PENSION AND RETIREMENT PLANS LIABILITIES

3 Months Ended

Mar. 31, 2023

PENSION AND RETIREMENT PLANS LIABILITIES

PENSION AND RETIREMENT PLANS LIABILITIES

10.    PENSION AND RETIREMENT PLANS LIABILITIES

The following represents the net periodic benefit cost and related components of the Company’s multiemployer Retirement Income Plan (Plan), a trusteed defined benefit pension plan:

	Three months ended March 31,
December 31,	2023		2022
(in thousands)
Interest cost	$	40	$	243
Expected return on Plan assets		—		—
Amortization of net losses		220		253
Settlement loss		17,375		—
Net periodic benefit cost	$	17,635	$	496

During the first quarter of 2023, as part of the termination of the Plan, the Company completed an annuity purchase to transfer the risk from the Plan to a commercial annuity provider for substantially all of the remaining Plan participants through the liquidation of investments in the Plan and an additional cash contribution of $4.0 million. As part of this transfer, the Company

recognized a pre-tax, non-cash settlement charge of $17.4 million representing the accelerated recognition of actuarial losses. The Company continues to utilize an expected return on plan assets of zero percent for the current period due to the nature of investments and their short-term duration. Additionally, the Company recorded a payable for approximately $430 thousand to Marine Products Corporation (MPC), which represents reimbursement of funds paid using MPC’s assets in the Plan to settle the Company’s participant liabilities. The Company plans to repay the amounts owed to MPC in the second quarter of 2023. The Company did not contribute to this Plan during the three months ended March 31, 2022.

The Company expects to recognize an estimated additional pre-tax, non-cash settlement charge of approximately $820 thousand and make an additional cash contribution to the plan of $1.2 million, in the second quarter of 2023. The final amount of settlement charge is subject to change based on the actual return on plan assets. The Company currently expects the Plan to be fully terminated in the second quarter of 2023.

The Company permits selected highly compensated employees to defer a portion of their compensation into the non-qualified Supplemental Retirement Plan SERP). The Company maintains certain securities primarily in mutual funds and company-owned life insurance (COLI) policies as a funding source to satisfy the obligation of the SERP that have been classified as trading and are stated at fair value totaling $24.6 million as of March 31, 2023 and $24.2 million as of December 31, 2022. Trading gains related to the SERP assets totaled approximately $400 thousand during the three months ended March 31, 2023, compared to trading losses of approximately $1.5 million during the three months ended March 31, 2022. The SERP assets are reported in non-current Other assets in the accompanying Consolidated Balance Sheets and changes in the fair value of these assets are reported in the accompanying Consolidated Statements of Operations as compensation cost in Selling, general and administrative expenses.

The SERP liabilities include participant deferrals net of distributions and are stated at fair value of approximately $22.6 million as of March 31, 2023 and $23.1 million as of December 31, 2022. The SERP liabilities are reported in the accompanying Consolidated Balance Sheets in Long-term retirement plan liabilities and any change in the fair value is recorded as compensation cost within Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. Changes in the fair value of the SERP liabilities represented unrealized gains of approximately $417 thousand during the three months ended March 31, 2023, compared to unrealized losses of approximately $1.4 million during the three months ended March 31, 2022.