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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 Defined Benefit Plans The Company sponsors pay related benefit plans for employees in the U.S., UK, Germany, Brazil, France, Mexico, Japan, and Canada. Employees in the U.S. and UK are no longer accruing benefits under the Company's defined benefit plans as these plans were frozen. The Company’s defined benefit plans are partially funded with the exception of certain supplemental benefit plans for executives and certain non-U.S. plans, primarily in Germany, which are unfunded. The Company's expense for all defined benefit pension plans, is as follows:
| U.S. Plans |  | Non-U.S. Plans
| Year Ended December 31, |  | Year Ended December 31,
(In millions, except percentages) | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Costs Recognized in Income: |  |  |  |  |  |  |  |  |  |  |
Pension service cost: |  |  |  |  |  |  |  |  |  |  |
Service cost | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (1) |  |  | $ | (1) |  |  | $ | (2) |
Pension financing benefit (cost): |  |  |  |  |  |  |  |  |  |  |
Interest cost | (20) |  |  | (17) |  |  | (24) |  |  | (6) |  |  | (5) |  |  | (7) |
Expected return on plan assets | 39 |  |  | 37 |  |  | 40 |  |  | 9 |  |  | 8 |  |  | 8 |
Amortization of losses and other | (1) |  |  | (3) |  |  | (1) |  |  | (1) |  |  | (2) |  |  | (2) |
Settlements and curtailments | — |  |  | — |  |  | (5) |  |  | — |  |  | — |  |  | — |
Restructuring related pension cost: |  |  |  |  |  |  |  |  |  |  |
Special termination benefits | — |  |  | — |  |  | (3) |  |  | — |  |  | (1) |  |  | (4) |
Net pension income (expense) | $ | 18 |  |  | $ | 17 |  |  | $ | 7 |  |  | $ | 1 |  |  | $ | (1) |  |  | $ | (7) |
Weighted Average Assumptions: |  |  |  |  |  |  |  |  |  |
Discount rate | 2.93 | % |  | 2.60 | % |  | 3.34 | % |  | 2.31 | % |  | 1.78 | % |  | 2.39 | %
Compensation increase | NA |  | N/A |  | N/A |  | 2.30 | % |  | 2.14 | % |  | 3.16 | %
Long-term return on assets | 6.23 | % |  | 6.15 | % |  | 6.60 | % |  | 3.70 | % |  | 3.30 | % |  | 3.98 | %
The Company's total accumulated benefit obligations for all defined benefit plans was $777 million and $1,121 million as of December 31, 2022 and 2021, respectively. The benefit plan obligations for employee retirement plans with accumulated benefit obligations in excess of plan assets were as follows:
| Year Ended December 31,
(In millions) | 2022 |  | 2021
Accumulated benefit obligation | $ | 641 |  |  | $ | 892 |
Projected benefit obligation | $ | 643 |  |  | $ | 895 |
Fair value of plan assets | $ | 546 |  |  | $ | 711 |
Assumptions used by the Company in determining its defined benefit pension obligations as of December 31, 2022 and 2021 are summarized in the following table:
|  | U.S. Plans |  | Non-U.S. Plans
|  | Year Ended December 31, |  | Year Ended December 31,
Weighted Average Assumptions |  | 2022 |  | 2021 |  | 2022 |  | 2021
Discount rate |  | 5.51 | % |  | 2.93 | % |  | 5.30 | % |  | 2.31 | %
Rate of increase in compensation |  | NA |  | N/A |  | 2.69 | % |  | 2.30 | %
The Company’s obligation for all defined benefit pension plans, is as follows:
| U.S. Plans |  | Non-U.S. Plans
| Year Ended December 31, |  | Year Ended December 31,
(In millions) | 2022 |  | 2021 |  | 2022 |  | 2021
Change in Benefit Obligation: |  |  |  |  |  |  |
Benefit obligation — beginning | $ | 829 |  |  | $ | 891 |  |  | $ | 299 |  |  | $ | 322 |
Service cost | — |  |  | — |  |  | 1 |  |  | 1 |
Interest cost | 20 |  |  | 17 |  |  | 6 |  |  | 5 |
Actuarial loss (gain) | (203) |  |  | (40) |  |  | (99) |  |  | (10) |
Settlements | — |  |  | — |  |  | (1) |  |  | (4) |
Special termination benefits | — |  |  | — |  |  | — |  |  | 1 |
Foreign exchange translation | — |  |  | — |  |  | (23) |  |  | (9) |
Benefits paid and other | (43) |  |  | (39) |  |  | (5) |  |  | (7) |
Benefit obligation — ending | $ | 603 |  |  | $ | 829 |  |  | $ | 178 |  |  | $ | 299 |
Change in Plan Assets: |  |  |  |  |  |  |
Plan assets — beginning | $ | 693 |  |  | $ | 659 |  |  | $ | 258 |  |  | $ | 250 |
Actual return on plan assets | (118) |  |  | 61 |  |  | (80) |  |  | 16 |
Sponsor contributions | — |  |  | 12 |  |  | 7 |  |  | 8 |
Settlements | — |  |  | — |  |  | (1) |  |  | (4) |
Foreign exchange translation | — |  |  | — |  |  | (21) |  |  | (5) |
Benefits paid and other | (43) |  |  | (39) |  |  | (6) |  |  | (7) |
Plan assets — ending | $ | 532 |  |  | $ | 693 |  |  | $ | 157 |  |  | $ | 258 |
Total funded status at end of period | $ | (71) |  |  | $ | (136) |  |  | $ | (21) |  |  | $ | (41) |
Balance Sheet Classification: |  |  |  |  |  |  |
Other non-current assets | — |  |  | $ | — |  |  | $ | 4 |  |  | $ | 7 |
Accrued employee liabilities | — |  |  | — |  |  | — |  |  | (1) |
Employee benefits | (71) |  |  | (136) |  |  | (25) |  |  | (47) |
Accumulated other comprehensive loss: |  |  |  |  |  |  |
Actuarial loss | 14 |  |  | 59 |  |  | 17 |  |  | 32 |
Tax effects/other | $ | — |  |  | — |  |  | (6) |  |  | (10) |
| $ | 14 |  |  | $ | 59 |  |  | $ | 11 |  |  | $ | 22 |
Components of the net change in AOCI related to all defined benefit pension plans, exclusive of amounts attributable to non-controlling interests on the Company’s Consolidated Statements of Changes in Equity for the years ended December 31, 2022 and 2021, are as follows:
| U.S. Plans |  | Non-U.S. Plans
| Year Ended December 31, |  | Year Ended December 31,
(In millions) | 2022 |  | 2021 |  | 2022 |  | 2021
Actuarial (gain) loss | $ | (44) |  |  | $ | (65) |  |  | $ | (10) |  |  | $ | (18) |
Deferred taxes | — |  |  | — |  |  | 4 |  |  | 4 |
Currency/other | — |  |  | — |  |  | (3) |  |  | — |
Reclassification to net income | (1) |  |  | (3) |  |  | (1) |  |  | (2) |
Settlements | — |  |  | — |  |  | (1) |  |  | — |
| $ | (45) |  |  | $ | (68) |  |  | $ | (11) |  |  | $ | (16) |
Actuarial loss for the year ended December 31, 2022 is primarily related to a decrease in discount rates partially offset by an increase in return on assets. Actuarial gains and losses are amortized using the 10% corridor approach representing 10% times the greater of plan assets and the projected benefit obligation. Generally, the expected return is determined using a market-related value of assets where gains (losses) are recognized in a systematic manner over five years. For less significant plans, fair value is used. During 2020 the Company transferred a portion of the benefit obligation related to its defined benefit U.S. pension plan to a third-party issuer. The transaction met the criteria for settlement accounting, and accordingly, the Company recognized a $5 million pension settlement charge. Benefit payments, which reflect expected future service, are expected to be paid by the Company plans as follows:
(In millions) | U.S. Plans |  | Non-U.S. Plans
2023 | $ | 37 |  |  | $ | 7 |
2024 | 37 |  |  | 8 |
2025 | 39 |  |  | 7 |
2026 | 39 |  |  | 7 |
2027 | 40 |  |  | 8 |
Years 2028 - 2032 | 219 |  |  | 50 |
During the year ended December 31, 2022, the Company contributed $7 million to its non-U.S. employee retirement pension plans. Contributions related to certain non-U.S. plans of approximately $2 million have been deferred until 2024 due to COVID-19 relief measures. Additionally, the Company expects to make contributions to its non-US defined benefit pension plans of $5 million during 2023. Substantially all of the Company’s defined benefit pension plan assets are managed by external investment managers and held in trust by third-party custodians. The selection and oversight of these external service providers is the responsibility of the investment committees of the Company and their advisers. The selection of specific securities is at the discretion of the investment manager and is subject to the provisions set forth by written investment management agreements and related policy guidelines regarding permissible investments, risk management practices, and the use of derivative securities. Derivative securities may be used by investment managers as efficient substitutes for traditional securities, to reduce portfolio risks, or to hedge identifiable economic exposures. The use of derivative securities to engage in unrelated speculation is expressly prohibited. The primary objective of the pension funds is to pay the plans’ benefit and expense obligations when due. Given the long-term nature of these plan obligations and their sensitivity to interest rates, the investment strategy is intended to improve the funded status of its U.S. and non-U.S. plans over time while maintaining a prudent level of risk. Risk is managed primarily by diversifying each plan’s target asset allocation across equity, fixed income securities, and alternative investment strategies, and then maintaining the allocation within a specified range of its target. In addition, diversification across various investment subcategories within each plan is also maintained within specified ranges. The Company’s retirement plan asset allocation as of December 31, 2022 and 2021 and target allocation for 2023 are as follows:
| Target Allocation |  | Percentage of Plan Assets
| U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S.
| 2023 |  | 2023 |  | 2022 |  | 2021 |  | 2022 |  | 2021
Equity securities | 38 | % |  | 31 | % |  | 31 | % |  | 38 | % |  | 9 | % |  | 15 | %
Fixed income | 15 | % |  | 41 | % |  | 11 | % |  | 14 | % |  | 65 | % |  | 63 | %
Alternative strategies | 46 | % |  | 8 | % |  | 56 | % |  | 47 | % |  | 12 | % |  | 11 | %
Cash | 1 | % |  | 9 | % |  | 2 | % |  | 1 | % |  | 2 | % |  | 4 | %
Other | — | % |  | 11 | % |  | — | % |  | — | % |  | 12 | % |  | 7 | %
| 100 | % |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | %
The expected long-term rate of return for defined benefit pension plan assets was selected based on various inputs, including returns projected by various external sources for the different asset classes held by and to be held by the Company’s trusts and its targeted asset allocation. These projections incorporate both historical returns and forward-looking views regarding capital market returns, inflation, and other variables. Pension plan assets are valued at fair value using various inputs and valuation techniques. A description of the inputs and valuation techniques used to measure the fair value for each class of plan assets is included in Note 16, "Fair Value Measurements." Discount Rate for Estimated Service and Interest Cost The Company uses the spot rate method to estimate the service and interest components of net periodic benefit cost for pension benefits for its U.S. and certain non-U.S. plans. The Company has elected to utilize an approach that discounts individual expected cash flows underlying interest and service costs using the applicable spot rates derived from the yield curve used to determine the benefit obligation to the relevant projected cash flows. The discount rate assumption is based on market rates for a hypothetical portfolio of high-quality corporate bonds rated Aa or better with maturities closely matched to the timing of projected benefit payments for each plan at its annual measurement date. The Company used discount rates ranging from 0.55% to 9.55% to determine its pension and other benefit obligations as of December 31, 2022. Defined Contribution Plans Most U.S. salaried employees and certain non-U.S. employees are eligible to participate in defined contribution plans by contributing a portion of their compensation which is partially matched by the Company. Matching contributions for the U.S. defined contribution plan are 100% on the first 6% of pay contributed. Matching contributions were suspended from May 1, 2020 to September 30, 2020 as a part of the cost saving actions in response to the COVID-19 pandemic. The expense related to all defined contribution plans was approximately $3 million in 2022, $6 million in 2021, and $5 million in 2020.

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