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Pension and Postretirement Benefits
 12 Months Ended
Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]  
Pension and Postretirement Benefits
Pension and Postretirement Benefits
Domestic Plans. Viad has trusteed, frozen defined benefit pension plans that cover certain employees which are funded by the Company. Viad also maintains certain unfunded defined benefit pension plans which provide supplemental benefits to select management employees. These plans use traditional defined benefit formulas based on years of service and final average compensation. Funding policies provide that payments to defined benefit pension trusts shall be at least equal to the minimum funding required by applicable regulations.
Viad also has certain defined benefit postretirement plans that provide medical and life insurance for certain eligible employees, retirees and dependents. The related postretirement benefit liabilities are recognized over the period that services are provided by employees. In addition, Viad retained the obligations for these benefits for retirees of certain sold businesses. While the plans have no funding requirements, Viad may fund the plans.
The components of net periodic benefit cost and other amounts recognized in other comprehensive income of Viad’s pension plans included the following as of December 31:
(in thousands)
2014
 
2013
 
2012
Net periodic benefit cost:
 
 
 
 
 
Service cost
$
87

 
$
66

 
$
104

Interest cost
1,079

 
1,030

 
1,150

Expected return on plan assets
(436
)
 
(400
)
 
(406
)
Recognized net actuarial loss
407

 
583

 
491

Net periodic benefit cost
1,137

 
1,279

 
1,339

Other changes in plan assets and benefit obligations recognized in other comprehensive income:
 
 
 
 
 
Net actuarial loss (gain)
3,418

 
(2,565
)
 
1,942

Reversal of amortization item:
 
 
 
 
 
Net actuarial loss
(407
)
 
(583
)
 
(491
)
Total recognized in other comprehensive income (loss)
3,011

 
(3,148
)
 
1,451

Total recognized in net periodic benefit cost and other comprehensive income (loss)
$
4,148

 
$
(1,869
)
 
$
2,790


The components of net periodic benefit cost and other amounts recognized in other comprehensive income of Viad’s postretirement benefit plans included the following:
(in thousands)
2014
 
2013
 
2012
Net periodic benefit cost:
 
 
 
 
 
Service cost
$
129

 
$
156

 
$
146

Interest cost
640

 
663

 
814

Expected return on plan assets
—

 
—

 
(74
)
Amortization of prior service credit
(593
)
 
(902
)
 
(1,113
)
Recognized net actuarial loss
166

 
518

 
547

Net periodic benefit cost
342

 
435

 
320

Other changes in plan assets and benefit obligations recognized in other comprehensive income:
 
 
 
 
 
Net actuarial loss (gain)
1,045

 
(1,496
)
 
224

Prior service credit
(1,283
)
 
(40
)
 
—

Reversal of amortization item:
 
 
 
 
 
Net actuarial loss
(166
)
 
(518
)
 
(547
)
Prior service credit
593

 
902

 
1,113

Total recognized in other comprehensive income (loss)
189

 
(1,152
)
 
790

Total recognized in net periodic benefit cost and other comprehensive income (loss)
$
531

 
$
(717
)
 
$
1,110


The following table indicates the funded status of the plans as of December 31:
 
 
 
 
 
 
 
 
 
Postretirement
Benefit Plans
 
Funded Plans
 
Unfunded Plans
 
(in thousands)
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Change in benefit obligation:
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation at beginning of year
$
13,435

 
$
15,348

 
$
10,536

 
$
11,570

 
$
16,919

 
$
18,701

Service cost
—

 
—

 
87

 
66

 
129

 
156

Interest cost
644

 
608

 
435

 
422

 
640

 
663

Actuarial adjustments
2,700

 
(1,530
)
 
649

 
(856
)
 
1,011

 
(1,631
)
Plan amendments
—

 
—

 
—

 
—

 
(1,283
)
 
(40
)
Benefits paid
(767
)
 
(991
)
 
(580
)
 
(666
)
 
(1,181
)
 
(930
)
Benefit obligation at end of year
16,012

 
13,435

 
11,127

 
10,536

 
16,235

 
16,919

Change in plan assets:
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
10,872

 
10,624

 
—

 
—

 
520

 
1,397

Actual return on plan assets
364

 
580

 
—

 
—

 
(34
)
 
(135
)
Company contributions
729

 
659

 
580

 
666

 
695

 
188

Benefits paid
(767
)
 
(991
)
 
(580
)
 
(666
)
 
(1,181
)
 
(930
)
Fair value of plan assets at end of year
11,198

 
10,872

 
—

 
—

 
—

 
520

Funded status at end of year
$
(4,814
)
 
$
(2,563
)
 
$
(11,127
)
 
$
(10,536
)
 
$
(16,235
)
 
$
(16,399
)

The net amounts recognized in Viad’s consolidated balance sheets under the caption “Pension and postretirement benefits” as of December 31 were as follows:
 
 
 
 
 
 
 
 
 
Postretirement
Benefit Plans
 
Funded Plans
 
Unfunded Plans
 
(in thousands)
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Other current liabilities
$
—

 
$
—

 
$
635

 
$
713

 
$
1,094

 
$
928

Non-current liabilities
4,814

 
2,563

 
10,492

 
9,823

 
15,141

 
15,471

Net amount recognized
$
4,814

 
$
2,563

 
$
11,127

 
$
10,536

 
$
16,235

 
$
16,399



Amounts recognized in accumulated other comprehensive income as of December 31, 2014 consisted of:
(in thousands)
Funded
Plans
 
Unfunded
Plans
 
Postretirement
Benefit Plans
 
Total
Net actuarial loss
$
9,442

 
$
4,020

 
$
5,571

 
$
19,033

Prior service credit
—

 
—

 
(2,729
)
 
(2,729
)
Subtotal
9,442

 
4,020

 
2,842

 
16,304

Less tax effect
(3,581
)
 
(1,525
)
 
(1,078
)
 
(6,184
)
Total
$
5,861

 
$
2,495

 
$
1,764

 
$
10,120

Amounts recognized in accumulated other comprehensive income as of December 31, 2013 consisted of:
(in thousands)
Funded
Plans
 
Unfunded
Plans
 
Postretirement
Benefit Plans
 
Total
Net actuarial loss
$
6,972

 
$
3,480

 
$
4,692

 
$
15,144

Prior service credit
—

 
—

 
(2,038
)
 
(2,038
)
Subtotal
6,972

 
3,480

 
2,654

 
13,106

Less tax effect
(2,644
)
 
(1,320
)
 
(1,006
)
 
(4,970
)
Total
$
4,328

 
$
2,160

 
$
1,648

 
$
8,136


The estimated net actuarial loss for the postretirement benefit plans that is expected to be amortized from accumulated other comprehensive income into net periodic benefit cost in 2015 is approximately $0.5 million. The estimated prior service credit for the postretirement benefit plans that is expected to be amortized from accumulated other comprehensive income into net periodic benefit credit in 2015 is approximately $0.6 million.
The fair value of the domestic plans’ assets by asset class was as follows:
 
 
 
Fair Value Measurements at December 31, 2014
 
 
 
Quoted Prices
in Active
Markets
 
Significant
Other
Observable
Inputs
 
Significant
Unobserved
Inputs
(in thousands)
Total
 
(Level 1)
 
(Level 2)
 
(Level 3)
Domestic pension plans:
 
 
 
 
 
 
 
Fixed income securities
$
6,534

 
$
6,534

 
$
—

 
$
—

U.S. equity securities
3,855

 
3,855

 
—

 
—

Cash
552

 
552

 
—

 
—

Other
257

 
—

 
257

 
—

Total
$
11,198

 
$
10,941

 
$
257

 
$
—


 
 
 
Fair Value Measurements at December 31, 2013
 
 
 
Quoted Prices
in Active
Markets
 
Significant
Other
Observable
Inputs
 
Significant
Unobserved
Inputs
(in thousands)
Total
 
(Level 1)
 
(Level 2)
 
(Level 3)
Domestic pension plans:
 
 
 
 
 
 
 
Fixed income securities
$
5,966

 
$
5,966

 
$
—

 
$
—

U.S. equity securities
4,542

 
4,542

 
—

 
—

Cash
147

 
147

 
—

 
—

Other
217

 
—

 
217

 
—

Total
$
10,872

 
$
10,655

 
$
217

 
$
—

Postretirement benefit plans:
 
 
 
 
 
 
 
Fixed income securities
$
407

 
$
407

 
$
—

 
$
—

U.S. equity securities
109

 
109

 
—

 
—

Cash
4

 
4

 
—

 
—

Total
$
520

 
$
520

 
$
—

 
$
—


The Viad Corp Medical Plan maintained a trust account for plan assets invested in various securities.  In June 2014, the trust account was closed after all plan assets were liquidated to reimburse Viad Corp for net postretirement medical claims paid.
Viad employs a total return investment approach whereby a mix of equities and fixed income securities is used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed income securities. Furthermore, equity securities are diversified across U.S. and non-U.S. stocks, as well as growth and value. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews and annual liability measurements.
Viad utilizes a building-block approach in determining the long-term expected rate of return on plan assets. Historical markets are studied and long-term historical relationships between equity securities and fixed income securities are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. The long-term portfolio return also considers diversification and rebalancing. Peer data and historical returns are reviewed relative to Viad’s assumed rates for reasonableness and appropriateness.
The following pension and postretirement benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
(in thousands)
Funded
Plans
 
Unfunded
Plans
 
Postretirement
Benefit
Plans
2015
$
872

 
$
647

 
$
1,116

2016
845

 
745

 
1,159

2017
888

 
781

 
1,175

2018
908

 
802

 
1,185

2019
889

 
812

 
1,161

2020-2024
5,046

 
3,869

 
5,441


Foreign Pension Plans. Certain of Viad’s foreign operations also maintain trusteed defined benefit pension plans covering certain employees which are funded by the companies, and unfunded defined benefit pension plans providing supplemental benefits to select management employees. These plans use traditional defined benefit formulas based on years of service and final average compensation. Funding policies provide that payments to defined benefit pension trusts shall be at least equal to the minimum funding required by applicable regulations. The components of net periodic benefit cost and other amounts recognized in other comprehensive income included the following:
(in thousands)
2014
 
2013
 
2012
Net periodic benefit cost:
 
 
 
 
 
Service cost
$
413

 
$
534

 
$
491

Interest cost
631

 
702

 
737

Expected return on plan assets
(640
)
 
(698
)
 
(622
)
Recognized net actuarial loss
145

 
248

 
201

Net periodic benefit cost
549

 
786

 
807

Other changes in plan assets and benefit obligations recognized in other comprehensive income:
 
 
 
 
 
Net actuarial loss (gain)
361

 
(1,214
)
 
958

Reversal of amortization of net actuarial loss
145

 
(248
)
 
(201
)
Total recognized in other comprehensive income (loss)
506

 
(1,462
)
 
757

Total recognized in net periodic benefit cost and other comprehensive income (loss)
$
1,055

 
$
(676
)
 
$
1,564



The following table represents the funded status of the plans as of December 31:
 
Funded Plans
 
Unfunded Plans
(in thousands)
2014
 
2013
 
2014
 
2013
Change in benefit obligation:
 
 
 
 
 
 
 
Benefit obligation at beginning of year
$
11,460

 
$
15,387

 
$
2,911

 
$
3,032

Service cost
413

 
534

 
—

 
—

Interest cost
507

 
582

 
124

 
120

Actuarial adjustments
1,042

 
(473
)
 
234

 
44

Benefits paid
(344
)
 
(3,644
)
 
(211
)
 
(219
)
Translation adjustment
(1,062
)
 
(926
)
 
(302
)
 
(66
)
Benefit obligation at end of year
12,016

 
11,460

 
2,756

 
2,911

Change in plan assets:
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
11,560

 
12,997

 
—

 
—

Actual return on plan assets
983

 
1,148

 


 
—

Company contributions
604

 
1,892

 
211

 
219

Benefits paid
(344
)
 
(3,644
)
 
(211
)
 
(219
)
Translation adjustment
(1,056
)
 
(833
)
 


 
—

Fair value of plan assets at end of year
11,747

 
11,560

 
—

 
—

Funded status at end of year
$
(269
)
 
$
100

 
$
(2,756
)
 
$
(2,911
)

As of December 31, 2014 and 2013, the foreign funded plans had net liabilities of $0.3 million and net assets of $0.1 million, respectively. The unfunded plans had liabilities of $2.8 million and $2.9 million at December 31, 2014 and 2013, respectively. These amounts are each included in the consolidated balance sheets under the caption “Pension and postretirement benefits.”
The net actuarial losses for the foreign funded plans as of December 31, 2014 and 2013 were $4.0 million ($3.1 million after-tax) and $3.8 million ($2.8 million after-tax), respectively. The net actuarial losses as of December 31, 2014 and 2013 for the foreign unfunded plans were $407,000 ($213,000 after-tax) and $367,000 ($275,000 after-tax), respectively.
The fair value of the foreign pension plans’ assets by asset category were as follows:
 
 
 
Fair Value Measurements at December 31, 2014
(in thousands)
Total
 
Quoted Prices
in Active
Markets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobserved
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Canadian fixed income securities
$
5,367

 
$
5,367

 


 
$
—

International equity securities
4,693

 
4,273

 
420

 
—

U.S. equity securities
1,236

 
1,236

 


 
—

Other
451

 
451

 


 
—

Total
$
11,747

 
$
11,327

 
$
420

 
$
—

 
 
 
Fair Value Measurements at December 31, 2013
(in thousands)
Total
 
Quoted Prices
in Active
Markets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobserved
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Canadian fixed income securities
$
5,174

 
$
5,174

 
$
—

 
$
—

International equity securities
4,781

 
4,386

 
395

 
—

U.S. equity securities
1,269

 
1,269

 
—

 
—

Other
336

33.0

336

 
—

 
—

Total
$
11,560

 
$
11,165

 
$
395

 
$
—




The following payments, which reflect expected future service, as appropriate, are expected to be paid:
(in thousands)
Funded
Plans
 
Unfunded
Plans
2015
$
357

 
$
187

2016
431

 
187

2017
434

 
186

2018
456

 
186

2019
517

 
186

2020-2024
3,055

 
918


Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets. The accumulated benefit obligations in excess of plan assets as of December 31 were as follows:
 
Domestic Plans
 
Funded Plans
 
Unfunded Plans
(in thousands)
2014
 
2013
 
2014
 
2013
Projected benefit obligation
$
16,012

 
$
13,435

 
$
11,127

 
$
10,536

Accumulated benefit obligation
16,012

 
13,435

 
11,014

 
10,227

Fair value of plan assets
11,200

 
10,872

 
—

 
—

 
 
Foreign Plans
 
Funded Plans
 
Unfunded Plans
(in thousands)
2014
 
2013
 
2014
 
2013
Projected benefit obligation
$
12,016

 
$
11,460

 
$
2,756

 
$
2,911

Accumulated benefit obligation
11,268

 
10,823

 
2,656

 
2,911

Fair value of plan assets
11,747

 
11,560

 
—

 
—


Contributions. In aggregate for both the domestic and foreign plans, the Company anticipates contributing $1.4 million to the funded pension plans, $0.8 million to the unfunded pension plans and $1.1 million to the postretirement benefit plans in 2015.
Weighted-Average Assumptions. Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows:
 
Domestic Plans
 
 
 
 
 
Funded Plans
 
Unfunded Plans
 
Postretirement
Benefit Plans
 
Foreign Plans
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Discount rate
4.01
%
 
4.89
%
 
3.90
%
 
4.60
%
 
4.00
%
 
4.65
%
 
3.85
%
 
4.67
%
Rate of compensation increase
N/A

 
N/A

 
3.00
%
 
3.00
%
 
N/A

 
N/A

 
3.00
%
 
3.00
%
Weighted-average assumptions used to determine net periodic benefit cost were as follows:
 
Domestic Plans
 
 
 
 
 
 
 
 
 
 
 
 
 
Postretirement
Benefit Plans
 
 
 
 
 
Funded Plans
 
Unfunded Plans
 
 
Foreign Plans
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Discount rate
4.90
%
 
4.09
%
 
4.60
%
 
3.80
%
 
4.65
%
 
3.85
%
 
4.67
%
 
4.03
%
Expected return on plan assets
4.15
%
 
3.90
%
 
N/A

 
N/A

 
0.00
%
 
0.00
%
 
5.69
%
 
5.44
%
Rate of compensation increase
N/A

 
N/A

 
3.00
%
 
4.50
%
 
N/A

 
N/A

 
3.00
%
 
3.00
%

The assumed health care cost trend rate used in measuring the December 31, 2014 accumulated postretirement benefit obligation was 7.5 percent, declining one-quarter percent each year to the ultimate rate of 5.0 percent by the year 2024 and remaining at that level thereafter. The assumed health care cost trend rate used in measuring the December 31, 2013 accumulated postretirement benefit obligation was 8.0 percent, declining one-half percent each year to the ultimate rate of 5.0 percent by the year 2019 and remaining at that level thereafter.
A one-percentage-point increase in the assumed health care cost trend rate for each year would increase the accumulated postretirement benefit obligation as of December 31, 2014 by approximately $1.8 million and the total of service and interest cost components by approximately $0.1 million. A one-percentage-point decrease in the assumed health care cost trend rate for each year would decrease the accumulated postretirement benefit obligation as of December 31, 2014 by approximately $1.5 million and the total of service and interest cost components by approximately $0.1 million.
Multi-employer Plans. Viad contributes to defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees. The financial risks of participating in these multi-employer pension plans generally include the fact that assets contributed to the plan by one employer may be used to provide benefits to employees of other participating employers. Furthermore, if a participating employer ceases to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. In addition, if Viad were to discontinue its participation in some of its multi-employer pension plans, the Company may be required to pay those plans a withdrawal liability amount based on the underfunded status of the plan. Viad also contributes to defined contribution plans pursuant to its collective-bargaining agreements, which are generally not subject to the funding risks inherent in defined benefit pension plans. The overall level of Viad’s contributions to its multi-employer plans may significantly vary from year to year based on the demand for union-represented labor to support the Company’s operations. Viad does not have any minimum contribution requirements for future periods pursuant to its collective-bargaining agreements for individually significant multi-employer plans.
Viad’s participation in multi-employer pension plans for 2014 is outlined in the following table. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2014 and 2013 relates to the plan’s year end as of December 31, 2013 and 2012, respectively, and is based on information received from the plan. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan or a rehabilitation plan is either pending or has been implemented.



  
 
 
Plan
 
Pension
Protection Act
Zone Status
 
FIP/RP
Status
Pending/ Implemented
 
Viad Contributions
 
Surcharge Paid
 
Expiration
Date of
Collective-
Bargaining Agreement(s)
(in thousands)
EIN
 
No.
 
2014
 
2013
 
 
2014
 
2013
 
2012
 
 
Pension Fund:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Western Conference of Teamsters Pension Plan
91-6145047
 
1

 
Green
 
Green
 
No
 
$
6,369

 
$
5,524

 
$
5,694

 
No
 
5/31/2015

Southern California Local 831—Employer Pension Fund(1)
95-6376874
 
1

 
Green
 
Green
 
No
 
2,481

 
2,244

 
2,358

 
No
 
8/31/17
Chicago Regional Council of Carpenters Pension Fund
36-6130207
 
1

 
Yellow
 
Yellow
 
Yes
 
1,946

 
1,614

 
1,749

 
No
 
5/31/18
National Electrical Benefit Fund
53-0181657
 
1

 
Green
 
Green
 
No
 
1,457

 
1,631

 
1,814

 
No
 
6/16/15
Electrical Contractors Assoc. Chicago Local Union 134, IBEW Joint Pension Trust of Chicago Plan #2
51-6030753
 
2

 
Green
 
Green
 
No
 
1,081

 
957

 
108

 
No
 
6/3/17
Central States, Southeast and Southwest Areas Pension Plan
36-6044243
 
1

 
Red
 
Red
 
Yes
 
1,018

 
836

 
874

 
No
 
7/31/15
Machinery Movers Riggers & Mach Erect Local 136 Supplemental Retirement Plan(1),
36-1416355
 
1

 
Red
 
Red
 
Yes
 
993

 
430

 
930

 
No
 
6/30/19
Southwest Carpenters Pension Trust
95-6042875
 
1

 
Green
 
Green
 
No
 
885

 
812

 
944

 
No
 
6/30/15
Southern California IBEW-NECA Pension Fund
95-6392774
 
1

 
Yellow
 
Yellow
 
Yes
 
768

 
184

 
62

 
No
 
continuous
All other funds(2)
 
 
 
 
 
 
 
 
 
 
4,097

 
2,592

 
2,468

 
 
 
 
Total contributions to defined benefit plans
 
 
 
 
 
 
 
 
 
 
21,095

 
16,824

 
17,001

 
 
 
 
Total contributions to other plans
 
 
 
 
 
 
 
 
 
 
2,057

 
3,489

 
3,668

 
 
 
 
Total contributions to multi-employer plans
 
 
 
 
 
 
 
 
 
 
$
23,152

 
$
20,313

 
$
20,669

 
 
 
 
(1) The Company contributed more than 5 percent of total plan contributions for the 2013 and 2012 plan years based on the plans’ Form 5500s.
(2) Represents participation in 41 pension funds during 2014.
Other Employee Benefits. Costs of the 401(k) Plan and other benefit plans totaled less than $0.1 million for 2014, and $1.3 million and $1.7 million in 2013 and 2012, respectively.