Retirement Plans

12 Months Ended

Dec. 31, 2023

Disclosure Text Block

Retirement Plans

15. Retirement Plans

Defined Contribution Retirement Plans

The Ironwood Pharmaceuticals, Inc. 401(k) Savings Plan is a defined contribution plan in the form of a qualified 401(k) plan in which substantially all employees are eligible to participate upon employment. Subject to certain IRS limits, eligible employees may elect to contribute from 1% to 100% of their compensation. Company contributions to the plan are at the sole discretion of the Company. During the years ended December 31, 2023, 2022 and 2021, the Company provided a matching contribution equal to the greater of: (a) 100% of employee contributions on the first 3% of eligible compensation and 50% of employee contributions on the next 3% of eligible compensation; or (b) 75% of the first $10,000 of employee contributions. During each of the years ended December 31, 2023, 2022, and 2021, the Company recorded $2.2 million of expense related to its 401(k) company match.

Defined Benefit Retirement Plans

As a result of the VectivBio Acquisition, the Company maintains defined benefit plans for employees in Switzerland and Belgium, as required by local laws. The pension plans provide employees retirement benefits and risk insurance for death and disability. The contributions of employers and employees in general are defined in percentages of the insured’s salary. The retirement pension is calculated based on the old-age credit balance on retirement multiplied by the fixed conversion rate. The employee has the option to withdraw the capital on demand.

During the post-acquisition period from June 29, 2023 through December 31, 2023, the Company recognized $1.8 million of expense and $0.9 million of other comprehensive loss related to its defined benefit plans. Employer contributions and employee contributions during the post-acquisition period from June 29, 2023 through December 31, 2023 were $1.2 million and $13.7 million, respectively. As of December 31, 2023 the total fair value of pension plan assets was $33.0 million and the fair values of projected benefit obligations was $37.6 million, resulting in a net liability status of $4.6 million recorded as other liabilities.