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RETIREMENT AND DEFERRED COMPENSATION PLANS
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
RETIREMENT AND DEFERRED COMPENSATION PLANS RETIREMENT AND DEFERRED COMPENSATION PLANSWe have various noncontributory retirement plans covering certain of our domestic and foreign employees. Benefits under our retirement plans are based on participants’ years of service and annual compensation as defined by each plan. Annual cash contributions to fund pension costs accrued under our domestic plans are generally at least equal to the minimum funding amounts required by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Certain pension commitments under our foreign plans are also funded according to local requirements or at our discretion.
Effective January 1, 2021, the domestic plans were amended to provide that no individual who became an employee after December 31, 2020 could become a participant and that no employee whose employment terminated and who was rehired after December 31, 2020 may accrue benefits under the plans with respect to the period of employment which begins on the date that his reemployment commences. These employees will instead be eligible for additional contribution to their defined contribution 401(k) employee savings plan. All domestic employees with hire/rehire dates prior to January 1, 2021 will still be eligible for the domestic pension plans and will still continue to accrue plan benefits after this date.
The following table presents the changes in the benefit obligations and plan assets for the most recent two years for our domestic and foreign plans.
Domestic PlansForeign Plans
2020201920202019
Change in benefit obligation:
Benefit obligation at beginning of year$227,275 $180,803 $120,490 $104,911 
Service cost14,278 11,093 7,311 5,921 
Interest cost7,046 7,381 1,410 2,023 
Special termination benefit charge— — — 64 
Plan Amendment— — — 18 
Curtailment/Settlement— — — (271)
Transfer— — — 939 
Prior service cost— — (2,701)(451)
Actuarial loss (gain)38,175 39,209 1,809 13,575 
Benefits paid(14,303)(11,211)(5,145)(4,130)
Foreign currency translation adjustment— — 11,252 (2,109)
Benefit obligation at end of year$272,471 $227,275 $134,426 $120,490 
Domestic PlansForeign Plans
2020201920202019
Change in plan assets:
Fair value of plan assets at beginning of year$188,801 $169,958 $74,189 $68,992 
Actual return on plan assets17,088 29,618 2,008 3,851 
Employer contribution448 436 7,527 6,542 
Benefits paid(14,303)(11,211)(5,145)(4,130)
Transfer— — — 359 
Foreign currency translation adjustment— — 6,508 (1,425)
Fair value of plan assets at end of year$192,034 $188,801 $85,087 $74,189 
Funded status at end of year$(80,437)$(38,474)$(49,339)$(46,301)
The following table presents the funded status amounts recognized in our Consolidated Balance Sheets as of December 31, 2020 and 2019.
Domestic PlansForeign Plans
2020201920202019
Non-current assets$— $— $81 $938 
Current liabilities(461)(449)(37)(44)
Non-current liabilities(79,976)(38,025)(49,383)(47,195)
$(80,437)$(38,474)$(49,339)$(46,301)
The following table presents the amounts not recognized as components of periodic benefit cost that are recognized in accumulated other comprehensive loss as of December 31, 2020 and 2019.
Domestic PlansForeign Plans
2020201920202019
Net actuarial loss$96,440 $68,789 $40,851 $40,442 
Net prior service cost— — 675 3,774 
Tax effects(22,181)(15,821)(13,466)(14,040)
$74,259 $52,968 $28,060 $30,176 
Changes in benefit obligations and plan assets recognized in other comprehensive income in 2020, 2019 and 2018 are as follows:
Domestic Plans
202020192018
Current year actuarial (loss) gain$(33,335)$(21,970)$4,611 
Amortization of net loss5,684 1,957 4,873 
$(27,651)$(20,013)$9,484 
Foreign Plans
202020192018
Current year actuarial (loss) gain$(2,530)$(11,999)$534 
Current year prior service cost2,701 451 (35)
Transfer Prior service Cost— (18)— 
Transfer Actuarial (loss) gain— (126)— 
Recognition due to curtailment— — 1,692 
Amortization of net loss2,121 1,444 1,716 
Amortization of prior service cost398 449 720 
$2,690 $(9,799)$4,627 
Components of net periodic benefit cost:
Domestic Plans
202020192018
Service cost$14,278 $11,093 $11,396 
Interest cost7,046 7,381 6,878 
Expected return on plan assets(12,248)(12,379)(11,257)
Amortization of net loss5,684 1,957 4,873 
Net periodic benefit cost$14,760 $8,052 $11,890 
Foreign Plans
202020192018
Service cost$7,311 $5,921 $5,954 
Interest cost1,410 2,023 1,828 
Expected return on plan assets(2,620)(2,366)(2,610)
Amortization of net loss2,121 1,444 1,716 
Amortization of prior service cost398 449 720 
Net periodic benefit cost$8,620 $7,471 $7,608 
Curtailment(8)(246)(59)
Special termination benefit charge— 65 62 
Total Net periodic benefit cost$8,612 $7,290 $7,611 
The accumulated benefit obligation (“ABO”) for our domestic defined benefit pension plans was $249.8 million and $205.3 million at 2020 and 2019, respectively. The ABO for our foreign defined benefit pension plans was $103.1 million and $91.8 million at December 31, 2020 and 2019, respectively.
The following table provides the projected benefit obligation (“PBO”), ABO, and fair value of plan assets for all pension plans with an ABO in excess of plan assets as of December 31, 2020 and 2019.
Domestic PlansForeign Plans
2020201920202019
Projected benefit obligation$272,471 $227,275 $120,795 $92,561 
Accumulated benefit obligation249,831 205,326 89,702 65,062 
Fair value of plan assets192,034 188,801 71,457 46,371 
The following table provides the PBO, ABO and fair value of plan assets for all pension plans with a PBO in excess of plan assets as of December 31, 2020 and 2019.
Domestic PlansForeign Plans
2020201920202019
Projected benefit obligation$272,471 $227,275 $130,616 $102,310 
Accumulated benefit obligation249,831 205,326 98,360 73,943 
Fair value of plan assets192,034 188,801 79,764 55,260 
Assumptions:
Domestic PlansForeign Plans
202020192018202020192018
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate2.40 %3.20 %4.20 %0.54 %1.04 %1.82 %
Rate of compensation increase3.19 %4.00 %4.00 %3.05 %3.05 %3.01 %
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate3.20 %4.20 %3.55 %1.12 %1.84 %1.62 %
Expected long-term return on plan assets7.00 %7.00 %7.00 %3.41 %3.69 %3.66 %
Rate of compensation increase4.00 %4.00 %4.00 %3.05 %3.05 %3.02 %
We develop the expected long-term rate of return assumptions based on historical experience and by evaluating input from the plans’ asset managers, including the managers’ review of asset class return expectations and benchmarks, economic indicators and long-term inflation assumptions.
In order to determine the 2021 net periodic benefit cost, we expect to use the December 31, 2020 discount rates, December 31, 2020 rates of compensation increase assumptions and the same assumed long-term returns on domestic and foreign plan assets used for the 2020 net periodic benefit cost.
Our domestic and foreign pension plan weighted-average asset allocations at December 31, 2020 and 2019 by asset category are as follows:
Plan Assets:
Domestic Plans Assets at December 31,Foreign Plans Assets at December 31,
2020201920202019
Equity securities48 %49 %5 %4 %
Fixed income securities28 %29 %1 %1 %
Corporate debt securities— — 2 %3 %
Infrastructure7 %6 %— — 
Hedge funds10 %10 %— — 
Money market2 %1 %— %3 %
Investment Funds— — 92 %89 %
Real estate5 %5 %— — 
Total100 %100 %100 %100 %
Our investment strategy for our domestic and foreign pension plans is to maximize the long-term rate of return on plan assets within an acceptable level of risk. The investment policy strives to have assets sufficiently diversified so that adverse or unexpected results from one security type will not have an unduly detrimental impact on the entire portfolio and accordingly, establishes a target allocation for each asset category within the portfolio. The domestic plan asset allocation is reviewed on a quarterly basis and the foreign plan asset allocation is reviewed annually. Rebalancing occurs as needed to comply with the investment strategy. The domestic plan target allocation for 2021 is 60% equity securities and 40% fixed income securities and infrastructure. The foreign plan target allocation for 2021 is 100% investment funds.
Authoritative guidelines require the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:
•Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.
•Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
•Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.
Domestic Fair Value Measurement at December 31, 2020Foreign Fair Value Measurement at December 31, 2020
(In Thousands $)Total(Level 1)(Level 2)(Level 3)Total(Level 1)(Level 2)(Level 3)
Cash and Short-term Securities (a)$3,207 $3,207 $— $— $415 $415 $— $— 
USD— 3,207 — — — — — — 
EUR— — — — — 404 — — 
Others— — — — — 11 — — 
Equity Securities (a)$83,041 $83,041 $— $— $4,107 $4,107 $— $— 
U.S. Large Cap Equities— 48,138 — — — — — — 
U.S. Small Cap Equities— 10,299 — — — — — — 
International Equities— 24,604 — — — 4,107 — — 
Fixed Income (a&b)$35,691 $35,691 $— $— $834 $834 $— $— 
Corporate debts securities$— $— $— $— $1,555 $1,555 $— $— 
Euro Corporate Bonds (a)— — — — — 1,555 — — 
Investment Funds$— $— $— $— $78,176 $27,500 $50,676 $— 
Mutual Funds in Equities (a)— — — — — 4,022 — — 
Mutual Funds in Bonds (a)— — — — — 22,475 — — 
Mutual Funds Diversified (a&b)— — — — — 1,003 50,676 — 
Total Investments in Fair Value Hierarchy$121,939 $121,939 $— $— $85,087 $34,411 $50,676 $— 
Investments at Net Asset Value per Share70,095 — — — — — — — 
Total Investments$192,034 $121,939 $— $— $85,087 $34,411 $50,676 $— 
Domestic Fair Value Measurement at December 31, 2019Foreign Fair Value Measurement at December 31, 2019
(In Thousands $)Total(Level 1)(Level 2)(Level 3)Total(Level 1)(Level 2)(Level 3)
Cash and Short-term Securities (a)$1,988 $1,988 $— $— $2,030 $2,030 $— $— 
USD— 1,988 — — — — — — 
EUR— — — — — 2,012 — — 
Others— — — — — 18 — — 
Equity Securities (a)$81,997 $81,997 $— $— $2,995 $2,995 $— $— 
U.S. Large Cap Equities— 48,580 — — — — — — 
U.S. Small Cap Equities— 9,921 — — — — — — 
International Equities— 23,496 — — — 2,995 — — 
Fixed Income (a&b)$35,898 $35,898 $— $— $820 $820 $— $— 
Corporate debts securities$— $— $— $— $2,115 $2,115 $— $— 
Euro Corporate Bonds (a)— — — — — 2,115 — — 
Investment Funds$— $— $— $— $66,229 $23,797 $42,432 $— 
Mutual Funds in Equities (a)— — — — — 4,025 — — 
Mutual Funds in Bonds (a)— — — — — 18,881 — — 
Mutual Funds Diversified (a&b)— — — — — 891 42,432 — 
Total Investments in Fair Value Hierarchy$119,883 $119,883 $— $— $74,189 $31,757 $42,432 $— 
Investments at Net Asset Value per Share68,918 — — — — — — — 
Total Investments$188,801 $119,883 $— $— $74,189 $31,757 $42,432 $— 
(a)Based on third party quotation from financial institution.
(b)Based on observable market transactions.
Contributions
Annual cash contributions to fund pension costs accrued under our domestic plans are generally at least equal to the minimum funding amounts required by ERISA. We contributed $0.4 million to our domestic defined benefit plans in 2020 and although we have no minimum funding requirement, we plan to contribute approximately $0.5 million to pay our ongoing SERP annuity contracts in 2021. Contributions to fund pension costs accrued under our foreign plans are made in accordance with local laws or at our discretion. We contributed approximately $7.5 million to our foreign defined benefit plan in 2020 and expect to contribute approximately $0.5 million in 2021.
Estimated Future Benefit Payments
As of December 31, 2020, we expect the plans to make the following estimated benefit payments relating to our defined benefit plans over the next ten years:
Domestic PlansForeign Plans
2021$12,464 $5,514 
202212,533 2,505 
202313,297 3,154 
202414,413 4,591 
202514,461 7,772 
2026 - 203078,437 37,211 
Other Plans
We have a non-qualified supplemental pension plan for domestic employees which provides for pension amounts that would have been payable from our principal domestic pension plan if it were not for limitations imposed by income tax regulations. The liability for this plan, which is not funded, was $16.8 million and $12.6 million at December 31, 2020 and 2019, respectively. This amount is included in the liability for domestic plans shown above.
We have a defined contribution 401(k) employee savings plan ("401(k) plan") available to substantially all domestic employees. Company matching contributions are made in cash up to a maximum of 3% of the participating employee’s salary subject to income tax regulations. For each of the years ended December 31, 2020, 2019 and 2018, total contributions made to these plans were approximately $4.3 million, $4.1 million and $3.7 million, respectively. As discussed above, domestic employees hired after December 31, 2020 will no longer be eligible for the pension plans and will instead receive an annual Aptar Retirement Savings Account contribution of 5% of their eligible earnings in the 401(k) plan.
We have several foreign defined contribution plans, which require us to contribute a percentage of the participating employee’s salary according to local regulations. For each of the years ended December 31, 2020, 2019 and 2018, total contributions made to these plans were approximately $2.4 million, $2.3 million and $2.4 million, respectively.
We have no additional postretirement or postemployment benefit plans.