PENSIONS AND OTHER EMPLOYEE BENEFITS

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

PENSIONS AND OTHER EMPLOYEE BENEFITS

12. PENSIONS AND OTHER EMPLOYEE BENEFITS

Defined Benefit Plan

In August 2022, the Company terminated its defined benefit pension plan, which had been frozen since 2003. As such, there are no remaining pension plan obligations as of December 31, 2022. The total settlement of $7.7 million was paid out through assets held in the Globalstar Plan and cash on hand, totaling $5.0 million and $2.7 million, respectively.

Defined Benefit Pension Obligation and Funded Status

The Company's funding policy was to fund its defined benefit pension plan in accordance with the Internal Revenue Code and regulations. Below is a reconciliation of projected benefit obligation, plan assets and the funded status of the Company’s defined benefit plan (in thousands):

	Year Ended December 31,
	2022		2021
Change in projected benefit obligation:
Projected benefit obligation, beginning of year	$	9,051	$	9,179
Service cost	117		174
Interest cost	168		225
Actuarial (gain) loss	(1,340)		(45)
Settlement	(7,663)		—
Benefits paid	(333)		(482)
Projected benefit obligation, end of year	$	—	$	9,051
Change in fair value of plan assets:
Fair value of plan assets, beginning of year	$	5,762	$	5,529
Return on plan assets	(643)		485
Employer contributions	2,877		230
Settlement	(7,663)		—
Benefits paid	(333)		(482)
Fair value of plan assets, end of year	$	—	$	5,762
Funded status, end of year-net liability	$	—	$	(3,289)

Net Benefit Cost and Amounts Recognized

Components of the net periodic benefit cost of the Company’s defined benefit pension plan were as follows (in thousands): 

	Year Ended December 31,
	2022		2021		2020
Net periodic benefit cost:
Service cost	$	117	$	174	$	176
Interest cost	168		225		521
Expected return on plan assets	(216)		(309)		(793)
Amortization of unrecognized net actuarial loss	91		189		300
Settlement	1,501		—		2,075
Total net periodic benefit cost	$	1,661	$	279	$	2,279

In December 2020, the Company settled a portion of the pension liability. In August 2022, the remaining obligations were fully settled. In accordance with ASC 715 Compensation — Retirement Benefits, the Company recognized losses totaling $1.5 million and $2.1 million, respectively. These losses are included in other (expense) income in its consolidated statement of operations during the periods associated with these settlements. The losses represent the pro rata portion of actuarial losses that were previously deferred in other comprehensive income. Components of net periodic benefit cost other than the service cost component are recorded in other (expense) income in the consolidated statement of operations.

Amounts recognized in the consolidated balance sheet were as follows (in thousands):

	December 31,
	2022		2021
Amounts recognized:
Funded status recognized in other non-current liabilities	$	—	$	(3,289)
Net actuarial loss recognized in accumulated other comprehensive loss	—		2,073
Net amount recognized in retained deficit	$	—	$	(1,216)

Assumptions

The weighted-average assumptions used to determine the benefit obligation and net periodic benefit cost were as follows: 

	Year Ended December 31,
	2022		2021		2020
Benefit obligation assumptions:
Discount rate	N/A		2.84	%	2.50	%
Rate of compensation increase	N/A		N/A		N/A
Net periodic benefit cost assumptions:
Discount rate	2.84	%	2.50	%	3.28	%
Expected rate of return on plan assets	5.75	%	5.75	%	6.50	%
Rate of compensation increase	N/A		N/A		N/A

The assumptions, investment policies and strategies for the Globalstar Plan were determined by the Globalstar Plan Committee. The Globalstar Plan Committee was responsible for ensuring the investments of the plans were managed in a prudent and effective manner. Amounts related to the pension plan were derived from actuarial and other assumptions, including discount rates, mortality, expected rate of return, participant data and termination. The Company reviewed assumptions on an annual basis and made adjustments as considered necessary.

The expected rate of return on pension plan assets was selected by taking into account the expected duration of the projected benefit obligation for the plan, the asset mix of the plan and the fact that the plan assets were actively managed to mitigate risk. Discount rates were determined annually based on the Plan administrator’s yield curve index, which considered expected benefit payments and was discounted with rates from the yield curve to determine a single equivalent discount rate.

Plan Assets and Investment Policies and Strategies

The plan assets were invested in various mutual funds which had quoted prices. The plan had a target allocation. On a weighted-average basis, target allocations for equity securities ranged from 50% to 60%, for debt securities 25% to 50% and for other investments 0% to 15%. The defined benefit pension plan asset allocations as of the measurement date presented as a percentage of total plan assets were as follows: 

 

	December 31,
	2022	2021
Equity securities	N/A	55	%
Debt securities	N/A	45
Total	N/A	100	%

The fair values of the Company’s pension plan assets by asset category were as follows (in thousands): 

	December 31, 2021
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
United States equity securities	$	2,542	$	—	$	2,542	$	—
International equity securities	631		—		631		—
Fixed income securities	1,693		—		1,693		—
Other	896		—		896		—
Total	$	5,762	$	—	$	5,762	$	—

Accumulated Benefit Obligation

The accumulated benefit obligation of the defined benefit pension plan was zero and $9.1 million at December 31, 2022 and 2021, respectively.

Benefits Payments and Contributions

For 2022 and 2021, the Company contributed $2.9 million and $0.2 million, respectively, to its defined benefit pension plan.

401(k) Plan

The Company has a defined contribution employee savings plan, or “401(k),” which provides that the Company may match the contributions of participating employees up to a designated level. Under this plan, the matching contributions were approximately $0.5 million for 2022 and $0.6 million for each of 2021 and 2020.