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RETIREMENT BENEFITS | 12 Months Ended
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Dec. 31, 2022
Retirement Benefits [Abstract] |
RETIREMENT BENEFITS | RETIREMENT B ENEFITS We sponsor a number of defined benefit and defined contribution pension plans which cover substantially all U.S. employees, other than union employees covered by multiemployer defined benefit pension plans under collective bargaining agreements. Pension benefits are provided based on either a career average, final pay or years of service formula. With respect to certain hourly employees, pension benefits are provided based on stated amounts for each year of service. Our U.S. salaried pension plans are closed to new employees. We also sponsor other postretirement benefits plans, including unfunded defined benefit health care and life insurance plans, which provide postretirement benefits to certain employees. The plans are contributory, with retiree contributions adjusted annually, and contain cost sharing features including deductibles and coinsurance. Retiree health care benefits are paid as covered expenses are incurred. The changes in benefit obligations and plan assets as well as the funded status of our retirement plans at December 31 were as follows:
| Pension Benefits |  | Other Postretirement Benefits
| 2022 |  | 2021 |  | 2022 |  | 2021
| (Dollars in thousands)
Change in benefit obligation |  |  |  |  |  |  |
Obligation at beginning of year | $ | 925,129 |  |  | $ | 971,415 |  |  | $ | 19,525 |  |  | $ | 22,152 |
Service cost | 12,603 |  |  | 14,265 |  |  | 78 |  |  | 107 |
Interest cost | 20,579 |  |  | 17,697 |  |  | 413 |  |  | 363 |
Actuarial gains | (231,923) |  |  | (23,537) |  |  | (3,609) |  |  | (1,631) |
Benefits paid | (44,443) |  |  | (43,512) |  |  | (1,984) |  |  | (1,573) |
Participants’ contributions | — |  |  | — |  |  | 24 |  |  | 107 |
Foreign currency exchange rate changes | (7,841) |  |  | (11,199) |  |  | — |  |  | — |
Obligation at end of year | 674,104 |  |  | 925,129 |  |  | 14,447 |  |  | 19,525 |
Change in plan assets |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | 1,024,454 |  |  | 956,345 |  |  | — |  |  | — |
Actual return on plan assets | (218,002) |  |  | 109,120 |  |  | — |  |  | — |
Employer contributions | 2,396 |  |  | 2,501 |  |  | 1,960 |  |  | 1,466 |
Participants’ contributions | — |  |  | — |  |  | 24 |  |  | 107 |
Benefits paid | (44,443) |  |  | (43,512) |  |  | (1,984) |  |  | (1,573) |
Fair value of plan assets at end of year | 764,405 |  |  | 1,024,454 |  |  | — |  |  | — |
Funded status | $ | 90,301 |  |  | $ | 99,325 |  |  | $ | (14,447) |  |  | $ | (19,525) |
Actuarial gains related to pension benefits were primarily the result of changes in discount rates used to calculate projected benefit obligations.
| Pension Benefits |  | Other Postretirement Benefits
| 2022 |  | 2021 |  | 2022 |  | 2021
| (Dollars in thousands)
Amounts recognized in the consolidated balance sheets |  |  |  |  |  |  |
Non-current assets | $ | 169,940 |  |  | $ | 226,882 |  |  | $ | — |  |  | $ | — |
Current liabilities | (2,766) |  |  | (2,602) |  |  | (1,421) |  |  | (1,460) |
Non-current liabilities | (76,873) |  |  | (124,955) |  |  | (13,026) |  |  | (18,065) |
Net amount recognized | $ | 90,301 |  |  | $ | 99,325 |  |  | $ | (14,447) |  |  | $ | (19,525) |
Amounts recognized in accumulated other comprehensive loss |  |  |  |  |  |  |
Net actuarial loss (gain) | $ | 209,874 |  |  | $ | 161,837 |  |  | $ | (6,002) |  |  | $ | (2,690) |
Prior service cost (credit) | 505 |  |  | 731 |  |  | (969) |  |  | (2,637) |
Net amount recognized | $ | 210,379 |  |  | $ | 162,568 |  |  | $ | (6,971) |  |  | $ | (5,327) |
The fair value of plan assets for our domestic pension plans was approximately 129 percent and 128 percent of their projected benefit obligations at December 31, 2022 and 2021, respectively. Pension plans with projected benefit obligations in excess of plan assets at December 31, 2022 and 2021 consisted entirely of our international pension benefit plans which are not funded. The projected benefit obligation for our international pension benefit plans was $79.6 million and $127.6 million at December 31, 2022 and 2021, respectively. The accumulated benefit obligation for all pension benefit plans at December 31, 2022 and 2021 was $658.5 million and $896.4 million, respectively. Pension plans with accumulated benefit obligations in excess of plan assets at December 31, 2022 and 2021 consisted entirely of our international pension benefit plans which are not funded. The accumulated benefit obligation for our international pension benefit plans was $77.1 million and $122.4 million at December 31, 2022 and 2021, respectively. The benefits expected to be paid from our pension and other postretirement benefit plans, which reflect future years of service, are as follows (dollars in thousands):
| Pension Benefits |  | Other Postretirement Benefits
2023 | $ | 46,366 |  |  | $ | 1,422 |
2024 | 47,186 |  |  | 1,399 |
2025 | 48,050 |  |  | 1,288 |
2026 | 49,031 |  |  | 1,239 |
2027 | 49,481 |  |  | 1,211 |
2028-2032 | 249,996 |  |  | 5,537 |
| $ | 490,110 |  |  | $ | 12,096 |
Our principal domestic pension and other postretirement benefit plans used the following weighted average actuarial assumptions to determine the benefit obligations at December 31:
| 2022 |  | 2021
Discount rate | 5.6 | % |  | 2.9 | %
Expected return on plan assets | 6.9 | % |  | 8.5 | %
Rate of compensation increase | 2.4 | % |  | 2.4 | %
Health care cost trend rate: |  |  |
Assumed for next year | 4.7 | % |  | 6.2 | %
Ultimate rate | 3.9 | % |  | 4.2 | %
Year that the ultimate rate is reached | 2043 |  | 2036
Our expected return on plan assets is determined by current and expected asset allocation of plan assets, estimates of future long-term returns on those types of plan assets and historical long-term investment performance. Our international pension benefit plans used a discount rate of 4.2 percent and 1.4 percent as of December 31, 2022 and 2021, respectively, and a rate of compensation increase of 3.8 percent and 3.5 percent to determine the benefit obligation as of December 31, 2022 and 2021, respectively. The components of the net periodic benefit credit for each of the years ended December 31 were as follows:
| Pension Benefits |  | Other Postretirement Benefits
| 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
| (Dollars in thousands)
Service cost | $ | 12,603 |  |  | $ | 14,265 |  |  | $ | 13,638 |  |  | $ | 78 |  |  | $ | 107 |  |  | $ | 88 |
Interest cost | 20,579 |  |  | 17,697 |  |  | 23,074 |  |  | 413 |  |  | 363 |  |  | 566 |
Expected return on plan assets | (69,132) |  |  | (79,453) |  |  | (72,122) |  |  | — |  |  | — |  |  | — |
Amortization of prior service cost (credit) | 222 |  |  | 243 |  |  | 205 |  |  | (1,668) |  |  | (1,830) |  |  | (1,937) |
Amortization of actuarial losses (gains) | 4,635 |  |  | 12,479 |  |  | 11,859 |  |  | (298) |  |  | (311) |  |  | (339) |
Net periodic benefit credit | $ | (31,093) |  |  | $ | (34,769) |  |  | $ | (23,346) |  |  | $ | (1,475) |  |  | $ | (1,671) |  |  | $ | (1,622) |
Our principal domestic pension and other postretirement benefit plans used the following weighted average actuarial assumptions to determine net periodic benefit credit for the years ended December 31:
| 2022 |  | 2021 |  | 2020
Discount rate | 2.9 | % |  | 2.5 | % |  | 3.4 | %
Expected return on plan assets | 6.9 | % |  | 8.5 | % |  | 8.5 | %
Rate of compensation increase | 2.4 | % |  | 2.5 | % |  | 2.5 | %
Health care cost trend rate | 4.7 | % |  | 6.2 | % |  | 6.3 | %
Our international pension benefit plans used a discount rate of 1.4 percent, 1.1 percent and 1.5 percent for the years ended December 31, 2022, 2021 and 2020, respectively, and used a rate of compensation increase of 3.8 percent, 3.2 percent and 3.3 percent to determine net periodic benefit credit for each of the years ended December 31, 2022, 2021 and 2020, respectively. M ULTIEMPLOYER P ENSION P LANS In 2022, we participated in three multiemployer pension plans which provide defined benefits to certain of our union employees. The aggregate amount contributed to these plans and charged to pension cost in 2022, 2021 and 2020 was $3.6 million, $3.9 million and $3.8 million, respectively. In the third quarter of 2022, we completely withdrew from the United Food & Commercial Workers - Local One Pension Fund, or the UFCW Pension Fund. As a result of our complete withdrawal from the UFCW Pension Fund, we will be required to pay an aggregate withdrawal liability of $2.8 million to the UFCW Pension Fund in quarterly installments through 2042. Accordingly, as of December 31, 2022, we participate in two multiemployer pension plans. The risks of participating in multiemployer plans are different from the risks of single-employer plans in the following respects: (i) assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers; (ii) if a participating employer ceases to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; and (iii) if we cease to have an obligation to contribute to the multiemployer plan in which we had been a contributing employer, we may be required to pay to the plan an amount (referred to as a withdrawal liability) based on the underfunded status of the plan and on our historical participation in the plan prior to the cessation of our obligation to contribute. Further information on the multiemployer plans we participated in during the years ended December 31, 2022, 2021 and 2020 is as follows:
Pension Fund |  | EIN/Pension Plan Number |  | Pension Protection Act Zone Status |  |  | FIP / RP Status Pending / Implemented |  | Contributions |  | Surcharge Imposed
2022 |  |  | 2021 |  |  | 2022 |  | 2021 |  | 2020 |
|  |  |  |  |  |  |  |  |  |  |  | (Dollars in thousands) |  |
United Food & Commercial Workers — Local One Pension Fund (1) |  | 16-6144007/001 |  | Red | (2) |  | Red | (2) |  | Implemented |  | 141 |  |  | 282 |  |  | 240 |  |  | No
IAM National Pension Fund (3) |  | 51-6031295/002 |  | Red |  |  | Red |  |  | Implemented |  | 2,511 |  |  | 2,767 |  |  | 2,746 |  |  | No
Western Conference of Teamsters Pension Plan (4) |  | 91-6145047 |  | Green |  |  | Green |  |  | N/A |  | 906 |  |  | 869 |  |  | 775 |  |  | No
Total Contributions |  |  |  |  |  |  |  |  |  |  |  | $ | 3,558 |  |  | $ | 3,918 |  |  | $ | 3,761 |  |  |
______________________ (1) In 2022, we completely withdrew from this pension fund. (2) Under the Multiemployer Pension Reform Act of 2014, the status of this pension fund was critical and declining, as defined under such Act. For 2021, the pension fund actuary projected insolvency for this pension fund in 2026. (3) The applicable collective bargaining agreements related to this pension fund expire at various times through April 30, 2025. Although this pension fund was formally certified in the yellow zone in 2019, the trustees of this pension fund elected voluntarily to place this pension fund in the red zone to take advantage of certain provisions of the Pension Protection Act even though this pension fund had a funded status of 87 percent, 85 percent and 84 percent at the end of 2019, 2020 and 2021, respectively. (4) The applicable collective bargaining agreements related to this pension plan expire at various times through September 30, 2025. The “EIN/Pension Plan Number” column provides the Employer Identification Number and the three digit plan number assigned to a plan by the Internal Revenue Service. The most recent Pension Protection Act Zone Status available for 2022 and 2021 is for plan years that ended in 2021 and 2020, respectively. The zone status is based on information provided to us and other participating employers by each plan and is certified by the plan’s actuary. A plan in the “red” zone has been determined to be in “critical status,” based on criteria established under the Internal Revenue Code of 1986, as amended (the “Code”), and is generally less than 65 percent funded. The “FIP/RP Status Pending/Implemented” column indicates whether a rehabilitation plan, as required under the Code to be adopted by plans in the “red” zone, is pending or has been implemented as of the end of the 2021 plan year. The “Surcharge Imposed” column indicates whether our contribution rate for 2021 included an amount in addition to the contribution rate specified in the applicable collective bargaining agreement, as imposed by a plan in “critical status” in accordance with the requirements of the Code. Our contributions to the UFCW Pension Fund were more than five percent of total contributions made by all employers to this plan, while our contributions to the IAM National Pension Fund and the Western Conference of Teamsters Pension Plan were less than five percent of total contributions made by all employers to these plans, as reported by these plans for the year ended December 31, 2021, the most recent plan year available. We do not expect our contributions to the IAM National Pension Fund and the Western Conference of Teamsters Pension Plan for the year ended December 31, 2023 to be significantly different from our contributions for the year ended December 31, 2022. D EFINED C ONTRIBUTION P LANS We also sponsor defined contribution plans covering certain employees. Our contributions to these plans are based upon employee contributions and operating profitability. Contributions charged to expense for these plans for the years ended December 31, 2022, 2021 and 2020 were $15.4 million, $15.1 million and $15.2 million, respectively. P LAN A SSETS I NVESTMENT S TRATEGY The composition of our plan assets has been broadly characterized as a 40 percent/60 percent allocation between equity and debt securities. The equity securities allocation utilizes indexed U.S. equity securities (which constitutes approximately 85 percent of equity securities), with a lesser allocation to indexed international equity securities. The debt securities allocation primarily utilizes indexed investment grade U.S. debt securities. We attempt to mitigate investment risk by regularly rebalancing between equity and debt securities as contributions and benefit payments are made. The weighted average asset allocation for our pension plans at December 31, 2022 and 2021 and target allocation for 2022 was as follows:
| Target Allocation |  | Actual Allocation
| 2022 |  | 2021
Equity securities—U.S. | 33 | % |  | 32 | % |  | 47 | %
Equity securities—International | 7 | % |  | 7 | % |  | 10 | %
Debt securities | 60 | % |  | 59 | % |  | 41 | %
Cash and cash equivalents | — |  |  | 2 | % |  | 2 | %
| 100 | % |  | 100 | % |  | 100 | %
F AIR V ALUE M EASUREMENTS Our plan assets are primarily invested in commingled funds holding equity and debt securities, which are valued using the Net Asset Value, or NAV, provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. Commingled funds are classified within Level 2 (as described in Note 10) of the fair value hierarchy because the NAV’s are not publicly available. Plan excess cash balances are invested in short term investment funds which include investments in cash, bank notes, corporate notes, government bills and various short-term debt instruments. These typically are commingled funds valued using one dollar for the NAV. These short term funds are also classified within Level 2 of the valuation hierarchy. The fair value of our plan assets by asset category consisted of the following at December 31:
| 2022 |  | 2021
| (Dollars in thousands)
Equity securities—U.S. | $ | 248,858 |  |  | $ | 482,381 |
Equity securities—International | 52,394 |  |  | 100,705 |
Debt securities | 448,908 |  |  | 422,570 |
Cash and cash equivalents | 14,245 |  |  | 18,798 |
| $ | 764,405 |  |  | $ | 1,024,454 |
C ONCENTRATIONS OF C REDIT R ISK As of December 31, 2022, approximately 98 percent of our plan assets were under management by a single investment management company in six individual commingled equity and debt index funds. Of these six funds, three funds held assets individually in excess of ten percent of our total plan assets. E XPECTED C ONTRIBUTIONS Based on current legislation, there are no significant minimum required contributions to our pension benefit plans in 2022. In addition, based on the current funded status of our domestic pension benefit plans we do not expect to make significant contributions to these plans in 2023. However, this estimate may change based on regulatory changes and actual plan asset returns.

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