Note 8 — Retirement and Other Postretirement Benefit Plans

We maintain qualified defined benefit retirement plans covering certain current and former European employees, as well as nonqualified defined benefit retirement plans, and retirement savings plans covering certain eligible U.S. and European employees and participate in a union sponsored multi-employer pension plan covering certain U.S. employees with union affiliations. In addition, we provide certain postretirement health care and life insurance benefits to eligible U.S. retirees.

Defined Benefit Retirement Plans

We have nonqualified defined benefit retirement plans covering certain current and former employees that are funded as benefits are incurred. Expense related to the defined benefit retirement plans for the three years ended December 31, 2025 was $1.9 million, $1.6 million, and $5.7 million, respectively. The amounts for the year ended December 31, 2023 do not include a non-cash charge of $70.5 million related to the completion of the buy-out of the UK pension plan and a gain of $1.9 million related to excess assets from the UK pension plan that reverted back to the Company.

Multi-Employer Plan

The Company is party to a multi-employer pension plan covering certain U.S. employees with union affiliations. The plan is the Western Metal Industry Pension Fund, (“the Plan”). The Plan’s employer identification number is 91-6033499; the Plan number is 001. In 2025, 2024 and 2023 the Plan reported Hexcel Corporation as being an employer that contributed greater than 5% of the Plan’s total contributions. The collective bargaining agreement was renewed on October 1, 2025 for a five-year term. The Plan has been listed in “critical status” and has been operating in accordance with a Rehabilitation Plan since 2010. The Plan, as amended under the Rehabilitation Plan, reduced the adjustable benefits of the participants, and levied a surcharge on employer contributions. Expense related to the multi-employer plan for the three years ended December 31, 2025 was $1.7 million, $1.7 million, and $1.5 million, respectively.

Retirement Savings Plan

Under the defined contribution retirement savings plans, eligible employees can make contributions up to certain thresholds of their annual compensation. The Company also makes matching contributions each year. Expense related to the matching contributions for the defined contribution plans for the three years ended December 31, 2025 was $20.4 million, $22.7 million, and $20.1 million, respectively.

Postretirement Plans

In addition to defined benefit and retirement savings plan benefits, we also provide certain postretirement health care and life insurance benefits to eligible retirees. Depending upon the plan, benefits are available to eligible employees who retire after meeting certain age and service requirements and were employed by Hexcel as of February 1996. Our funding policy for the postretirement health care and life insurance benefit plans is generally to pay covered expenses as they are incurred.

Non-Qualified Deferred Compensation Plan

Under the deferred compensation plan, eligible U.S. employees may make tax-deferred contributions that cannot be made under the 401(k) Plan because of Internal Revenue Service limitations. We match 50% of a participant’s contributions up to 6% of the participant's excess compensation pay as well as provide the same fixed and profit-sharing contributions as provided under the 401(k) plan.

We have elected to fund our deferred compensation obligation through a rabbi trust. The rabbi trust is subject to creditor claims in the event of insolvency, but the assets held in the rabbi trust are not available for general corporate purposes. Amounts in the rabbi trust are invested in a number of funds based on the funds available under our 401(k) plan, other than the Hexcel stock fund. The securities are carried at fair value and are included in other assets on the Consolidated Balance Sheets. We record trading gains and losses in general and administrative expenses on the Consolidated Statements of Operations, along with the offsetting amount related to the increase or decrease in deferred compensation to reflect our exposure to liabilities for payment under the deferred compensation plan.

Net Periodic Pension Expense

The measurement date used to determine the benefit obligations and plan assets of the defined benefit retirement and postretirement plans was December 31, 2025. All costs related to our pensions are included as a component of operating income in our Consolidated Statements of Operations.

During 2025, the Company paid $16.5 million to settle certain plans. As of December 31, 2025, the total benefit obligation was $21.0 million, and the fair value of plan assets was $4.0 million, resulting in a net projected benefit obligation ("PBO") of $17.0 million ($2.4 million recorded in current liabilities and $14.6 million in other non-current liabilities). As of December 31, 2024 the total benefit obligation was $37.8 million, and the fair value of plan assets was $4.0 million, resulting in a net PBO of $33.8 million ($17.4 million recorded in current liabilities and $16.4 million in other non-current liabilities).