Pension and Postretirement Benefits

12 Months Ended

Dec. 31, 2021

Pension and Other Postretirement Benefits [Abstract]

Pension And Other Postretirement Benefits [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, 2021 and 2020:

Other Post-

Pension Benefits

Retirement Benefits

2021

2020

2021

2020

Foreign

U.S.

Total

Foreign

U.S.

Total

U.S.

U.S.

Change in benefit obligation

Gross benefit obligation at beginning

of year

$

247,675

$

109,969

$

357,644

$

217,893

$

153,723

$

371,616

$

3,234

$

4,266

Service cost

698

547

1,245

4,340

491

4,831

1

5

Interest cost

2,594

1,737

4,331

3,416

2,923

6,339

27

77

Employee contributions

71

-

71

73

-

73

-

-

Effect of plan amendments

-

-

-

-

50

50

(78)

-

Curtailment gain

-

-

-

(2,324)

-

(2,324)

-

-

Plan settlements

(541)

-

(541)

(2,316)

(53,494)

(55,810)

-

-

Benefits paid

(6,869)

(5,064)

(11,933)

(5,087)

(6,138)

(11,225)

(182)

(250)

Plan expenses and premiums paid

(74)

-

(74)

(135)

-

(135)

-

-

Transfer in of business acquisition

231

-

231

-

-

-

-

-

Actuarial (gain) loss 

(4,160)

(3,769)

(7,929)

16,834

12,414

29,248

(992)

(864)

Translation differences and other

(10,873)

-

(10,873)

14,981

-

14,981

-

-

Gross benefit obligation at end of year

$

228,752

$

103,420

$

332,172

$

247,675

$

109,969

$

357,644

$

2,010

$

3,234

Other Post-

Pension Benefits

Retirement Benefits

2021

2020

2021

2020

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

$

228,789

$

73,481

$

302,270

$

195,099

$

120,550

$

315,649

$

-

$

-

Actual return on plan assets

915

7,201

8,116

20,367

10,759

31,126

-

-

Employer contributions

4,289

2,063

6,352

6,912

2,302

9,214

182

250

Employee contributions

71

-

71

73

-

73

-

-

Plan settlements

(541)

-

(541)

(2,316)

(53,494)

(55,810)

-

-

Benefits paid

(6,869)

(5,065)

(11,934)

(5,087)

(6,138)

(11,225)

(182)

(250)

Plan expenses and premiums paid

(74)

-

(74)

(135)

(498)

(633)

-

-

Translation differences

(9,694)

-

(9,694)

13,876

-

13,876

-

-

Fair value of plan assets at end of year

$

216,886

$

77,680

$

294,566

$

228,789

$

73,481

$

302,270

$

-

$

-

Net benefit obligation recognized

$

(11,866)

$

(25,740)

$

(37,606)

$

(18,886)

$

(36,488)

$

(55,374)

$

(2,010)

$

(3,234)

Amounts recognized in the balance 

 sheet consist of:

 Non-current assets

$

7,916

$

-

$

7,916

$

6,748

$

-

$

6,748

$

-

$

-

 Current liabilities

(191)

(1,137)

(1,328)

(568)

(612)

(1,180)

(220)

(286)

 Non-current liabilities

(19,591)

(24,603)

(44,194)

(25,066)

(35,876)

(60,942)

(1,790)

(2,948)

Net benefit obligation recognized

$

(11,866)

$

(25,740)

$

(37,606)

$

(18,886)

$

(36,488)

$

(55,374)

$

(2,010)

$

(3,234)

Amounts not yet reflected in net

 periodic benefit costs and included in

 accumulated other comprehensive loss:

 Prior service (cost) credit

(22)

43

21

(26)

50

24

46

-

 Accumulated (loss) gain

(19,163)

(9,763)

(28,926)

(21,976)

(5,532)

(27,508)

1,034

124

 AOCI

(19,185)

(9,720)

(28,905)

(22,002)

(5,482)

(27,484)

1,080

124

 Cumulative employer contributions

 in excess of or (below) net 

 periodic benefit cost

7,319

(16,020)

(8,701)

3,116

(31,006)

(27,890)

(3,090)

(3,358)

Net benefit obligation recognized

$

(11,866)

$

(25,740)

$

(37,606)

$

(18,886)

$

(36,488)

$

(55,374)

$

(2,010)

$

(3,234)

The accumulated benefit obligation for all defined benefit pension plans was $

321.5

 million ($

103.4

 million U.S. and $

218.1

million Foreign) and $

344.4

 million ($

109.5

 million U.S. and approximately $

234.9

 million Foreign) as of December 31, 2021 and

2020, respectively. 

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

2021

2020

Foreign

U.S.

Total

Foreign

U.S.

Total

Projected benefit obligation

$

138,963

$

103,420

$

242,383

$

32,373

$

109,969

$

142,342

Accumulated benefit obligation

128,268

103,420

231,688

30,892

109,540

140,432

Fair value of plan assets

119,181

77,680

196,861

18,074

73,481

91,555

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

2021

2020

Foreign

U.S.

Total

Foreign

U.S.

Total

Projected benefit obligation

$

138,963

$

103,420

$

242,383

$

32,373

$

109,969

$

142,342

Fair value of plan assets

119,181

77,680

196,861

18,074

73,481

91,555

Components of net periodic benefit costs – pension plans:

2021

2020

Foreign

U.S.

Total

Foreign

U.S.

Total

Service cost

$

698

$

547

$

1,245

$

4,340

$

491

$

4,831

Interest cost

2,594

1,737

4,331

3,416

2,923

6,339

Expected return on plan assets

(4,686)

(3,611)

(8,297)

(4,262)

(4,810)

(9,072)

Settlement loss (gain)

35

-

35

(88)

22,667

22,579

Curtailment charge

-

-

-

(1,155)

-

(1,155)

Actuarial loss amortization

996

2,252

3,248

886

2,110

2,996

Prior service cost (credit)

amortization

3

7

10

(167)

-

(167)

Net periodic benefit (income) cost

$

(360)

$

932

$

572

$

2,970

$

23,381

$

26,351

2019

Foreign

U.S.

Total

Service cost

$

3,507

$

434

$

3,941

Interest cost

3,046

3,313

6,359

Expected return on plan assets

(3,668)

(3,227)

(6,895)

Settlement loss

258

-

258

Actuarial loss amortization

757

2,348

3,105

Prior service credit amortization

(165)

-

(165)

Net periodic benefit cost

$

3,735

$

2,868

$

6,603

Other changes recognized in other comprehensive income – pension plans:

2021

2020

Foreign

U.S.

Total

Foreign

U.S.

Total

Net (gain) loss arising during 

the period

$

(388)

$

(448)

$

(836)

$

(1,594)

$

1,536

$

(58)

Effect of plan amendment

Recognition of amortization in net

periodic benefit cost

Settlement loss

(83)

(2,252)

(2,335)

(39)

(22,667)

(22,706)

Prior service (cost) credit

-

(7)

(7)

1,325

50

1,375

Actuarial (loss) gain

(954)

(6,925)

(7,879)

(758)

3,967

3,209

Curtailment Recognition

(3)

-

(3)

(3)

-

(3)

Effect of exchange rates on amounts

included in AOCI

(1,390)

-

(1,390)

1,535

-

1,535

Total recognized in other 

comprehensive (income) loss

(2,818)

(9,632)

(12,450)

466

(17,114)

(16,648)

Total recognized in net periodic 

benefit cost and other 

comprehensive (income) loss

$

(3,178)

$

(8,700)

$

(11,878)

$

3,436

$

6,267

$

9,703

2019

Foreign

U.S.

Total

Net loss arising during period

$

3,826

$

3,926

$

7,752

Recognition of amortization in net periodic benefit

 cost

Prior service credit

196

-

196

Actuarial loss

(1,015)

(2,347)

(3,362)

Effect of exchange rates on amounts included

 in AOCI

(61)

-

(61)

Total recognized in other comprehensive loss

2,946

1,579

4,525

Total recognized in net periodic benefit cost and 

other comprehensive loss

$

6,681

$

4,447

$

11,128

Components of net periodic benefit costs – other postretirement plan:

2021

2020

2019

Service cost

$

1

$

5

$

6

Interest cost

27

77

143

Actuarial loss amortization

(82)

(5)

-

Prior service credit amortization

(31)

-

-

Net periodic benefit costs

$

(85)

$

77

$

149

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

2021

2020

2019

Net (gain) loss arising during period

$

(992)

$

(864)

$

395

Recognition of amortizations in net periodic

benefit cost 

(78)

-

-

Prior service credit

31

-

-

Actuarial gain amortization

82

5

-

Total recognized in other comprehensive (income)

loss

(957)

(859)

395

Total recognized in net periodic benefit cost and 

other comprehensive (income) loss 

$

(1,042)

$

(782)

$

544

Weighted-average assumptions used to determine benefit obligations as of December 31, 2021 and 2020:

Other Postretirement

Pension Benefits

Benefits

2021

2020

2021

2020

U.S. Plans:

Discount rate

2.58

%

2.19

%

2.45

%

2.05

%

Rate of compensation increase

N/A

6.00

%

N/A

N/A

Foreign Plans:

Discount rate

1.71

%

1.79

%

N/A

N/A

Rate of compensation increase

2.21

%

2.74

%

N/A

N/A

Weighted-average assumptions used to determine net periodic benefit costs for the years ended December 31, 2021 and

2020:

Other Postretirement

Pension Benefits

Benefits

2021

2020

2021

2020

U.S. Plans:

Discount rate

2.67

%

3.11

%

1.90

%

2.99

%

Expected long-term return on

plan assets

5.75

%

6.50

%

N/A

N/A

Rate of compensation increase

6.00

%

6.00

%

N/A

N/A

Foreign Plans:

Discount rate

1.38

%

2.30

%

N/A

N/A

Expected long-term return on

plan assets

2.06

%

2.20

%

N/A

N/A

Rate of compensation increase

2.52

%

2.79

%

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, 2021 and 2020:

2021

2020

Health care cost trend rate for next year

5.65

%

5.70

%

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

ultimate trend rate)

4.00

%

4.50

%

Year that the rate reaches the ultimate trend rate

2046

2037

Plan Assets and Fair Value

The Company’s pension plan target asset allocation and the weighted-average asset allocations as of December 31, 2021 and 2020

by asset category were as follows:

Asset Category

Target

2021

2020

U.S. Plans

Equity securities

44

%

46

%

58

%

Debt securities

50

%

48

%

36

%

Other

6

%

6

%

6

%

Total

100

%

100

%

100

%

Foreign Plans

Equity securities

39

%

36

%

33

%

Debt securities

50

%

43

%

45

%

Other

11

%

21

%

22

%

Total

100

%

100

%

100

%

As of December 31, 2021 and 2020, “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, 2021, 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,

2021, the U.S. pension plan pooled separate accounts included approximately 49 percent of investments in equity securities and 51

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, 2021, the diversified investment funds included approximately

62

 percent of investments in equity securities,

20

 percent

of investments in fixed income securities, and

18

 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, 2021 and 2020, the U.S. and foreign plans’ investments measured at fair value on a recurring basis were as

follows:

Fair Value Measurements at December 31, 2021

Total

Using Fair Value Hierarchy

U.S. Pension Assets

Fair Value

Level 1

Level 2

Level 3

Pooled separate accounts

$

72,721

$

-

$

72,721

$

-

Real estate

4,959

-

-

4,959

Subtotal U.S. pension plan assets in fair value hierarchy

$

77,680

$

-

$

72,721

$

4,959

Total U.S. pension plan assets

$

77,680

Foreign Pension Assets

Cash and cash equivalents

$

1,989

$

1,989

$

-

$

-

Insurance contract

99,527

-

-

99,527

Diversified equity securities - registered investment companies

10,999

-

10,999

-

Fixed income – foreign registered investment companies

3,593

-

3,593

-

Fixed income government securities

35,339

-

35,339

-

Real estate

6,588

-

-

6,588

Other - alternative investments

6,979

-

-

6,979

Sub-total of foreign pension assets in fair value hierarchy

$

165,014

$

1,989

$

49,931

$

113,094

Commingled funds measured at NAV

2,300

Diversified investment fund - registered investment

companies measured at NAV

49,572

Total foreign pension assets

$

216,886

Total pension assets in fair value hierarchy

$

242,694

$

1,989

$

122,652

$

118,053

Total pension assets measured at NAV

51,872

Total pension assets

$

294,566

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 hierarchy

$

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

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, 2021 and 2020 were as follows:

Insurance

Alternative

Contract

Real Estate

Investments

Total

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

Purchases

1,722

(78)

(334)

1,310

Settlements

(1,812)

-

-

(1,812)

Unrealized (losses) gains

(5,031)

1,926

(3,282)

(6,387)

Currency translation adjustment

(8,272)

(76)

(43)

(8,391)

Balance as of December 31, 2021

$

99,527

$

11,547

$

6,979

$

118,053

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 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, 2020, the last valuation date available for the multiemployer plan,

total plan liabilities were approximately $

587

 million. As of December 31, 2020, the multiemployer pension plan had total plan assets

of approximately $

387

 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 $

0.2

million during the year ended December 31, 2021. 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, 2021. 

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$

10.6

 million to its pension plans (approximately

$

6.6

 million U.S. and $

4.0

 million Foreign) and approximately $

0.2

 million to its other postretirement benefit plan in 2022.

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

2022

$

6,678

$

6,627

$

13,305

$

220

2023

6,661

6,043

12,704

209

2024

6,475

6,205

12,680

187

2025

6,984

6,199

13,183

174

2026

7,702

6,213

13,915

157

2027 to 2031

42,577

30,169

72,746

625

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 $

3.0

 million, $

2.5

 million and $

1.8

 million for the years ended December 31, 2021, 2020 and 2019, 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 and continuing through March

2021, the Company matched 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 $

4.8

 million,

$

5.7

 million and $

4.0

 million for the years ended December 31, 2021, 2020 and 2019, respectively.