6 .	ACCRUED RETIREMENT BENEFITS

Accrued Retirement Benefits at

December 31, 2019

and

2018

consisted of the following:

	2019			2018
	(in thousands)

Defined benefit pension plans	$	7,658		$	7,971
Non-qualified retirement plans		2,209			2,065
Total		9,867			10,036
Less current portion		(165	)		(165	)
Non-current portion of accrued retirement benefits	$	9,702		$	9,871

The Company had

two

defined benefit pension plans which cover substantially all of its former bargaining and non-bargaining full-time, part-time and intermittent employees. In

2011,

pension benefits under both plans were frozen. The Company also has unfunded non-qualified retirement plans covering

ten

of its former executives. The non-qualified retirement plans were frozen in

2009

and future vesting of additional benefits was discontinued. During the

fourth

quarter of

2018,

the Company merged the

two

defined benefit pension plans to streamline the administration of the frozen plan.

The measurement date for the Company’s benefit plan disclosures is

December

of each year. The changes in benefit obligations and plan assets for

2019

and

2018,

and the funded status of the plans and assumptions used to determine benefit information at

December 31, 2019

and

2018

were as follows:

	2019			2018
	(in thousands)

Change in benefit obligations:
Benefit obligations at beginning of year	$	51,306		$	56,453
Interest cost		2,096			1,974
Actuarial loss (gain)		4,706			(3,096	)
Benefits paid		(3,980	)		(4,025	)

Benefit obligations at end of year		54,128			51,306

Change in plan assets:
Fair value of plan assets at beginning of year		41,290			48,442
Actual return on plan assets		6,814			(3,114	)
Employer reimbursement for retirement benefits		-			(118	)
Employer contributions		160			105
Benefits paid		(3,980	)		(4,025	)

Fair value of plan assets at end of year		44,284			41,290

Funded status	$	(9,844	)	$	(10,016	)
Accumulated benefit obligations	$	54,128		$	51,306

Weighted average assumptions used to determine benefit obligations at December 31st:
Discount rate	3.10%	-	3.14%	4.28%
Expected long-term return on plan assets		5.00%		5.00%
Rate of compensation increase		n/a		n/a

Accumulated other comprehensive loss of

$20.8

and

$21.8

million at

December 31, 2019

and

2018,

respectively, represent the net actuarial loss which has

not

yet been recognized as a component of pension expense. In

2020,

$0.8

million of net actuarial loss is expected to be recognized as a component of net pension expense.

Components of net periodic benefit cost and other amounts recognized in comprehensive income were as follows:

	2019			2018
	(in thousands)

Pension and other benefits:
Interest cost	$	2,096		$	1,974
Expected return on plan assets		(1,965	)		(2,319	)
Recognized net actuarial loss		865			786
Pension expense	$	996		$	441

Other changes in plan assets and benefit obligations recognized in comprehensive income:
Net (gain) loss	$	(141	)	$	2,314
Recognized gain		(865	)		(764	)

Total recognized (gain) loss in comprehensive income	$	(1,006	)	$	1,550

Weighed average assumptions used to determine net periodic benefit cost:	2019		2018

Discount rate		4.28%	3.59%	-	3.64%
Expected long-term return on plan assets		5.00%		5.00%
Rate of compensation increase		n/a		n/a

The expected long-term rate of return on plan assets was based on a building-block approach. Historical markets are studied and long-term historical relationships between equities and fixed income are presumed consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors, such as inflation and interest rates, are evaluated before long-term capital markets are determined. Diversification and rebalancing of plan assets are properly considered as part of establishing long-term portfolio returns.

The fair values of the Company’s pension plan assets at

December 31, 2019

and

2018,

by asset category, were as follows:

	2019 Fair Value Measurements (in thousands)
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
AHGT pooled equity funds	$	-	$	12,714	$	12,714
AHGT pooled fixed income funds		-		30,548		30,548
Cash management funds		-		1,022		1,022

	$	-	$	44,284	$	44,284

	2018 Fair Value Measurements (in thousands)
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
AHGT pooled equity funds	$	-	$	10,665	$	10,665
AHGT pooled fixed income funds		-		29,635		29,635
Cash management funds		-		990		990

	$	-	$	41,290	$	41,290

Aon Hewitt Group Trust (AHGT)

ooled equity and fixed income funds:

Pooled equity and fixed income funds consist of various AHGT Funds offered through private placements. The units are valued daily using net asset values (NAV). NAV are based on the fair value of each fund’s underlying investments. Level

assets are priced using quotes for trades occurring in active markets for the identical asset. Level

assets are priced using observable inputs for the asset (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs).

An administrative committee consisting of certain senior management employees administers the Company’s defined benefit pension plans. The pension plan assets are allocated among approved asset types based on the plans current funded status and other characteristics set by the administrative committee, and subject to liquidity requirements of the plans.

Estimated future benefit payments are as follows (in thousands):

2020			$	4,080
2021			$	3,985
2022			$	3,870
2023			$	3,754
2024			$	3,652
2025	-	2029	$	16,605

The Company expects to make minimum required contributions of

$542,000

to its pension plans in

2020.

required minimum contributions were made in

2019

2018.