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Employee Benefit Plans
 12 Months Ended
Dec. 31, 2021
Employee Benefit Plans  
Employee Benefit Plans

12. Employee Benefit Plans

Defined Contribution Plans

The Company administers several defined contribution plans in various countries globally, including The Western Union Company Incentive Savings Plan (the “401(k)”), which covers eligible employees on the United States payroll. Such plans have vesting and employer contribution provisions that vary by country. In addition, the Company sponsors a non-qualified deferred compensation plan for a select group of highly compensated United States employees. The plan provides tax-deferred contributions and the restoration of Company matching contributions otherwise limited under the 401(k). The aggregate amount charged to expense in connection with all of the above plans was $17.8 million, $18.4 million, and $20.0 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Defined Benefit Plan

The Company had a frozen defined benefit pension plan (the “Plan”), for which the funded status was reported in the Consolidated Balance Sheets and measured as the difference between the fair value of the plan assets and the projected benefit obligation. Plan assets, which were managed in a third-party trust, primarily consisted of fixed income and equity investments and had a total fair value of $280.6 million as of December 31, 2020.

On July 22, 2021, the Company’s Board of Directors approved a plan to terminate and settle the Plan. Upon settlement in the fourth quarter of 2021, the Company transferred Plan assets to an insurance company that will provide for and pay the remaining benefits to participants.

The Company incurred $109.8 million of charges associated with this settlement. The pre-tax balance in AOCL associated with the Plan, along with costs related to the settlement, were recorded as a component of Total other income/(expense), net, with the related income tax effects recorded in Provision for income taxes, in the Consolidated Statements of Income. As of December 31, 2021, the Company had $18.4 million of restricted cash and $11.9 million of investments remaining from the settlement, which are included in Other assets in the Consolidated Balance Sheets. These assets will be used to fund contributions to the Company's defined contribution plan in future periods.

The benefit obligation was $240.7 million and the discount rate assumption used in the measurement of this obligation was 1.66% for the year ended December 31, 2020. As of December 31, 2020, the fair value of the plan assets exceeded the projected benefit obligation, which resulted in prepaid pension costs of $39.9 million as reported in Other assets. The Plan’s overfunded status as of December 31, 2020 was primarily due to favorable investment returns relative to the expected return on plan assets during the year then ended.

The net periodic benefit cost associated with the Plan was $9.4 million, $4.4 million, and $4.1 million for the years ended December 31, 2021, 2020, and 2019, respectively. The Company made no material contributions to the Plan during the years ended December 31, 2021 and 2020.