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EMPLOYEE BENEFIT PLANS | 12 Months Ended
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Jun. 30, 2022
Retirement Benefits [Abstract] |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Savings and Retirement Plans - The Company’s Savings and Retirement Plans include a U.S. defined contribution plan for employees primarily in the U.S. and international savings plans for employees in certain other countries. In the U.S., hourly and salary based employees are eligible to participate in the plan after 90 days of service and the Company matches 100% of employee contributions up to 6.0% of employee compensation. In addition, the Company makes contributions to the plan on behalf of employees determined by their age and compensation. During fiscal 2022, 2021 and 2020, the defined contribution expense for Coty Inc. for the U.S. defined contribution plan was $13.6, $15.8 and $20.5, respectively, and the defined contribution expense for the international savings plans was $9.7, $12.0 and $14.1, respectively. Defined contribution expense includes amounts related to discontinued operations, which are not material for any period. Pension Plans - The Company sponsors contributory and noncontributory defined benefit pension plans covering certain U.S. and international employees primarily in France, Germany and Switzerland. Participants in the U.S. defined benefit pension plan no longer accrue benefits. The Company measures defined benefit plan assets and obligations as of the date of the Company’s fiscal year-end. The Company’s defined benefit pension plans are funded primarily through contributions from the Company after consideration of recommendations from the pension plans’ independent actuaries and are funded at levels sufficient to comply with local requirements. Settlements and Curtailments for Pension Plans As part of the Turnaround Plan, the Company concluded that restructuring actions resulted in a significant reduction of future services of active employees in certain of the Company’s non-U.S. pension plans. As a result, the Company recognized curtailment gains of $1.3, $6.9 and $14.1 during the years ended June 30, 2022, 2021 and 2020, respectively. Additionally, the Company recognized settlement losses of $1.8 and $3.8, of which $1.4 and $2.3 were related to restructuring actions during the years ended June 30 2022 and June 30, 2021, respectively. The impact of settlement and curtailment activity on the current and prior comparative periods is included in Other expense, net in the Consolidated Statements of Operations. Plan Amendments for Pension Plans - There were no Plan amendments as of June 30, 2022. Other Post-Employment Benefit Plans (“OPEB”) - The Company provides certain post-employment health and life insurance benefits for certain employees and spouses principally in the U.S. and France if certain age and service requirements are met. Estimated benefits to be paid by the Company are expensed over the service period of each employee based on calculations performed by an independent actuary. In addition, the Company has a supplemental retirement plan and a termination benefit plan for selected salaried employees. Settlements and Curtailments for OPEB Plans - As part of the Turnaround Plan, the Company concluded that restructuring actions resulted in a significant reduction of future services of active employees in certain of the Company’s U.S. OPEB Plans. The impact of settlement and curtailment activity on the current and prior comparative periods is included in Other income, net in the Consolidated Statements of Operations. All of the disclosures below include amounts related to discontinued operations through November 30, 2020, except when otherwise noted. The aggregate reconciliation of the projected benefit obligations, plan assets, funded status and amounts recognized in the Company’s Consolidated Financial Statements related to the Company’s pension plans and other post-employment benefit plans is presented below:
| Pension Plans |  | Other Post-Employment Benefits |  | Total
| U.S. |  | International |  |
| 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021
Change in benefit obligation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligation—July 1 | $ | 18.9 |  |  | $ | 18.5 |  |  | $ | 515.9 |  |  | $ | 753.2 |  |  | $ | 50.2 |  |  | $ | 53.7 |  |  | $ | 585.0 |  |  | $ | 825.4 |
Service cost | — |  |  | — |  |  | 9.1 |  |  | 18.4 |  |  | 0.8 |  |  | 1.0 |  |  | 9.9 |  |  | 19.4 |
Interest cost | 0.5 |  |  | 0.5 |  |  | 5.9 |  |  | 8.4 |  |  | 0.8 |  |  | 1.3 |  |  | 7.2 |  |  | 10.2 |
Plan participants’ contributions | — |  |  | — |  |  | 1.5 |  |  | 4.3 |  |  | 0.2 |  |  | 0.2 |  |  | 1.7 |  |  | 4.5 |
Benefits paid | (2.1) |  |  | (0.6) |  |  | (15.1) |  |  | (16.2) |  |  | (2.2) |  |  | (2.3) |  |  | (19.4) |  |  | (19.1) |
New employees transfers in | — |  |  | — |  |  | 4.2 |  |  | 29.7 |  |  | — |  |  | — |  |  | 4.2 |  |  | 29.7 |
Premiums paid | — |  |  | — |  |  | (0.5) |  |  | (1.3) |  |  | — |  |  | — |  |  | (0.5) |  |  | (1.3) |
Pension curtailment | — |  |  | — |  |  | (1.6) |  |  | (6.6) |  |  | — |  |  | — |  |  | (1.6) |  |  | (6.6) |
Acquisitions/Divestitures | — |  |  | — |  |  | — |  |  | (303.4) |  |  | — |  |  | (0.6) |  |  | — |  |  | (304.0) |
Pension settlement | — |  |  | — |  |  | (39.3) |  |  | (47.0) |  |  | — |  |  | — |  |  | (39.3) |  |  | (47.0) |
Actuarial loss (gain) | (2.8) |  |  | 0.5 |  |  | (86.8) |  |  | 35.4 |  |  | (10.9) |  |  | (2.8) |  |  | (100.5) |  |  | 33.1 |
Plan combinations | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Effect of exchange rates | — |  |  | — |  |  | (49.6) |  |  | 41.0 |  |  | (0.1) |  |  | (0.3) |  |  | (49.7) |  |  | 40.7 |
Benefit obligation—June 30 | $ | 14.5 |  |  | $ | 18.9 |  |  | $ | 343.7 |  |  | $ | 515.9 |  |  | $ | 38.8 |  |  | $ | 50.2 |  |  | $ | 397.0 |  |  | $ | 585.0 |
Change in plan assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets—July 1 | $ | — |  |  | $ | — |  |  | $ | 159.1 |  |  | $ | 274.1 |  |  | $ | — |  |  | $ | 0.5 |  |  | $ | 159.1 |  |  | $ | 274.6 |
Actual return on plan assets | — |  |  | — |  |  | (11.6) |  |  | 24.6 |  |  | — |  |  | — |  |  | (11.6) |  |  | 24.6 |
Employer contributions | 2.1 |  |  | 0.6 |  |  | 15.7 |  |  | 25.9 |  |  | 2.0 |  |  | 2.0 |  |  | 19.8 |  |  | 28.5 |
Plan participants’ contributions | — |  |  | — |  |  | 1.5 |  |  | 4.3 |  |  | 0.2 |  |  | 0.2 |  |  | 1.7 |  |  | 4.5 |
Benefits paid | (2.1) |  |  | (0.6) |  |  | (15.1) |  |  | (16.2) |  |  | (2.2) |  |  | (2.3) |  |  | (19.4) |  |  | (19.1) |
New employees transfers in | — |  |  | — |  |  | 4.2 |  |  | 29.7 |  |  | — |  |  | — |  |  | 4.2 |  |  | 29.7 |
Premiums paid | — |  |  | — |  |  | (0.5) |  |  | (1.3) |  |  | — |  |  | — |  |  | (0.5) |  |  | (1.3) |
Plan settlements | — |  |  | — |  |  | (39.1) |  |  | (46.5) |  |  | — |  |  | — |  |  | (39.1) |  |  | (46.5) |
Acquisitions/Divestitures | — |  |  | — |  |  | — |  |  | (148.6) |  |  | — |  |  | (0.4) |  |  | — |  |  | (149.0) |
Effect of exchange rates | — |  |  | — |  |  | (12.7) |  |  | 13.1 |  |  | — |  |  | — |  |  | (12.7) |  |  | 13.1 |
Fair value of plan assets—June 30 | — |  |  | — |  |  | 101.5 |  |  | 159.1 |  |  | — |  |  | — |  |  | 101.5 |  |  | 159.1 |
Funded status—June 30 | $ | (14.5) |  |  | $ | (18.9) |  |  | $ | (242.2) |  |  | $ | (356.8) |  |  | $ | (38.8) |  |  | $ | (50.2) |  |  | $ | (295.5) |  |  | $ | (425.9) |
With respect to the Company’s pension plans and other post-employment benefit plans, amounts recognized in the Company’s Consolidated Balance Sheets as of June 30, 2022 and 2021, are presented below (this table excludes discontinued operations):
| Pension Plans |  | Other Post-Employment Benefits |  | Total
| U.S. |  | International |  |
| 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021
Noncurrent assets | $ | — |  |  | $ | — |  |  | $ | 1.4 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1.4 |  |  | $ | — |
Current liabilities | (1.3) |  |  | (2.0) |  |  | (0.8) |  |  | (0.7) |  |  | (2.6) |  |  | (2.6) |  |  | (4.7) |  |  | (5.3) |
Noncurrent liabilities | (13.2) |  |  | (16.9) |  |  | (242.8) |  |  | (356.1) |  |  | (36.2) |  |  | (47.6) |  |  | (292.2) |  |  | (420.6) |
Funded status | (14.5) |  |  | (18.9) |  |  | (242.2) |  |  | (356.8) |  |  | (38.8) |  |  | (50.2) |  |  | (295.5) |  |  | (425.9) |
AOC(L)/I | 3.5 |  |  | 0.3 |  |  | 39.8 |  |  | (31.2) |  |  | 17.6 |  |  | 7.7 |  |  | 60.9 |  |  | (23.2) |
Net amount recognized | $ | (11.0) |  |  | $ | (18.6) |  |  | $ | (202.4) |  |  | $ | (388.0) |  |  | $ | (21.2) |  |  | $ | (42.5) |  |  | $ | (234.6) |  |  | $ | (449.1) |
The projected benefit obligation actuarial gain of $89.6 for the fiscal year ended June 30, 2022 was primarily driven by a significant increase in discount rates since fiscal year ended June 30, 2021. The actuarial gain in the projected benefit obligation was partially offset by the asset loss of $16.0 as a result of worse than expected asset performance, particularly in Switzerland and Germany. For the fiscal year ended June 30, 2021, the projected benefit obligation actuarial loss of $35.9 was primarily driven by a decrease in discount rates since June 30, 2020. The actuarial loss was the cumulative impact of the decrease in discount rates at (i) the remeasurement as of November 30, 2020 due to the Wella divestiture and (ii) the measurement as of fiscal year ended June 30, 2021. The actuarial loss in the projected benefit obligation was partially offset by the asset gain of $18.3 as a result of better than expected asset performance, particularly in Germany. During fiscal 2022 the retiree medical and life insurance plan experienced a gain on the liability of $10.9 primarily driven by the increase in the discount rate. Retirees waiving medical coverage, updated medical trend, and a change in the plan participation assumption for active participants to 50% HSA and 50% OAP also contributed to the gain. The gain was slightly offset due to updated claims and mortality assumption changes. During fiscal 2021 the retiree medical and life insurance plan experienced a gain on the liability of $2.8 primarily due to retirees waiving medical coverage this year that had coverage last year, and updated claims, mortality and discount rate assumptions. The gain was slightly offset due to updated medical trend assumptions. The accumulated benefit obligation for the U.S. defined benefit pension plans was $14.5 and $18.9 as of June 30, 2022 and 2021, respectively. The accumulated benefit obligation for international defined benefit pension plans was $333.0 and $498.4 as of June 30, 2022 and 2021, respectively. Pension plans with accumulated benefit obligations in excess of plan assets and projected benefit obligations in excess of plan assets are presented below:
| Pension plans with accumulated benefit obligations in excess of plan assets |  | Pension plans with projected benefit obligations in excess of plan assets
| U.S. |  | International |  | U.S. |  | International
| 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021
Projected benefit obligation | $ | 14.5 |  |  | $ | 18.9 |  |  | $ | 328.8 |  |  | $ | 493.4 |  |  | $ | 14.5 |  |  | $ | 18.9 |  |  | $ | 328.8 |  |  | $ | 501.1 |
Accumulated benefit obligation | 14.5 |  |  | 18.9 |  |  | 319.0 |  |  | 479.3 |  |  | 14.5 |  |  | 18.9 |  |  | 319.0 |  |  | 498.4 |
Fair value of plan assets | — |  |  | — |  |  | 85.3 |  |  | 138.0 |  |  | — |  |  | — |  |  | 85.3 |  |  | 144.7 |
Net Periodic Benefit Cost The components of net periodic benefit cost for pension plans and other post-employment benefit plans recognized in the Consolidated Statements of Operations are presented below:
| Year Ended June 30,
| Pension Plans |  | Other Post- Employment Benefits |  |  |  |  |  |
| U.S. |  | International |  |  | Total
| 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Service cost | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 9.1 |  |  | $ | 18.4 |  |  | $ | 33.1 |  |  | $ | 0.8 |  |  | $ | 1.0 |  |  | $ | 1.1 |  |  | $ | 9.9 |  |  | $ | 19.4 |  |  | $ | 34.2 |
Interest cost | 0.5 |  |  | 0.5 |  |  | 0.6 |  |  | 5.9 |  |  | 8.4 |  |  | 9.1 |  |  | 0.8 |  |  | 1.3 |  |  | 1.7 |  |  | 7.2 |  |  | 10.2 |  |  | 11.4 |
Expected return on plan assets | — |  |  | — |  |  | — |  |  | (4.5) |  |  | (6.3) |  |  | (8.4) |  |  | — |  |  | — |  |  | — |  |  | (4.5) |  |  | (6.3) |  |  | (8.4) |
Amortization of prior service (credit) cost | — |  |  | — |  |  | — |  |  | (0.1) |  |  | (0.3) |  |  | (0.8) |  |  | (0.3) |  |  | (3.3) |  |  | (5.9) |  |  | (0.4) |  |  | (3.6) |  |  | (6.7) |
Amortization of net (gain) loss | 0.4 |  |  | 1.5 |  |  | 0.7 |  |  | (0.2) |  |  | (0.2) |  |  | (0.1) |  |  | (0.2) |  |  | (0.1) |  |  | (0.1) |  |  | — |  |  | 1.2 |  |  | 0.5 |
Settlements (gain) loss recognized | — |  |  | — |  |  | — |  |  | 1.8 |  |  | 3.8 |  |  | (0.2) |  |  | — |  |  | — |  |  | — |  |  | 1.8 |  |  | 3.8 |  |  | (0.2) |
Curtailment (gain) loss recognized | — |  |  | — |  |  | — |  |  | (1.3) |  |  | (6.9) |  |  | (14.1) |  |  | — |  |  | — |  |  | (0.8) |  |  | (1.3) |  |  | (6.9) |  |  | (14.9) |
Net periodic benefit cost | $ | 0.9 |  |  | $ | 2.0 |  |  | $ | 1.3 |  |  | $ | 10.7 |  |  | $ | 16.9 |  |  | $ | 18.6 |  |  | $ | 1.1 |  |  | $ | (1.1) |  |  | $ | (4.0) |  |  | $ | 12.7 |  |  | $ | 17.8 |  |  | $ | 15.9 |
Net periodic benefit costs include amounts related to discontinued operations of $0.0, $6.2, and $14.4 for the years ended June 30, 2022, 2021 and 2020, respectively. Pre-tax amounts recognized in AOC(L)/I, which have not yet been recognized as a component of net periodic benefit cost are presented below:
| Pension Plans |  | Other Post-Employment Benefits |  |  |  |
| U.S. |  | International |  |  | Total
| 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021
Net actuarial (loss) gain | $ | 3.5 |  |  | $ | 0.3 |  |  | $ | 39.0 |  |  | $ | (32.1) |  |  | $ | 17.1 |  |  | $ | 6.9 |  |  | $ | 59.6 |  |  | $ | (24.9) |
Prior service credit (cost) | — |  |  | — |  |  | 0.8 |  |  | 0.9 |  |  | 0.5 |  |  | 0.8 |  |  | 1.3 |  |  | 1.7 |
Total recognized in AOC(L)/I | $ | 3.5 |  |  | $ | 0.3 |  |  | $ | 39.8 |  |  | $ | (31.2) |  |  | $ | 17.6 |  |  | $ | 7.7 |  |  | $ | 60.9 |  |  | $ | (23.2) |
Changes in plan assets and benefit obligations recognized in OCI/(L) during the fiscal year are presented below:
| Pension Plans |  | Other Post-Employment Benefits |  |  |  |
| U.S. |  | International |  |  | Total
| 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021
Net actuarial (loss) gain | $ | 2.8 |  |  | $ | (0.5) |  |  | $ | 71.1 |  |  | $ | (17.1) |  |  | $ | 10.9 |  |  | $ | 2.8 |  |  | $ | 84.8 |  |  | $ | (14.8) |
Amortization or curtailment recognition of prior service (credit) cost | — |  |  | — |  |  | (0.1) |  |  | (0.7) |  |  | (0.3) |  |  | (3.3) |  |  | (0.4) |  |  | (4.0) |
Recognized net actuarial (gain) loss | 0.4 |  |  | 1.5 |  |  | 1.7 |  |  | 3.6 |  |  | (0.2) |  |  | (0.1) |  |  | 1.9 |  |  | 5.0 |
Prior service credit (cost) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Effect of exchange rates | — |  |  | — |  |  | (1.7) |  |  | 0.1 |  |  | (0.5) |  |  | 0.3 |  |  | (2.2) |  |  | 0.4 |
Total recognized in OCI/(L) | $ | 3.2 |  |  | $ | 1.0 |  |  | $ | 71.0 |  |  | $ | (14.1) |  |  | $ | 9.9 |  |  | $ | (0.3) |  |  | $ | 84.1 |  |  | $ | (13.4) |
Changes in plan assets and benefit obligations recognized in OCI/(L) excludes $(19.2) of discontinued operations for the year ended June 30, 2021. Pension and Other Post-Employment Benefit Assumptions The weighted-average assumptions used to determine the Company’s projected benefit obligation above are presented below:
| Pension Plans |  | Other Post-Employment Benefits
| U.S. |  | International |
| 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021
Discount rates | 4.0%-4.7% |  | 2.4%-2.6% |  | 2.3%-3.4% |  | 0.3%-1.6% |  | 2.9%-4.7% |  | 1.5%-2.8%
Future compensation growth rates | N/A |  | N/A |  | 1.1%-3.2% |  | 1.0%-2.5% |  | N/A |  | N/A
The weighted-average assumptions used to determine the Company’s net periodic benefit cost in fiscal 2022, 2021 and 2020 are presented below:
| Pension Plans |  | Other Post- Employment Benefits
| U.S. |  | International |
| 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Discount rates | 2.4%-2.6% |  | 2.5%-2.8% |  | 3.2%-3.6% |  | 0.3%-1.6% |  | 0.4%-6.7% |  | 0.4%-8.4% |  | 1.5%-2.8% |  | 1.7%-2.8% |  | 1.7%-3.5%
Future compensation growth rates | N/A |  | N/A |  | N/A |  | 1.0%-2.5% |  | 1.5%-6.7% |  | 1.0%-5.8% |  | N/A |  | N/A |  | N/A
Expected long-term rates of return on plan assets | N/A |  | N/A |  | N/A |  | 1.3%-3.8% |  | 1.0%-5.8% |  | 1.4%-8.9% |  | N/A |  | N/A |  | N/A
The health care cost trend rate assumptions have a significant effect on the amounts reported.
| Year Ended June 30,
| 2022 |  | 2021 |  | 2020
Health care cost trend rate assumed for next year | 6.7% |  | 7.5%-7.6% |  | 6.8%-7.6%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.5% |  | 4.5% |  | 5.0%
Year that the rate reaches the ultimate trend rate | 2029 |  | 2027 |  | 2026
Pension Plan Investment Policy The Company’s investment policies and strategies for plan assets are to achieve the greatest return consistent with the fiduciary character of the plan and to maintain a level of liquidity that is sufficient to meet the need for timely payment of benefits. The goals of the investment managers include minimizing risk and achieving growth in principal value so that the purchasing power of such value is maintained with respect to the rate of inflation. The pension plan’s return on assets is based on management’s expectations of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, management considers historical and expected returns for the assets in which the plan is invested, as well as current economic and market conditions. The asset allocation decision includes consideration of future retirements, lump-sum elections, growth in the number of participants, the Company’s contributions and cash flow. These actual characteristics of the plan place certain demands upon the level, risk and required growth of trust assets. Actual asset allocation is regularly reviewed and periodically rebalanced to the strategic allocation when considered appropriate. The target asset allocations for the Company’s pension plans as of June 30, 2022 and 2021, by asset category are presented below:
|  |  | % of Plan Assets at Year Ended
| Target |  | 2022 |  | 2021
Equity securities | 40% |  | 38% |  | 42%
Fixed income securities | 45% |  | 42% |  | 36%
Cash and other investments | 15% |  | 20% |  | 22%
Fair Value of Plan Assets The international pension plan assets that the Company measures at fair value on a recurring basis, based on the fair value hierarchy as described in Note 2—Summary of Significant Accounting Policies, as of June 30, 2022 and 2021 are presented below:
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021
Equity securities | $ | 32.5 |  |  | $ | 50.7 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 32.5 |  |  | $ | 50.7 |
Fixed income securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate securities | 33.8 |  |  | 33.0 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 33.8 |  |  | 33.0 |
Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 1.6 |  |  | 0.2 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1.6 |  |  | 0.2 |
Insurance contracts and other | — |  |  | — |  |  | — |  |  | — |  |  | 33.6 |  |  | 75.2 |  |  | 33.6 |  |  | 75.2 |
Total pension plan assets | $ | 67.9 |  |  | $ | 83.9 |  |  | $ | — |  |  | $ | — |  |  | $ | 33.6 |  |  | $ | 75.2 |  |  | $ | 101.5 |  |  | $ | 159.1 |
The following is a description of the valuation methodologies used for plan assets measured at fair value: Equity securities-The fair values reflect the closing price reported on a major market where the individual securities are traded. These investments are classified within Level 1 of the valuation hierarchy. Corporate securities-The fair values are based on a compilation of primarily observable market information or a broker quote in a non-active market. These investments are classified within Level 1 of the valuation hierarchy. Cash and cash equivalents-The carrying amount approximates fair value, primarily because of the short maturity of cash equivalent instruments. These investments are classified within Level 1 of the valuation hierarchy. Insurance contracts and other- Includes contracts issued by insurance companies and other investments that are not publicly traded. These investments are generally classified as Level 3 as there are neither quoted prices nor other observable inputs for pricing. Insurance contracts are valued at cash surrender value, which approximates the contract fair value. Other Level 3 plan assets include real estate and other alternative investment funds requiring inputs that cannot be readily derived from observable market data due to the infrequency with which the underlying assets trade. The Company sponsors a qualified defined benefit pension plan for all eligible Swiss employees. Retirement benefits are provided based on employees’ years of service and earnings, or in accordance with applicable employee regulations. Consistent with typical Swiss practice, the pension plan is funded through a guaranteed insurance contract with an insurance company (“IC”). The IC is responsible for the investment strategy of the insurance premiums that the Company submits and does not hold individual assets per participating employer. Assets are invested in accordance with the IC’s own strategies and risk assessments. Under the terms of the contract, the interest rate as well as the capital value is guaranteed for each participant, with the IC assuming any risk to the value of the underlying assets. The IC is a member of a security fund, whose purpose is to cover any shortfall in the event they are not able to fulfill its contractual agreements. The plan assets of the Swiss plan are included in the Level 3 valuation. The Company also sponsors qualified defined benefit pension plans for certain eligible German employees. The Company’s German pension plans are partially funded with plan assets held in a Contractual Trust Arrangement, under which Company assets have been irrevocably transferred to a registered association for the exclusive purpose of securing and funding pension obligations in Germany. The association invests primarily in publicly tradable equity and fixed income securities, using a funding strategy that is reviewed on a regular basis. Plan assets are also held in the Company’s other non-U.S. defined benefit pension plans. The other non-U.S. defined benefit pension plans provide benefits primarily based on earnings and years of service and are funded in compliance with local laws and practices. The plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification and investment return over the long term at an acceptable level of risk. The reconciliations of Level 3 plan assets measured at fair value in fiscal 2022 and 2021 are presented below:
| June 30, 2022 |  | June 30, 2021
Insurance contracts: |  |  |
Fair value—July 1 | $ | 75.2 |  |  | $ | 148.0 |
Return on plan assets | (7.5) |  |  | 3.6 |
Purchases, sales and settlements, net | (31.6) |  |  | (82.4) |
Effect of exchange rates | (2.5) |  |  | 6.0 |
Fair value—June 30 | $ | 33.6 |  |  | $ | 75.2 |
Contributions The Company plans to contribute approximately $1.3 to its remaining U.S. pension plan and expects to contribute approximately $20.6 and $2.5 to its international pension and other post-employment benefit plans, respectively, during fiscal 2023. Estimated Future Benefit Payments Expected benefit payments, which reflect expected future service, as appropriate, are presented below:
| Pension Plans |  | Other Post-Employment Benefits |  | Total
Fiscal Year Ending June 30, | U.S. |  | International |  |
2023 | $ | 1.3 |  |  | $ | 20.2 |  |  | $ | 2.5 |  |  | $ | 24.0 |
2024 | 1.3 |  |  | 17.0 |  |  | 2.7 |  |  | 21.0 |
2025 | 1.2 |  |  | 17.1 |  |  | 2.9 |  |  | 21.2 |
2026 | 1.2 |  |  | 17.8 |  |  | 2.9 |  |  | 21.9 |
2027 | 1.2 |  |  | 18.1 |  |  | 3.0 |  |  | 22.3 |
2028 - 2032 | 5.4 |  |  | 95.1 |  |  | 15.7 |  |  | 116.2 |

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