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Retirement and Postretirement Plans
 9 Months Ended
Sep. 30, 2024
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Retirement and Postretirement Plans

Note 9 - Retirement and Postretirement Plans

 

Plan Amendments and Updates

 

Bargaining Plan

 

On October 29, 2021, the United Steelworkers ("USW") Local 1123 voted to ratify a new four-year contract (the “Contract”). The Contract, which is in effect until September 27, 2025, resulted in several changes to the Bargaining Plan including but not limited to closing the plan to new entrants effective January 1, 2022. For a detailed discussion of the Company's Bargaining Plan changes, refer to “Note 15 - Retirement and Postretirement Plans” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

 

In the nine months ended September 30, 2024, the Company contributed a total of $37.5 million in pension contributions, most of which related to the Bargaining Plan. In October 2024, the Company contributed an additional $5.3 million to the Bargaining Plan, resulting in total 2024 pension contributions of $42.8 million. Required future pension contribution timing and amounts are subject to significant change based on future investment performance, Company estimates and actuarial assumptions, as well as current funding laws.

Salaried Plan

 

During the fourth quarter of 2021, termination of the Salaried Plan was approved by the Company's Board of Directors. Participants were notified in January 2022 and the plan was terminated effective March 31, 2022, subject to regulatory approval which was received in the fourth quarter of 2023. On May 15, 2024, the Company entered into an agreement to purchase a group annuity contract from Prudential in connection with the annuitization of the Salaried Plan. The Salaried Plan annuitization settled approximately $121 million of the Company’s remaining U.S. pension obligations. Prudential began future benefit payments under the group annuity contract starting August 1, 2024 for all remaining participants in the Salaried Plan. Benefits payable to Salaried Plan participants were not reduced as a result of the annuitization. The group annuity contract was purchased using existing assets of the Salaried Plan and requires no cash contribution from the Company. At the date of the annuitization of the Salaried Plan, the Company transferred the Salaried Plan assets and liabilities to Prudential and recorded a non-cash loss of approximately $1.0 million.

 

Pension Net Periodic Benefit Cost (Income)

The components of net periodic benefit cost (income) for the three months ended September 30, 2024 were as follows:

 

 

Pension

 

 

 

 

 

 

 

 

 

United States of America

 

 

United Kingdom

 

 

Mexico

 

 

 

 

 

 

 

 

 

Bargaining
Plan

 

 

Salaried
Plan

 

 

Supplemental
Plan

 

 

Pension
Scheme

 

 

Pension
Plan

 

 

Total
Pension

 

 

Postretirement
Plans

 

Service cost

 

$

2.2

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

2.2

 

 

$

0.1

 

Interest cost

 

 

6.4

 

 

 

—

 

 

 

0.2

 

 

 

0.6

 

 

 

—

 

 

 

7.2

 

 

 

1.1

 

Expected return on plan assets

 

 

(7.0

)

 

 

—

 

 

 

—

 

 

 

(0.7

)

 

 

—

 

 

 

(7.7

)

 

 

(0.7

)

Amortization of prior service cost

 

 

0.3

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.3

 

 

 

(1.5

)

Net remeasurement losses (gains)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Net Periodic Benefit Cost (Income)

 

$

1.9

 

 

$

—

 

 

$

0.2

 

 

$

(0.1

)

 

$

—

 

 

$

2.0

 

 

$

(1.0

)

 

The components of net periodic benefit cost (income) for the three months ended September 30, 2023 were as follows:

 

 

Pension

 

 

 

 

 

 

 

 

 

United States of America

 

 

United Kingdom

 

 

Mexico

 

 

 

 

 

 

 

 

 

Bargaining
Plan

 

 

Salaried
Plan

 

 

Supplemental
Plan

 

 

Pension
Scheme

 

 

Pension
Plan

 

 

Total
Pension

 

 

Postretirement
Plans

 

Service cost

 

$

2.4

 

 

$

0.2

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

2.6

 

 

$

0.2

 

Interest cost

 

 

6.5

 

 

 

1.6

 

 

 

0.2

 

 

 

0.5

 

 

 

—

 

 

 

8.8

 

 

 

1.2

 

Expected return on plan assets

 

 

(6.7

)

 

 

(1.8

)

 

 

—

 

 

 

(0.6

)

 

 

—

 

 

 

(9.1

)

 

 

(0.9

)

Amortization of prior service cost

 

 

0.3

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.3

 

 

 

(1.5

)

Net remeasurement losses (gains)

 

 

—

 

 

 

(1.0

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1.0

)

 

 

—

 

Net Periodic Benefit Cost (Income)

 

$

2.5

 

 

$

(1.0

)

 

$

0.2

 

 

$

(0.1

)

 

$

—

 

 

$

1.6

 

 

$

(1.0

)

The components of net periodic benefit cost (income) for the nine months ended September 30, 2024 were as follows:

 

 

Pension

 

 

 

 

 

 

 

 

 

United States of America

 

 

United Kingdom

 

 

Mexico

 

 

 

 

 

 

 

 

 

Bargaining
Plan

 

 

Salaried
Plan

 

 

Supplemental
Plan

 

 

Pension
Scheme

 

 

Pension
Plan

 

 

Total
Pension

 

 

Postretirement
Plans

 

Service cost

 

$

6.6

 

 

$

0.3

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

6.9

 

 

$

0.3

 

Interest cost

 

 

19.2

 

 

 

2.5

 

 

 

0.6

 

 

 

1.8

 

 

 

—

 

 

 

24.1

 

 

 

3.3

 

Expected return on plan assets

 

 

(21.0

)

 

 

(2.7

)

 

 

—

 

 

 

(2.1

)

 

 

—

 

 

 

(25.8

)

 

 

(2.1

)

Amortization of prior service cost

 

 

0.9

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.9

 

 

 

(4.5

)

Net remeasurement losses (gains)

 

 

—

 

 

 

1.8

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1.8

 

 

 

—

 

Net Periodic Benefit Cost (Income)

 

$

5.7

 

 

$

1.9

 

 

$

0.6

 

 

$

(0.3

)

 

$

—

 

 

$

7.9

 

 

$

(3.0

)

 

The components of net periodic benefit cost (income) for the nine months ended September 30, 2023 were as follows:

 

 

Pension

 

 

 

 

 

 

 

 

 

United States of America

 

 

United Kingdom

 

 

Mexico

 

 

 

 

 

 

 

 

 

Bargaining
Plan

 

 

Salaried
Plan

 

 

Supplemental
Plan

 

 

Pension
Scheme

 

 

Pension
Plan

 

 

Total
Pension

 

 

Postretirement
Plans

 

Service cost

 

$

7.2

 

 

$

0.6

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

7.8

 

 

$

0.6

 

Interest cost

 

 

19.5

 

 

 

4.9

 

 

 

0.6

 

 

 

1.5

 

 

 

—

 

 

 

26.5

 

 

 

3.6

 

Expected return on plan assets

 

 

(20.1

)

 

 

(5.6

)

 

 

—

 

 

 

(1.8

)

 

 

—

 

 

 

(27.5

)

 

 

(2.7

)

Amortization of prior service cost

 

 

0.9

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.9

 

 

 

(4.5

)

Net remeasurement losses (gains)

 

 

—

 

 

 

1.7

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1.7

 

 

 

—

 

Net Periodic Benefit Cost (Income)

 

$

7.5

 

 

$

1.6

 

 

$

0.6

 

 

$

(0.3

)

 

$

—

 

 

$

9.4

 

 

$

(3.0

)

The Bargaining Plan, Supplemental Plan and the recently terminated Salaried Plan have a provision that permits employees to elect to receive their pension benefits in a lump sum upon retirement. The Company's accounting policy is to recognize settlements during the quarter in which it is projected that the costs of all settlements during the year will be greater than the sum of the service cost and interest cost components.

In the first quarter of 2024, the cumulative cost of all lump sum payments was expected to exceed the sum of the service cost and interest cost components of net periodic pension cost for the Salaried Plan. As a result, the Company completed a full remeasurement of its pension obligations and plan assets associated with the Salaried Plan during the first quarter of 2024. On May 1, 2024, in advance of the annuitization of the Salaried plan and upon the election of certain participants, the Company made $20.8 million in lump sum payments. The Company remeasured the Salaried Plan ahead of the annuitization on May 15, 2024.

In the first quarter of 2023, in anticipation of receiving the regulatory approval to move forward with the plan termination process, the cumulative costs of all lump sum payments and other settlements were projected to exceed this threshold during 2023 for the Salaried Plan. Ultimately, these costs did not exceed this threshold for the Salaried Plan during 2023. The Salaried Plan's pension obligations and plan assets were remeasured during each quarter of 2023.