EnerSys
For the period ended Mar 31, 2025. Filed May 21, 2025.
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FY2025 · Filed May 21, 2025
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16. Retirement Plans
- Retirement Plans
Defined Benefit Plans
The Company sponsors several retirement and pension plans covering eligible salaried and hourly employees. The Company uses a measurement date of March 31 for its pension plans.
Net periodic pension cost for fiscal 2025, 2024 and 2023, includes the following components:
| United States Plans · International Plans | ||||||
|---|---|---|---|---|---|---|
| Fiscal year ended March 31, | Fiscal year ended March 31, | |||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |
| Service cost | $— | $— | $— | $954 | $884 | $918 |
| Interest cost | 491 | 657 | 582 | 2,501 | 2,215 | 1,715 |
| Expected return on plan assets | (141) | (424) | (455) | (1,421) | (1,244) | (2,005) |
| Amortization and deferral | (61) | — | — | 582 | 326 | 478 |
| Settlement gain | (1,548) | — | — | — | — | — |
| Net periodic benefit cost | $(1,259) | $233 | $127 | $2,616 | $2,181 | $1,106 |
The following table sets forth a reconciliation of the related benefit obligation, plan assets, and accrued benefit costs related to the pension benefits provided by the Company for those employees covered by defined benefit plans:
| United States Plans · International Plans | |||||||
|---|---|---|---|---|---|---|---|
| March 31, · March 31, | |||||||
| 2025 · 2024 · 2025 · 2024 | |||||||
| Change in projected benefit obligation | |||||||
| Benefit obligation at the beginning of the period | $13,313 | $14,056 | $55,806 | $51,718 | |||
| Service cost | — | — | 954 | 884 | |||
| Interest cost | 491 | 657 | 2,501 | 2,215 | |||
| Benefits paid, inclusive of plan expenses | (635) | (865) | (2,759) | (2,353) | |||
| Plan curtailments and settlements | (13,338) | — | — | — | |||
| Plan combinations | — | — | — | 1,835 | |||
| Actuarial (gains) losses | 169 | (535) | (3,601) | 633 | |||
| Foreign currency translation adjustment | — | 901 | 874 | ||||
| Benefit obligation at the end of the period | $— | $13,313 | $53,802 | $55,806 | |||
| Change in plan assets | ||||
|---|---|---|---|---|
| Fair value of plan assets at the beginning of the period | $15,153 | $13,975 | $32,563 | $40,104 |
| Actual return on plan assets | (23) | 2,043 | (2,075) | (7,717) |
| Employer contributions | — | — | 1,720 | 1,655 |
| Benefits paid, inclusive of plan expenses | (635) | (865) | (2,759) | (2,353) |
| Plan curtailments and settlements | (13,338) | — | — | — |
| Foreign currency translation adjustment | — | — | 715 | 874 |
| Fair value of plan assets at the end of the period | $1,157 | $15,153 | $30,164 | $32,563 |
| Funded status surplus (deficit) | $1,157 | $1,840 | $(23,638) | $(23,243) |
| March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Amounts recognized in the Consolidated Balance Sheets consist of: | ||
| Non-current assets | $4,409 | $5,606 |
| Accrued expenses | (1,583) | (1,497) |
| Other liabilities | (25,307) | (25,512) |
| Funded status deficit | $(22,481) | $(21,403) |
The following table represents pension components (before tax) and related changes (before tax) recognized in AOCI for the Company’s pension plans for the years ended March 31, 2025, 2024 and 2023:
| Fiscal year ended March 31, | |||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| Amounts recorded in AOCI before taxes: | |||
| Prior service cost | $(43) | $(85) | $(128) |
| Net loss | (11,145) | (9,590) | (2,307) |
| Net amount recognized | $(11,188) | $(9,675) | $(2,435) |
The following table represents changes in plan assets and benefit obligations recognized in AOCI for the Company’s pension plans for the years ended March 31, 2025, 2024 and 2023:
| Fiscal year ended March 31, | |||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| Changes in plan assets and benefit obligations: | |||
| New prior service cost | $— | $— | $— |
| Net loss (gain) arising during the year | 228 | 7,439 | (10,352) |
| Effect of exchange rates on amounts included in AOCI | 260 | 127 | (957) |
| Amounts recognized as a component of net periodic benefit costs: | |||
| Amortization of prior service cost | (42) | (42) | (41) |
| Amortization or settlement recognition of net loss | 1,069 | (284) | (438) |
| Total recognized in other comprehensive (income) loss | $1,515 | $7,240 | $(11,788) |
The amounts included in AOCI as of March 31, 2025 that are expected to be recognized as components of net periodic pension cost (before tax) during the next twelve months are as follows:
| Prior service cost | $(42) |
|---|---|
| Net loss | (567) |
| Net amount expected to be recognized | $(609) |
The accumulated benefit obligation related to all defined benefit pension plans and information related to unfunded and underfunded defined benefit pension plans at the end of each fiscal year are as follows:
| United States Plans · International Plans | ||||
|---|---|---|---|---|
| March 31, | March 31, | |||
| 2025 | 2024 | 2025 | 2024 | |
| All defined benefit plans: | ||||
| Accumulated benefit obligation | $— | $13,313 | $51,690 | $53,169 |
| Unfunded defined benefit plans: | ||||
| Projected benefit obligation | $— | $— | $26,871 | $27,009 |
| Accumulated benefit obligation | — | — | 24,787 | 24,930 |
| Defined benefit plans with a projected benefit obligation in excess of the fair value of plan assets: | ||||
| Projected benefit obligation | $— | $— | $27,214 | $27,009 |
| Fair value of plan assets | — | — | 325 | — |
| Defined benefit plans with an accumulated benefit obligation in excess of the fair value of plan assets: | ||||
| Projected benefit obligation | $— | $— | $26,871 | $27,009 |
| Accumulated benefit obligation | — | — | 24,787 | 24,930 |
| Fair value of plan assets | — | — | — | — |
Assumptions
Significant assumptions used to determine the net periodic benefit cost for the U.S. and International plans were as follows:
| United States Plans · International Plans | ||||||
|---|---|---|---|---|---|---|
| Fiscal year ended March 31, | Fiscal year ended March 31, | |||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |
| Discount rate | 5.2% | 4.9% | 3.7% | 3.8%-5.3% | 3.5%-6.0% | 1.5%-5.4% |
| Expected return on plan assets | 3.25 | 5.5 | 5.5 | 4.8-5 | 4-4.7 | 3.1-5.3 |
| Rate of compensation increase | N/A | N/A | N/A | 2.5-4.5 | 2.3-4.5 | 1.8-5.5 |
N/A = not applicable
Significant assumptions used to determine the projected benefit obligations for the U.S. and International plans were as follows:
| United States Plans · International Plans | ||||
|---|---|---|---|---|
| March 31, | March 31, | |||
| 2025 | 2024 | 2025 | 2024 | |
| Discount rate | N/A | 5.2% | 3.3%-5.9% | 3.8%-5.3% |
| Rate of compensation increase | N/A | N/A | 2.0-4.5 | 2.5-4.5 |
N/A = not applicable
The United States plans do not include compensation in the formula for determining the pension benefit as it is based solely on years of service.
The expected long-term rate of return for the Company’s pension plan assets is based upon the target asset allocation and is determined using forward looking assumptions in the context of historical returns and volatilities for each asset class, as well as correlations among asset classes. The Company evaluates the rate of return assumptions for each of its plans on an annual basis.
Pension Plan Investment Strategy
The US plan has been terminated during fiscal 2025. Once all expenses associated with the plan termination have been paid, any excess cash will be returned to the company. In fiscal 2024, the UK plan entered in an annuity insurance contract and now the UK plan is fully insured.
The following table represents the Company's pension plan investments measured at fair value as of March 31, 2025 and 2024 and the basis for that measurement:
| United States Plans | International Plans | |||||||
|---|---|---|---|---|---|---|---|---|
| Total FairValueMeasurement | Quoted PriceIn ActiveMarketsfor IdenticalAssets(Level 1) | SignificantOtherObservableInputs(Level 2) | SignificantUnobservableInputs(Level 3) | Total FairValueMeasurement | Quoted PriceIn ActiveMarketsfor IdenticalAssets(Level 1) | SignificantOtherObservableInputs(Level 2) | SignificantUnobservableInputs(Level 3) | |
| Asset category: | ||||||||
| Cash and cash equivalents | $1,157 | $1,157 | $— | $— | $3,252 | $3,252 | $— | $— |
| Equity securities | ||||||||
| US(a) | — | — | — | — | — | — | — | — |
| International(b) | — | — | — | — | — | — | — | — |
| Fixed income(c) | — | — | — | — | 324 | — | 324 | — |
| Other investments(d) | — | — | — | — | 26,588 | — | — | 26,588 |
| Total | $1,157 | $1,157 | $— | $— | $30,164 | $3,252 | $324 | $26,588 |
| United States Plans | International Plans | |||||||
|---|---|---|---|---|---|---|---|---|
| Total FairValueMeasurement | Quoted PriceIn ActiveMarketsfor IdenticalAssets(Level 1) | SignificantOtherObservableInputs(Level 2) | SignificantUnobservableInputs(Level 3) | Total FairValueMeasurement | Quoted PriceIn ActiveMarketsfor IdenticalAssets(Level 1) | SignificantOtherObservableInputs(Level 2) | SignificantUnobservableInputs(Level 3) | |
| Asset category: | ||||||||
| Cash and cash equivalents | $5,473 | $5,473 | $— | $— | $3,752 | $3,752 | $— | $— |
| Equity securities | ||||||||
| US(a) | — | — | — | — | — | — | — | — |
| International(b) | — | — | — | — | — | — | — | — |
| Fixed income(c) | 9,680 | 9,680 | — | — | 314 | — | 314 | — |
| Other investments(d) | — | — | — | — | 28,497 | — | — | 28,497 |
| Total | $15,153 | $15,153 | $— | $— | $32,563 | $3,752 | $314 | $28,497 |
The fair values presented above were determined based on valuation techniques to measure fair value as discussed in Note 1.
(a)US equities include companies that are well diversified by industry sector and equity style (i.e., growth and value strategies). Active and passive management strategies are employed. Investments are primarily in large capitalization stocks and, to a lesser extent, mid- and small-cap stocks.
(b)International equities are invested in companies that are traded on exchanges outside the U.S. and are well diversified by industry sector, country and equity style. Active and passive strategies are employed. The vast majority of the investments are made in companies in developed markets with a small percentage in emerging markets.
(c)Fixed income consists primarily of investment grade bonds from diversified industries.
(d)Other investments consists of a buy-in annuity insurance contract. The fair value of the buy-in policy is set equal to the value of the obligations as determined by the actuary. This value is considered Level 3 due to the use of the significant unobservable inputs.
Level 3 Rollforward
The following presents our Level 3 Rollforward for our defined pension plan assets:
| Beginning of year balance as of March 31, 2024 | $28,497 |
|---|---|
| Actual return on plan assets, relating to assets still held at the reporting date | $(1,511) |
| Purchases | $(1,024) |
| Change due to exchange rate changes | $626 |
| End of year balance as of March 31, 2025 | $26,588 |
The Company expects to make cash contributions of approximately $1,616 to its pension plans in fiscal 2026.
Estimated future benefit payments under the Company’s pension plans are as follows:
| 2026 | $2,588 |
| 2027 | 2,468 |
| 2028 | 3,014 |
| 2029 | 3,579 |
| 2030 | 3,965 |
| Years 2031-2035 | 20,097 |
Defined Contribution Plan
The Company maintains defined contribution plans primarily in the U.S. and U.K. eligible employees can contribute a portion of their pre-tax and / or after-tax income in accordance with plan guidelines and the Company will make contributions based on the employees’ eligible pay and /or will match a percentage of the employee contributions up to certain limits. Matching contributions charged to expense for the fiscal years ended March 31, 2025, 2024 and 2023 were $22,031, $22,819 and $20,933, respectively.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.