Pension Benefits and Other Postretirement Benefits

3 Months Ended

Mar. 31, 2020

Pension Benefit and Other Postretirement Benefits

Pension Benefits and Other Postretirement Benefits

Pension and Other Postretirement Benefit Plans

As of March 31, 2020, we had two qualified noncontributory defined benefit pension plans, the Rogers Corporation Employees’ Pension Plan (the Union Plan) and the Rogers Corporation Defined Benefit Pension Plan (following its merger with the Hourly Employees Pension Plan of Arlon LLC, Microwave Material and Silicone Technologies Divisions, Bear, Delaware (collectively, the Merged Plan)), which were frozen and had ceased accruing benefits. The Merged Plan was terminated and substantially settled in late 2019, with remaining settlement efforts expected to be completed in the second quarter of 2020. There are no plans to terminate the Union Plan.

Additionally, we sponsor other postretirement benefit plans, including multiple fully insured or self-funded medical plans and life insurance plans for certain retirees. The measurement date for all plans is December 31^st for each respective plan year.

Pension Plan Termination & Settlement

During the second quarter of 2019, following receipt of a determination letter from the Internal Revenue Service (IRS), we amended the Merged Plan to (a) terminate the Merged Plan (subject to discretionary approval by our Chief Executive Officer) and (b) add a lump sum distribution option in connection with the termination of the Merged Plan, if approved. We subsequently provided participants of the Merged Plan an option to elect either a lump sum distribution or an annuity.

On October 17, 2019, our Chief Executive Officer approved the termination of the Merged Plan. A group annuity contract was purchased with an insurance company for all participants who did not elect a lump sum distribution, for $123.5 million, with a cash settlement date of October 24, 2019. The insurance company became responsible for administering and paying pension benefit payments effective January 1, 2020.

The lump sum distributions of $38.9 million were paid out prior to December 31, 2019. The Merged Plan paid an additional $1.3 million of monthly pension benefit payments subsequent to the annuity purchase date during the transition period ending December 31, 2019. As of March 31, 2020, the Merged Plan had sufficient assets to satisfy all transaction obligations and had $9.0 million of net assets remaining.

In addition, we recorded a total non-cash pre-tax settlement charge in connection with the termination of the Merged Plan of $53.2 million during the fourth quarter of 2019. This settlement charge included the immediate recognition into expense of the related unrecognized losses within “Accumulated other comprehensive loss” on the consolidated statements of financial position as of the plan termination date. The settlement charge was recognized in “Pension settlement charges” in the consolidated statements of operations. We expect to incur an additional non-cash pre-tax settlement charge in connection with the remaining settlement efforts of the Merged Plan of approximately $0.7 million during the second quarter of 2020.

Components of Net Periodic Benefit (Credit) Cost

The components of net periodic benefit (credit) cost were as follows:


	Pension Benefits						Other Postretirement Benefits
	Three Months Ended						Three Months Ended
	March 31,						March 31,
(Dollars in thousands)	2020		2019		2020		2019
Service cost	$	—	$	—	$	17	$	18
Interest cost	231		1,784		10		15
Expected return of plan assets	(393)		(2,192)		—		—
Amortization of prior service credit	—		—		(28)		(253)
Amortization of net loss	114		454		—		—
Net periodic benefit (credit) cost	$	(48)	$	46	$	(1)	$	(220)

Employer Contributions

There were no required contributions to our qualified defined benefit pension plan for the three-month periods ended March 31, 2020 and 2019, and we are not required to make additional contributions to these plans for the remainder of 2020. No voluntary contributions were made to our qualified defined benefit pension plans for either of the three-month periods ended March 31, 2020 and 2019.

As there is no funding requirement for the other postretirement benefit plans, we funded these benefit payments as incurred, which were immaterial for each of the three-month periods ended March 31, 2020 and 2019, using cash from operations.