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Pension Plans | 12 Months Ended
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Dec. 31, 2023
Retirement Benefits [Abstract] |
Pension Plans | Pension Plans The Company operates funded defined benefit pension plans in the U.K., the U.S. and France. The levels of funding are determined by periodic actuarial valuations that take into account changes in actuarial assumptions, including discount rates and expected returns on plan assets. The assets of the plans are generally held in separate Trustee-administered funds. The Company also operates defined contribution plans in the U.K., the U.S., Australia and Canada. The "10% corridor" method for recognizing gains and losses has been adopted. This methodology means that cumulative gains and losses up to an amount equal to 10% of the higher of the liabilities and the assets (the corridor) have no impact on the pension cost. Cumulative gains or losses greater than this corridor are amortized over the average future lifetime of the members in the plans. The principal defined benefit pension plan in the Company is the U.K. Luxfer Group Pension Plan ("the Plan"), which closed to new members in 1998, with new employees then being eligible for a defined contribution plan. In April 2016, the Plan was closed to further benefit accrual, with members being offered contributions to a defined contribution plan. The Company completed a buyout of the U.S. BA Holdings, Inc. Pension Plan in the first quarter of 2023. The Company's other arrangements are less significant than the Plan. The following tables present reconciliations of pension benefit obligations, fair value of plan assets and the funded status of pension plans as of and for the years ended December 31, 2023 and 2022:
|  | 2023 |  | 2023 |  | 2023 |  | 2022 |  | 2022 |  | 2022 |
| In millions | U.K. |  | U.S. / other |  | Total |  | U.K. |  | U.S. / other |  | Total |
| Change in benefit obligations |  |  |  |  |  |  |  |  |  |  |  |
| Benefit obligation at January 1 | $ | 225.6 |  |  | $ | 32.6 |  |  | $ | 258.2 |  |  | $ | 362.9 |  |  | $ | 48.7 |  |  | $ | 411.6 |  |
| Interest cost | 11.0 |  |  | 0.2 |  |  | 11.2 |  |  | 6.2 |  |  | 1.3 |  |  | 7.5 |  |
| Settlement gain | — |  |  | (29.3) |  |  | (29.3) |  |  | — |  |  | (5.9) |  |  | (5.9) |  |
| Actuarial gains | (2.9) |  |  | (2.5) |  |  | (5.4) |  |  | (93.7) |  |  | (9.0) |  |  | (102.7) |  |
| Exchange difference | 12.8 |  |  | — |  |  | 12.8 |  |  | (37.0) |  |  | — |  |  | (37.0) |  |
| Benefits paid | (12.6) |  |  | (0.9) |  |  | (13.5) |  |  | (12.8) |  |  | (2.5) |  |  | (15.3) |  |
| Benefit obligation at December 31 | $ | 233.9 |  |  | $ | 0.1 |  |  | $ | 234.0 |  |  | $ | 225.6 |  |  | $ | 32.6 |  |  | $ | 258.2 |  |
| Change in plan assets |  |  |  |  |  |  |  |  |  |  |  |
| Fair value of plan assets at January 1 | $ | 252.6 |  |  | $ | 28.1 |  |  | $ | 280.7 |  |  | $ | 376.6 |  |  | $ | 46.8 |  |  | $ | 423.4 |  |
| Actual return on assets | 19.4 |  |  | — |  |  | 19.4 |  |  | (71.2) |  |  | (10.4) |  |  | (81.6) |  |
| Exchange difference | 14.6 |  |  | — |  |  | 14.6 |  |  | (40.4) |  |  | — |  |  | (40.4) |  |
| Contributions from employer | 0.2 |  |  | 2.1 |  |  | 2.3 |  |  | 0.4 |  |  | — |  |  | 0.4 |  |
| Benefits paid | (12.6) |  |  | (0.9) |  |  | (13.5) |  |  | (12.8) |  |  | (2.4) |  |  | (15.2) |  |
| Settlement loss | — |  |  | (29.3) |  |  | (29.3) |  |  | — |  |  | (5.9) |  |  | (5.9) |  |
| Fair value of plan assets at December 31 | $ | 274.2 |  |  | $ | — |  |  | $ | 274.2 |  |  | $ | 252.6 |  |  | $ | 28.1 |  |  | $ | 280.7 |  |
| Funded status |  |  |  |  |  |  |  |  |  |  |  |
| Net benefit surplus / (obligation) | $ | 40.3 |  |  | $ | (0.1) |  |  | $ | 40.2 |  |  | $ | 27.0 |  |  | $ | (4.5) |  |  | $ | 22.5 |  |
The net benefit surplus of $40.3 million (2022: $27.0 million) in the U.K. plan is recorded in non-current assets at December 31, 2023 and December 31, 2022, the net benefit obligation of $0.1 million (2022: $4.5 million) in the U.S. / other is recorded in non-current liabilities at December 31, 2022. In December 2021, the Company made a special one-off deficit reduction payment to the U.K. Plan of $12.7 million. The payment means the Company is not expected to make any additional deficit recovery contributions to the Plan until at least December 2024. Contributions of $0.2m were paid to the U.K. plan in relation to the Pension Protection Fund levy. 14. Pension Plans (continued) The amounts recognized in the Consolidated Statements of Income in respect of the pension plans were as follows:
|  | 2023 |  | 2023 |  | 2023 |  | 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021 |
| In millions | U.K. |  | U.S. / other |  | Total |  | U.K. |  | U.S. / other |  | Total |  | U.K. |  | U.S. / other |  | Total |
| In respect of defined benefit plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Interest cost | 11.0 |  |  | 0.2 |  |  | 11.2 |  |  | 6.2 |  |  | 1.3 |  |  | 7.5 |  |  | 5.6 |  |  | 1.1 |  |  | 6.7 |  |
| Expected return on assets | (13.8) |  |  | 0.2 |  |  | (13.6) |  |  | (10.4) |  |  | (0.7) |  |  | (11.1) |  |  | (10.2) |  |  | (1.8) |  |  | (12.0) |  |
| Settlement loss | — |  |  | 8.9 |  |  | 8.9 |  |  | — |  |  | 2.0 |  |  | 2.0 |  |  | — |  |  | — |  |  | — |  |
| Amortization of net actuarial loss | 1.7 |  |  | 0.1 |  |  | 1.8 |  |  | 1.8 |  |  | 0.3 |  |  | 2.1 |  |  | 3.4 |  |  | 0.4 |  |  | 3.8 |  |
| Amortization of prior service credit | (0.4) |  |  | — |  |  | (0.4) |  |  | (0.4) |  |  | — |  |  | (0.4) |  |  | (0.4) |  |  | — |  |  | (0.4) |  |
| Total (credit) / expense for defined benefit plans | $ | (1.5) |  |  | $ | 9.4 |  |  | $ | 7.9 |  |  | $ | (2.8) |  |  | $ | 2.9 |  |  | $ | 0.1 |  |  | $ | (1.6) |  |  | $ | (0.3) |  |  | $ | (1.9) |  |
| In respect of defined contribution plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Total charge for defined contribution plans | $ | 2.1 |  |  | $ | 1.6 |  |  | $ | 3.7 |  |  | $ | 2.0 |  |  | $ | 1.7 |  |  | $ | 3.7 |  |  | $ | 2.1 |  |  | $ | 1.5 |  |  | $ | 3.6 |  |
| Total charge / (credit) for benefit plans | $ | 0.6 |  |  | $ | 11.0 |  |  | $ | 11.6 |  |  | $ | (0.8) |  |  | $ | 4.6 |  |  | $ | 3.8 |  |  | $ | 0.5 |  |  | $ | 1.2 |  |  | $ | 1.7 |  |
In accordance with ASC 715, defined benefit pension credit is split in the income statement, with $0.3 million (2022: $0.2 million; 2021: $0.4 million) of expenses recognized within sales, general and administrative expenses and a charge of $7.6 million (2022: $0.1 million credit; 2021: $2.3 million credit) recognized below operating income in the income statement. The following table shows other changes in plan assets and benefit obligations recognized in other comprehensive income during the years ended December 31:
| In millions | 2023 |  | 2022 |  | 2021 |
| Net actuarial gain | $ | 11.4 |  |  | $ | 8.2 |  |  | $ | 38.8 |  |
| Amortization of actuarial loss | 1.8 |  |  | 2.1 |  |  | 3.8 |  |
| Actuarial loss recognized due to settlement event | 8.9 |  |  | 2.0 |  |  | — |  |
| Amortization of prior service credit | (0.4) |  |  | (0.4) |  |  | (0.4) |  |
| Total recognized in other comprehensive income | 21.7 |  |  | 11.9 |  |  | 42.2 |  |
| Total recognized in net periodic benefit cost and other comprehensive income | $ | 13.8 |  |  | $ | 11.8 |  |  | $ | 44.1 |  |
The estimated net loss for defined benefit plans included in AOCI that will be recognized in net periodic benefit cost during 2024 is $1.0 million, consisting of amortization of net actuarial loss of $1.4 million, partially offset by amortization of prior service credit of $0.4 million. In accordance with ASC 715, recognition of all accumulated losses were triggered upon settlement of the U.S. plan. The following table shows the amounts included in AOCI that have not yet been recognized as components of net periodic benefit cost for the years ended December 31:
| In millions | 2023 |  | 2022 |
| Gross actuarial loss | $ | (88.1) |  |  | $ | (110.2) |  |
| Gross prior service credit | 10.6 |  |  | 11.0 |  |
| Total included in AOCI not yet recognized in the statement of income | $ | (77.5) |  |  | $ | (99.2) |  |
14. Pension Plans (continued) In September 2019, the U.K. Statistics Authority announced plans to reform the RPI inflation index. On November 25, 2020, the government and U.K. Statistics Authority confirmed these plans to reform the RPI index to bring it into line with the CPIH index from 2030, with no compensation for the holders of index-linked gilts. Inflation measured by the CPIH is consistently significantly lower than that measured by RPI, and, therefore, these plans imply a significant expected reduction in RPI inflation from 2030 onwards. As a result.we have taken a stepped approach and used different inflation rates pre and post 2030. The financial assumptions used in the calculations were:
|  | Projected Unit Credit Valuation |
|  | U.K. |  | U.S. |
|  | 2023 |  | 2022 |  | 2021 |  | 2023 |  | 2022 |  | 2021 |
|  | % |  | % |  | % |  | % |  | % |  | % |
| Discount rate | 4.50 |  |  | 4.80 |  |  | 1.90 |  |  | n/a |  | 5.10 |  |  | 2.70 |  |
| Expected return on assets | 4.80 |  |  | 5.60 |  |  | 3.30 |  |  | n/a |  | 4.70 |  |  | 2.50 |  |
| Pre-2030 |  |  |  |  |  |  |  |  |  |  |  |
| Retail Price Inflation | 3.10 |  |  | 3.20 |  |  | 3.30 |  |  | n/a |  | n/a |  | n/a |
| Consumer Price Inflation | 2.00 |  |  | 2.10 |  |  | 2.20 |  |  | n/a |  | n/a |  | n/a |
| Pension increases |  |  |  |  |  |  |  |  |  |  |  |
| Pre 6 April 1997 | 1.80 |  |  | 1.90 |  |  | 2.00 |  |  | n/a |  | n/a |  | n/a |
| 1997 - 2005 | 2.10 |  |  | 2.10 |  |  | 2.20 |  |  | n/a |  | n/a |  | n/a |
| Post 5 April 2005 | 1.60 |  |  | 1.70 |  |  | 1.80 |  |  | n/a |  | n/a |  | n/a |
| Post-2030 |  |  |  |  |  |  |  |  |  |  |  |
| Retail Price Inflation | 3.10 |  |  | 3.20 |  |  | 3.30 |  |  | n/a |  | n/a |  | n/a |
| Consumer Price Inflation | 3.00 |  |  | 3.10 |  |  | 3.20 |  |  | n/a |  | n/a |  | n/a |
| Pension increases |  |  |  |  |  |  |  |  |  |  |  |
| Pre 6 April 1997 | 2.30 |  |  | 2.40 |  |  | 2.50 |  |  | n/a |  | n/a |  | n/a |
| 1997 - 2005 | 2.90 |  |  | 3.00 |  |  | 3.10 |  |  | n/a |  | n/a |  | n/a |
| Post 5 April 2005 | 2.00 |  |  | 2.20 |  |  | 2.20 |  |  | n/a |  | n/a |  | n/a |
The discount rate used for the UK Plan represents the annualized yield based on a cash-flow matched methodology, with reference to an AA corporate bond spot curve and having regard to the duration of the Plan’s liabilities. The inflation rate is derived using a similar cash flow matched methodology as used for the discount rate but with regard to the difference between yields on fixed-interest and index-linked United Kingdom government gilts. The expected return on assets assumption is set with regard to the asset allocation and expected return on each asset class as of the balance sheet date. During 2023, the Plan's actuary was changed, enabling a more refined cashflow roll-forward to December 31, 2023, and providing the ability to allow for actual pension increase experience over the inter-valuation period more accurately. Due to this, an approximate 3% to 4% technical provisions basis difference was identified in valuation liabilities at April 5, 2021. As a result of the change in Plan actuary, we therefore have an experience gain coming through the UK figures at 31 December 2023.
|  | 2023 |  | 2022 |
| Other principal actuarial assumptions: | Years |  | Years |
| Life expectancy of male / female in the U.K. aged 65 at accounting date | 21.2 / 23.1 |  | 21.2 / 23.0 |
| Life expectancy of male / female in the U.K. aged 65 at 20 years after accounting date | 22.5 / 24.6 |  | 22.5 / 24.5 |
Investment strategies For the principal defined benefit plan in the Company and the U.K., the Luxfer Group Pension Plan, (the "Plan," as defined above), the assets are invested in a diversified range of asset classes and include matching assets (comprising fixed-interest and index-linked bonds and swaps) and growth assets (comprising all other assets). The Trustees of the Plan have formulated a de-risking strategy to help control the short-term risk of volatility associated with holding growth assets. The Trustees also monitor the cost of a buy-in to secure pensioner liabilities with an insurance company to ensure they and the Company are able to act if such an opportunity arises. 14. Pension Plans (continued) Risk exposures The U.K. plan currently has a long-term strategic target to hold 20 percent of assets in equity and other growth investments, with the intention of growing the value of assets relative to liabilities. The Company is at risk if the value of liabilities grows at a faster rate than the plans' assets, or if there is a significant fall in the value of these assets not matched by a fall in the value of liabilities. If any of these events occurred, it would be expected to lead to an increase in the Company's future cash contributions. Special events In 2021, the Company decided to terminate its U.S. Pension Plan. The Company completed the buyout of the U.S. plan in the first quarter of 2023. As a result, a final premium totaling $29.3 million was paid to settle the liabilities. Assets of $27.2 million were sold from the plan, resulting in a $2.1 million contribution from the Company to extinguish the liabilities from the plan in full. The fair value of plan assets were:
|  | 2023 |  | 2023 |  | 2023 |  | 2022 |  | 2022 |  | 2022 |
| In millions | U.K. |  | U.S. / other |  | Total |  | U.K. |  | U.S. / other |  | Total |
| Assets in active markets: |  |  |  |  |  |  |  |  |  |  |  |
| Equities and growth funds | $ | 65.7 |  |  | $ | — |  |  | $ | 65.7 |  |  | $ | 78.3 |  |  | $ | — |  |  | $ | 78.3 |  |
| Government bonds | 69.6 |  |  | — |  |  | 69.6 |  |  | 65.7 |  |  | — |  |  | 65.7 |  |
| Corporate bonds | 135.5 |  |  | — |  |  | 135.5 |  |  | 106.1 |  |  | 27.5 |  |  | 133.6 |  |
| Cash | 3.4 |  |  | — |  |  | 3.4 |  |  | 2.5 |  |  | 0.6 |  |  | 3.1 |  |
| Total fair value of plan assets | $ | 274.2 |  |  | $ | — |  |  | $ | 274.2 |  |  | $ | 252.6 |  |  | $ | 28.1 |  |  | $ | 280.7 |  |
We have taken the bid value of invested assets as at December 31, 2023 as supplied by Legal & General ('L&G'), the LGPP’s investment managers. As the L&G funds are weekly priced we have taken the price on the first dealing day of the New Year All investments, apart from cash, were classified as Level 2 in the fair value hierarchy as of December 31, 2023 and 2022. Cash is classified as Level 1 in the fair value hierarchy as of December 31, 2023 and 2022. The following benefit payments are expected to be paid by the plans for the years ended December 31 as follows:
| In millions | U.K. pension plans |  |
| 2024 | $ | 13.6 |  |  |
| 2025 | 14.4 |  |  |
| 2026 | 14.6 |  |  |
| 2027 | 14.5 |  |  |
| 2028 | 14.6 |  |  |
| Thereafter | 76.4 |  |  |
The estimated amount of employer deficit recovery contributions expected to be paid to the defined benefit pension plans for the year ending December 31, 2024, is nil (2023: nil actual employer contributions).

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