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Pension Benefits, Other Postretirement Benefits and Employee Savings and Investment Plans
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Pension Benefits, Other Postretirement Benefits and Employee Savings and Investment Plan Pension Benefits, Other Postretirement Benefits and Employee Savings and Investment Plan
Pension and Other Postretirement Benefits
Pension and Other Postretirement Benefit Plans
As of December 31, 2022, we had one qualified noncontributory defined benefit pension plan: the Union Plan. In June 2020, we completed the remaining settlement efforts for 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 had been terminated and substantially settled in late 2019. There are no plans to terminate the Union Plan.
Additionally, we sponsor non-qualified noncontributory defined benefit pension plans and 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 31st for each respective plan year.
Pension Plan Termination & Settlement
In October 2019, our Chief Executive Officer approved the termination of the Merged Plan. We provided participants of the Merged Plan an option to elect either a lump sum distribution or an annuity. A group annuity contract was purchased with an insurance company for all participants who did not elect a lump sum distribution. The insurance company became responsible for administering and paying pension benefit payments effective January 1, 2020.
Upon completion of the pension termination and settlement processes for the Merged Plan, we had a $9.7 million remaining pension surplus investment balance. In July 2020 and December 2021, we transferred $9.2 million of the pension surplus investment balance to a suspense account held within a trust for the Rogers Employee Savings and Investment Plan (RESIP), a 401(k) plan for domestic employees. In December 2021, we transferred the remaining pension investment balance not initially transferred, to the RESIP trust suspense account. In 2021, $0.5 million of the pension surplus investment balance was used for further settlement efforts for the Merged Plan termination. The funds in the RESIP trust suspense account were used to fund certain employer contributions. In 2022, we exhausted the pension surplus investment balance.
Plan Assets and Plan Benefit Obligations
The following table summarizes the change in plan assets and changes in benefit obligations:
Pension BenefitsOther Postretirement Benefits
(Dollars in thousands)2022202120222021
Change in plan assets:
Fair value of plan assets as of January 1$33,462 $35,296 $— $— 
Actual return on plan assets(5,616)(222)— — 
Employer contributions— — 19 165 
Benefit payments(1,546)(1,612)(19)(165)
Transfer related to plan termination— — — — 
Pension settlements— — — — 
Fair value of plan assets as of December 31$26,300 $33,462 $— $— 
Change in plan benefit obligations:
Fair value of plan benefit obligations as of January 1$28,652 $30,289 $1,444 $1,503 
Service cost— — 89 41 
Interest cost746 732 36 26 
Actuarial (gain) loss(6,573)(757)(109)39 
Benefit payments(1,546)(1,612)(19)(165)
Pension settlements— — — — 
Fair value of plan benefit obligations as of December 31$21,279 $28,652 $1,441 $1,444 
Amount overfunded (underfunded)$5,021 $4,810 $(1,441)$(1,444)
The decreases in our plan benefit obligations in 2022 and 2021 were primarily driven by actuarial gains and benefit payments, partially offset by interest costs.
Our pension-related balances reflected in the consolidated statements of financial position consisted of the following:
Pension BenefitsOther Postretirement Benefits
As of December 31,As of December 31,
(Dollars in thousands)2022202120222021
Assets & Liabilities:
Non-current assets$5,251 $5,123 $— $— 
Current liabilities(4)(3)(166)(136)
Non-current liabilities(226)(310)(1,275)(1,308)
Net assets (liabilities)$5,021 $4,810 $(1,441)$(1,444)
Accumulated Other Comprehensive Loss:
Net actuarial (loss) gain$(11,803)$(11,807)$189 $80 
Prior service benefit— — — — 
Accumulated other comprehensive (loss) income$(11,803)$(11,807)$189 $80 
The projected benefit obligation (PBO), accumulated benefit obligation (ABO), and fair value of plan assets for the pension plan with a PBO or ABO in excess of its plan assets were immaterial as of December 31, 2022 and 2021.
The PBO, ABO, and fair value of plan assets for the pension plan with plan assets in excess of its PBO or ABO were $21.0 million, $21.0 million and $26.3 million, respectively, as of December 31, 2022. The PBO, ABO, and fair value of plan assets for the pension plans with plan assets in excess of their PBO or ABO were $28.3 million, $28.3 million and $33.5 million, respectively, as of December 31, 2021.
The PBO and ABO of plan assets for the other postretirement benefit plans with a PBO or ABO in excess of plan assets were both $1.4 million as of December 31, 2022. The PBO and ABO of plan assets for the other postretirement benefit plans with a PBO or ABO in excess of plan assets were both $1.4 million as of December 31, 2021. The other postretirement benefit plans did not have any plan assets as of December 31, 2022 or 2021.
Components of Net Periodic Benefit Cost (Credit)
The components of net periodic benefit cost (credit) were as follows:
Pension BenefitsOther Postretirement Benefits
Years Ended December 31,Years Ended December 31,
(Dollars in thousands)202220212020202220212020
Service cost$— $— $— $89 $41 $56 
Interest cost746 732 908 36 26 40 
Expected return of plan assets(1,359)(1,558)(1,574)— — — 
Amortization of prior service credit— — — — (97)(112)
Amortization of net loss (gain)405 387 427 — — — 
Settlement charge— — (63)— — — 
Net periodic benefit cost (credit)$(208)$(439)$(302)$125 $(30)$(16)
Plan Assumptions
The key plan assumptions utilized in our annual plan measurements were as follows:
Pension BenefitsOther Postretirement Benefits
2022202120222021
Weighted average assumptions used in benefit obligations:
Discount rate5.25 %2.75 %5.00 %2.25 %
Weighted average assumptions used in net periodic benefit costs:
Discount rate2.75 %2.50 %2.25 %1.75 %
Expected long-term rate of return on assets4.17 %4.53 %— %— %
For measurement purposes as of December 31, 2022, we assumed an annual health care cost trend rate of 6.25% for covered health care benefits for retirees pre-age 65 or post-age 65. For measurement purposes as of December 31, 2021, we assumed an annual health care cost trend rate of 6.25% for covered health care benefits for retirees pre-age 65 or post-age 65.
Our pension plan assets are invested with the objective of achieving a total rate of return over the long-term that is sufficient to fund future pension obligations. In managing these assets and our investment strategy, we consider future cash contributions to the plan as well as the potential of the portfolio underperforming the market. We set asset allocation target ranges based on current funding status and future projections in order to mitigate the portfolio performance risk while maintaining its funded status. Fixed income securities comprise a substantial percentage of our plan assets portfolio. As of December 31, 2022, we held approximately 91% fixed income and short-term cash securities and 9% equity securities in our portfolio, compared to December 31, 2021 when we held approximately 90% fixed income and short-term cash securities and 10% equity securities.
In determining our investment strategy and calculating the net benefit cost, we utilized an expected long-term rate of return on plan assets, which was developed based on several factors, including the plans’ asset allocation targets, the historical and projected performance on those asset classes, as well as the plan’s current asset composition. To justify our assumptions, we analyzed certain data points related to portfolio performance. Based on the historical returns and the projected future returns, we determined that a target return of 5.59% is appropriate for the current portfolio.
The following table presents the fair value of the pension plan net assets by asset category and level, within the fair value hierarchy, as of December 31, 2022 and 2021:
Fair Value of Plan Assets as of December 31, 2022
(Dollars in thousands)Level 1Level 2Level 3Total
Fixed income bonds$— $22,180 $— $22,180 
Mutual funds2,466 — — 2,466 
Pooled separate accounts— 531 — 531 
Guaranteed deposit account— — 1,123 1,123 
Total plan assets at fair value$2,466 $22,711 $1,123 $26,300 
Fair Value of Plan Assets as of December 31, 2021
(Dollars in thousands)Level 1Level 2Level 3Total
Fixed income bonds$— $28,392 $— $28,392 
Mutual funds3,400 — — 3,400 
Pooled separate accounts— 380 — 380 
Guaranteed deposit account— — 1,290 1,290 
Total plan assets at fair value$3,400 $28,772 $1,290 $33,462 
The following table presents a summary of changes in the fair value of the guaranteed deposit account’s Level 3 assets for the year ended December 31, 2022:
Guaranteed Deposit Account
Balance as of December 31, 2021$1,290 
Change in unrealized gain (loss)(129)
Purchases, sales, issuances and settlements (net)(38)
Balance as of December 31, 2022$1,123 
Cash Flows
We were not required to make any contributions to our qualified noncontributory defined benefit pension plan in 2022 and 2021. We made expected benefit payments for our qualified defined benefit pension plan through the utilization of plan assets for the funded pension plans in 2022 and 2021. As there is no funding requirement for the non-qualified noncontributory defined benefit pension plans and other postretirement benefit plans, we funded benefit payments, which were immaterial in 2022 and 2021, as incurred using cash from operations.
The benefit payments are based on the same assumptions used to measure our benefit obligations as of December 31, 2022. The following table sets forth the expected benefit payments to be paid for the pension plans and the other postretirement benefit plans:
Pension BenefitsOther Postretirement Benefits
2023$1,721 $166 
2024$1,725 $147 
2025$1,761 $158 
2026$1,712 $164 
2027$1,705 $158 
2028-2032$7,972 $718 
Employee Savings and Investment Plan
We sponsor the RESIP, a 401(k) plan for domestic employees. In 2022, employees could defer an amount they choose, up to the annual IRS limit of $20,500. Certain eligible participants are also allowed to contribute the maximum catch-up contribution per IRS regulations. We match each eligible employee’s annual pre-tax contributions at a rate of 100% for the first 1% of the employee’s salary and 50% for the next 5% of each employee’s salary for a total match of 3.5%. Unless otherwise indicated by the participant, the matching dollars are invested in the same funds as the participant’s contributions. RESIP related expense amounted to $11.8 million, $5.6 million and $4.9 million in 2022, 2021 and 2020, respectively. The increase in expense in 2022 was primarily due to a $6.5 million discretionary RESIP contribution related to the previously anticipated merger with DuPont.