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Retirement Plans
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Retirement Plans Retirement Plans
The Company has three retirement plans that cover its hourly and salaried employees in the United States: one defined benefit plan, which is frozen, and two defined contribution plans. Employees are eligible to participate in the appropriate plan based on employment classification. The Company’s contributions to the defined benefit and defined contribution plans are governed by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the Company’s policy and investment guidelines of the applicable plan. The Company’s policy is to contribute at least the required minimum in accordance with the funding standards of ERISA.
The Company maintains two defined contribution plans for its employees in Canada, as well as a post-retirement benefit plan. In the United Kingdom, the Company maintains two defined contribution plans and a defined benefit plan, which is frozen. These plans are discussed in further detail below.
United States Defined Benefit Plan
The following tables present a reconciliation of the changes in the benefit obligation, the fair market value of the assets, and the funded status of the plan, as of December 31, 2020 and 2019:
December 31,
20202019
Changes in benefit obligation:
Benefit obligation at beginning of year$7,809 $16,717 
Interest cost224 648 
Actuarial loss813 400 
Benefits paid(398)(840)
Settlements— (9,116)
Benefit obligation at end of year$8,448 $7,809 
Change to plan assets:
Fair value of assets at beginning of year$4,360 $12,468 
Actual gain on plan assets197 1,298 
Employer contribution300 550 
Benefits paid(398)(840)
Settlements— (9,116)
Fair value of assets at end of year4,459 4,360 
Funded status at end of year$(3,989)$(3,449)
Amounts recognized in the consolidated balance sheets consist of:
Other long-term liabilities$(3,989)$(3,449)
Amounts recognized in accumulated other comprehensive loss consist of:
Net loss$2,686 $1,893 
The actuarial loss included in accumulated other comprehensive loss that will be recognized in net periodic pension cost during 2021 is $24, before taxes.
Net periodic pension costs for the years ended December 31, 2020, 2019, and 2018 were as follows:
Year Ended December 31,
202020192018
Components of net periodic benefit cost:
Interest cost224 648 622 
Expected return on plan assets(230)(719)(853)
Recognized net actuarial loss53 125 96 
Net periodic pension cost (income)$47 $54 $(135)
Settlement charge— 2,210 —
Total pension expense (income)$47 $2,264 $(135)
The weighted average assumptions in the following table represent the rates used to develop the actuarial present value of the projected benefit obligation for the year listed and also the net periodic benefit cost for the following year.
Year Ended December 31,
202020192018
Discount rate3.0 %4.0 %3.4 %
Expected rate of return on plan assets5.3 %5.9 %5.9 %
The expected long-term rate of return is based on numerous factors, including the target asset allocation for plan assets, historical rate of return, long-term inflation assumptions, and current and projected market conditions.
Amounts applicable to the Company’s pension plan with accumulated benefit obligations in excess of plan assets were as follows as of December 31, 2020 and 2019:
December 31,
20202019
Projected benefit obligation$8,448 $7,809 
Accumulated benefit obligation8,448 7,809 
Fair value of plan assets4,459 4,360 
Plan assets consist primarily of various fixed income and equity investments. The Company’s primary investment objective is to provide long-term growth of capital while accepting a moderate level of risk. The investments are limited to cash and cash equivalents, bonds, preferred stocks, and common stocks. The investment target ranges and actual allocation of pension plan assets by major category as of December 31, 2020 and 2019 were as follows:
December 31,
Target20202019
Asset Category
Cash and cash equivalents
0 - 20%
9 %19 %
Total fixed income funds
25 - 50%
32 30 
Total mutual funds and equities
35 - 70%
59 51 
Total100 %100 %
In accordance with the fair value disclosure requirements of ASC 820, “Fair Value Measurements and Disclosures,” the following assets were measured at fair value on a recurring basis as of December 31, 2020 and 2019. Additional information regarding ASC 820 and the fair value hierarchy can be found in Note 16.
December 31,
20202019
Asset Category
Cash and cash equivalents$399 $817 
Fixed income funds
Corporate bonds1,440 1,336 
Total fixed income funds1,440 1,336 
Equity funds and equities
Mutual funds713 694 
Exchange-traded funds1,907 1,513 
Total mutual funds and equities2,620 2,207 
Total$4,459 $4,360 
Cash equivalents: The Company uses quoted market prices to determine the fair value of these investments in interest-bearing cash accounts and they are classified as Level 1 of the fair value hierarchy. The carrying amounts approximate fair value because of the short maturity of the instruments.
Fixed income funds: Investments within the fixed income funds category consist of fixed income corporate debt. The Company uses quoted market prices to determine the fair values of these fixed income funds. These instruments consist of exchange-traded government and corporate bonds and are classified as Level 1 of the fair value hierarchy.
Equity funds and equities: The valuation of investments in registered investment companies is based on the underlying investments in securities. Securities traded on security exchanges are valued at the latest quoted sales price. Securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the average of the last reported bid and ask quotations. These investments are classified as Level 1 of the fair value hierarchy.
The Company currently anticipates contributions of $1,000 to its United States defined benefit plan in 2021.
The following benefit payments are expected to be paid during the years indicated:
Year Ending December 31,
2021$468 
2022467 
2023491 
2024487 
2025478 
Years 2026-20302,255 
United Kingdom Defined Benefit Plan
The Company’s U.K. defined benefit plan covers certain current employees, former employees, and retirees. The plan has been frozen to new entrants since April 1, 1997 and also covers the former employees of a merged plan after January 2002. Benefits under the plan were based on years of service and eligible compensation during defined periods of service. The Company’s funding policy for the plan is to make minimum annual contributions required by applicable regulations.
The funded status of the United Kingdom defined benefit plan as of December 31, 2020 and 2019 was as follows:
December 31,
20202019
Changes in benefit obligation:
Benefit obligation at beginning of year$9,101 $7,750 
Interest cost184 221 
Actuarial loss (gain)996 1,142 
Benefits paid(283)(326)
Foreign currency exchange rate changes267 314 
Benefit obligation at end of year$10,265 $9,101 
Change to plan assets:
Fair value of assets at beginning of year$7,290 $6,347 
Actual gain (loss) on plan assets453 697 
Employer contribution337 314 
Benefits paid(319)(326)
Foreign currency exchange rate changes214 258 
Fair value of assets at end of year7,975 7,290 
Funded status at end of year$(2,290)$(1,811)
Amounts recognized in the consolidated balance sheets consist of:
Other long-term liabilities$(2,290)$(1,811)
Amounts recognized in accumulated other comprehensive loss consist of:
Net loss$2,247 $1,641 
Prior service cost152 172 
$2,399 $1,813 
Net periodic pension costs for the years ended December 31, 2020, 2019, and 2018 were as follows:
Year Ended December 31,
202020192018
Components of net periodic benefit cost:
Interest cost$184 $221 $194 
Expected return on plan assets(250)(252)(260)
Amortization of prior service cost26 25 42 
Recognized net actuarial loss329 263 208 
Net periodic pension cost$289 $257 $184 
The weighted average assumptions in the following table represent the rates used to develop the actuarial present value of the projected benefit obligation for the year listed and also the net periodic benefit cost for the following year.
Year Ended December 31,
202020192018
Discount rate1.1 %2.0 %2.8 %
Expected rate of return on plan assets3.2 %3.3 %3.8 %
Amounts applicable to the Company’s pension plans with accumulated benefit obligations in excess of plan assets were as follows as of December 31, 2020 and 2019:
December 31,
20202019
Projected benefit obligation$10,265 $9,101 
Accumulated benefit obligation10,265 9,101 
Fair value of plan assets7,975 7,290 
The Company has estimated the long-term rate of return on plan assets based primarily on historical returns on plan assets, adjusted for changes in target portfolio allocations, and recent changes in long-term interest rates based on publicly available information.
Plan assets are invested by the trustees in accordance with a written statement of investment principles. This statement permits investment in equities, corporate bonds, United Kingdom government securities, commercial property, and cash, based on certain target allocation percentages. Asset allocation is primarily based on a strategy to provide steady growth without undue fluctuations. The target asset allocation percentages for 2020 were as follows:
Equity securities
Up to 100%
Commercial property
Not to exceed 50%
U.K. Government securities
Not to exceed 50%
Cash
Up to 100%
Plan assets held within the United Kingdom defined benefit plan consist of cash and equity securities that have been classified as Level 1 of the fair value hierarchy. All other plan assets have been classified as Level 2 of the fair value hierarchy.
The plan assets by category for the years ended December 31, 2020 and 2019 were as follows:
December 31,
20202019
Asset Category
Cash and cash equivalents$348 $516 
Equity securities3,101 2,090 
Bonds3,410 3,735 
Other1,116 949 
Total$7,975 $7,290 
United Kingdom regulations require trustees to adopt a prudent approach to funding required contributions to defined benefit pension plans. The Company anticipates making contributions of $337 to the United Kingdom defined benefit plan during 2021.
The following estimated future benefits payments are expected to be paid under the United Kingdom defined benefit plan:
Year Ending December 31,
2021$306 
2022318 
2023377 
2024404 
2025429 
Years 2026-20301,844 
Other Post-Retirement Benefit Plan
The Company’s operation near Montreal, Quebec, Canada, maintains a post-retirement benefit plan, which provides retiree life insurance, health care benefits, and, for a closed group of employees, dental care. Retiring employees with a minimum of 10 years of
service are eligible for the plan benefits. The plan is not funded. Cost of benefits earned by employees is charged to expense as services are rendered. The expense related to this plan was not material for 2020 or 2019. The accrued benefit obligation was $932 and $840 as of December 31, 2020 and 2019, respectively. This obligation is recognized within “Other long-term liabilities” on the Consolidated Balance Sheets. Benefit payments anticipated for 2021 are not material.
The weighted average assumptions in the following table represent the rates used to develop the actuarial present value of the projected benefit obligation for the year listed and also the net periodic benefit cost for the following year.
Year Ended December 31,
20202019
Discount rate2.5 %3.1 %
Weighted average health care trend rate4.8 %4.9 %
The weighted average health care rate is assumed to trend downward to an ultimate rate of 4.0% in 2040.
Defined Contribution Plans
The Company sponsors six defined contribution plans for hourly and salaried employees across its domestic and international facilities. The following table summarizes the expense associated with the contributions made to these plans.
Year Ended December 31,
202020192018
United States$866 $2,323 $2,762 
Canada137 144 193 
United Kingdom437 442 451 
$1,440 $2,909 $3,406