EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2019

Defined Contribution Plans

During 2019, the Company sponsored two 401(k) savings plans for eligible employees. The plans allow participants to make pretax contributions and the Company matches certain percentages of those pretax contributions. One of the plans has a discretionary profit sharing portion and matches 401(k) contributions with shares of the Company’s Common Stock. All amounts contributed to the plans are deposited into a trust fund administered by independent trustees. The Company provided for profit sharing contributions and matching 401(k) savings plan contributions of $592 and $3,451 in 2019, $825 and $3,153 in 2018, and $395 and $2,594 in 2017, respectively.

Postretirement Medical Plans

The Company provides postretirement benefits in the form of two unfunded postretirement medical plans; one that is under a collective bargaining agreement and covers eligible retired employees of the Verona facility and a plan for those named as executive officers in the Company’s proxy statement. The Company uses a December 31 measurement date for its postretirement

medical plans. In accordance with ASC 715, “Compensation—Retirement Benefits,” the Company is required to recognize the over funded or underfunded status of a defined benefit post retirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position, and to recognize changes in that funded status in the year in which the changes occur through comprehensive income.

The actuarial recorded liabilities for such unfunded postretirement benefits are as follows:

Change in benefit obligation:


	2019		2018
Benefit obligation at beginning of year	$	1,174	$	1,573
Initial adoption of new plan	—		—
Service cost with interest to end of year	63		78
Interest cost	39		44
Participant contributions	35		40
Benefits paid	(162)		(136)
Actuarial gain	(73)		(425)
Benefit obligation at end of year	$	1,076	$	1,174

Change in plan assets:


	2019		2018
Fair value of plan assets at beginning of year	$	—	$	—
Employer (reimbursement)/contributions	127		96
Participant contributions	35		40
Benefits paid	(162)		(136)
Fair value of plan assets at end of year	$	—	$	—

Amounts recognized in consolidated balance sheet:


	2019		2018
Accumulated postretirement benefit obligation	$	(1,076)	$	(1,174)
Fair value of plan assets	—		—
Funded status	(1,076)		(1,174)
Unrecognized prior service cost	N/A		N/A
Unrecognized net (gain)/loss	N/A		N/A
Net amount recognized in consolidated balance sheet (after ASC 715) (included in other long-term obligations)	$	1,076	$	1,174
Accrued postretirement benefit cost (included in other long-term obligations)	N/A		N/A

Components of net periodic benefit cost:


	2019		2018		2017
Service cost with interest to end of year	$	63	$	78	$	67
Interest cost	39		44		46
Amortization of prior service credit	74		74		74
Amortization of gain	(46)		(8)		(15)
Total net periodic benefit cost	$	130	$	188	$	172

Estimated future employer contributions and benefit payments are as follows:


Year
2020	$	79
2021	67
2022	85
2023	76
2024	99
Years 2025-2029	444

Assumed health care cost trend rates have been used in the valuation of postretirement health insurance benefits. The trend rate is 5.99% in 2020 declining to 4.50% in 2038 and thereafter. A one percentage point increase in health care cost trend rates in each year would increase the accumulated postretirement benefit obligation as of December 31, 2019 by $96 and the net periodic postretirement benefit cost for 2019 by $14. A one percentage point decrease in health care cost trend rates in each year would decrease the accumulated postretirement benefit obligation as of December 31, 2019 by $84 and the net periodic postretirement benefit cost for 2019 by $12. The weighted average discount rate used in determining the accumulated postretirement benefit obligation was 2.50% in 2019 and 3.50% in 2018.

Defined Benefit Pension Plans

The Company contributes to one multiemployer defined benefit plan under the terms of a collective-bargaining agreement covering its union-represented employees of the Verona facility. The risks of participation in this multiemployer plan are different from single-employer plans in the following aspects: (a) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers, (b) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers, and (c) if the Company chooses to stop participating in its multiemployer plan, the Company will be required to pay that plan an amount based on the underfunded status of the plan, referred to as the withdrawal liability.

The Company’s participation in this plan for the annual period ended December 31, 2019 is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employee Identification Number (EIN). The zone status is based on information that the Company received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone or critical and declining 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 (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. The last column lists the expiration date of the collective-bargaining agreement to which the plan is subject. Finally, the period-to-period comparability of the contributions for 2019 and 2018 was affected by a 4.0% increase in the 2019 contribution rate. There have been no other significant changes that affect the comparability of 2019 and 2018 contributions. The Company does not represent more than 5% of the contributions to this pension fund.


Pension Fund	EIN/Pension Plan Number	Pension Plan Protection Act Zone Status					FIP/RP Status Pending/ Implemented	Contributions of Balchem Corporation				Surcharge Imposed	Expiration Date of Collective- Bargaining Agreement
				2019		2018			2019	2018	2017
Central States, Southeast and Southwest Areas Pension Fund	36-6044243	Critical & Declining as of 1/1/19	Critical & Declining as of 1/1/18		Implemented		$676	$614	$594	No	7/11/2020

On May 27, 2019, the Company acquired Chemogas, which has an unfunded defined benefit pension plan. The plan provides for the payment of a lump sum at retirement or payments in case of death of the covered employees. The amount recorded for these obligations on the Company's balance sheet as of December 31, 2019 was $596 and was included in other long-term obligations.

Deferred Compensation Plan

On June 1, 2018, the Company established an unfunded, non-qualified deferred compensation plan maintained for the benefit of a select group of management or highly compensated employees. Assets of the plan are held in a rabbi trust, which are subject to additional risk of loss in the event of bankruptcy or insolvency of the Company. The deferred compensation liability as of

December 31, 2019 and 2018 were $1,982, $265, respectively and were included in other long-term obligations on the Company's balance sheet.