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Retirement Benefit Plans
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Retirement Benefit Plans Retirement Benefit Plans
Defined Benefit Plans: The Company maintains defined benefit pension plans that provide benefits based on years of service and average compensation during certain periods. Prior to 2020, the Company amended the Combined Defined Benefit Plan for NACCO Industries, Inc. and its subsidiaries (the “Combined Plan”) to freeze pension benefits for all employees. The Company also amended the Supplemental Retirement Benefit Plan (the “SERP”) to freeze all pension benefits. All eligible employees of the Company, including employees whose pension benefits are frozen, receive retirement benefits under defined contribution retirement plans.
During the year ended December 31, 2019, the Company offered lump-sum settlements to certain Combined Plan participants. These lump sum payments resulted in a pension settlement charge of $0.9 million.
The assumptions used in accounting for the defined benefit plans were as follows for the years ended December 31:
 20202019
Weighted average discount rates for pension benefit obligation
2.02% - 2.36%
2.98% - 3.20%
Weighted average discount rates for net periodic benefit cost
2.98% - 3.20%
4.10% - 4.20%
Expected long-term rate of return on assets for net periodic benefit cost7.00 %7.50 %
Set forth below is a detail of the net periodic pension (income) expense for the defined benefit plans for the years ended December 31:
 20202019
Interest cost$1,285 $1,710 
Expected return on plan assets(2,435)(2,778)
Amortization of actuarial loss597 422 
Amortization of prior service cost58 58 
     Settlements— 873 
Net periodic pension (income) expense$(495)$285 
Set forth below is detail of other changes in plan assets and benefit obligations recognized in other comprehensive loss (income) for the years ended December 31:
 20202019
Current year actuarial loss (gain)$667 $(1,030)
Amortization of actuarial loss(597)(422)
Amortization of prior service cost(58)(58)
Settlements— (873)
Total recognized in other comprehensive loss (income)$12 $(2,383)
The following table sets forth the changes in the benefit obligation and the plan assets during the year and the funded status of the defined benefit plans at December 31:
 20202019
Change in benefit obligation  
Projected benefit obligation at beginning of year$41,854 $42,026 
Interest cost1,285 1,710 
Actuarial loss3,996 3,121 
Benefits paid(2,535)(2,391)
Settlements— (2,612)
Projected benefit obligation at end of year$44,600 $41,854 
Accumulated benefit obligation at end of year$44,600 $41,854 
Change in plan assets  
Fair value of plan assets at beginning of year$37,364 $34,954 
Actual return on plan assets5,763 6,930 
Employer contributions507 483 
Benefits paid(2,535)(2,391)
Settlements— (2,612)
Fair value of plan assets at end of year$41,099 $37,364 
Funded status at end of year$(3,501)$(4,490)
Amounts recognized in the balance sheets consist of:  
Non-current assets$4,070 $3,079 
Current liabilities(549)(606)
Non-current liabilities(7,022)(6,963)
 $(3,501)$(4,490)
Components of accumulated other comprehensive loss (income) consist of:
Actuarial loss$14,022 $13,951 
Prior service cost761 819 
Deferred taxes(3,316)(3,305)
 $11,467 $11,465 
The Company recognizes as a component of benefit (income) cost, as of the measurement date, any unrecognized actuarial net gains or losses that exceed 10% of the larger of the projected benefit obligations or the plan assets, defined as the "corridor." Amounts outside the corridor are amortized over the average expected remaining service of active participants expected to benefit under the retiree medical plans or over the average expected remaining lifetime of inactive participants for the pension plans. The (gain) loss amounts recognized in AOCI are not expected to be fully recognized until the plan is terminated or as settlements occur, which would trigger accelerated recognition. Prior service costs resulting from plan changes are also in AOCI.
The Company's policy is to make contributions to fund its pension plans within the range allowed by applicable regulations.
The Company maintains one supplemental defined benefit plan that pays monthly benefits to participants directly out of corporate funds. All other pension benefit payments are made from assets of the pension plans.
Future pension benefit payments expected to be paid from assets of the pension plans are:
2021$2,631 
20222,600 
20232,676 
20242,695 
20252,666 
2026 - 203012,866 
 $26,134 
The expected long-term rate of return on defined benefit plan assets reflects management's expectations of long-term rates of return on funds invested to provide for benefits included in the projected benefit obligations. In establishing the expected long-term rate of return assumption for plan assets, the Company considers the historical rates of return over a period of time that is consistent with the long-term nature of the underlying obligations of these plans as well as a forward-looking rate of return. The historical and forward-looking rates of return for each of the asset classes used to determine the Company's estimated rate of return assumption were based upon the rates of return earned or expected to be earned by investments in the equivalent benchmark market indices for each of the asset classes.
Expected returns for pension plans are based on a calculated market-related value for pension plan assets. Under this methodology, asset gains and losses resulting from actual returns that differ from the Company's expected returns are recognized in the market-related value of assets ratably over three years.
The pension plans maintain investment policies that, among other things, establish a portfolio asset allocation methodology with percentage allocation bands for individual asset classes. The investment policies provide that investments are reallocated between asset classes as balances exceed or fall below the appropriate allocation bands.
The following is the actual allocation percentage and target allocation percentage for the pension plan assets at December 31:
 2020
Actual
Allocation		2019
Actual
Allocation		Target Allocation
Range
U.S. equity securities45.4 %45.1 %
36.0% - 54.0%
Non-U.S. equity securities20.3 %20.0 %
16.0% - 24.0%
Fixed income securities33.9 %34.4 %
30.0% - 40.0%
Money market0.4 %0.5 %
0.0% - 10.0%
The defined benefit pension plans do not have any direct ownership of NACCO common stock.
The fair value of each major category of the Company's pension plan assets are valued using quoted market prices in active markets for identical assets, or Level 1 in the fair value hierarchy. Following are the values as of December 31:
Level 1
 20202019
U.S. equity securities$18,640 $16,862 
Non-U.S. equity securities8,335 7,482 
Fixed income securities13,948 12,854 
Money market176 166 
Total$41,099 $37,364 
Postretirement Health Care: The Company also maintains health care plans which provide benefits to grandfathered eligible retired employees. All health care plans of the Company have a cap on the Company's share of the costs. The health care plans were amended effective January 1, 2019 to eliminate the open network structure. The move to network provided benefits will result in cost savings for the Company. These plans have no assets. Under the Company's current policy, plan benefits are funded at the time they are due to participants.
The assumptions used in accounting for the postretirement health care plans are set forth below for the years ended December 31:
 20202019
Weighted average discount rates for benefit obligation1.37 %2.65 %
Weighted average discount rates for net periodic benefit cost
1.37% - 2.65%
3.80 %
Health care cost trend rate assumed for next year6.25 %6.50 %
Rate to which the cost trend rate is assumed to decline (ultimate trend rate)5.0 %5.0 %
Year that the rate reaches the ultimate trend rate20272025
Set forth below is a detail of the net periodic benefit (income) expense for the postretirement health care plans for the years ended December 31:
 20202019
Service cost$21 $24 
Interest cost52 77 
Amortization of actuarial (gain) loss(1)8 
Amortization of prior service credit(59)(80)
Amortization of curtailment(31)— 
Net periodic benefit (income) expense$(18)$29 
Set forth below is a detail of other changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31:
 20202019
Current year actuarial loss$194 $46 
Amortization of actuarial gain (loss)1 (8)
Amortization of prior service credit59 80 
Amortization of curtailment31 — 
Transfers46 — 
Total recognized in other comprehensive income$331 $118 
The following sets forth the changes in benefit obligations during the year and the funded status of the postretirement health care at December 31:
 20202019
Change in benefit obligation  
Benefit obligation at beginning of year$2,049 $2,113 
Service cost21 24 
Interest cost52 77 
Plan amendments49 — 
Actuarial loss145 46 
Benefits paid(262)(211)
Benefit obligation at end of year$2,054 $2,049 
Funded status at end of year$(2,054)$(2,049)
Amounts recognized in the balance sheets consist of:  
Current liabilities$(238)$(204)
Noncurrent liabilities(1,816)(1,845)
 $(2,054)$(2,049)
Components of accumulated other comprehensive loss (income) consist of:  
Actuarial loss$466 $227 
Prior service credit(167)(259)
Deferred taxes(167)(96)
 $132 $(128)
Future postretirement health care benefit payments expected to be paid are:
2021239 
2022226 
2023211 
2024196 
2025171 
2026 - 2030688 
 $1,731 
Defined Contribution Plans: NACCO and its subsidiaries maintain a defined contribution (401(k)) plan for substantially all employees and provide employer matching contributions based on plan provisions. The plan also provides for a minimum employer contribution. Total costs, including Company contributions, for these plans were $2.8 million and $2.7 million in 2020 and 2019, respectively.