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Pension and Other Postretirement Benefits | 12 Months Ended
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Dec. 31, 2020
Retirement Benefits [Abstract] |
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits The funded status of our U.S. qualified and nonqualified defined benefit pension plans, our Germany, France, and Belgium defined benefit pension plans, plus our U.S. other postretirement healthcare and life insurance benefit plans for continuing operations, together with the associated balances and net periodic benefit cost recognized in our consolidated financial statements as of December 31, are shown in the tables below. We are required to recognize in our consolidated balance sheets the overfunded and underfunded status of our defined benefit postretirement plans. The overfunded or underfunded status is defined as the difference between the fair value of plan assets and the projected benefit obligation. We are also required to recognize as a component of other comprehensive income the actuarial gains and losses and the prior service costs and credits that arise during the period. The following table summarizes the weighted-average assumptions used to determine the benefit obligations at December 31 for the U.S. Plans:
| Pensions and Other Benefits
| December 31,
| 2020 |  | 2019
Discount rate qualified | 2.49 | % |  | 3.22 | %
Discount rate nonqualified plan | 1.62 | % |  | 2.74 | %
Discount rate other benefits | 1.91 | % |  | 2.89 | %
Rate of compensation increase | 3.10 | % |  | 3.10 | %
The following table summarizes the components of our defined benefit postretirement plans and reflect a measurement date of December 31:
|  |  |  | Pensions |  | Other Benefits (1)
|  |  |  | December 31,
(in Millions) |  |  |  | 2020 |  | 2019 |  | 2020 |  | 2019
Change in projected benefit obligation |  |  |  |  |  |  |  |  |  |
Projected benefit obligation at January 1 |  |  |  | $ | 1,379.1 |  |  | $ | 1,261.3 |  |  | $ | 15.8 |  |  | $ | 18.9 |
Service cost |  |  |  | 4.4 |  |  | 4.2 |  |  | — |  |  | — |
Interest cost |  |  |  | 36.7 |  |  | 47.6 |  |  | 0.4 |  |  | 0.6 |
Actuarial loss (gain) (2) |  |  |  | 115.5 |  |  | 153.0 |  |  | 0.3 |  |  | (2.2) |
Plan participants’ contributions |  |  |  | — |  |  | — |  |  | 0.5 |  |  | 0.4 |
Settlements |  |  |  | (1.5) |  |  | (3.5) |  |  | — |  |  | — |
Benefits paid |  |  |  | (83.9) |  |  | (83.5) |  |  | (1.7) |  |  | (1.9) |
Projected benefit obligation at December 31 |  |  |  | $ | 1,450.3 |  |  | $ | 1,379.1 |  |  | $ | 15.3 |  |  | $ | 15.8 |
Change in plan assets |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at January 1 |  |  |  | $ | 1,390.6 |  |  | $ | 1,269.7 |  |  | $ | — |  |  | $ | — |
Actual return on plan assets |  |  |  | 176.5 |  |  | 196.2 |  |  | — |  |  | — |
Foreign currency exchange rate changes |  |  |  | — |  |  | (0.2) |  |  | — |  |  | — |
Company contributions |  |  |  | 2.9 |  |  | 11.9 |  |  | 1.2 |  |  | 1.5 |
Plan participants’ contributions |  |  |  | — |  |  | — |  |  | 0.5 |  |  | 0.4 |
Settlements |  |  |  | (1.5) |  |  | (3.5) |  |  | — |  |  | — |
Benefits paid |  |  |  | (83.9) |  |  | (83.5) |  |  | (1.7) |  |  | (1.9) |
Fair value of plan assets at December 31 |  |  |  | $ | 1,484.6 |  |  | $ | 1,390.6 |  |  | $ | — |  |  | $ | — |
Funded Status |  |  |  |  |  |  |  |  |  |
U.S. plans with assets |  |  |  | $ | 69.5 |  |  | $ | 44.2 |  |  | $ | — |  |  | $ | — |
U.S. plans without assets |  |  |  | (23.9) |  |  | (22.4) |  |  | (15.3) |  |  | (15.8) |
Non-U.S. plans with assets |  |  |  | (3.0) |  |  | (1.3) |  |  | — |  |  | — |
All other plans |  |  |  | (8.3) |  |  | (9.0) |  |  | — |  |  | — |
Net funded status of the plan (liability) |  |  |  | $ | 34.3 |  |  | $ | 11.5 |  |  | $ | (15.3) |  |  | $ | (15.8) |
Amount recognized in the consolidated balance sheets: |  |  |  |  |  |  |  |  |  |
Pension asset (3) |  |  |  | $ | 69.5 |  |  | $ | 44.2 |  |  | $ | — |  |  | $ | — |
Accrued benefit liability (4) |  |  |  | (35.2) |  |  | (32.7) |  |  | (15.3) |  |  | (15.8) |
Total |  |  |  | $ | 34.3 |  |  | $ | 11.5 |  |  | $ | (15.3) |  |  | $ | (15.8) |
____________________ (1) Refer to Note 11 for information on our discontinued postretirement benefit plans. (2) The actuarial loss in 2020 and 2019 was primarily driven by the change in discount rate on the U.S. qualified plan. Additionally, the Society of Actuaries released an updated mortality table projection scale for measurement of retirement program obligations in both 2020 and 2019. Adoption of the most recent projection scale for each applicable year increased the U.S. defined benefit obligations by approximately $10 million and $13 million at December 31, 2020 and 2019, respectively. (3) Recorded as "Other assets including long-term receivables, net" on the consolidated balance sheets. (4) Recorded as "Accrued pension and other postretirement benefits, current" and "Accrued pension and other postretirement benefits, long-term" on the consolidated balance sheets. The amounts in accumulated other comprehensive income (loss) that have not yet been recognized as components of net periodic benefit cost are as follows:
| Pensions |  | Other Benefits (1)
| December 31,
(in Millions) | 2020 |  | 2019 |  | 2020 |  | 2019
Prior service (cost) credit | $ | (0.7) |  |  | $ | (0.9) |  |  | $ | — |  |  | $ | — |
Net actuarial (loss) gain | (321.9) |  |  | (367.3) |  |  | 4.2 |  |  | 5.5 |
Accumulated other comprehensive income (loss) – pretax | $ | (322.6) |  |  | $ | (368.2) |  |  | $ | 4.2 |  |  | $ | 5.5 |
Accumulated other comprehensive income (loss) – net of tax (2) | (240.7) |  |  | (277.2) |  |  | 2.7 |  |  | 3.7 |
____________________ (1) Refer to Note 11 for information on our discontinued postretirement benefit plans. (2) Accumulated other comprehensive income (loss) - net of tax as of December 31, 2019 includes the reclassification of stranded income tax effects. See Note 2 for more information. The accumulated benefit obligation for all pension plans was $1,435.9 million and $1,364.2 million at December 31, 2020 and 2019, respectively.
(in Millions) | December 31
Information for pension plans with projected benefit obligation in excess of plan assets | 2020 |  | 2019
Projected benefit obligations | $ | 42.9 |  |  | $ | 37.2 |
Accumulated benefit obligations | 43.3 |  |  | 37.5 |
Fair value of plan assets | 7.7 |  |  | 4.5 |
(in Millions) | December 31
Information for pension plans with accumulated benefit obligation in excess of plan assets | 2020 |  | 2019
Projected benefit obligations | $ | 42.9 |  |  | $ | 37.2 |
Accumulated benefit obligations | 43.3 |  |  | 37.5 |
Fair value of plan assets | 7.7 |  |  | 4.5 |
Other changes in plan assets and benefit obligations for continuing operations recognized in other comprehensive loss (income) are as follows:
| Pensions |  | Other Benefits (1)
| Year Ended December 31,
(in Millions) | 2020 |  | 2019 |  | 2020 |  | 2019
Current year net actuarial loss (gain) | $ | (23.5) |  |  | $ | 11.0 |  |  | $ | 0.4 |  |  | $ | (2.3) |
Amortization of net actuarial (loss) gain | (21.3) |  |  | (12.9) |  |  | 0.9 |  |  | 1.0 |
Amortization of prior service (cost) credit | (0.2) |  |  | (0.2) |  |  | — |  |  | (0.1) |
Settlement loss | (0.6) |  |  | (1.4) |  |  | — |  |  | — |
Total recognized in other comprehensive (income) loss, before taxes | $ | (45.6) |  |  | $ | (3.5) |  |  | $ | 1.3 |  |  | $ | (1.4) |
Total recognized in other comprehensive (income) loss, after taxes | (36.5) |  |  | (3.0) |  |  | 1.0 |  |  | (1.1) |
____________________ (1) Refer to Note 11 for information on our discontinued postretirement benefit plans. The following table summarizes the weighted-average assumptions used for and the components of net annual benefit cost (income):
| Year Ended December 31,
| Pensions |  | Other Benefits (1)
(in Millions, except for percentages) | 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Discount rate | 3.22 | % |  | 4.36 | % |  | 3.68 | % |  | 2.89 | % |  | 4.08 | % |  | 3.41 | %
Expected return on plan assets | 3.00 | % |  | 4.25 | % |  | 5.00 | % |  | — |  |  | — |  |  | — |
Rate of compensation increase | 3.10 | % |  | 3.10 | % |  | 3.10 | % |  | — |  |  | — |  |  | — |
Components of net annual benefit cost: |  |  |  |  |  |  |  |  |  |  |
Service cost | $ | 4.4 |  | $ | 4.2 |  | $ | 6.3 |  | $ | — |  | $ | — |  | $ | —
Interest cost | 36.7 |  | 47.6 |  | 44.5 |  | 0.4 |  | 0.6 |  | 0.7
Expected return on plan assets | (37.1) |  | (53.4) |  | (63.0) |  | — |  | — |  | —
Amortization of prior service cost | 0.2 |  | 0.2 |  | 0.4 |  | — |  | 0.1 |  | (0.1)
Amortization of net actuarial and other (gain) loss | 21.4 |  | 12.9 |  | 16.0 |  | (0.9) |  | (1.0) |  | (0.5)
Recognized (gain) loss due to settlement | 0.7 |  | 1.4 |  | 1.8 |  | — |  | — |  | —
Net annual benefit cost (income) | $ | 26.3 |  | $ | 12.9 |  | $ | 6.0 |  | $ | (0.5) |  | $ | (0.3) |  | $ | 0.1
___________________ (1) Refer to Note 11 for information on our discontinued postretirement benefit plans. For the year ended December 31, 2018 we recognized a $4.3 million loss due to curtailment and special termination benefits associated with the planned separation of FMC Lithium which was recorded within "Discontinued operations, net of income taxes" within the consolidated statements of income (loss). Our U.S. qualified defined benefit pension plan ("U.S. Plan") holds the majority of our pension plan assets. The expected long-term rate of return on these plan assets was 3.00 percent for the year ended December 31, 2020, 4.25 percent for the year ended December 31, 2019, and 5.0 percent for the year ended December 31, 2018 (except for the period between the November 1, 2018 remeasurement and December 31, 2018 during which it was 4.5 percent). The expected long-term rate of return on these plan assets decreased by 1.25 percent in 2020 compared to 2019 primarily due to falling yields on corporate bonds. In developing the assumption for the long-term rate of return on assets for our U.S. Plan, we take into consideration the technical analysis performed by our outside actuaries, including historical market returns, information on the assumption for long-term real returns by asset class, inflation assumptions and expectations for standard deviation related to these best estimates. Given an actively managed investment portfolio, the expected annual rates of return by asset class for our portfolio, assuming an estimated inflation rate of approximately 2.1 percent, is in line with our assumption for the rate of return on assets. The target asset allocation at December 31, 2020 by asset category is 100 percent fixed income investments. Our U.S. Plan reached fully funded status during 2018. The primary investment strategy is a liability hedging approach with an objective of maintaining the funded status of the plan such that the funded status volatility is minimized and the likelihood that we will be required to make significant contributions to the plan is limited. The portfolio is comprised of 100 percent fixed income securities and cash. Investment performance and related risks are measured and monitored on an ongoing basis through monthly liability measurements, periodic asset liability studies, and quarterly investment portfolio reviews. The increase in our non-operating pension and post retirement charges (income) is attributable to the continued approach of using the smoothed market related value of assets (MRVA) as opposed to the actual fair value of plan assets in the determination of 2020 expense. This continued approach will create some volatility in our non-operating periodic pension cost since our qualified pension plan is 100 percent fixed income securities. The following tables present our fair value hierarchy for our major categories of pension plan assets by asset class. See Note 19 for the definition of fair value and the descriptions of Level 1, 2 and 3 in the fair value hierarchy.
(in Millions) | December 31, 2020 |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Cash and short-term investments | $ | 24.7 |  |  | $ | 24.6 |  |  | $ | 0.1 |  |  | $ | — |
Fixed income investments: |  |  |  |  |  |  |
Investment contracts | 151.4 |  |  | — |  |  | 151.4 |  |  | — |
U.S. Government Securities | 307.0 |  |  | 297.9 |  |  | 9.1 |  |  | — |
Mutual funds | 70.5 |  |  | 70.5 |  |  | — |  |  | — |
Corporate debt instruments | 931.0 |  |  | — |  |  | 931.0 |  |  | — |
Total assets | $ | 1,484.6 |  |  | $ | 393.0 |  |  | $ | 1,091.6 |  |  | $ | — |
(in Millions) | December 31, 2019 |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Cash and short-term investments | $ | 19.8 |  |  | $ | 19.8 |  |  | $ | — |  |  | $ | — |
Fixed income investments: |  |  |  |  |  |  |
Investment contracts | 150.1 |  |  | — |  |  | 150.1 |  |  | — |
U.S. Government Securities | 331.0 |  |  | 294.3 |  |  | 36.7 |  |  | — |
Mutual funds | 65.2 |  |  | 65.2 |  |  | — |  |  | — |
Corporate debt instruments | 824.5 |  |  | — |  |  | 824.5 |  |  | — |
Total assets | $ | 1,390.6 |  |  | $ | 379.3 |  |  | $ | 1,011.3 |  |  | $ | — |
We made the following contributions to our pension and other postretirement benefit plans:
| Year Ended December 31,
(in Millions) | 2020 |  | 2019
U.S. qualified pension plan | $ | — |  |  | $ | 7.0 |
U.S. nonqualified pension plan | 2.9 |  |  | 4.9 |
Non-U.S. plans | 0.5 |  |  | — |
Other postretirement benefits | 1.2 |  |  | 1.5 |
Total | $ | 4.6 |  |  | $ | 13.4 |
The following table reflects the estimated future benefit payments for our pension and other postretirement benefit plans. These estimates take into consideration expected future service, as appropriate:
| Estimated Net Future Benefit Payments
(in Millions) | 2021 |  | 2022 |  | 2023 |  | 2024 |  | 2025 |  | 2026 - 2030
Pension Benefits | $ | 90.6 |  |  | $ | 87.9 |  |  | $ | 86.1 |  |  | $ | 86.6 |  |  | $ | 84.7 |  |  | $ | 404.6 |
Other Benefits | 1.7 |  |  | 1.6 |  |  | 1.5 |  |  | 1.4 |  |  | 1.3 |  |  | 5.0 |
FMC Corporation Savings and Investment Plan. The FMC Corporation Savings and Investment Plan is a qualified salary-reduction plan under Section 401(k) of the Internal Revenue Code in which substantially all of our U.S. employees may participate by contributing a portion of their compensation. For eligible employees participating in the Plan, except for those employees covered by certain collective bargaining agreements, the Company makes matching contributions of 80 percent of the portion of those contributions up to 5 percent of the employee’s compensation. Eligible employees participating in the Plan that do not participate in the U.S. qualified pension plan are entitled to receive an employer contribution of 5 percent of the employee’s eligible compensation. Charges against income for all contributions were $16.6 million in 2020, $15.3 million in 2019, and $15.0 million in 2018.

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