Pension and Postretirement Benefits

12 Months Ended

Dec. 31, 2020

Pension and Other Postretirement Benefits [Abstract]

Pension And Other Postretirement Benefits Disclosure [Text Block]

Note 21 – Pension and Other Postretirement Benefits

The following table shows the funded status of the Company’s plans’ reconciled with amounts reported in the Consolidated

Balance Sheets as of December 31, 2020 and 2019:

Other Post-

Pension Benefits

Retirement Benefits

2020

2019

2020

2019

Foreign

U.S.

Total

Foreign

U.S.

Total

U.S.

U.S.

Change in benefit obligation

Gross benefit obligation at beginning

of year

$

217,893

$

153,723

$

371,616

$

111,316

$

58,734

$

170,050

$

4,266

$

4,106

Service cost

4,340

491

4,831

3,507

434

3,941

5

6

Interest cost

3,416

2,923

6,339

3,046

3,313

6,359

77

143

Employee contributions

73

—

73

73

—

73

—

—

Effect of plan amendments

—

50

50

30

—

30

—

—

Curtailment gain

(2,324)

—

(2,324)

—

—

—

—

—

Plan settlements

(2,316)

(53,494)

(55,810)

(1,087)

—

(1,087)

—

—

Benefits paid

(5,087)

(6,138)

(11,225)

(3,832)

(6,034)

(9,866)

(250)

(384)

Plan expenses and premiums paid

(135)

—

(135)

(129)

—

(129)

—

—

Transfer in of business acquisition

—

—

—

85,658

86,414

172,072

—

—

Actuarial loss (gain)

16,834

12,414

29,248

13,616

10,862

24,478

(864)

395

Translation differences and other

14,981

—

14,981

5,695

—

5,695

—

—

Gross benefit obligation at end of year

$

247,675

$

109,969

$

357,644

$

217,893

$

153,723

$

371,616

$

3,234

$

4,266

Other Post-

Pension Benefits

Retirement Benefits

2020

2019

2020

2019

Foreign

U.S.

Total

Foreign

U.S.

Total

U.S.

U.S.

Change in plan assets

Fair value of plan assets at 

beginning of year

$

195,099

$

120,550

$

315,649

$

94,826

$

49,415

$

144,241

$

—

$

—

Actual return on plan assets

20,367

10,759

31,126

13,458

10,663

24,121

—

—

Employer contributions

6,912

2,302

9,214

5,223

1,087

6,310

250

384

Employee contributions

73

—

73

73

—

73

—

—

Plan settlements

(2,316)

(53,494)

(55,810)

(1,087)

—

(1,087)

—

—

Benefits paid

(5,087)

(6,138)

(11,225)

(3,832)

(6,034)

(9,866)

(250)

(384)

Plan expenses and premiums paid

(135)

(498)

(633)

(129)

(500)

(629)

—

—

Transfer in of business acquisition

—

—

—

81,068

65,919

146,987

—

—

Translation differences

13,876

—

13,876

5,499

—

5,499

—

—

Fair value of plan assets at end of year

$

228,789

$

73,481

$

302,270

$

195,099

$

120,550

$

315,649

$

—

$

—

Net benefit obligation recognized

$

(18,886)

$

(36,488)

$

(55,374)

$

(22,794)

$

(33,173)

$

(55,967)

$

(3,234)

$

(4,266)

Amounts recognized in the balance 

sheet consist of:

Non-current assets

$

6,748

$

—

$

6,748

$

—

$

—

$

—

$

—

$

—

Current liabilities

(568)

(612)

(1,180)

(359)

(2,620)

(2,979)

(286)

(426)

Non-current liabilities

(25,066)

(35,876)

(60,942)

(22,435)

(30,553)

(52,988)

(2,948)

(3,840)

Net benefit obligation recognized

$

(18,886)

$

(36,488)

$

(55,374)

$

(22,794)

$

(33,173)

$

(55,967)

$

(3,234)

$

(4,266)

Amounts not yet reflected in net

periodic benefit costs and included in

accumulated other comprehensive loss:

Prior service credit

(26)

50

24

1,271

—

1,271

—

—

Accumulated loss

(21,976)

(5,532)

(27,508)

(22,816)

(46,560)

(69,376)

124

(734)

AOCI

(22,002)

(5,482)

(27,484)

(21,545)

(46,560)

(68,105)

124

(734)

Cumulative employer contributions

(below) or in excess of net periodic

benefit cost

3,116

(31,006)

(27,890)

(1,249)

13,387

12,138

(3,358)

(3,532)

Net benefit obligation recognized

$

(18,886)

$

(36,488)

$

(55,374)

$

(22,794)

$

(33,173)

$

(55,967)

$

(3,234)

$

(4,266)

The accumulated benefit obligation for all defined benefit pension plans was

$344.4

 million

($109.5

 million U.S. and

$234.9

million Foreign) and

$366.0

 million (

$152.9

 million U.S. and approximately

$213.1

 million Foreign) as of December 31, 2020 and

2019, respectively. 

Information for pension plans with an accumulated benefit obligation in excess of plan assets:

2020

2019

Foreign

U.S.

Total

Foreign

U.S.

Total

Projected benefit obligation

$

32,373

$

109,969

$

142,342

$

217,893

$

153,723

$

371,616

Accumulated benefit obligation

30,892

109,540

140,432

213,060

152,930

365,990

Fair value of plan assets

18,074

73,481

91,555

195,099

120,550

315,649

Information for pension plans with a projected benefit obligation in excess of plan assets:

2020

2019

Foreign

U.S.

Total

Foreign

U.S.

Total

Projected benefit obligation

$

32,373

$

109,969

$

142,342

$

217,893

$

153,723

$

371,616

Fair value of plan assets

18,074

73,481

91,555

195,099

120,550

315,649

Components of net periodic benefit costs – pension plans:

2020

2019

Foreign

U.S.

Total

Foreign

U.S.

Total

Service cost

$

4,340

$

491

$

4,831

$

3,507

$

434

$

3,941

Interest cost

3,416

2,923

6,339

3,046

3,313

6,359

Expected return on plan assets

(4,262)

(4,810)

(9,072)

(3,668)

(3,227)

(6,895)

Settlement loss

(88)

22,667

22,579

258

—

258

Curtailment charge

(1,155)

—

(1,155)

—

—

—

Actuarial loss amortization

886

2,110

2,996

757

2,348

3,105

Prior service (credit) cost 

amortization

(167)

—

(167)

(165)

—

(165)

Net periodic benefit cost

$

2,970

$

23,381

$

26,351

$

3,735

$

2,868

$

6,603

2018

Foreign

U.S.

Total

Service cost

$

3,426

$

383

$

3,809

Interest cost

2,254

1,847

4,101

Expected return on plan assets

(2,228)

(2,803)

(5,031)

Settlement loss

2

—

2

Actuarial loss amortization

881

2,276

3,157

Prior service (credit) cost amortization

(175)

59

(116)

Net periodic benefit cost

$

4,160

$

1,762

$

5,922

Other changes recognized in other comprehensive income – pension plans:

2020

2019

Foreign

U.S.

Total

Foreign

U.S.

Total

Net (gain) loss arising during 

the period

$

(1,594)

$

1,536

$

(58)

$

3,826

$

3,926

$

7,752

Effect of plan amendment

Recognition of amortization in net

periodic benefit cost

Settlement (loss)

(39)

(22,667)

(22,706)

—

—

—

Prior service credit (cost)

1,325

50

1,375

196

—

196

Actuarial loss

(758)

3,967

3,209

(1,015)

(2,347)

(3,362)

Curtailment Recognition

(3)

—

(3)

—

—

—

Effect of exchange rates on amounts

included in AOCI

1,535

—

1,535

(61)

—

(61)

Total recognized in other 

comprehensive loss (income) 

466

(17,114)

(16,648)

2,946

1,579

4,525

Total recognized in net periodic 

benefit cost and other 

comprehensive loss (income) 

$

3,436

$

6,267

$

9,703

$

6,681

$

4,447

$

11,128

2018

Foreign

U.S.

Total

Net gain arising during period

$

(663)

$

453

$

(210)

Recognition of amortization in net periodic benefit

 cost

Prior service credit (cost)

175

(59)

116

Actuarial loss

(883)

(2,276)

(3,159)

Effect of exchange rates on amounts included

 in AOCI

(890)

—

(890)

Total recognized in other comprehensive loss

(2,261)

(1,882)

(4,143)

Total recognized in net periodic benefit cost and 

other comprehensive loss

$

1,899

$

(120)

$

1,779

Components of net periodic benefit costs – other postretirement plan:

2020

2019

2018

Service cost

$

5

$

6

$

7

Interest cost

77

143

130

Actuarial loss amortization

(5)

—

42

Net periodic benefit costs

$

77

$

149

$

179

Other changes recognized in other comprehensive income – other postretirement benefit plans:

2020

2019

2018

Net (gain) loss arising during period

$

(864)

$

395

$

(443)

Amortization of actuarial loss in net periodic 

benefit costs

5

—

(42)

Total recognized in other comprehensive (income)

loss

(859)

395

(485)

Total recognized in net periodic benefit cost and 

other comprehensive (income) loss 

$

(782)

$

544

$

(306)

Weighted-average assumptions used to determine benefit obligations as of December 31, 2020 and 2019:

Other Postretirement

Pension Benefits

Benefits

2020

2019

2020

2019

U.S. Plans:

Discount rate

2.19

%

3.06

%

2.05

%

2.98

%

Rate of compensation increase

6.00

%

6.00

%

N/A

N/A

Foreign Plans:

Discount rate

1.79

%

1.83

%

N/A

N/A

Rate of compensation increase

2.74

%

2.58

%

N/A

N/A

Weighted-average assumptions used to determine net periodic benefit costs for the years ended December 31, 2020 and

2019:

Other Postretirement

Pension Benefits

Benefits

2020

2019

2020

2019

U.S. Plans:

Discount rate

3.11

%

4.08

%

2.99

%

4.03

%

Expected long-term return on

plan assets

6.50

%

5.75

%

N/A

N/A

Rate of compensation increase

6.00

%

5.50

%

N/A

N/A

Foreign Plans:

Discount rate

2.30

%

2.30

%

N/A

N/A

Expected long-term return on

plan assets

2.20

%

3.13

%

N/A

N/A

Rate of compensation increase

2.79

%

2.87

%

N/A

N/A

The long-term rates of return on assets were selected from within the reasonable range of rates determined by (a) historical real

returns for the asset classes covered by the investment policy and (b) projections of inflation over the long-term period during which

benefits are payable to plan participants. See Note 1 of Notes to Consolidated Financial Statements for further information.

Assumed health care cost trend rates as of December 31, 2020 and 2019:

2020

2019

Health care cost trend rate for next year

5.70

%

5.90

%

Rate to which the cost trend rate is assumed to decline (the

ultimate trend rate)

4.50

%

4.50

%

Year that the rate reaches the ultimate trend rate

2037

2037

Plan Assets and Fair Value

The Company’s pension plan target asset allocation and the weighted-average asset allocations as of December 31, 2020 and 2019

by asset category were as follows:

Asset Category

Target

2020

2019

U.S. Plans

Equity securities

10

%

58

%

32

%

Debt securities

90

%

36

%

64

%

Other

0

%

6

%

4

%

Total

100

%

100

%

100

%

Foreign Plans

Equity securities

37

%

33

%

34

%

Debt securities

53

%

45

%

45

%

Other

10

%

22

%

21

%

Total

100

%

100

%

100

%

As of December 31, 2020 and 2019, “Other” consisted principally of cash and cash equivalents, and investments in real estate

funds. 

The following is a description of the valuation methodologies used for the investments measured at fair value, including the

general classification of such instruments pursuant to the valuation hierarchy, where applicable:

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and money market funds and are classified as Level 1 investments.

Commingled Funds

Investments in the U.S. pension plan and foreign pension plan commingled funds represent pooled institutional investments,

including primarily collective investment trusts. These commingled funds are not available on an exchange or in an active market

and these investments are valued using their net asset value (“NAV”), which is generally based on the underlying asset values of the

investments held in the trusts. 

As of December 31, 2020, the foreign pension plan commingled funds included approximately

35

 percent of investments in

equity securities,

51

 percent of investments in fixed income securities, and

14

 percent of other non-related investments, primarily

real estate.

Pooled Separate Accounts

Investments in the U.S. pension plan pooled separate accounts consist of annuity contracts and are valued based on the reported

unit value at year end. Units of the pooled separate account are not traded on an exchange or in an active market; however, valuation is

based on the underlying investments of each pooled separate account and are classified as Level 2 investments. 

As of December 31,

2020, the U.S. pension plan pooled separate accounts included approximately 61 percent of investments in equity securities and 39

percent of investments in fixed income securities.

Fixed Income Government Securities

Investments in foreign pension plans fixed income government securities were valued using third party pricing services

which are based on a combination of quoted market prices on an exchange in an active market as well as proprietary pricing

models and inputs using observable market data and are classified as Level 2 investments.

Insurance Contract

Investments in the foreign pension plan insurance contract are valued at the highest value available for the Company at year

end, either the reported cash surrender value of the contract or the vested benefit obligation. Both the cash surrender value and

the vested benefit obligation are determined based on unobservable inputs, which are contractually or actuarially determined,

regarding returns, fees, the present value of the future cash flows of the contract and benefit obligations. The contract is classified

as a Level 3 investment.

Diversified Equity Securities - Registered Investment Companies

Investments in the foreign pension plans diversified equity securities of registered investment companies are based upon the

quoted redemption value of shares in the fund owned by the plan at year end. The shares of the fund are not available on an exchange

or in an active market; however, the fair value is determined based on the underlying investments in the fund as traded on an exchange

in an active market and are classified as Level 2 investments.

Fixed Income – Foreign Registered Investment Companies

Investments in the foreign pension plans fixed income securities of foreign registered investment companies are based upon the

quoted redemption value of shares in the fund owned by the plan at year end. The shares of the fund are not available on an exchange

or in an active market; however, the fair value is determined based on the underlying investments in the fund as traded on an exchange

in an active market and are classified as Level 2 investments.

Diversified Investment Fund - Registered Investment Companies

Investments in the foreign pension plan diversified investment fund of registered investment companies are based upon the quoted

redemption value of shares in the fund owned by the plan at year end. This fund is not available on an exchange or in an active market

and this investment is valued using its NAV, which is generally based on the underlying asset values of the investments held. As of

December 31, 2020, the diversified investment funds included approximately

62

 percent of investments in equity securities,

19

 percent

of investments in fixed income securities, and

19

 percent of other alternative investments.

Other – Alternative Investments

Investments in the foreign pension plans include certain other alternative investments such as inflation and interest rate swaps. 

These investments are valued based on unobservable inputs, which are contractually or actuarially determined, regarding returns, fees,

the present value of future cash flows of the contract and benefit obligations. These alternative investments are classified as Level 3

investments.

Real Estate

The U.S. and foreign pension plans’ investment in real estate consists of investments in property funds. The funds’

underlying investments consist of real property which are valued using unobservable inputs. These property funds are classified

as a Level 3 investment.

As of December 31, 2020 and 2019, the U.S. and foreign plans’ investments measured at fair value on a recurring basis were as

follows:

Fair Value Measurements at December 31, 2020

Total

Using Fair Value Hierarchy

U.S. Pension Assets

Fair Value

Level 1

Level 2

Level 3

Pooled separate accounts

$

69,385

$

—

$

69,385

$

—

Real estate

4,096

—

—

4,096

Subtotal U.S. pension plan assets in fair value hierarch y

$

73,481

$

—

$

69,385

$

4,096

Total U.S. pension plan assets

$

73,481

Foreign Pension Assets

Cash and cash equivalents

$

634

$

634

$

—

$

—

Insurance contract

112,920

—

—

112,920

Diversified equity securities - registered investment companies

8,851

—

8,851

—

Fixed income – foreign registered investment companies

3,711

—

3,711

—

Fixed income government securities

37,579

—

37,579

—

Real estate

5,679

—

—

5,679

Other - alternative investments

10,638

—

—

10,638

Sub-total of foreign pension assets in fair value hierarchy

$

180,012

$

634

$

50,141

$

129,237

Commingled funds measured at NAV

2,368

Diversified investment fund - registered investment

companies measured at NAV

46,409

Total foreign pension assets

$

228,789

Total pension assets in fair value hierarchy

$

253,493

$

634

$

119,526

$

133,333

Total pension assets measured at NAV

48,777

Total pension assets

$

302,270

Fair Value Measurements at December 31, 2019

Total

Using Fair Value Hierarchy

U.S. Pension Assets

Fair Value

Level 1

Level 2

Level 3

Cash and cash equivalents

$

450

$

450

$

—

$

—

Pooled separate accounts

64,636

—

64,636

—

Real estate

4,060

—

—

4,060

Subtotal U.S. pension plan assets in fair value hierarch y

$

69,146

$

450

$

64,636

$

4,060

Commingled funds measured at NAV

51,404

Total U.S. pension plan assets

$

120,550

Foreign Pension Assets

Cash and cash equivalents

$

1,502

$

1,502

$

—

$

—

Insurance contract

92,657

—

—

92,657

Diversified equity securities - registered investment companies

8,604

—

8,604

—

Fixed income – foreign registered investment companies

3,021

—

3,021

—

Fixed income government securities

32,512

—

32,512

—

Real estate

5,521

—

—

5,521

Other - alternative investments

9,436

—

—

9,436

Sub-total of foreign pension assets in fair value hierarchy

$

153,253

$

1,502

$

44,137

$

107,614

Commingled funds measured at NAV

2,037

Diversified investment fund - registered investment

companies measured at NAV

39,809

Total foreign pension assets

$

195,099

Total pension assets in fair value hierarchy

$

222,399

$

1,952

$

108,773

$

111,674

Total pension assets measured at NAV

93,250

Total pension assets

$

315,649

Certain investments that are measured at fair value using the NAV per share (or its equivalent) have not been classified in the fair

value hierarchy. The fair value amounts presented for these investments in the preceding tables are intended to permit reconciliation

of the fair value hierarchies to the line items presented in the statements of net assets available for benefits.

Changes in the fair value of the plans’ Level 3 investments during the years ended December 31, 2020 and 2019 were as follows:

Insurance

Alternative

Contract

Real Estate

Investments

Total

Balance as of December 31, 2018

$

79,873

2,382

—

$

82,255

Purchases

3,762

—

1,029

4,791

Assets acquired in business combinations

129

7,058

8,914

16,101

Sales

—

(238)

(278)

(516)

Settlements

(1,730)

—

—

(1,730)

Unrealized (losses) gains

12,199

403

(960)

11,642

Currency translation adjustment

(1,576)

(24)

731

(869)

Balance as of December 31, 2019

92,657

9,581

9,436

111,674

Purchases

3,902

18

989

4,909

Settlements

(2,027)

—

—

(2,027)

Unrealized gains (losses)

8,917

(16)

(171)

8,730

Currency translation adjustment

9,471

192

384

10,047

Balance as of December 31, 2020

$

112,920

$

9,775

$

10,638

$

133,333

In the fourth quarter of 2018, the Company began the process of terminating its Legacy Quaker noncontributory U.S. pension

plan (“Legacy Quaker U.S. Pension Plan”). During the third quarter of 2019, the Company received a favorable termination

determination letter from the Internal Revenue Service (“I.R.S.”) and completed the Legacy Quaker U.S. Pension Plan termination

during the first quarter of 2020. In order to terminate the Legacy Quaker U.S. Pension Plan in accordance with I.R.S. and Pension

Benefit Guaranty Corporation requirements, the Company was required to fully fund the Legacy Quaker U.S. Pension Plan on a

termination basis and the amount necessary to do so was approximately $

1.8

 million, subject to final true up adjustments. In the third

quarter of 2020, the Company finalized the amount of the liability and related annuity payments and received a refund in premium of

approximately $

1.6

 million. In addition, the Company recorded a non-cash pension settlement charge at plan termination of

approximately $

22.7

 million. This settlement charge included the immediate recognition into expense of the related unrecognized

losses within AOCI on the balance sheet as of the plan termination date.

In connection with the Combination, the Company indirectly acquired all of Houghton’s defined benefit pension plans, which are

included in the tables set forth above. The pension plans cover certain U.S. salaried and hourly employees as well as certain

employees in the U.K., France and Germany. The Houghton U.S. plans provide benefits based on an employee’s years of service and

compensation received for the highest five consecutive years of earnings. The foreign plans provide benefits based on a formula of

years and service and a percentage of compensation which varies among the various countries. 

The Company contributes to a multiemployer defined benefit pension plan under terms of a collective bargaining union contract

(the Cleveland Bakers and Teamsters Pension Fund, Employer Identification Number: 34-0904419 -001). The expiration date of the

collective bargaining contract is

May 1, 2022

. As of January 1, 2019, the last valuation date available for the multiemployer plan,

total plan liabilities were approximately $

589

 million. As of December 31, 2019, the multiemployer pension plan had total plan assets

of approximately $

364

 million. The Company’s contribution rate to the multiemployer pension plan is specified in the collective

bargaining union contract and contributions are made to the plan based on its union employee payroll. The Company contributed $

0.1

million during the year ended December 31, 2020. The Employee Retirement Income Security Act of 1974, as amended by the Multi-

Employer Pension Plan Amendments Act of 1980, imposes certain contingent liabilities upon an employer who is a contributor to a

multiemployer pension plan if the employer withdraws from the plan or the plan is terminated or experiences a mass withdrawal. 

While the Company may also have additional liabilities imposed by law as a result of its participation in the multiemployer defined

benefit pension plan, there is

no

 liability as of December 31, 2020. 

The Pension Protection Act of 2006 (the “PPA”) also added special funding and operational rules generally applicable to plan

years beginning after 2007 for multiemployer plans with certain classifications based on a multitude of factors (including, for

example, the plan’s funded percentage, cash flow position and whether the plan is projected to experience a minimum funding

deficiency). The plan to which the Company contributes is in “critical” status. Plans in the “critical” status classification must adopt

measures to improve their funded status through a funding improvement or rehabilitation plan which may require additional

contributions from employers (which may take the form of a surcharge on benefit contributions) and/or modifications to retiree

benefits. The amount of additional funds that the Company may be obligated to contribute to the plan in the future cannot be

estimated as such amounts will be likely based on future levels of work that require the specific use of those union employees covered

by the plan, and the amount of that future work and the number of affected employees that may be needed is not reasonably estimable. 

Cash Flows

Contributions

The Company expects to make minimum cash contributions of approximately

$10.0

 million to its pension plans (approximately

$5.9

 million U.S. and

$4.1

 million Foreign) and approximately

$0.3

 million to its other postretirement benefit plan in 2021.

Estimated Future Benefit Payments

Excluding any impact related to the PPA noted above, the following benefit payments, which reflect expected future service, as

appropriate, are expected to be paid:

Other Post-

Pension Benefits

Retirement

Foreign

U.S.

Total

Benefits

2021

$

6,658

$

5,923

$

12,581

$

286

2022

6,939

5,298

12,237

278

2023

7,024

6,072

13,096

265

2024

6,745

6,234

12,979

245

2025

7,394

6,228

13,622

226

2025 to 2029

42,522

30,443

72,965

923

The Company maintains a plan under which supplemental retirement benefits are provided to certain officers. Benefits payable

under the plan are based on a combination of years of service and existing postretirement benefits. Included in total pension costs are

charges of $

2.5

 million, $

1.8

 million and $

1.6

 million for the years ended December 31, 2020, 2019 and 2018, respectively,

representing the annual accrued benefits under this plan.

Defined Contribution Plan

The Company has a 401(k) plan with an employer match covering a majority of its U.S. employees. The plan allows for and the

Company previously paid a nonelective contribution on behalf of participants who have completed one year of service equal to 3% of

the eligible participants’ compensation in the form of Company common stock. During 2019 and 2018, the Company made both non-

elective and elective 401(k) matching contributions in cash, rather than stock. Beginning in April 2020, the Company began matching

both non-elective and elective 401(k) contributions in fully vested shared of the Company’s common stock rather than cash. See Note

8 of Notes to Consolidated Financial Statements. Total Company contributions were $

5.7

 million, $

4.0

 million and $

3.1

 million for

the years ended December 31, 2020, 2019 and 2018, respectively.