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Pension and Other Postretirement Benefits
 12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefits Pension and Other Postretirement Benefits
The Company has various pension and post-employment plans which provide for payment of benefits to certain eligible employees, mainly commencing between the ages of 50 and 65, and for payment of certain disability benefits. After meeting certain qualifications, eligible employees acquire a vested right to future benefits. The benefits payable under the plans are generally determined on the basis of an employee's length of service and/or earnings. Employer contributions to the plans are made, as necessary, to ensure legal funding requirements are satisfied. The Company may make contributions in excess of the legal funding requirements.
The Company provides postretirement healthcare benefits to certain retirees. Many employees and retirees outside of the United States are covered by government sponsored healthcare programs.
The following table presents the change in benefit obligation, change in plan assets and funded status for the Company's defined benefit and postretirement benefit plans for the year ended December 31, 2019:
(in thousands)
Pension
Benefits
(Underfunded)
 
Pension
Benefits
(Overfunded)
 
Postretirement
Benefits
Change in projected benefit obligation ("PBO")
 
 
 
 
 
Benefit obligation at December 31, 2018
$
274,821

 
$
25,629

 
$
14,412

Service cost
8,839

 
—

 
574

Interest cost
10,208

 
729

 
557

Actuarial loss
47,077

 
2,628

 
2,288

Curtailments
(116
)
 
—

 
—

Settlements
(27,438
)
 
—

 
—

Plan amendments
1,464

 
—

 
—

Participants’ contributions
—

 
—

 
498

Benefit payments
(2,605
)
 
(639
)
 
(1,504
)
Foreign currency translation
290

 
742

 
—

Projected benefit obligation at December 31, 2019
312,540

 
29,089

 
16,825

Accumulated benefit obligation at December 31, 2019
282,986

 
27,412

 
16,825

Change in plan assets

 

 
 
Fair value of plan assets at December 31, 2018
176,044

 
40,700

 
—

Return on plan assets
33,799

 
1,772

 
—

Employer contributions
24,540

 
—

 
1,006

Participants’ contributions
—

 
—

 
498

Settlements
(27,438
)
 
—

 
—

Benefit payments
(2,605
)
 
(639
)
 
(1,504
)
Foreign currency translation
9

 
1,122

 
—

Fair value of plan assets at December 31, 2019
204,349

 
42,955

 
—

Funded status (fair value of plan assets less PBO)
$
(108,191
)
 
$
13,866

 
$
(16,825
)
The following table presents the change in benefit obligation, change in plan assets and funded status for the Company's defined benefit and postretirement benefit plans for the year ended December 31, 2018:
(in thousands)
Pension
Benefits
(Underfunded)
 
Pension
Benefits
(Overfunded)
 
Postretirement
Benefits
Change in projected benefit obligation
 
 
 
 
 
Benefit obligation at December 31, 2017
$
316,882

 
$
35,468

 
$
16,052

Service cost
9,067

 
—

 
657

Interest cost
11,040

 
857

 
490

Actuarial gain
(22,436
)
 
(5,255
)
 
(1,600
)
Curtailments
(177
)
 
—

 
—

Settlements
(36,244
)
 
(3,507
)
 
—

Plan amendments
—

 
285

 
—

Participants’ contributions
—

 
—

 
378

Benefit payments
(2,990
)
 
(580
)
 
(1,565
)
Foreign currency translation
(321
)
 
(1,639
)
 
—

Projected benefit obligation at December 31, 2018
274,821

 
25,629

 
14,412

Accumulated benefit obligation at December 31, 2018
240,270

 
23,821

 
14,412

Change in plan assets

 

 

Fair value of plan assets at December 31, 2017
183,093

 
50,767

 
—

Return on plan assets
(11,863
)
 
(3,846
)
 
—

Employer contributions
44,105

 
441

 
1,187

Participants’ contributions
—

 
—

 
378

Settlements
(36,244
)
 
(3,507
)
 
—

Benefit payments
(2,990
)
 
(580
)
 
(1,565
)
Foreign currency translation
(57
)
 
(2,575
)
 
—

Fair value of plan assets at December 31, 2018
176,044

 
40,700

 
—

Funded status (fair value of plan assets less PBO)
$
(98,777
)
 
$
15,071

 
$
(14,412
)

The amount of pension and postretirement assets and liabilities recognized on the consolidated balance sheets was as follows:
 
Pension Benefits
 
Postretirement Benefits
 
December 31, 
 
December 31, 
(in thousands)
2019
 
2018
 
2019
 
2018
Other noncurrent assets
$
13,866

 
$
15,071

 
$
—

 
$
—

Accrued compensation and benefits
(5,357
)
 
(10,391
)
 
(807
)
 
(721
)
Accrued pension and other postretirement benefits
(102,834
)
 
(88,386
)
 
(16,018
)
 
(13,691
)
Net liability recognized
$
(94,325
)
 
$
(83,706
)
 
$
(16,825
)
 
$
(14,412
)

The amounts in accumulated other comprehensive loss, net of tax on the consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost were as follows:
 
Pension Benefits
 
Postretirement Benefits
 
Year ended December 31, 
 
Year ended December 31, 
(in thousands)
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Net actuarial gain (loss) at beginning of year
$
(39,125
)
 
$
(44,892
)
 
$
(33,736
)
 
$
12,315

 
$
12,392

 
$
8,055

Actuarial gain (loss)
(27,123
)
 
(882
)
 
(14,554
)
 
(2,288
)
 
1,600

 
5,075

Prior service cost
(1,464
)
 
(285
)
 
—

 
—

 
—

 
—

Curtailment impact
—

 
(97
)
 
—

 
—

 
—

 
—

Settlement impact
4,324

 
4,982

 
2,740

 
—

 
—

 
—

Amortization of actuarial (gain) loss
1,530

 
1,687

 
804

 
(1,436
)
 
(1,540
)
 
(601
)
Amortization of prior service cost (credit)
247

 
175

 
175

 
(137
)
 
(137
)
 
(137
)
Foreign currency translation
(190
)
 
187

 
(321
)
 
—

 
—

 
—

Net actuarial gain (loss) at end of year
$
(61,801
)
 
$
(39,125
)
 
$
(44,892
)
 
$
8,454

 
$
12,315

 
$
12,392


The expected prior service cost (credit) that will be amortized from accumulated other comprehensive loss, net of tax, into net periodic benefit cost in the next fiscal year is a cost of $0.3 million for the pension plans and a credit of $0.1 million for the postretirement plans. The expected actuarial (gain) loss that will be amortized from accumulated other comprehensive loss, net of tax, into net periodic benefit cost in the next fiscal year is a loss of $3.8 million for the pension benefit plans and a gain of $0.9 million for the postretirement benefit plans.
Components of net periodic benefit cost were as follows:
 
Pension Benefits
 
Postretirement Benefits
 
Year ended December 31, 
 
Year ended December 31, 
(in thousands)
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Components of net periodic benefit cost
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
8,839

 
$
9,067

 
$
9,217

 
$
574

 
$
657

 
$
955

Interest cost
10,937

 
11,897

 
11,832

 
557

 
490

 
713

Expected return on plan assets
(12,987
)
 
(13,041
)
 
(12,006
)
 
—

 
—

 
—

Curtailment income
(118
)
 
(97
)
 
—

 
—

 
—

 
—

Settlement expense
4,324

 
4,982

 
2,740

 
—

 
—

 
—

Amortization of net (gain) loss
1,530

 
1,687

 
804

 
(1,436
)
 
(1,540
)
 
(601
)
Amortization of prior service cost (credit)
247

 
175

 
175

 
(137
)
 
(137
)
 
(137
)
Net periodic benefit cost (credit)
$
12,772

 
$
14,670

 
$
12,762

 
$
(442
)
 
$
(530
)
 
$
930


The non-service cost components of net periodic benefit cost (credit) are included in other expense, net in the consolidated statement of operations (Note 18).  
The weighted average assumptions used to determine benefit obligations at December 31, 2019 and 2018 were as follows:
 
Pension Benefits
 
Postretirement Benefits
 
2019
 
2018
 
2019
 
2018
Discount rate
3.24
%
 
4.25
%
 
3.12
%
 
4.27
%
Rate of compensation increase
3.97
%
 
4.00
%
 
N/A

 
N/A

The weighted average assumptions used to determine net periodic benefit cost (credit) for the years ended December 31, 2019, 2018 and 2017 were as follows:
 
Pension Benefits
 
Postretirement Benefits
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Discount rate
4.25
%
 
3.62
%
 
4.17
%
 
4.27
%
 
3.61
%
 
4.08
%
Expected long-term rate of return on plan assets
5.84
%
 
5.77
%
 
5.77
%
 
N/A

 
N/A

 
N/A

Rate of compensation increase
4.00
%
 
4.01
%
 
4.02
%
 
N/A

 
N/A

 
N/A


The assumed healthcare cost trend rates used to determine benefit obligations and net periodic benefit cost (credit) for postretirement benefits as of and for the years ended December 31, 2019, 2018 and 2017 were as follows:
 
2019
 
2018
 
2017
Healthcare cost trend rate assumed for next year
6.03%/8.44%

 
6.25%/9.00%

 
5.50%/8.50%

Rate that the cost trend rate is assumed to decline
(the ultimate trend rate)
4.50
%
 
4.50
%
 
4.50
%
Year that the rate reaches the ultimate trend rate
2027

 
2027

 
2024


Assumed healthcare cost trend rates have a significant effect on the amounts reported for the postretirement benefits. A one-percentage-point change in assumed healthcare cost trend rates would have the following effects:
 
2019
 
2018
(in thousands)
One-Percentage
Point Increase
 
One-Percentage
Point Decrease
 
One-Percentage
Point Increase
 
One-Percentage
Point Decrease
Effect on total of service cost and interest cost
$
68

 
$
(61
)
 
$
72

 
$
(64
)
Effect on projected benefit obligation
710

 
(642
)
 
632

 
(572
)

Plan Assets
Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2019 were as follows:
(in thousands)
Total
 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Asset category
 
 
 
 
 
 
 
Individual securities
 
 
 
 
 
 
 
Fixed income
$
1,682

 
$
—

 
$
1,682

 
$
—

Commingled funds
 
 
 
 
 
 
 
Measured at net asset value
245,622

 
—

 
—

 
—

 
$
247,304

 
$
—

 
$
1,682

 
$
—

Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2018 were as follows:
(in thousands)
Total
 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Asset category
 
 
 
 
 
 
 
Individual securities
 
 
 
 
 
 
 
Fixed income
$
1,682

 
$
—

 
$
1,682

 
$
—

Commingled funds
 
 
 
 
 
 
 
Measured at net asset value
215,062

 
—

 
—

 
—

 
$
216,744

 
$
—

 
$
1,682

 
$
—


Pension assets include fixed income securities and commingled funds. Fixed income securities are valued at daily closing prices or institutional mid-evaluation prices provided by independent industry-recognized pricing sources. Commingled funds are not traded in active markets with quoted prices and as a result, are valued using the net asset values provided by the administrator of the fund. The investments underlying the net asset values are based on quoted prices traded in active markets. In accordance with ASU 2015-7, “Fair Value Measurement: Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent)”, the Company has elected the practical expedient to exclude assets measured at net asset value from the fair value hierarchy.
The Company's investment strategy is to optimize investment returns through a diversified portfolio of investments, taking into consideration underlying plan liabilities and asset volatility. Asset allocations are based on the underlying liability structure and local regulations. All retirement asset allocations are reviewed periodically to ensure the allocation meets the needs of the liability structure.
Master trusts were established to hold the assets of the Company's U.S. defined benefit plan. During the year ended December 31, 2019, the U.S. defined benefit plan asset allocation of these trusts targeted a return-seeking investment allocation of 57% to 72% and a liability-hedging investment allocation of 28% to 43%. During the year ended December 31, 2018, the U.S. defined benefit plan asset allocation of these trusts targeted a return-seeking investment allocation of 50% to 76% and a liability-hedging investment allocation of 24% to 50%. Return-seeking investments include equities, real estate, high yield bonds and other instruments. Liability-hedging investments include assets such as corporate and government fixed income securities.
The Company's future expected blended long-term rate of return on plan assets of 5.01% is determined based on long-term historical performance of plan assets, current asset allocation, and projected long-term rates of return.
Estimated Contributions
The Company expects to make pension contributions of approximately $20.6 million during 2020 based on current assumptions as of December 31, 2019.
Estimated Future Retirement Benefit Payments
The following retirement benefit payments, which reflect expected future service, are expected to be paid as follows:
(in thousands)
Pension
Benefits
 
Postretirement
Benefits
Year ending December 31,
 
 
 
2020
$
23,308

 
$
807

2021
22,808

 
981

2022
23,017

 
1,108

2023
26,913

 
1,165

2024
27,333

 
1,290

Thereafter
144,095

 
6,989

 
$
267,474

 
$
12,340


The estimated future retirement benefit payments noted above are estimates and could change significantly based on differences between actuarial assumptions and actual events and decisions related to lump sum distribution options that are available to participants in certain plans.
International Plans
Pension coverage for certain eligible employees of the Company's international subsidiaries is provided, to the extent deemed appropriate, through separate defined benefit pension plans. The international defined benefit pension plans are included in the tables above. As of December 31, 2019 and 2018, the international pension plans had total projected benefit obligations of $48.8 million and $43.9 million, respectively, and fair values of plan assets of $45.1 million and $44.0 million, respectively. The majority of the plan assets are invested in equity securities. The net periodic benefit cost related to international plans was $0.9 million, $0.4 million and $0.9 million for the years ended December 31, 2019, 2018 and 2017, respectively. The expected prior service cost that will be amortized from accumulated other comprehensive loss, net of tax, into net periodic benefit cost in the next fiscal year is $0.1 million. The expected actuarial loss that will be amortized from accumulated other comprehensive loss, net of tax, into net periodic benefit cost in the next fiscal year is $0.1 million.
Defined Contribution Plans
The Company sponsors a number of defined contribution plans and company contributions related to these plans are determined under various formulas. Company contributions to defined contribution plans amounted to $16.3 million, $16.5 million and $13.8 million for the years ended December 31, 2019, 2018 and 2017, respectively.