Company: CRD-A
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0000950170-25-030894
Chunk: 245

Company: CRAWFORD & CO
Filing Date: 2025-03-03
Form: 10-K
Item: Item 7
Chunk 245
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 assets and the expected return we can reasonably expect those investment classes to earn over time; and

•the investment returns we can reasonably expect our investment management program to achieve in excess of the returns we could expect if investments were made strictly in indexed funds.

We review the expected long-term rate of return on an annual basis and revise it as appropriate. To support our conclusions, we periodically commission asset/liability studies performed by third-party professional investment advisors and actuaries to assist us in our reviews. These studies project our estimated future pension payments and evaluate the efficiency of the allocation of our pension plan assets into various investment categories. These studies also generate probability-adjusted expected future returns on those assets. 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. and U.K. plans, respectively.

We review our employee demographic assumptions annually and update the assumptions as necessary. During 2024, we did not revise our mortality assumptions.

Pension expense is also affected by the accounting policy used to determine the value of plan assets at the measurement date. We apply our 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 our pension expense than the calculated value method. The amounts recognized in the balance sheet reflect the amount of our long-term pension liabilities at the plan measurement date and the effect of fair value accounting on plan assets. At December 31, 2024, we recorded a decrease to equity through other comprehensive income ("OCI") of $8.0 million (net of tax at the applicable jurisdictional rate) to reflect unrealized actuarial losses during 2024. At December 31, 2023, we recorded an decrease to equity through OCI of $15.7 million (net of tax at the applicable jurisdictional rate) to reflect unrealized actuarial losses during 2023. Those changes are subject to amortization over future years and may be reflected in future income statements.

Cumulative unrecognized actuarial losses for all plans were $257.1 million through December 31, 2024, compared with $261.1 million through December 31, 2023. These unrecognized losses reflect changes in the discount rates, differences between expected and actual asset returns, and changes to mortality expectations for plan participants, which are being amortized over future periods. These unrecognized losses may be recovered in future periods through act