Note 23 - Defined Benefit Plan

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Defined Benefit Plan [Text Block]

23.  Defined Benefit Plan:

As part of the Merger, the Company assumed sponsorship of Weingarten’s noncontributory qualified cash balance retirement plan (“the Benefit Plan”). At the date of the Merger, the Benefit Plan was frozen and as a result no new benefits will be offered to employees who were not already part of the Benefit Plan on the Merger date. The Benefit Plan was terminated as of December 31, 2021. The Benefit Plan maintains a separate account for each participant. Annual additions to each participant’s account included an interest credit of 4.5% as the service credit was suspended upon the freeze. The participant data used in determining the liabilities and costs for the Benefit Plan was determined as of January 1, 2021.

The following table summarizes the measurement changes in the Benefit Plan’s projected benefit obligation, plan assets and funded status, as well as the components of net periodic benefit costs, including key assumptions, from the date of the Merger through December 31, 2021 (in thousands):

	2021
Change in Projected Benefit Obligation:
Benefit obligation at date of the Merger	$	73,081
Interest cost		762
Settlement payments		(29,107	)
Actuarial gain		(6,831	)
Benefit payments		(910	)
Benefit obligation at December 31, 2021	$	36,995
Change in Plan Assets:
Fair value of plan assets at date of the Merger	$	74,025
Actual return on plan assets		642
Settlement payments		(30,104	)
Benefit payments		(910	)
Fair value of plan assets at December 31, 2021	$	43,653
Funded status at December 31, 2021 (included in Other assets)	$	6,658
Accumulated benefit obligation	$	36,995
Net gain recognized in other comprehensive income	$	2,216

The components of net periodic benefit income, included in Other income, net in the Company’s Consolidated Statements of Income for the year ended December 31, 2021 are as follows (in thousands):

	2021
Interest cost	$	(750	)
Expected return on plan assets		2,125
Settlement gain		2,216
Total net periodic benefit income	$	3,591

The weighted-average assumptions used to determine the benefit obligation as of December 31, 2021 are as follows:

Discount rate	2.43	%
Salary scale increases	N/A
Interest credit rate for cash balance plan	4.50	%

The selection of the discount rate is made annually after comparison to yields based on high quality fixed-income investments. The long-term rate of return is a composite rate for the Benefit Plan. It is derived as the sum of the percentages invested in each principal asset class included in the portfolio multiplied by their respective expected rates of return. The Company considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the Benefit Plan portfolio. This analysis resulted in the selection of 7.00% as the long-term rate of return assumption for the year ended December 31, 2021.

No contributions are anticipated to be made to the Benefit Plan during 2022. The expected benefit payments for the next 10 years for the Benefit Plan is as follows (in millions):

		2022		2023		2024		2025		2026		2027 - 2031
Benefit payments	$	19.5	$	2.3	$	2.3	$	2.3	$	2.2	$	10.4

The Benefit Plan’s investment policy is to address the long-term needs of the Benefit Plan and consider the risk tolerances of participants, to select appropriate investments to be offered by the Benefit Plan and to establish procedures for monitoring and evaluating the performance of the investments of the Benefit Plan. The Benefit Plan’s overall objectives for selecting and monitoring investment options are (i) to promote and optimize retirement wealth accumulation, (ii) to provide a full range of asset classes and investment options that are intended to help diversify the portfolio to maximize return within reasonable and prudent levels of risk, (iii) to control costs of administering the Benefit Plan and (iv) to manage the investments held by the Benefit Plan.

The selection of investment options is determined using criteria based on the following characteristics: fund history, relative performance, investment style, portfolio structure, manager tenure, minimum assets, expenses and operation considerations. Investment options selected for use in the Benefit Plan are reviewed at least on a semi-annual basis to evaluate material changes from the selection criteria. Asset allocation is used to determine how the investment portfolio should be split between stocks, bonds and cash. The asset allocation decision is influenced by investment time horizon; risk tolerance; and investment return objectives. The primary factor in establishing asset allocation is demographics of the Benefit Plan. A broad market diversification model is used in considering all these factors, and the percentage allocation to each investment category may also vary depending upon market conditions. Re-balancing of the allocation of the Benefit Plan’s assets occurs semi-annually.

The fair value of plan assets was determined based on publicly quoted market prices for identical assets as of the December 31, 2021, which are all classified as Level 1 observable inputs. The fair value and allocation of the plan assets were as follows (in thousands):

	Fair Value		Asset Allocation
Cash and short-term investments	$	26,246		60.1	%
Large company funds		7,130		16.3	%
Mid company funds		662		1.5	%
Small company funds		1,958		4.5	%
International funds		1,972		4.5	%
Fixed income funds		4,260		9.8	%
Growth funds		1,425		3.3	%
Total	$	43,653		100.0	%

Concentrations of risk within the equity portfolio are investments classified within the following sectors: technology, healthcare, consumer cyclical goods, financial services, and communication services, which represent approximately 24%, 15%, 14%, 14% and 11% of total equity investments, respectively.