Employee Benefit Plans

12 Months Ended

Dec. 31, 2023

Employee Benefit Plans

Employee Benefit Plans

17. Employee Benefit Plans

Defined Benefit Pension and Other Postretirement Benefit Plans

The Company provides funded and unfunded non-contributory defined benefit pension plans covering certain of its salaried and hourly employees. Benefits are generally based on the employee’s age and compensation. The Company funds the plans in an amount not less than the minimum statutory funding requirements or more than the maximum amount that can be deducted for U.S. federal income tax purposes.

The Company also currently provides certain postretirement medical and life insurance coverage for eligible employees. Generally, covered employees who terminate employment after meeting eligibility requirements are eligible for postretirement coverage for themselves and their dependents. The Company offers a subsidy to eligible retirees based on age and years of service at retirement and contain other cost-sharing features such as deductibles and coinsurance. The Company’s current funding policy is to fund the cost of all postretirement benefits as they are paid.

On January 1, 2015, the Company’s cash balance and excess plans were amended to freeze new service credits for any new or active employees.

In February 2022, the Board of Directors approved the termination of the Company’s Cash Balance Pension Plan. The Company has executed plan amendments regarding the termination and filed an Application for Determination for Terminating Pension Plan with the Internal Revenue Service (“IRS”), which was approved by the IRS during the first quarter of 2023. The Company also prepared and filed appropriate notices and documents related to the Pension Plan's termination and wind-down with the Pension Benefit Guaranty Corporation (“PBGC”). To complete the termination of the plan, the Company made a $3.2 million cash contribution into the plan in order to complete lump sum payments and to purchase annuity contracts for plan participants. An immaterial gain was recognized on the plan termination, which is reflected in the Consolidated Incomes Statements line item “Non-service related pension and postretirement benefits credits (costs)”. The Company no longer administers or pays the retirement benefits of the Cash Balance Pension Plan.

Obligations and Funded Status.

Summaries of the changes in the benefit obligations, plan assets and funded status of the plans are as follows:

	Pension Benefits				Other Postretirement Benefits
	Year Ended		Year Ended		Year Ended		Year Ended
	December 31,		December 31,		December 31,		December 31,
	2023		2022		2023		2022
(In thousands)
CHANGE IN BENEFIT OBLIGATIONS
Benefit obligations at beginning of period	$	122,430	$	169,976	$	54,514	$	79,245
Service cost		—		—		231		282
Interest cost		4,108		5,264		2,694		2,006
Settlement gain		(1,586)		(771)		—		—
Plan Settlements		(124,382)		—		—		—
Benefits paid		(4,652)		(22,164)		(3,858)		(4,834)
Other-primarily actuarial gain		5,070		(29,875)		(2,227)		(22,185)
Benefit obligations at end of period	$	988	$	122,430	$	51,354	$	54,514
CHANGE IN PLAN ASSETS
Value of plan assets at beginning of period	$	121,127	$	177,499	$	—	$	—
Actual return on plan assets		4,625		(34,325)		—		—
Employer contributions		3,282		117		3,858		4,834
Plan Settlements		(124,382)		—		—		—
Benefits paid		(4,652)		(22,164)		(3,858)		(4,834)
Value of plan assets at end of period	$	—	$	121,127	$	—	$	—
Accrued benefit net obligation	$	(988)	$	(1,303)	$	(51,354)	$	(54,514)
ITEMS NOT YET RECOGNIZED AS A COMPONENT OF NET PERIODIC BENEFIT COST
Prior service credit	$	—	$	945	$	—	$	—
Accumulated gain		1,150		5,164		32,871		40,334
	$	1,150	$	6,109		32,871	$	40,334
BALANCE SHEET AMOUNTS
Noncurrent asset	$	—	$	—	$	—	$	—
Current liability		(110)		(202)		(3,860)		(4,840)
Noncurrent liability		(878)		(1,101)		(47,494)		(49,674)
	$	(988)	$	(1,303)	$	(51,354)	$	(54,514)

Pension Benefits

The accumulated benefit obligation for all pension plans was $1.0 million and $122.4 million at December 31, 2023 and 2022, respectively. The termination of the Company’s Cash Balance Pension Plan significantly impacted the benefit obligation.

The weighted-average interest credit rate for the cash balance pension plan was 4.25% at December 31, 2022.

Other Postretirement Benefits

Significant gains and losses affecting the benefit obligations included:

● the lower discount rate increased plan obligations by $1.0 million;

● the claims cost assumptions were updated decreasing plan obligations by $0.9 million; and

● updated census data resulted in a decrease of plan obligations in the amount of $1.4 million.

Components of Net Periodic Benefit Cost. The following table details the components of pension and postretirement benefit costs (credits):

	Pension Benefits						Other Postretirement Benefits
	Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended
	December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
	2023		2022		2021		2023		2022		2021
(In thousands)
Service cost	$	—	$	—	$	—	$	231	$	282	$	341
Interest cost(1)		4,108		5,264		4,334		2,694		2,006		2,113
Settlements/Terminations(1)		(1,586)		(771)		(1,768)		—		—		—
Expected return on plan assets(1)		(4,048)		(6,173)		(7,245)		—		—		—
Amortization of prior service credits(1)		(98)		(147)		(128)		—		—		—
Amortization of other actuarial losses (gains) (1)		(553)		(313)		(62)		(9,690)		(2,508)		—
Net benefit cost (credit)	$	(2,177)	$	(2,140)	$	(4,869)	$	(6,765)	$	(220)	$	2,454

(1) In accordance with the adoption of ASU 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” these costs are recorded within Nonoperating expenses in the Consolidated Income Statements on the line item “Non-service related pension and postretirement benefit credits (costs).”

The differences generated from changes in assumed discount rates and returns on plan assets are amortized into earnings over the remaining service attribution periods of the employees using the corridor method.

Assumptions. The following table provides the assumptions used to determine the actuarial present value of projected benefit obligations for the respective periods.

	Year Ended	Year Ended
	December 31,	December 31,
	2023	2022
(Percentages)
Pension Benefits
Discount rate	4.89	5.20/5.15
Other Postretirement Benefits
Discount rate	4.94	5.19

The following table provides the weighted average assumptions used to determine net periodic benefit cost for the respective periods.

	Year Ended	Year Ended	Year Ended
	December 31,	December 31,	December 31,
	2023	2022	2021
(Percentages)
Pension Benefits
Discount rate	5.20	4.47	2.50
Expected return on plan assets	4.20	4.06	4.30
Other Postretirement Benefits
Discount rate	5.19	2.63	2.17

The discount rates used in 2023, 2022 and 2021 were reevaluated during the year for settlements. The obligations are remeasured at an updated discount rate that impacts the benefit cost recognized subsequent to the remeasurement.

As of December 31, 2023, there are no pension plan assets. For December 31, 2022, the Company established the expected long-term rate of return at the beginning of each fiscal year based upon historical returns and projected returns on the underlying mix of invested assets. The Company utilized modern portfolio theory modeling techniques in the development of its return assumptions. This technique projects rates of return that can be generated through various asset allocations that lie within the risk tolerance set forth by members of the Company’s retirement committee. The risk assessment provides a link between a pension plan’s risk capacity, management’s willingness to accept investment risk and the asset allocation process, which ultimately leads to the return generated by the invested assets.

The health care cost trend rate assumed for 2024 is 7.37% and is expected to reach an ultimate trend rate of 4.0% by 2048.

The Company’s pension plan assets at December 31, 2023 and 2022, respectively, are categorized below according to the fair value hierarchy as defined in Note 13, “Fair Value Measurements”:

	Total				Level 1				Level 2				Level 3
	2023		2022		2023		2022		2023		2022		2023		2022
	(In thousands)
Fixed income securities:
U.S. government securities(A)	$	—	$	37,148	$	—	$	34,143	$	—	$	3,005	$	—	$	—
Non-U.S. government securities(B)		—		2,340		—		—		—		2,340		—		—
Corporate fixed income(C)		—		41,286		—		—		—		41,286		—		—
State and local government securities(D)		—		2,504		—		—		—		2,504		—		—
Other investments(E)		—		15,616		—		—		—		15,616		—		—
Total	$	—	$	98,894	$	—	$	34,143	$	—	$	64,751	$	—	$	—
Assets at net asset value(F)		—		22,233
	$	—	$	121,127

(A) U.S. government securities includes agency and treasury debt. These investments are valued using dealer quotes in an active market.

(B) Non-U.S. government securities includes debt securities issued by foreign governments and are valued utilizing a price spread basis valuation technique with observable sources from investment dealers and research vendors.

(C) Corporate fixed income is primarily comprised of corporate bonds and certain corporate asset-backed securities that are denominated in the U.S. dollar and are investment-grade securities. These investments are valued using dealer quotes.

(D) State and local government securities include different U.S. state and local municipal bonds and asset backed securities, these investments are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes, benchmark yields and securities, reported trades, issuer trades and/or other applicable data.

(E) Other investments include cash, forward contracts, derivative instruments, credit default swaps, interest rate swaps and mutual funds. Investments in interest rate swaps are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and non-active markets, benchmark yields and securities, reported trades, issuer trades and/or other applicable data. Forward contracts and derivative instruments are valued at their exchange listed price or broker quote in an active market. The mutual funds are valued at the net asset value per share multiplied by the number of shares held as of the measurement date and are traded on listed exchanges.

(F) Investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy in accordance with Accounting Standards Update 2015-07. These investments are primarily mutual funds that are highly liquid with no restrictions on ability to redeem the funds into cash.

Cash Flows. The Company expects to make no contributions to the pension plans in 2024.

The following represents expected future benefit payments from the plan:

			Other
	Pension		Postretirement
	Benefits		Benefits
	(In thousands)
2024	$	109	$	4,699
2025		106		4,645
2026		103		4,564
2027		99		4,493
2028		95		4,381
Next 5 years		393		19,208
	$	905	$	41,990

Other Plans

The Company sponsors savings plans which were established to assist eligible employees in providing for their future retirement needs. The Company’s expense, representing its contributions to the plans, was $20.5 million, $18.7 million, and $16.8 million for the years ended December 31, 2023, 2022, and 2021, respectively.