EMPLOYEE BENEFIT PLANS

Pension Plans

The Company has a defined benefit pension plan (the “UK Pension Plan”) that covers certain employees located in the United Kingdom who meet various eligibility requirements. Benefits are based on years of service and on a percentage of compensation near retirement. The UK Pension Plan is funded by contributions from the Company. The Company’s UK Pension Plan has a measurement date of May 31.

The Company had a cash balance retirement plan (the “U.S. Pension Plan”), which covered the majority of United States employees who met certain eligibility requirements. On July 20, 2016, the Board approved the termination of the U.S. Pension Plan, as it was determined that the on-going costs of maintaining the U.S. Pension Plan were growing at a greater rate than the benefit delivered to the Company’s participating and former employees. In fiscal 2018, the U.S. Pension Plan made $37.8 of lump sum benefit payments to vested plan participants. The Company completed the final step in the distribution of the U.S. Pension Plan assets to participants by purchasing group annuity contracts for the remaining U.S. Pension Plan participants (the "U.S. Pension Plan Termination"). The total cost of these contracts was $86.3, paid to the respective insurers on February 21, 2018. The net funded asset position of the U.S. Pension Plan had previously included the value of the insurance contracts and lump sums settled prior to the purchase of such contracts. The U.S. Pension Plan's asset balance was sufficient to fund the purchase of these insurance contracts as well as any remaining benefit obligations and plan related operating expenses, with no additional cost to the Company as the plan sponsor. As a result, a remeasurement was completed on the final settlement date and a non-cash, pre-tax settlement expense of $57.3 was recognized in fiscal 2018 as a final settlement charge in the Company's consolidated statement of operations in Other components of net periodic benefit (cost).

Postretirement Benefits

The Company provides postretirement benefits to eligible retired United States-based employees (the “Postretirement Benefits”) consisting of certain healthcare and life insurance benefits. Employees may become eligible for these benefits after completing certain minimum age and service requirements. Effective June 1, 2009, the Company modified the terms of the Postretirement Benefits, effectively excluding a large percentage of employees from the plan. The Company’s postretirement benefit plan has a measurement date of May 31.

In the second quarter of fiscal 2019, the Company made a change in benefits for certain postretirement benefit plan participants. Beginning January 1, 2019, the plan established Health Reimbursement Accounts (HRAs) to provide certain participants with additional flexibility to choose healthcare options based on individual needs. As a result of this change, the Company remeasured its Postretirement Benefit obligation as of November 30, 2018, and recognized a reduction of $2.7 to its benefit obligation and a reduction to its accumulated comprehensive loss of $2.7 in the second quarter of fiscal 2019. The related prior service credit will be amortized as a Component of net periodic benefit (cost) over the average remaining life expectancy of plan participants of approximately 13 years.

The Medicare Prescription Drug, Improvement and Modernization Act (the “Medicare Act”) introduced a prescription drug benefit under Medicare (“Medicare Part D”) as well as a Federal subsidy of 28% to sponsors of retiree health care

benefit plans providing a benefit that is at least actuarially equivalent to Medicare Part D. The Company has determined that the Postretirement Benefits provided to its retiree population are in aggregate the actuarial equivalent of the benefits under Medicare Part D. As a result, in fiscal 2019, 2018 and 2017, the Company recognized a cumulative reduction of its accumulated postretirement benefit obligation of $1.5, $2.3 and $2.5, respectively, due to the Federal subsidy under the Medicare Act.

The following table sets forth the weighted average actuarial assumptions utilized to determine the benefit obligations for the U.S. Pension Plan and the UK Pension Plan (collectively the “Pension Plans”), including the Postretirement Benefits, at May 31:



	U.S. Pension Plan					UK Pension Plan						Postretirement Benefits
	2019 ^*	2018		2017		2019		2018		2017		2019			2018			2017
Weighted average assumptions used to determine benefit obligations:
Discount rate	*	—	%	2.4	%	2.3	%	2.6	%	2.5	%	3.6	%		4.0	%		3.7	%
Rate of compensation increase	*	—		—		4.1	%	3.9	%	4.1	%	—			—			—
Weighted average assumptions used to determine net periodic benefit cost:
Discount rate ⁽¹⁾	*	2.3	%	3.5	%	2.4	%	2.5	%	3.5	%	3.7	%		3.7	%		3.7	%
Expected short-term return on plan assets ⁽²⁾	*	4.8	%	4.8		—		—		—		—		—	—		—	—
Expected long-term return on plan assets	*	—		—		3.4	%	3.4	%	3.9	%	—			—			—
Rate of compensation increase	*	—		—		3.9	%	4.1	%	3.8	%	—			—			—

^*The U.S. Pension Plan was terminated in fiscal 2018.

⁽¹⁾The fiscal 2018 U.S. Pension Plan discount rate is for the period of June 1, 2017 through the plan settlement date.

⁽²⁾The fiscal 2018 U.S. Pension Plan expected short-term return on plan assets is for the period of June 1, 2017 through the plan settlement date.

To develop the expected long-term rate of return on plan assets assumption for the UK Pension Plan, the Company considers historical returns and future expectations. Considering this information and the potential for lower future returns due to a generally lower interest rate environment, the Company selected an assumed weighted average long-term rate of return on plan assets of 3.4% for the UK Pension Plan. In fiscal 2018, the U.S. Pension Plan utilized a short-term rate of return assumption of 4.8% due to the U.S. Pension Plan termination for the period June 1, 2017 through the plan settlement date.

The following table sets forth the change in benefit obligation for the Pension Plans and Postretirement Benefits at May 31:



	U.S. Pension Plan					UK Pension Plan						Postretirement Benefits
	2019 ^*		2018			2019			2018			2019			2018
Change in benefit obligation:
Benefit obligation at beginning of year	*		$	127.8		$	40.0		$	41.7		$	26.8		$	28.8
Service cost	*		—			—			—			0.0			0.0
Interest cost	*		1.9			0.9			1.1			0.8			0.8
Plan participants’ contributions	*		—			—			—			0.4			0.4
Actuarial losses (gains)	*		1.7			3.1			(2.0		)	0.1			(2.4		)
Foreign currency translation	*		—			(2.0		)	1.3			—			—
Settlement	*		(125.2		)	—			—			—			—
Plan amendments	*		—			0.1			—			(2.7		)	—
Benefits paid, including expenses	*		(6.2		)	(1.2		)	(2.1		)	(2.0		)	(0.8		)
Benefit obligation at end of year	$	—	$	—		$	40.9		$	40.0		$	23.4		$	26.8

^*The U.S. Pension Plan was terminated in fiscal 2018.

The U.S. Pension Plan Termination resulted in an increase in actuarial losses for the U.S. Pension Plan in fiscal 2018. The increase primarily related to premiums associated with insurance company pricing for the obligations that were not distributed through lump sum payments.

The following table sets forth the change in plan assets for the Pension Plans and Postretirement Benefits at May 31:



	U.S. Pension Plan					UK Pension Plan						Postretirement Benefits
	2019 ^*		2018			2019			2018			2019		2018
Change in plan assets:
Fair value of plan assets at beginning of year	*		$	132.5		$	30.8		$	29.2		$	—	$	—
Actual return on plan assets	*		0.5			2.8			1.7			—		—
Employer contributions	*		—			1.0			1.1			—		2.0
Settlement	*		(125.2		)	—			—			—		—
Benefits paid, including expenses	*		(6.2		)	(1.2		)	(2.1		)	—		(2.4		)
Plan participants’ contributions	*		—			—			—			—		0.4
Foreign currency translation	*		—			(1.6		)	0.9			—		—
Fair value of plan assets at end of year	$	—	$	1.6		$	31.8		$	30.8		$	—	$	—

^*The U.S. Pension Plan was terminated in fiscal 2018.

The U.S. Pension Plan reflected a current asset of $1.6 as of May 31, 2018, that was used to pay plan-related expenses, with the remaining balance contributed for the benefit of the Company's employees participating in the Company's 401(k) plan.

The following table sets forth the net funded status of the Pension Plans and Postretirement Benefits and the related amounts recognized on the Company’s Consolidated Balance Sheets at May 31:



	U.S. Pension Plan				UK Pension Plan						Postretirement Benefits
	2019 ^*		2018		2019			2018			2019			2018
Current assets	*		$	1.6	$	—		$	—		$	—		$	—
Current liabilities	*		—		—			—			(1.8		)	(2.2		)
Non-current liabilities	*		—		(9.1		)	(9.2		)	(21.6		)	(24.6		)
Net funded balance	$	—	$	1.6	$	(9.1	)	$	(9.2	)	$	(23.4	)	$	(26.8	)

^*The U.S. Pension Plan was terminated in fiscal 2018.

The following amounts were recognized in Accumulated other comprehensive income (loss) for the Pension Plans and Postretirement Benefits in the Company’s Consolidated Balance Sheets at May 31:



	2019									2018
	U.S. Pension Plan ^*	UK Pension Plan			Post - Retirement Benefits		Total			U.S. Pension Plan		UK Pension Plan			Post - Retirement Benefits			Total
Net actuarial gain (loss)	*	$	(13.0	)	$	0.5	$	(12.5	)	$	—	$	(12.5	)	$	(1.3	)	$	(13.8	)
Amount recognized in Accumulated comprehensive income (loss) before tax	*	(13.0		)	0.0		(13.0		)	—		(12.5		)	(2.4		)	(14.9		)

^*The U.S. Pension Plan was terminated in fiscal 2018.

Accumulated other comprehensive loss of $55.0 for the U.S Pension Plan was reversed during fiscal 2018 as a result of the U.S. Pension Plan Termination in fiscal 2018. For the fiscal year ended May 31, 2018, the Company recognized final pretax settlement charges of $57.3 in Other components of net periodic benefit (cost), related to the settlement of the U.S Pension Plan and the related purchase of insurance company group annuity contracts.

The estimated net loss for the UK Pension Plan that will be amortized from Accumulated other comprehensive loss into net periodic benefit (cost) over the fiscal year ending May 31, 2020 is $1.0.

The estimated net gain for the Postretirement Benefits plan that will be amortized from Accumulated other comprehensive loss into net periodic benefit (cost) over the fiscal year ending May 31, 2020 is $0.2.

Income tax benefit of $0.5, income tax expense of $20.9 and income tax expense of $0.4 were recognized in Accumulated other comprehensive loss at May 31, 2019, 2018 and 2017, respectively.

The following table sets forth the projected benefit obligations, accumulated benefit obligations and the fair value of plan assets with respect to the Pension Plans as of May 31:



	U.S. Pension Plan			UK Pension Plan
	2019^*	2018		2019		2018
Projected benefit obligations	*	$	—	$	40.9	$	40.0
Accumulated benefit obligations	*	—		40.2		39.4
Fair value of plan assets	*	1.6		31.8		30.8

^*The U.S. Pension Plan was terminated in fiscal 2018.

The following table sets forth the net periodic benefit (cost) for the Pension Plans and Postretirement Benefits for the fiscal years ended May 31:



	U.S. Pension Plan								UK Pension Plan									Postretirement Benefits
	2019 ^*		2018			2017			2019			2018			2017			2019			2018		2017
Components of net (benefit) cost:
Service cost	*		$	—		$	—		$	—		$	—		$	—		$	0.0		$	0.0	$	0.0
Interest cost	*		1.9			3.2			0.9			1.1			1.2			0.8			0.8		0.9
Expected return on assets	*		(4.1		)	(6.1		)	(1.0		)	(1.0		)	(1.0		)	—			—		—
Settlement charge	*		57.3			—			—			—			—			—			—		—
Amortization of net actuarial (gain) loss	*		0.9			0.9			0.8			1.2			0.8			(0.1		)	0.1		0.4
Net periodic (benefit) cost	$	—	$	56.0		$	(2.0	)	$	0.7		$	1.3		$	1.0		$	0.7		$	0.9	$	1.3

^*The U.S. Pension Plan was terminated in fiscal 2018.

Plan Assets

The Company’s investment policy with regard to the assets in the UK Pension Plan is to actively manage, within acceptable risk parameters, certain asset classes where the potential exists to outperform the broader market. The U.S. Pension Plan assets were invested in short term cash and cash equivalent investments due to the Plan's termination in fiscal 2018.

The following table sets forth the total weighted average asset allocations for the Pension Plans by asset category at May 31:



	U.S. Pension Plan				UK Pension Plan
	2019 ^*		2018		2019		2018
Equity securities	*		—	%	35.0	%	38.6	%
Cash and cash equivalents	*		100.0	%	3.0	%	2.6	%
Liability-driven instruments	*		—	%	38.0	%	32.8	%
Real estate	*		—	%	7.0	%	7.5	%
Other	*		—	%	17.0	%	18.5	%
	—	%	100.0	%	100.0	%	100.0	%

^*The U.S. Pension Plan was terminated in fiscal 2018.

The following table sets forth the targeted weighted average asset allocations for the UK Pension Plan included in the Company’s investment policy:



	UK Pension Plan
Equity securities	35	%
Cash and cash equivalents	3	%
Liability-driven instruments and other	55	%
Real estate	7	%
Total	100	%

The fair values of the Company’s Pension Plan assets are measured using Level 1, Level 2 and Level 3 fair value measurements.

The following table sets forth the measurement of the Company’s Pension Plan assets at fair value by asset category at the respective dates:



	Assets at Fair Value as of May 31, 2019
	U.S. Pension Plan ^*		UK Pension Plan		U.S. Pension Plan ⁽¹⁾		UK Pension Plan		U.S. Pension Plan ⁽¹⁾		UK Pension Plan		Total
	Level 1				Level 2				Level 3
Cash and cash equivalents	*		$	0.9	*		$	—	*		$	—	$	0.9
Equity securities:
U.S. ⁽²⁾	*		1.1		*		—		*		—		1.1
International ⁽³⁾	*		10.0		*		—		*		—		10.0
Pooled, Common and Collective Funds ^{(4) (5)}	*		—		*		12.0		*		—		12.0
Annuities	*		—		*		—		*		5.5		5.5
Real estate ⁽⁶⁾	*		2.3		*		—		*		—		2.3
Total	$	—	$	14.3	$	—	$	12.0	$	—	$	5.5	$	31.8



	Assets at Fair Value as of May 31, 2018
	U.S. Pension Plan		UK Pension Plan		U.S. Pension Plan		UK Pension Plan		U.S. Pension Plan		UK Pension Plan		Total
	Level 1				Level 2				Level 3
Cash and cash equivalents	$	1.6	$	0.8	$	—	$	—	$	—	$	—	$	2.4
Equity securities:
U.S.⁽¹⁾	—		1.5		—		—		—		—		1.5
International ⁽²⁾	—		10.4		—		—		—		—		10.4
Pooled, Common and Collective Funds ^{(3) (4)}	—		—		—		10.1		—		—		10.1
Annuities	—		—		—		—		—		5.7		5.7
Real estate ⁽⁵⁾	—		2.3		—		—		—		—		2.3
Total	$	1.6	$	15.0	$	—	$	10.1	$	—	$	5.7	$	32.4

* The U.S. Pension Plan was terminated in fiscal 2018.

(1) Funds which invest in a diversified portfolio of publicly traded U.S. common stocks of large-cap, medium-cap and small-cap

companies. There are no restrictions on these investments.

(2) Funds which invest in a diversified portfolio of publicly traded common stocks of non-U.S. companies, primarily in Europe and

Asia. There are no restrictions on these investments.

(3) Funds which invest in UK government bonds and bond index-linked investments and interest rate and inflation swaps. There are

no restrictions on these investments.

(4) Funds which invest in bond index funds available to certain qualified retirement plans but not traded openly in any

public exchanges. There are no restrictions on these investments.

(5) Represents assets of a non-U.S. entity plan invested in a fund whose underlying investments are comprised of properties. The

fund has publicly available quoted market prices and there are no restrictions on these investments.

The Company has purchased annuities to service fixed payments to certain retired plan participants in the UK. These annuities are purchased from investment grade counterparties. These annuities are not traded on open markets and are therefore valued based upon the actuarial determined valuation, and related assumptions, of the underlying projected benefit obligation, a Level 3 valuation technique. The fair value of these assets was $5.5 and $5.7 at May 31, 2019 and May 31, 2018, respectively.

The following table summarizes the changes in fair value of these Level 3 assets for the fiscal years ended May 31, 2019 and 2018:



Balance at May 31, 2017	$	5.8
Actual Return on Plan Assets:
Relating to assets still held at May 31, 2017	(0.3		)
Relating to assets sold during the year	—
Purchases, sales and settlements, net	—
Transfers in and/or out of Level 3	—
Foreign currency translation	0.2
Balance at May 31, 2018	$	5.7
Actual Return on Plan Assets:
Relating to assets still held at May 31, 2018	0.1
Relating to assets sold during the year	—
Purchases, sales and settlements, net	—
Transfers in and/or out of Level 3	—
Foreign currency translation	(0.3		)
Balance at May 31, 2019	$	5.5

Contributions

In fiscal 2020, the Company expects to make contributions of $1.1 to the UK Pension Plan.

Estimated future benefit payments

The following table sets forth the expected future benefit payments under the UK Pension Plan and the Postretirement Benefits by fiscal year:



	UK Pension Plan		Postretirement
	Pension benefits		Benefit payments		Medicare subsidy receipts
2020	$	1.0	$	1.9	$	0.1
2021	0.9		1.9		0.1
2022	0.9		1.9		0.1
2023	1.3		1.9		0.2
2024	1.2		1.9		0.2
2025 and thereafter	10.2		8.5		0.8

Beneficiary payments for the U.S. Pension Plan were paid in full in fiscal 2018.

Assumed health care cost trend rates at May 31:



	2019		2018
Health care cost trend rate assumed for the next fiscal year	6.5	%	6.8	%
Rate to which the cost trend is assumed to decline (the ultimate trend rate)	5.0	%	5.0	%
Year that the rate reaches the ultimate trend rate	2026		2026

Assumed health care cost trend rates could have a significant effect on the amounts reported for the postretirement health care plan. A one percentage point change in assumed health care cost trend rates would have the following effects:



	2019			2018
Total service and interest cost - 1% increase	$	0.1		$	0.1
Total service and interest cost - 1% decrease	(0.1		)	(0.1		)
Postretirement benefit obligation - 1% increase	2.1			2.8
Postretirement benefit obligation - 1% decrease	(1.9		)	(2.4		)

Defined contribution plans

The Company also provides defined contribution plans for certain eligible employees. In the United States, the Company sponsors a 401(k) retirement plan and has contributed $7.6, $7.2 and $7.1 for fiscal years 2019, 2018 and 2017, respectively.