Retirement Plans

3 Months Ended

Mar. 31, 2021

Compensation And Retirement Disclosure [Abstract]

Retirement Plans

NOTE 7 – Retirement Plans

Pension Plans

Net pension expense for our domestic and foreign plans included in other expense, net in the Condensed Consolidated Statement of Earnings is as follows:

	Three months ended
	March 31,		March 31,
	2021		2020
Net pension expense	$	1,957	$	664

The components of net pension expense for our domestic and foreign plans include the following:

	Domestic Pension Plans						Foreign Pension Plans
	Three Months Ended						Three Months Ended
	March 31,			March 31,			March 31,			March 31,
	2021			2020			2021			2020
Service cost	$	—		$	—		$	6		$	7
Interest cost		1,253			1,443			4			7
Expected return on plan assets(1)		(1,113	)		(2,454	)		(3	)		(4	)
Amortization of loss		1,767			1,622			43			43
Total expense, net	$	1,907		$	611		$	50		$	53

(1) Expected return on plan assets is net of expected investment expenses and certain administrative expenses.

In February 2020, the CTS Board of Directors authorized management to explore termination of the U.S.-based pension plan ("Plan"), subject to certain conditions. On June 1, 2020, we entered the Fifth Amendment to the Plan whereby we set an effective termination date for the Plan of July 31, 2020. In February 2021, we received a determination letter from the Internal Revenue Service that allows us to proceed with the termination process for the Plan. In connection with the termination, the Plan has offered a window extending from March 29, 2021 through May 7, 2021 to certain eligible participants to elect lump sum payments. The distribution date is June 1, 2021. The completion of the Plan termination process, including the final purchase of annuities, is expected to occur in the second half of 2021.

Upon settlement of the pension liability, we will reclassify the related pension losses, currently recorded in accumulated other comprehensive loss, to the Condensed Consolidated Statements of Earnings. As of March 31, 2021, we had gross unrecognized losses related to the Plan of $123,238 in accumulated other comprehensive loss that are expected to be recognized in the income statement in 2021. Since the amount of the settlement depends on a number of factors determined as of the liquidation date, including lump sum payout estimates, the annuity pricing interest rate environment and asset performance, we are currently unable to determine the ultimate cost of the settlement. However, we estimate non-cash settlement charges of approximately $10,000 to $20,000 will be

recognized in the second quarter of 2021 with the remaining amount of the gross accumulated other comprehensive loss balance to be recognized upon final settlement. We do not expect any cash contributions from the Company to the Plan as a result of this termination because Plan assets significantly exceed estimated liabilities.

Other Post-retirement Benefit Plan

Net post-retirement expense for our other post-retirement plan includes the following components:

	Three Months Ended
	March 31,		March 31,
	2021		2020
Service cost	$	—	$	—
Interest cost		23		30
Amortization of gain		—		(21	)
Total expense, net	$	23	$	9