Benefit Plans

9 Months Ended

Sep. 30, 2021

Compensation And Retirement Disclosure [Abstract]

Benefit Plans

13. BENEFIT PLANS

The following table summarizes key information related to the Company’s pension plans and retirement agreements (in thousands):

	Nine Months Ended September 30, 2021			Year Ended December 31, 2020
Change in Projected Benefit Obligation
Projected benefit obligation, beginning of period	$	33,530		$	37,551
Service cost		1,053			1,254
Interest cost		956			1,306
Actuarial gain		—			3,180
Other reclassification [1]		—			(8,925	)
Benefits paid		(649	)		(836	)
Projected benefit obligation, end of period	$	34,890		$	33,530
Change in Plan Assets
Plan assets at fair value, beginning of period	$	—		$	—
Company contributions		649			836
Benefits paid		(649	)		(836	)
Plan assets at fair value, end of period	$	—		$	—
Unfunded Status of the Plan	$	34,890		$	33,530

	Three Months Ended				Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Components of Net Periodic Benefit Cost
Service cost	$	351	$	313	$	1,053	$	940
Interest cost		319		326		956		979
Net loss		197		135		591		405
Net periodic pension cost	$	867	$	774	$	2,600	$	2,324

[1] The Company has a non-qualified deferred compensation agreement with its former CEO. The agreement provided for a lump sum cash payment upon retirement, no sooner than age 55. As of September 30, 2021, the former CEO had reached age 55 and was eligible to receive the payment upon retirement.

On February 26, 2020, the Company and its former CEO entered into an amended and restated executive retirement agreement that amends the former CEO’s executive retirement agreement.

The amended and restated executive retirement agreement provided that upon the former CEO’s retirement from the Company, the Company would pay a lump sum amount initially equal to $8,925,065 (determined as of February 26, 2020) which was to be paid in the form of a fixed number of shares of the Company’s common stock. The Grandfathered Payment would be delayed for six months and a day following the effective date of the former CEO’s termination of employment in compliance with Section 409A of the Code.

On the Effective Date, an amount equal to the Grandfathered Payment was invested in the Company’s common stock. The number of the Company’s shares of common stock as of the Effective Date was equal to the Grandfathered Payment divided by the closing price of the Company’s common stock on the Effective Date (rounded up to the nearest whole number of shares), which equaled 553,665 shares of the Company’s common stock. Additional shares of the Company’s common stock were credited with a value equal to any dividends declared and paid on the Company’s shares of common stock, calculated by reference to the closing price of the Company’s common stock on the payment date for such dividends (rounded up to the nearest whole number of shares).

The Company had established several trusts for the purpose of paying the retirement benefit pursuant to the amended and restated executive retirement agreement. The trusts were revocable “rabbi trusts” and the assets of the trusts are subject to the claims of the Company’s creditors in the event of the Company’s insolvency.

The Company repurchased shares of its outstanding common stock under its stock buyback program and contributed such shares to the trusts in order to fund the retirement benefit under the amended and restated executive retirement agreement. In accordance with Accounting Standards Codification (“ASC”) 710 – Compensation-General, the shares of common stock held in the rabbi trusts were classified as treasury stock. In addition, the amended and restated executive retirement agreement qualified for equity accounting under ASC 710 and therefore, the fair value of the Grandfathered Payment had been reclassified to stockholders’ equity.

The Company and its former CEO entered into on May 27, 2021, and effective as of July 1, 2021, an Amended and Restated Executive Retirement Agreement which replaced the February 26, 2020 agreement discussed above. Pursuant to the terms of the Amended and Restated Executive Retirement Agreement, upon the date that the former CEO ceases to provide services to the Company, the Company will pay to the former CEO an amount equal to $3,600,000 which shall be paid in cash. As the former CEO’s retirement payment will no longer be settled with a fixed number of shares of GEO’s common stock, $3,600,000 has been reclassed from equity to other non-current liabilities. Refer to Note 11 – Commitments, Contingencies and Other Matters for further information.

The long-term portion of the pension liability as of September 30, 2021 and December 31, 2020 was $34.6 million and $33.2 million, respectively, and is included in Other Non-Current Liabilities in the accompanying consolidated balance sheets.