Employer Sponsored Benefit Plans

9 Months Ended

Sep. 30, 2019

Prior to the quarter ended June 30, 2019, the Company maintained a defined benefit pension plan ("U.S. Lydall Pension Plan") and two domestic pension plans acquired in the Interface acquisition ("Interface Pension Plans"), (collectively the "domestic defined benefit pension plans"). During the quarter ended June 30, 2019, the Company settled the pension obligation of the U.S. Lydall Pension Plan through lump sum distributions to participants or by irrevocably transferring pension liabilities to two insurance companies through the purchase of group annuity contracts. These purchases, funded with pension assets, resulted in a pre-tax settlement loss of $25.5 million in the quarter ended June 30, 2019, related to the recognition of accumulated deferred actuarial losses. During the quarter ended September 30, 2019, additional expenses of $0.2 million were incurred related to the settlement of the U.S. Lydall Pension Plan. The settlement loss and expenses were included as non-operating expense in the condensed consolidated statements of operations. No contributions were made to the U.S. Lydall Pension Plan during the quarter and nine months ended September 30, 2019 and contributions of $3.0 million and $7.2 million were made during the quarter and nine months ended September 30, 2018, respectively.

The Interface Pension Plans cover Interface's union and non-union employees. The plans are closed to new employees and benefits are no longer accruing for the majority of participants. The Company expects to make a required contribution of approximately $1.5 million to the Interface Pension Plans during 2019. Contributions of $0.3 million and $1.1 million were made during the quarter and nine months ended September 30, 2019, respectively.

The following is a summary of the components of net periodic benefit cost for the domestic defined benefit pension plans for the quarters and nine months ended September 30, 2019 and 2018:



	Quarters Ended September 30,						Nine Months Ended September 30,
In thousands	2019			2018			2019			2018
Components of employer benefit cost
Service cost	$	30		$	12		$	90		$	12
Interest cost	530			640			2,356			1,579
Expected return on assets	(488		)	(893		)	(2,105		)	(2,193		)
Amortization of actuarial loss	—			256			464			768
Net periodic benefit cost	$	72		$	15		$	805		$	166
Settlement loss	186			—			25,701			—
Total employer benefit plan cost	$	258		$	15		$	26,506		$	166

The Company reports the service cost component of net periodic benefit cost in the same line item as other compensation costs in operating expenses and the non-service cost components of net periodic benefit cost in other income.