Retirement Benefit Plans

9 Months Ended

Oct. 01, 2022

Retirement Benefit Plans

Note L - Retirement Benefit Plans

Note L - Retirement Benefit Plans

The Company has four non-contributory defined benefit pension plans covering most U.S. employees. Three of these pension plans are frozen and participants in these three plans have not accrued benefits since the date on which these plans were frozen. A fourth pension plan, The Eastern Company Pension Plan for Hourly-Rated Employees of the Eberhard Division, does not permit new participants but existing participants in this fourth pension plan continue to accrue benefits. Plan benefits are generally based upon age at retirement, years of service and, for the plan covering salaried employees, the level of compensation. On August 29, 2022, in agreement with the International Association of Machinist and Aerospace Workers Union AFL-CIO District #54, Local #439 the Company agreed to freeze The Eastern Company Pension Plan for Hourly-Rated Employees of the Eberhard Division effective December 31, 2022. As a result, no benefits will accrue under this plan after December 31, 2022. The Company also sponsors unfunded non-qualified supplemental retirement plans that provide certain former officers with benefits in excess of limits imposed by federal tax law.

The Company also provides health care and life insurance for retired salaried employees in the United States who meet specific eligibility requirements.

Significant disclosures relating to these benefit plans for the first three months and first nine months 2022 and 2021 are as follows:

	Pension Benefits
	Three Months Ended						Nine Months Ended
	October 1, 2022			October 2, 2021			October 1, 2022			October 2, 2021
Service cost	$	269,744		$	271,832		$	809,231		$	815,500
Interest cost		608,188			504,252			1,824,568			1,512,761
Expected return on plan assets		(1,460,658	)		(1,448,671	)		(4,381,980	)		(4,346,020	)
Amortization of prior service cost		16,563			24,845			49,689			74,535
Amortization of the net loss		390,075			432,539			1,170,225			1,297,614
Net periodic benefit	$	(176,088	)	$	(215,203	)	$	(528,267	)	$	(645,610	)

	Other Postretirement Benefits
	Three Months Ended						Nine Months Ended
	October 1, 2022			October 2, 2021			October 1, 2022			October 2, 2021
Service cost		13,323			13,626			39,969			40,878
Interest cost		10,988			9,842			32,964			29,526
Expected return on plan assets		(4,400	)		(6,420	)		(13,200	)		(19,260	)
Amortization of prior service cost		1,060			—			3,180			—
Amortization of the net loss		(2,054	)		(3,094	)		(6,162	)		(9,282	)
Net periodic benefit cost	$	18,917		$	13,954		$	56,751		$	41,862

The Company’s funding policy with respect to its qualified plans is to contribute at least the minimum amount required by applicable laws and regulations. In 2022, the Company expects to contribute $300,000 into its pension plans and $50,000 into its postretirement plan. As of October 1, 2022, the Company has contributed $15,000 into its pension plans, has contributed $18,000 to its postretirement plan, and expects to make the remaining contributions as required during the remainder of the fiscal year.

The Company has a contributory savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”) covering substantially all U.S. non-union employees. The 401(k) Plan allows participants to make voluntary contributions from their annual compensation on a pre-tax basis, subject to limitations under the Internal Revenue Code. The 401(k) Plan provides for contributions by the Company at its discretion.

The Company made contributions to the plan as follows:

	Three Months Ended				Nine Months Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Regular matching contribution	$	149,673	$	135,664	$	522,327	$	433,061
Transitional credit contribution		28,144		32,468		107,886		108,337
Non-discretionary contribution		16,715		15,001		376,861		377,486
Total contributions for the period	$	194,532	$	183,133	$	1,007,074	$	918,884

The non-discretionary contribution of $323,082 made in the nine months ended October 1, 2022, was accrued and expensed in the prior fiscal year.