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RETIREMENT PLANS | 12 Months Ended
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Sep. 30, 2022
Retirement Benefits [Abstract] |
RETIREMENT PLANS | RETIREMENT PLANS The Company sponsors a defined contribution 401(k) plan for substantially all U.S. associates. The Company matches 200% of associates’ initial 3% contribution and 50% of their remaining contribution up to 6%. The Company may make additional discretionary profit sharing matching contributions to eligible employees on their initial 4% contribution. The Company recorded charges of $28.3, $30.1 and $27.7 under the plan in fiscal 2022, fiscal 2021 and fiscal 2020, respectively. The Company sponsors two defined benefit pension plans for certain U.S. associates and three defined benefit pension plans associated with the former businesses in the United Kingdom and Germany. Benefits under these plans have been frozen and closed to new associates since 1997 for the U.S. plans, 2010 for the United Kingdom plans and 2017 for the Germany plan. The benefits under the plans are based on years of service and compensation levels. The Company’s funding policy for the defined benefit pension plans, consistent with statutory requirements and tax considerations, is based on actuarial computations using the Projected Unit Credit method. During fiscal 2021, a defined benefit pension plan associated with the former business in the United Kingdom entered into a buy-in insurance policy in exchange for a premium payment of $67.7, which is subject to adjustment as a result of subsequent data cleansing activities. Under the terms of this buy-in insurance policy, the insurer is liable to pay the benefits to the plan but the plan still retains full legal responsibility to pay the benefits to plan participants using the insurance payments. The buy-in policy will be treated as an asset of the plan going forward until such time as the buy-in policy is converted to a buy-out policy, which is when individual insurance policies will be assigned to each plan participant and the plan will no longer have legal responsibility to pay the benefits to the plan participants. The following tables present information about benefit obligations, plan assets, annual expense, assumptions and other information about the Company’s defined benefit pension plans. The defined benefit pension plans are valued using a September 30 measurement date.
| U.S. Defined Benefit Pension Plans |  | International Defined Benefit Pension Plans
| 2022 |  | 2021 |  | 2022 |  | 2021
Change in projected benefit obligation: |  |  |  |  |  |  |
Benefit obligation at beginning of year | $ | 100.2 |  |  | $ | 109.8 |  |  | $ | 193.6 |  |  | $ | 193.7 |
Interest cost | 1.7 |  |  | 1.5 |  |  | 3.0 |  |  | 2.6 |
Actuarial gain | (17.2) |  |  | (4.1) |  |  | (55.1) |  |  | (2.9) |
Benefits paid | (7.0) |  |  | (7.0) |  |  | (7.5) |  |  | (7.6) |
Foreign currency translation | — |  |  | — |  |  | (24.8) |  |  | 7.8 |
Projected benefit obligation (“PBO”) at end of year | $ | 77.7 |  |  | $ | 100.2 |  |  | $ | 109.2 |  |  | $ | 193.6 |
Accumulated benefit obligation (“ABO”) at end of year | $ | 77.7 |  |  | $ | 100.2 |  |  | $ | 109.2 |  |  | $ | 193.6 |
Change in plan assets: |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | $ | 81.7 |  |  | $ | 81.5 |  |  | $ | 221.6 |  |  | $ | 209.9 |
Actual return on plan assets | (15.8) |  |  | 5.9 |  |  | (61.2) |  |  | 2.1 |
Employer contribution | 0.2 |  |  | 1.3 |  |  | 5.3 |  |  | 7.9 |
Benefits paid | (7.0) |  |  | (7.0) |  |  | (7.5) |  |  | (7.6) |
Foreign currency translation | — |  |  | — |  |  | (29.3) |  |  | 9.3 |
Fair value of plan assets at end of year | $ | 59.1 |  |  | $ | 81.7 |  |  | $ | 128.9 |  |  | $ | 221.6 |
Overfunded (underfunded) status at end of year | $ | (18.6) |  |  | $ | (18.5) |  |  | $ | 19.7 |  |  | $ | 28.0 |
The decrease in the PBO during fiscal 2022 was primarily driven by the increase in discount rates. These gains were partially offset by demographic experience losses, an update to the terminated vested retirement assumption, and the adoption of the updated mortality projection scale.
| U.S. Defined Benefit Pension Plans |  | International Defined Benefit Pension Plans
| 2022 |  | 2021 |  | 2022 |  | 2021
Information for pension plans with an ABO in excess of plan assets: |  |  |  |  |  |  |
Accumulated benefit obligation | $ | 77.7 |  |  | $ | 100.2 |  |  | $ | 11.6 |  |  | $ | 16.9 |
Fair value of plan assets | 59.1 |  |  | 81.7 |  |  | — |  |  | — |
Information for pension plans with a PBO in excess of plan assets: |  |  |  |  |  |  |
Projected benefit obligation | $ | 77.7 |  |  | $ | 100.2 |  |  | $ | 11.6 |  |  | $ | 16.9 |
Fair value of plan assets | 59.1 |  |  | 81.7 |  |  | — |  |  | — |
Amounts recognized in the Consolidated Balance Sheets consist of: |  |  |  |  |  |  |
Non-current assets | $ | — |  |  | $ | — |  |  | $ | 31.3 |  |  | $ | 44.9 |
Current liabilities | (0.2) |  |  | (0.2) |  |  | (0.8) |  |  | (0.9) |
Non-current liabilities | (18.4) |  |  | (18.3) |  |  | (10.8) |  |  | (16.0) |
Total amount accrued | $ | (18.6) |  |  | $ | (18.5) |  |  | $ | 19.7 |  |  | $ | 28.0 |
Amounts recognized in AOCL consist of: |  |  |  |  |  |  |
Actuarial loss | $ | 38.8 |  |  | $ | 39.2 |  |  | $ | 51.2 |  |  | $ | 51.4 |
Prior service cost | — |  |  | — |  |  | 2.1 |  |  | 2.7 |
Total amount recognized | $ | 38.8 |  |  | $ | 39.2 |  |  | $ | 53.3 |  |  | $ | 54.1 |
| U.S. Defined Benefit Pension Plans |  | International Defined Benefit Pension Plans
| 2022 |  | 2021 |  | 2022 |  | 2021
Total change in other comprehensive loss attributable to: |  |  |  |  |  |  |
Net gain (loss) during the period | $ | (1.3) |  |  | $ | 6.6 |  |  | $ | (11.1) |  |  | $ | (0.6) |
Reclassification to net income | 1.7 |  |  | 2.1 |  |  | 1.3 |  |  | 1.3 |
Foreign currency translation | — |  |  | — |  |  | 10.6 |  |  | (2.0) |
Total change in other comprehensive loss | $ | 0.4 |  |  | $ | 8.7 |  |  | $ | 0.8 |  |  | $ | (1.3) |
Weighted average assumptions used in development of projected benefit obligation: |  |  |  |  |  |  |
Discount rate | 5.06 | % |  | 2.37 | % |  | 4.96 | % |  | 1.90 | %
| U.S. Defined Benefit Pension Plans |  | International Defined Benefit Pension Plans
| 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Components of net periodic benefit cost (income): |  |  |  |  |  |  |  |  |  |  |
Interest cost | $ | 1.7 |  |  | $ | 1.5 |  |  | $ | 2.6 |  |  | $ | 3.0 |  |  | $ | 2.6 |  |  | $ | 2.7 |
Expected return on plan assets | (2.8) |  |  | (3.4) |  |  | (3.9) |  |  | (5.1) |  |  | (5.5) |  |  | (6.9) |
Net amortization | 1.7 |  |  | 2.1 |  |  | 1.8 |  |  | 1.3 |  |  | 1.3 |  |  | 1.0 |
Net periodic benefit cost (income) | $ | 0.6 |  |  | $ | 0.2 |  |  | $ | 0.5 |  |  | $ | (0.8) |  |  | $ | (1.6) |  |  | $ | (3.2) |
Weighted average assumptions used in development of net periodic benefit cost (income): |  |  |  |  |  |  |  |  |  |  |
Weighted average discount rate - interest cost | 1.74 | % |  | 1.43 | % |  | 2.44 | % |  | 1.64 | % |  | 1.26 | % |  | 1.42 | %
Expected return on plan assets | 3.50 | % |  | 4.25 | % |  | 5.00 | % |  | 2.37 | % |  | 2.45 | % |  | 3.39 | %
Investment Strategy Target allocation percentages among various asset classes are maintained based on an individual investment policy established for each of the various pension plans. Asset allocations are designed to achieve long-term objectives of return while mitigating against downside risk considering expected cash requirements necessary to fund benefit payments. However, the Company cannot predict future investment returns and therefore cannot determine whether future pension plan funding requirements could materially and adversely affect its financial condition, results of operations or cash flows. Basis for Long-Term Rate of Return on Asset Assumptions The Company’s expected long-term rate of return on asset assumptions are derived from studies conducted by third parties. The studies include a review of anticipated future long-term performance of individual asset classes and consideration of the appropriate asset allocation strategy given the anticipated requirements of the plans to determine the average rate of earnings expected. While the studies give appropriate consideration to recent fund performance and historical returns, the assumptions primarily represent expectations about future rates of return over the long term.
| U.S. Defined Benefit Pension Plans |  | International Defined Benefit Pension Plans
Other information: |  |  |
Plan asset allocations: |  |  |
Target for September 30, 2023: |  |  |
Equity securities | 22 | % |  | 25 | %
Debt securities | 74 | % |  | 44 | %
Real estate securities | 4 | % |  | — | %
Cash and cash equivalents | — | % |  | 1 | %
Insurance contracts | — | % |  | 30 | %
September 30, 2022 |  |  |
Equity securities | 17 | % |  | 25 | %
Debt securities | 75 | % |  | 44 | %
Real estate securities | 5 | % |  | — | %
Cash and cash equivalents | 3 | % |  | 1 | %
Insurance contracts | — | % |  | 30 | %
September 30, 2021 |  |  |
Equity securities | 20 | % |  | 22 | %
Debt securities | 73 | % |  | 48 | %
Real estate securities | 4 | % |  | — | %
Cash and cash equivalents | 3 | % |  | — | %
Insurance contracts | — | % |  | 30 | %
Expected company contributions in fiscal 2023 | $ | 0.2 |  |  | $ | 1.1 |
Expected future benefit payments: |  |  |
2023 | $ | 7.4 |  |  | $ | 5.6 |
2024 | 7.2 |  |  | 5.8 |
2025 | 7.0 |  |  | 6.1 |
2026 | 6.9 |  |  | 6.2 |
2027 | 6.8 |  |  | 6.2 |
2028 – 2032 | 30.5 |  |  | 33.8 |
The following tables set forth the fair value of the Company’s pension plan assets, segregated by level within the fair value hierarchy:
|  |  |  |  | U.S. Defined Benefit Pension Plans |  | International Defined Benefit Pension Plans
|  |  | Fair Value Hierarchy Level |  | 2022 |  | 2021 |  | 2022 |  | 2021
Cash and cash equivalents |  |  | Level 1 |  | $ | 2.1 |  |  | $ | 2.9 |  |  | $ | 1.7 |  |  | $ | 0.2 |
Insurance contracts |  |  | Level 3 |  | — |  |  | — |  |  | 38.1 |  |  | 66.7 |
Total assets in the fair value hierarchy |  |  |  |  | $ | 2.1 |  |  | $ | 2.9 |  |  | $ | 39.8 |  |  | $ | 66.9 |
Common collective trusts measured at net asset value |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  |  |  | $ | 2.8 |  |  | $ | 3.4 |  |  | $ | — |  |  | $ | — |
Equities |  |  |  |  | 10.0 |  |  | 16.0 |  |  | 32.6 |  |  | 48.3 |
Fixed income |  |  |  |  | 44.2 |  |  | 59.4 |  |  | 56.5 |  |  | 106.4 |
Total common collective trusts measured at net asset value |  |  |  |  | 57.0 |  |  | 78.8 |  |  | 89.1 |  |  | 154.7 |
Total assets at fair value |  |  |  |  | $ | 59.1 |  |  | $ | 81.7 |  |  | $ | 128.9 |  |  | $ | 221.6 |
The carrying value of cash equivalents approximated their aggregate fair value as of September 30, 2022 and 2021. The valuation of the buy-in insurance policy was calculated on an insurer pricing basis updated for changes in market implied insurance pricing, market rates, and inflation during the year, and was estimated using unobservable inputs. Common collective trusts are not publicly traded and were valued at a net asset value unit price determined by the portfolio’s sponsor based on the fair value of underlying assets held by the common collective trust on September 30, 2022 and 2021. The common collective trusts hold underlying investments that have prices derived from quoted prices in active markets. The underlying assets are principally marketable equity and fixed income securities.

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