 | % |  | 3.18 | % |  | 3.00 | %
2021 | 3.27 | % |  | 2.01 | % |  | 3.69 | %
2020 | 2.93 | % |  | 2.93 | % |  | 4.10 | %
Rate of Compensation Increase |  |  |  |  |
2022 | — | % |  | 3.01 | % |  | 3.21 | %
2021 | — | % |  | 3.03 | % |  | 3.20 | %
2020 | — | % |  | 3.04 | % |  | 3.37 | %
The Company adjusts its discount rates at the end of each fiscal year based on yield curves of high-quality debt instruments over durations that match the expected benefit payouts of each plan. The expected long-term rate of return assumption is based on the Company’s current and expected future portfolio mix by asset class, and expected nominal returns of these asset classes using an economic “building block” approach. Expectations for inflation and real interest rates are developed and various risk premiums are assigned to each asset class based primarily on historical performance. The assumed rate of compensation increase reflects historical experience and management’s expectations regarding future salary and incentive increases. Medical trends The U.S. Retiree Health and Life Insurance Plan makes up approximately 96% of the Retiree Health liability. Therefore, the following information relates to the U.S. plan only.
Healthcare Cost Trend Rate | Pre-age 65 |  | Post-age 65
2022 | 5.80 | % |  | 6.50 | %
2021 | 6.91 | % |  | 8.27 | %
Ultimate Trend Rate | Pre-age 65 |  | Post-age 65
2022 | 4.50 | % |  | 4.50 | %
2021 | 4.45 | % |  | 4.40 | %
Year at which the Rate Reaches the Ultimate Trend Rate | Pre-age 65 |  | Post-age 65
2022 | 2030 |  | 2030
2021 | 2030 |  | 2030
Based on amendments to the U.S. plan approved in 1999, which became effective in 2003, cost increases borne by the Company are limited to the Urban CPI, as defined. Retirement plan assets The assets of the U.S., U.K., and Canadian defined benefit plans comprise approximately 92% of the total postretirement benefit plan assets. Therefore, the following disclosures relate only to the assets of these plans. The following table sets forth the weighted-average asset allocations of the Company’s retirement plans at 2022 and 2021, by asset category.
Asset Category |  |  | U.S. |  | U.K. |  | Canada
Equity securities | 2022 |  | 23.4 | % |  | 22.6 | % |  | 34.0 | %
2021 |  | 23.5 | % |  | 32.8 | % |  | 33.6 | %
Debt securities | 2022 |  | 72.9 | % |  | 76.3 | % |  | 66.0 | %
2021 |  | 72.0 | % |  | 66.6 | % |  | 66.4 | %
Cash and short-term investments | 2022 |  | 3.7 | % |  | 1.1 | % |  | — | %
2021 |  | 4.5 | % |  | 0.6 | % |  | — | %
Total | 2022 |  | 100.0 | % |  | 100.0 | % |  | 100.0 | %
2021 |  | 100.0 | % |  | 100.0 | % |  | 100.0 | %
The Company employs a total-return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a desired level of risk. Alternative assets such as real estate funds, private equity funds and hedge funds may also be used to enhance expected long-term returns while improving portfolio diversification. Risk tolerance is established through consideration of plan liabilities, plan funded status and corporate financial condition. Investment risk is measured and monitored on an ongoing basis through periodic investment portfolio reviews and periodic asset/liability studies. U.S. defined benefit plans The Company has adopted investment guidelines for the Active Plan based on asset/liability studies. These guidelines established a dynamic derisking framework for gradually shifting the allocation of assets to long-duration domestic fixed income from equity and other asset categories, as the relative funding ratio of the plan increased over time. Beginning in 2019, the Company accelerated the derisking measures by reallocating plan assets to a more conservative mix of primarily fixed income investments. The current target allocation (midpoint) for the Active Plan investment portfolio is: Equity Securities - 20% and Debt Securities – 80%. United Kingdom defined benefit plan The equity investments consist of direct ownership and funds and are diversified among U.K. and international stocks of small and large capitalization. The current target allocation (midpoint) for the investment portfolio is: Equity Securities – 20% and Debt Securities – 80%. Canada defined benefit plan The equity investments consist of direct ownership and funds and are diversified among Canadian and international stocks of primarily large capitalizations and short to intermediate duration corporate and government bonds. The current target allocation (midpoint) for the investment portfolio is 28% Equity Securities and 72% Debt Securities. Retiree health and life insurance plan assets The following table sets forth the weighted-average asset allocations by asset category of the Company’s retiree health and life insurance plan.
Asset Category | 2022 |  | 2021
Equity securities | —% |  | —%
Debt securities | 100.0% |  | 100.0%
Cash | —% |  | —%
Total | 100.0% |  | 100.0%
Contributions Based on current actuarial estimates, the Company anticipates that contributions to its defined benefit plans will be approximately $15,000 in 2023. No assurances can be made about funding requirements beyond 2023, however, as they will depend largely on actual investment returns and future actuarial assumptions, legislative actions, and changes to the Company's benefit offerings. Sonoco Retirement and Savings Plan The Sonoco Retirement and Savings Plan is a defined contribution retirement plan provided for certain of the Company’s U.S. employees. Through December 31, 2021, the plan was comprised of both an elective and non-elective component. The elective component of the plan, which is designed to meet the requirements of section 401(k) of the Internal Revenue Code, allows participants to set aside a portion of their wages and salaries for retirement and encourages saving by matching a portion of their contributions with contributions from the Company. The plan provides for participant contributions of 1% to 100% of gross pay. Effective December 31, 2021, the Company's 401(k) matching contribution was increased to 100% of the first 6% of pretax and/or Roth compensation contributed by the participant. Prior to this, the Company had matched 50% on the first 4% of such participant contributions. Participants are immediately fully vested in these matching contributions. The Company’s expenses related to the plan for 2022, 2021 and 2020 were approximately $38,900, $13,900 and $13,700, respectively. The non-elective component of the plan, the Sonoco Retirement Contribution (SRC), was eliminated effective December 31, 2021 and the benefit replaced by the higher matching 401(k) matching contribution discussed above. The SRC was available to certain employees who were not active participants in the Company’s U.S. qualified defined benefit pension plan and provided for an annual Company contribution of 4% of all eligible pay plus 4% of eligible pay in excess of the Social Security wage base to eligible participant accounts. Participants were fully vested after three years of service or upon reaching age 55, if earlier. As a result of the termination, the Company recognized no SRC expense in 2022. Expenses related to the plan for 2021 and 2020 were approximately $22,914 and $23,505, respectively. Cash contributions to the SRC, which were made annually in March following the year in which they were earned, totaled $21,948, $22,665 and $22,503 in 2022, 2021 and 2020, respectively. No additional SRC contributions will be made in 2023 or beyond. Other plans The Company also provides retirement and postretirement benefits to certain other non-U.S. employees through various Company-sponsored and local government sponsored defined contribution arrangements. For the most part, the liabilities related to these arrangements are funded in the period they arise. The Company’s expenses for these plans were not material for all years presented.

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