Company's assumed ultimate health care cost trend rate

  
Assumptions  
The weighted average assumptions used to determine net periodic benefit cost were as follows for the years ended December 31:

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|  | Pension Benefits |  |  |
|  | United States Plans |  | Non-United States Plans |  |  |
|  | 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019 |  |  |  |  |  |  |
| Discount rate | 2.84  | % |  | 3.52  | % |  | 4.42  | % |  | 1.00  | % |  | 1.45  | % |  | 1.99  | % |  |  |  |  |  |  |
| Rate of compensation increases | 3.00  | % |  | 3.00  | % |  | 3.00  | % |  | 2.55  | % |  | 2.78  | % |  | 4.54  | % |  |  |  |  |  |  |
| Expected return on plan assets | 7.23  | % |  | 7.42  | % |  | 7.67  | % |  | 3.92  | % |  | 3.91  | % |  | 4.02  | % |  |  |  |  |  |  |

  
The weighted average assumptions used to determine benefit obligations were as follows as of December 31:

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Pension Benefits |  |  |
|  | United States Plans | Non-United States Plans |  |  |
|  | 2021 |  | 2020 |  | 2021 |  | 2020 |  |  |  |  |
| Discount rate | 3.08  | % |  | 2.84  | % |  | 1.42  | % |  | 1.02  | % |  |  |  |  |
| Rate of compensation increases | 3.00  | % |  | 3.00  | % |  | 2.57  | % |  | 2.55  | % |  |  |  |  |

  
The discount rate represents the interest rate used to determine the present value of the future cash flows currently expected to be required to settle the Company’s defined benefit plan obligations. The discount rates are derived using weighted average yield curves on AA-rated corporate bonds. The cash flows from the Company’s expected benefit obligation payments are then matched to the yield curve to derive the discount rates.  
The Company’s assumption for the expected return on plan assets was determined by the weighted average of the long-term expected rate of return on each of the asset classes invested as of the balance sheet date. For plan assets invested in government bonds, the expected return was based on the yields on the relevant indices as of the balance sheet date. There is considerable uncertainty for the expected return on plan assets invested in equity and diversified growth funds.   
Under the Company’s United States qualified retirement plan, participants have a notional retirement account that increases with pay and investment credits. The rate used to determine the investment credit (cash balance crediting rate) varies monthly and is equal to 1/12th of the yield on 30-year U.S. Government Treasury Bonds, with a minimum of 0.25%. At retirement, the account is converted to a monthly retirement benefit.  
As of December 31, 2021, the Company’s health care cost trend rate for the next seven years was assumed to be 7.0% and the assumed ultimate cost trend rate was 4.5%. The Company assumed that ultimate cost trend rate is reached in 2027.  
Assumed health care cost trend rates could have a significant effect on the amounts reported for the health care plans. A one-percentage- point change in assumed health care cost trend rates as of December 31, 2021 would have a de minimis effect on the total of service and interest cost and on the accumulated postretirement benefit obligation.  
  
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