Note 7 - Accrued Retirement Benefits

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Retirement Benefits [Text Block]

7. ACCRUED RETIREMENT BENEFITS

Accrued retirement benefits at December 31, 2023 and 2022 consisted of the following:

	2023			2022
	(in thousands)
Defined benefit pension plan	$	(33	)	$	1,023
Non-qualified retirement plan		1,725			1,731
Total		1,692			2,754
Less current portion		(142	)		(142	)
Non-current portion of accrued retirement benefits	$	1,550		$	2,612

The Company had two defined benefit pension plans which covered substantially all former bargaining and non-bargaining full-time, part-time and intermittent employees. In 2011, pension benefits under both plans were frozen. The Company merged the two defined benefit pension plans to streamline the administration of the frozen plan in 2018. The Company also has an unfunded non-qualified retirement plan covering nine of its former employees. The non-qualified retirement plan was frozen in 2009 and future vesting of additional benefits was discontinued.

In November 2022, the Company signed a purchase agreement with an insurer to annuitize the scheduled pension payments of 167 participants currently receiving benefits. Approximately $14.5 million was paid to the insurer from plan assets for the group annuity contract.

The measurement date for the Company’s benefit plan disclosures is December 31 of each year. The changes in benefit obligations and plan assets for the years ended December 31, 2023 and 2022, and the funded status of the plans and assumptions used to determine benefit information at December 31, 2023 and 2022 were as follows:

	2023			2022
	(in thousands)
Change in benefit obligations:
Benefit obligations at beginning of year	$	16,537		$	40,182
Interest cost		783			1,034
Actuarial gain		(580	)		(7,772	)
Benefits paid		(1,188	)		(16,907	)
Benefit obligations at end of year		15,552			16,537
Change in plan assets:
Fair value of plan assets at beginning of year		13,783			32,103
Actual return on plan assets		1,137			(7,241	)
Employer contributions		128			5,828
Benefits paid		(1,188	)		(16,907	)
Fair value of plan assets at end of year		13,860			13,783
Funded status	$	(1,692	)	$	(2,754	)
Accumulated benefit obligations	$	(15,552	)	$	16,537

Weighted average assumptions to determine benefit obligations:
Discount rate	4.90	-	4.95%	5.11	-	5.14%
Expected long-term return on plan assets		5.25%			5.00%
Rate of compensation increase		n/a			n/a

Accumulated other comprehensive loss of $6.9 million and $8.3 million at December 31, 2023 and 2022, respectively, represent the net actuarial loss which have not yet been recognized as a component of pension and other post-retirement expense.

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

	2023			2022
	(in thousands)
Pension and other benefits:
Interest cost	$	783		$	1,034
Expected return on plan assets		(657	)		(1,226	)
Recognized net actuarial loss		310			585
Settlement expense		-			7,492
Pension expense	$	436		$	7,885
Other changes in plan assets and benefit obligations recognized in comprehensive income:
Net loss (gain)	$	(1,060	)	$	696
Amortization of recognized loss		(310	)		(8,077	)
Total recognized gain in comprehensive income	$	(1,370	)		(7,381	)

Weighted average assumptions used to determine net periodic benefit cost:	2023			2022
Discount rate	5.11	-	5.14%		2.69	-	2.74%
Expected long-term return on plan assets		5.00%				4.00%
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.

At December 31, 2023 and 2022, the plan held shares of various Aon Collective Investment Trust (“ACIT”) funds. The fair value of the Company’s pension plan assets by category were as follows:

	2023 Fair Value Measurements (in thousands)
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Measured at NAV as a practical expedient		Total
ACIT equity funds	$	-	$	760	$	-	$	760
ACIT fixed income funds		-		12,002		70		12,072
Cash management funds		-		1,028		-		1,028
	$	-	$	13,790	$	70	$	13,860

	2022 Fair Value Measurements (in thousands)
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Measured at NAV as a practical expedient		Total
ACIT equity funds	$	-	$	631	$	828	$	1,459
ACIT fixed income funds		-		10,666		261		10,927
Cash management funds		-		1,397		-		1,397
	$	-	$	12,694	$	1,089	$	13,783

Level 1 assets are priced using quotes for trades occurring in active markets for the identical asset. Level 2 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). Net asset values (“NAV”) of ACIT funds included in Level 2 are readily determinable, measured daily and based on the fair value of each fund’s underlying investments. For certain ACIT funds, NAV is used as a practical expedient to estimate fair value and is not categorized in the fair value hierarchy. These funds determine NAV based on the fair value of its underlying investments on a monthly or quarterly basis and have redemption restrictions. Redemptions may be requested at the fund’s quarter-end NAV under the notification requirements of each fund, including a 105 day notice.

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

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

Years ending December 31,
2023	$	1,394
2024	$	1,373
2025	$	1,346
2026	$	1,316
2027	$	1,277
2028-2032	$	5,851

The Company made a voluntary contribution of $5.7 million to its defined benefit pension plan in August 2022. No minimum contributions were required in 2023.