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Retirement Plans
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Retirement Plans

8. Retirement Plans

The Company and its subsidiaries sponsor various retirement plans. Substantially all employees in the U.S. and certain employees outside the U.S. are covered under the Company's defined contribution plans. Certain employees, retirees, and eligible dependents are also covered under the Company's defined benefit pension plans.

Employer contributions under the Company's defined contribution plans are determined annually based on employee contributions, a percentage of each covered employee's compensation, and years of service. The Company's cost for defined contribution plans totaled $30,531,000, $28,217,000, and $27,599,000 in 2024, 2023, and 2022, respectively.

The Company sponsors a qualified defined benefit pension plan in the U.S. (the "U.S. Qualified Plan") and three defined benefit pension plans in the U.K. (the "U.K. Plans"). Effective December 31, 2002, the Company elected to freeze its U.S. Qualified Plan. Benefits payable under the Company's U.S. Qualified Plan are generally based on career compensation; however, no additional benefits have accrued on this plan since December 31, 2002. The Company's U.K. Plans were closed to new participants as of October 31, 1997, but existing participants may still accrue additional limited benefits based on salary amounts in effect at the time the relevant plan was closed. Benefits payable under the U.K. Plans are generally based on an employee's final salary at the time the plan was closed. Benefits paid under the U.K. Plans are also subject to adjustments for the effects of inflation. The actuarial present value of the projected benefit payments under the U.K. Plans are based on the employees' expected dates of separation by retirement.

The Company did not make any voluntary contributions to the U.S. Qualified Plan in 2022, 2023, or 2024. Currently, the Company does not plan to make any discretionary contributions to the U.S. Qualified Plan in 2025.

Certain other employees participating in Other International Plans have retirement benefits that are accounted for as defined benefit pension plans under GAAP.

External trusts are maintained to hold assets of the Company's U.S. Qualified Plan, U.K. Plans, and Other International Plans. The Company's funding policy is to make cash contributions in amounts at least sufficient to meet regulatory funding requirements and, in certain instances, to make contributions in excess thereof if such contributions would otherwise be in accordance with the Company's capital allocation plans. Assets of the plans are measured at fair value at the end of each reporting period, but the plan assets are not separately recorded on the Company's Consolidated Balance Sheets. Instead, the funded or unfunded status of the Company's U.S. Qualified Plan, U.K. Plans, and Other International Plans are recorded in "Accrued pension liabilities" or "Other noncurrent assets" on the Company's Consolidated Balance Sheets based on the projected benefit obligations less the fair values of the plans' assets.

The majority of the Company's defined benefit pension plans have projected benefit obligations in excess of the fair value of plan assets. For these plans, the projected benefit obligations and the fair value of plan assets were as follows as of December 31, 2024 and 2023:

 

 

December 31,

 

2024

 

 

2023

 

 

 

(In thousands)

 

Projected benefit obligations

 

$

278,389

 

 

$

311,336

 

Fair value of plans' assets

 

 

255,389

 

 

 

285,243

 

 

Certain of the Company's U.K. Plans have fair values of plan assets that exceed the projected benefit obligations. For these plans, and certain Other International Plans, the projected benefit obligations and the fair value of plan assets were as follows as of December 31, 2024 and 2023:

 

 

December 31,

 

2024

 

 

2023

 

 

 

(In thousands)

 

Projected benefit obligations

 

$

161,567

 

 

$

146,960

 

Fair value of plans' assets

 

 

170,747

 

 

 

157,914

 

 

In addition, the Company sponsors two frozen nonqualified, unfunded defined benefit pension plans for certain employees and retirees, which are based on career compensation. These plans were frozen effective December 31, 2002. The liabilities of these plans, which equal their projected benefit obligations, are included in "Other accrued liabilities" and "Other noncurrent liabilities" on the Company's Consolidated Balance Sheets based on the expected timing of funding these obligations, since they are funded as needed from Company assets.

A reconciliation of the beginning and ending balances of the projected benefit obligations and the fair value of plans' assets for the Company's defined benefit pension plans as of the plans' most recent measurement dates is as follows:

 

Year Ended December 31,

 

2024

 

 

2023

 

 

 

(In thousands)

 

Projected Benefit Obligations:

 

 

 

 

 

 

Beginning of measurement period

 

$

458,296

 

 

$

485,573

 

Service cost

 

 

1,531

 

 

 

1,423

 

Interest cost

 

 

23,163

 

 

 

23,915

 

Employee contributions

 

 

22

 

 

 

23

 

Actuarial gain

 

 

(3,504

)

 

 

(11,023

)

Plan settlements

 

 

(296

)

 

 

—

 

Plan curtailments

 

 

48

 

 

 

—

 

Benefits paid

 

 

(49,068

)

 

 

(51,232

)

Foreign currency effects

 

 

9,764

 

 

 

9,617

 

End of measurement period

 

 

439,956

 

 

 

458,296

 

Fair Value of Plans' Assets:

 

 

 

 

 

 

Beginning of measurement period

 

 

443,157

 

 

 

477,728

 

Actual return on plans' assets

 

 

18,268

 

 

 

2,712

 

Employer contributions

 

 

3,561

 

 

 

3,265

 

Employee contributions

 

 

22

 

 

 

23

 

Plan settlements

 

 

(296

)

 

 

—

 

Benefits paid

 

 

(49,068

)

 

 

(51,232

)

Foreign currency effects

 

 

10,492

 

 

 

10,661

 

End of measurement period

 

 

426,136

 

 

 

443,157

 

Unfunded Status

 

$

(13,820

)

 

$

(15,139

)

 

Due to the frozen status of the U.S. Qualified Plan and the closed status of the U.K. Plans, the accumulated benefit obligations and the projected benefit obligations are not materially different.

The funded status of the Company's defined benefit pension plans recognized in the Consolidated Balance Sheets at December 31 consisted of:

 

December 31,

 

2024

 

 

2023

 

 

 

(In thousands)

 

U.S. Qualified Plan

 

$

18,991

 

 

$

22,317

 

Other international plans

 

 

2,092

 

 

 

1,688

 

Subtotal, included in "Accrued pension liabilities"

 

 

21,083

 

 

 

24,006

 

U.K. prepaid pension asset included in "Other noncurrent assets"

 

 

(9,176

)

 

 

(10,876

)

Other international plans

 

 

(4

)

 

 

(78

)

Subtotal, included in "Other noncurrent assets"

 

 

(9,180

)

 

 

(10,954

)

Unfunded status of nonqualified defined benefit deferred pension plans included in "Other accrued liabilities"

 

 

201

 

 

 

230

 

Unfunded status of nonqualified defined benefit pension plans included in "Other noncurrent liabilities"

 

 

1,716

 

 

 

1,858

 

Total underfunded status

 

$

13,820

 

 

$

15,139

 

Accumulated other comprehensive loss, before income taxes

 

$

(257,116

)

 

$

(261,102

)

 

A fixed number of U.S. employees, retirees, and eligible dependents were previously covered under a frozen post-retirement medical benefits plan and are now provided Company-subsidized premiums for participation in health care exchanges. The liabilities for this plan are included in the Company's self-insured risks liabilities and are not material. This plan was frozen effective December 31, 2002.

The following tables set forth the changes in accumulated other comprehensive loss during 2024 and 2023 for the Company's defined benefit retirement plans on a combined basis:

 

 

Defined Benefit
Pension Plans

 

 

 

(In thousands)

 

Net unrecognized actuarial loss, December 31, 2022

 

$

(256,695

)

Amortization of net loss

 

 

12,019

 

Net loss arising during the year

 

 

(13,432

)

Currency translation

 

 

(2,993

)

Net unrecognized actuarial loss, December 31, 2023

 

 

(261,102

)

Amortization of net loss

 

 

12,580

 

Net loss arising during the year

 

 

(4,109

)

Currency translation

 

 

(4,484

)

Net unrecognized actuarial loss, December 31, 2024

 

$

(257,116

)

 

 

Unrecognized losses reflect changes in the discount rates and differences between expected and actual asset returns, which are being amortized over future periods. These unrecognized losses may be recovered in future periods through actuarial gains. However, unless the minimum amount required to be amortized is below a corridor amount equal to 10.0% of the greater of the projected benefit obligation or the market-related value of plan assets, these unrecognized actuarial losses are required to be amortized and recognized in future periods. Net unrecognized actuarial losses included in accumulated other comprehensive loss and expected to be recognized in net periodic benefit costs during the year ending December 31, 2025 for the U.S. and U.K. defined benefit pension plans are $12,525,000 ($10,035,000 net of tax).

Pension expense is affected by the accounting policy used to determine the value of plan assets at the measurement date. The Company applies the expected return on plan assets using fair market value as of the annual measurement date. The fair market value method results in greater volatility to pension expense than the calculated value method. The amounts recognized in the Consolidated Balance Sheets reflect the fair value of the Company's long-term pension liabilities at the plan measurement date and the fair value of plan assets as of the balance sheet date.

Net periodic benefit (credit) cost related to all of the Company's defined benefit pension plans recognized in the Company's Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022 included the following components:

 

Year Ended December 31,

 

2024

 

 

2023

 

 

2022

 

 

 

(In thousands)

 

Service cost

 

$

1,531

 

 

$

1,423

 

 

$

1,219

 

Interest cost

 

 

23,163

 

 

 

23,915

 

 

 

12,903

 

Expected return on assets

 

 

(25,882

)

 

 

(27,168

)

 

 

(24,600

)

Amortization of actuarial loss

 

 

12,580

 

 

 

12,020

 

 

 

10,198

 

Curtailment loss recognized

 

 

48

 

 

 

—

 

 

 

—

 

Net periodic benefit cost (credit)

 

$

11,440

 

 

$

10,190

 

 

$

(280

)

 

Benefit cost for the U.S. Qualified Plan does not include service cost since the plan is frozen. For the years ended December 31, 2024, 2023 and 2022, the non-service components of net periodic pension cost/(credits) of $9,909,000, $8,767,000, and $(1,499,000), respectively, are included in "Other (Income) Loss" on the Consolidated Statement of Operations. These amounts represent the non-service pension costs of the U.S., U.K., and Other International Plans.

Over the next ten years, the following benefit payments are expected to be required to be made from the Company's U.S. and U.K. defined benefit pension plans:

 

 

Year Ending December 31,

 

Expected Benefit
Payments

 

 

 

(In thousands)

 

2025

 

$

35,188

 

2026

 

 

34,690

 

2027

 

 

34,412

 

2028

 

 

34,586

 

2029

 

 

33,951

 

2030-2034

 

 

157,645

 

 

 

The Company reviews its employee demographic assumptions annually and updates the assumptions as necessary. The Company updates the mortality assumptions for the U.S. plans to incorporate the current mortality tables issued by the Society of Actuaries, adjusted to reflect the Company's specific experience and future expectations. This resulted in a $1,393,852 decrease in the projected benefit obligation for the U.S. plans for the year ended December 31, 2022. No changes were made to the mortality tables for the years ended December 31, 2023 and 2024. Certain assumptions used in computing the benefit obligations and net periodic benefit cost for the U.S. and U.K. defined benefit pension plans were as follows:

 

U.S. Qualified Plan:

 

2024

 

 

2023

 

Discount rate used to compute benefit obligations

 

 

5.57

%

 

 

4.94

%

Discount rate used to compute periodic benefit cost

 

 

4.94

%

 

 

5.13

%

Expected long-term rates of return on plans' assets

 

 

5.90

%

 

 

6.20

%

 

U.K. Defined Benefit Plans:

 

2024

 

 

2023

 

Discount rate used to compute benefit obligations

 

 

5.30

%

 

 

5.78

%

Discount rate used to compute periodic benefit cost

 

 

5.78

%

 

 

4.93

%

Expected long-term rates of return on plans' assets

 

 

6.20

%

 

 

5.40

%

 

The discount rate assumptions reflect the rates at which the Company believes the benefit obligations could be effectively settled. The discount rates were determined based on the yield for a portfolio of investment grade corporate bonds with maturity dates matched to the estimated future payments of the plans' benefit obligations.

The Company estimates the service and interest components of net periodic benefit cost for its U.S. and international pension and other postretirement benefits. This estimation approach discounts the individual expected cash flows underlying the service cost and interest cost using the applicable spot rates derived from the yield curve used to discount the cash flows used to measure the benefit obligation. For the pension plans, the weighted average spot rates used to determine 2025 interest costs are estimated to be 5.29% for the U.S. Qualified plan and 5.18% for the U.K. plans.

The expected long-term rates of return on plan assets were based on the plans' asset mix, historical returns on equity securities and fixed income investments, and an assessment of expected future returns. The expected long-term rates of return on plan assets assumption used to determine 2025 net periodic pension cost are estimated to be 6.40% and 5.90% for the U.S. Qualified Plan and U.K. plans, respectively. If actual long-term rates of return differ from those assumed or if the Company used materially different assumptions, actual funding obligations could differ materially from these estimates. Due to the frozen status of the U.S. plan and closed status of the U.K. plans, increases in compensation rates are not material to the computations of benefit obligations or net periodic benefit cost.

Plans' Assets

Asset allocations at the respective measurement dates, by asset category, for the Company's U.S. and U.K. qualified defined benefit pension plans were as follows:

 

 

 

 

U.S. Qualified Plan

 

 

U.K. Plans

 

December 31,

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Equity securities

 

 

14.7

%

 

 

14.6

%

 

 

—

 

 

 

—

 

Fixed income securities

 

 

77.9

%

 

 

75.8

%

 

 

73.6

%

 

 

74.1

%

Alternative strategies

 

 

4.2

%

 

 

4.6

%

 

 

25.9

%

 

 

24.4

%

Cash, cash equivalents and short-term investment funds

 

 

3.2

%

 

 

5.0

%

 

 

0.4

%

 

 

1.5

%

Total asset allocation

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

Investment objectives for the Company's U.S. and U.K. pension plan assets are to ensure availability of funds for payment of plan benefits as they become due; provide for a reasonable amount of long-term growth of capital, without undue exposure to volatility; protect the assets from erosion of purchasing power; and provide investment results that meet or exceed the actuarially assumed long-term rate of return of each plan.

Alternative strategies include funds that invest in derivative instruments such as futures, forward contracts, options and swaps, hedge funds, and funds that invest in real estate. These investments are used to help manage risks.

The long-term goal for the U.S. and U.K. plans is to reach fully-funded status and to maintain that status. The investment policies recognize that the plans' asset return requirements and risk tolerances will change over time. Accordingly, reallocation of the portfolios' mix of return-seeking assets and liability-hedging assets will be performed as the plans' funded status improves.

See Note 12, "Fair Value Measurements" for the fair value disclosures of the U.S. and U.K. qualified defined benefit pension plan assets. The assets of the Company's Other International Plans are primarily insurance contracts, which are measured at contract value and are not measured at fair value. Obligations of the U.S. nonqualified plans are paid from Company assets.