Pension Benefits

12 Months Ended

Jun. 30, 2020

Defined Benefit Plan Disclosure [Line Items]

Defined Benefit Pension Plans

We sponsor multiple defined benefit pension plans that covered certain workers under collective bargaining contracts. However, as a result of prior-years’ restructuring activities, for all periods presented, we no longer have any active employees continuing to accrue service cost or otherwise eligible to receive plan benefits. Benefits being paid under the plans are primarily based on negotiated rates and years of service. We contribute to these plans at least the minimum amount required by regulation.

At the end of the year, we discount our plan liabilities using an assumed discount rate. In estimating this rate, we, along with our third-party actuaries, review the timing of future benefit payments, bond indices, consider yield curve analysis results and the past history of discount rates.

The actuarial present value of benefit obligations summarized below was based on the following assumption:



	2020		2019
Weighted-average assumption as of June 30
Discount rate	2.49	%	3.35	%

The net periodic benefit costs were determined utilizing the following beginning-of-the-year assumptions:



	2020		2019		2018
Discount rate	3.35	%	4.07	%	3.68	%
Expected long-term return on plan assets	6.50	%	7.00	%	7.00	%

In determining the long-term expected return on plan assets, we consider our related investment guidelines, our expectations of long-term rates of return by asset category, our target asset allocation weighting and historical rates of return and volatility for equity and fixed income investments. The investment strategy for plan assets is to control and manage investment risk through diversification among asset classes, investment managers/funds and investment styles. The plans’ investment guidelines have been designed to meet the intended objective that plan assets earn at least nominal returns equal to or in excess of the plans’ liability growth rate. In consideration of the current average age of the plans’ participants, the investment guidelines are based upon an investment horizon of at least 10 years.

The target and actual asset allocations for our plans at June 30 by asset category were as follows:



	Target Percentage of Plan Assets at June 30	Actual Percentage of Plan Assets
	2020	2020		2019
Equity securities	20%-80%	36		53
Fixed income, including cash	20%-80%	64		47
Total		100	%	100	%

Our target asset allocations are maintained through ongoing review and periodic rebalancing of equity and fixed income investments with assistance from an independent outside investment consultant. Also, the plan assets are diversified among asset classes, asset managers or funds and investment styles to avoid concentrations of risk. We expect that a modest allocation to cash will exist within the plans because each investment manager is likely to hold limited cash in a portfolio.

We categorize our plan assets within a three-level fair value hierarchy, as previously defined in Note 3. The following table summarizes the fair values and levels, within the fair value hierarchy, for our plan assets at June 30:



	June 30, 2020
Asset Category	Level 1		Level 2		Level 3		Total
Cash and equivalents	$	367	$	—	$	—	$	367
Money market funds	1,046		—		—		1,046
U.S. government obligations	—		1,261		—		1,261
Municipal obligations	—		264		—		264
Corporate obligations	—		1,303		—		1,303
Mortgage obligations	—		1,836		—		1,836
Mutual funds fixed income	17,326		—		—		17,326
Mutual funds equity	13,365		—		—		13,365
Total	$	32,104	$	4,664	$	—	$	36,768

	June 30, 2019
Asset Category	Level 1		Level 2		Level 3		Total
Cash and equivalents	$	559	$	—	$	—	$	559
Money market funds	113		—		—		113
U.S. government obligations	—		2,600		—		2,600
Municipal obligations	—		37		—		37
Corporate obligations	—		3,440		—		3,440
Mortgage obligations	—		3,613		—		3,613
Mutual funds fixed income	6,907		—		—		6,907
Mutual funds equity	19,359		—		—		19,359
Total	$	26,938	$	9,690	$	—	$	36,628

The plan assets classified at Level 1 include money market funds and mutual funds. Quoted market prices in active markets for identical assets are available for investments in this category.

The plan assets classified at Level 2 include fixed income securities consisting of government securities, municipal obligations, corporate obligations and mortgage obligations. For these types of securities, market prices are observable for identical or similar investment securities but not readily accessible for each of those investments individually at the measurement date. For these assets, we obtain pricing information from an independent pricing service. The pricing service uses various pricing models for each asset class that are consistent with what other market participants would use. The inputs and assumptions to the model of the pricing service are derived from market observable sources including as applicable: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.

Relevant information with respect to our pension benefits as of June 30 can be summarized as follows:



	2020			2019
Change in benefit obligation
Benefit obligation at beginning of year	$	38,382		$	36,892
Interest cost	1,246			1,453
Actuarial loss	2,639			2,342
Benefits paid	(2,298		)	(2,305		)
Benefit obligation at end of year	$	39,969		$	38,382



	2020			2019
Change in plan assets
Fair value of plan assets at beginning of year	$	36,628		$	36,713
Actual return on plan assets	2,344			2,058
Employer contributions	94			162
Benefits paid	(2,298		)	(2,305		)
Fair value of plan assets at end of year	$	36,768		$	36,628



	2020			2019
Funded status - net accrued benefit cost	$	(3,201	)	$	(1,754	)



	2020			2019
Amounts recognized in the Consolidated Balance Sheets consist of
Prepaid benefit cost (Other Noncurrent Assets)	$	339		$	289
Accrued benefit liability (Other Noncurrent Liabilities)	(3,540		)	(2,043		)
Net amount recognized	$	(3,201	)	$	(1,754	)



	2020		2019
Accumulated benefit obligation	$	39,969	$	38,382

The following table discloses, in the aggregate, those plans with benefit obligations in excess of the fair value of plan assets at the June 30 measurement date:



	2020		2019
Benefit obligations	$	37,883	$	36,167
Fair value of plan assets at end of year	$	34,343	$	34,124

Amounts recognized in accumulated other comprehensive loss at June 30 were as follows:



	2020			2019
Net actuarial loss	$	17,170		$	15,145
Income taxes	(4,013		)	(3,539		)
Total	$	13,157		$	11,606

The following table summarizes the components of net periodic benefit income for our pension plans at June 30:



	2020			2019			2018
Components of net periodic benefit income
Interest cost	$	1,246		$	1,453		$	1,463
Expected return on plan assets	(2,302		)	(2,487		)	(2,491		)
Amortization of unrecognized net loss	572			447			572
Settlement charge	—			—			42
Net periodic benefit income	$	(484	)	$	(587	)	$	(414	)

We have not yet finalized our anticipated funding level for 2021, but based on initial estimates, we do not expect our 2021 contributions to our pension plans to be material.

Benefit payments estimated for future years are as follows:




2021	$	2,425
2022	$	2,418
2023	$	2,386
2024	$	2,390
2025	$	2,382
2026 - 2030	$	11,361