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EMPLOYEE BENEFIT AND RETIREMENT PLANS
 12 Months Ended
Jun. 30, 2022
Retirement Benefits [Abstract]  
EMPLOYEE BENEFIT AND RETIREMENT PLANS EMPLOYEE BENEFIT AND RETIREMENT PLANS
The Company has two defined benefit pension plans, one for U.S. employees and another for U.K. employees, together referred to as the "Plans Combined". The U.K. plan was closed to new entrants in fiscal 2009. The Company has a postretirement medical and life insurance benefit plan for U.S. employees with a total benefit in fiscal 2022, 2021 and 2020 of $1.2 million, $0.5 million and $0.1 million. The Company also has defined contribution plans with a total cost in fiscal 2022, 2021 and 2020 of $1.6 million, $1.4 million and $1.6 million, respectively. The total Plans Combined cost for fiscal 2022, 2021 and 2020 was a benefit of $0.2 million and $0.1 million and a cost of $16.9 million, respectively. The Net Periodic Benefit Cost for the U.S. Retirement Plan decreased slightly and the U.K. plan increased slightly during the year.
On December 21, 2016, the Company amended the U.S. defined benefit pension plan to freeze benefit accruals effective December 31, 2016. Consequently, the plan is closed to new participants and current participants no longer earn additional benefits after December 31, 2016.
The Company amended its Postretirement Medical Plan effective December 31, 2013 whereby the Company terminated eligibility for employees ages 55-64. For retirees 65 and older, the Company’s contribution is fixed at $28.50 or $23.00 per month depending upon the plan the retiree has chosen.
The year end obligation for the Non-qualified Excess Plan improved $0.2 million during fiscal 2022 to $2.0 million as compared to $2.2 million in the prior year. The change was mostly due to an actuarial gain of $0.2 million. The Net Periodic Benefit Cost remained flat from the prior year.
The main drivers of the actuarial gains and losses are as follows:

The year-end obligation for the Non-qualified Excess Plan improved $0.2 million during fiscal 2022 to $2.0 million as compared to $2.2 million in the prior year, primarily due to the higher discount rate from 2.69% to 4.77%, offset by changes in demographic assumptions and other experience gains and losses.

The funded status for the U.K. Plan improved during the year by $3.9 million to an under-funded balance of $4.6 million as the plan experienced a liability gain due to increase in discount rate from 1.86% at June 30, 2021 to 3.82% at June 30, 2022.
The funded status of the Plans Combined went from underfunded amount of $37.4 million in fiscal 2021 to underfunded $23.7 million in fiscal 2022, an improvement of $13.7 million as the benefit obligation decreased by $38.3 million and the assets decreased by $24.6 million. This was due to the increase in discount rate from 2.69% to 4.77%, offset by asset losses during the year.

The Post Retirement Benefit Plan also improved during the year due to the higher discount rate. The Net Periodic Benefit Cost for the current year improved as compared to the prior year, due to a plan settlement "Settlement" occurred during fiscal 2021, in the U.S. Retirement Plan, as a result of the annuity purchased, which decreased both liabilities and assets. The plan was also amended during fiscal 2021 to the Postretirement Benefit Plan to eliminate Life Insurance coverage. There were no plan settlements in fiscal 2022.
A plan settlement "Settlement" occurred during fiscal 2021, in the U.S. Retirement Plan, as a result of the annuity purchased, which decreased both liabilities and assets. The plan was also amended during fiscal 2021 to the Postretirement Benefit Plan to eliminate Life Insurance coverage. There were no plan settlements in fiscal 2022.
Settlement
ASC 715-30-35 (subsections 79 to 83) describes the treatment of a pension settlement. A settlement is defined as: a transaction that (a) is an irrevocable action, (b) relieves the employer (or the plan) of primary responsibility for a pension benefit obligation, and (c) eliminates significant risks related to the obligation and the assets used to effect the settlement.
The Company purchased an annuity contract on behalf of participants in which an insurance company unconditionally undertook a legal obligation to provide specified benefits to specific individuals and is considered a settlement for GAAP purposes. As such, special settlement accounting is triggered requiring accelerated recognition of the unrecognized gain recorded in Other Income on the Consolidated Statement of Operations and in the Postretirement benefit and pension obligation on the Consolidated Balance Sheets. The settlement expense is recorded in the period of the purchase. Liabilities and assets were remeasured as of June 30, 2021 and the change as a result of the remeasurement in the asset and liability values as included in the existing unrecognized gain/loss. A fraction of the determined gain/loss was recognized immediately in Other Income on the Consolidated Statement of Operations, and was based on the ratio of the amount settled divided by the total liability.
The table below illustrates the funded status and unrecognized amounts before the remeasurement, after the remeasurement, as well as the effect of the settlement. These amounts are as of the remeasurement date of June 30, 2021, in thousands.
Before remeasurementEffect of remeasurementAfter remeasurementEffect of settlementAfter settlement
Benefit obligation$133,748 $75 $133,823 $(11,411)$122,412 
Market value of assets$107,259 $— $107,259 $(11,411)$95,848 
Funded status$26,489 $75 $26,564 $— $26,564 
Unrecognized (gain) loss$1,606 $(75)$1,531 $(130)$1,401 
Prepaid / (Accrued)$28,095 $— $28,095 $(130)$27,965 
The total annuity purchase amount released from the plan assets was $11.4 million and a settlement credit of $0.1 million (based on 8.53% of liability settled) was included in the net periodic benefit cost for fiscal year ending June 30, 2021.
Plan amendment
With a plan amendment that results in a change in liability, liabilities are remeasured as of the effective date of the change and a new prior service cost/(credit) base was created equal to the amount of the change in liability. This prior service cost/(credit) was recognized in Other Comprehensive Income at the date of the amendment and amortized as a component of the net periodic benefit cost in future periods.
Effective February 1, 2021, the Company amended the Postretirement Benefit Plan to eliminate Life Insurance coverage for current and future retirees. This amendment resulted in a decrease in liability of $5.6 million and triggered a remeasurement of the net periodic benefit cost for fiscal 2021. This change is amortized over 5.96 years, which results in a credit of $0.9 million per year. However, only $0.4 million (5/12 of the annual amortization amount) is recognized in fiscal 2021 based on the effective date of the plan change. The total net periodic benefit cost for fiscal 2021 is based on 7/12 of the original expense,
plus 5/12 of the remeasured expense (including the plan amendment). The table below summarizes the total net periodic benefit cost for the Post Retirement Benefit plan for fiscal 2021, in thousands:
7/1/20 to 1/31/212/1/21 to 6/30/21Total expense
(before amendment)(after amendment)for fiscal 2021
Service cost$50 $15 $65 
Interest cost$120 $21 $141 
Amortization of prior service (credit)$(313)$(614)$(927)
Amortization of net (gain)$97 $97 $194 
Total expense$(46)$(481)$(527)
Measurement dateJune 30, 2020January 31, 2021n/a
Discount rate2.73 %2.57 %n/a
Under the Plans Combined, benefits are based on years of service and final average earnings. Plan assets consist primarily of investment grade debt obligations, marketable equity securities and shares of the Company’s common stock. The asset allocation of the Company’s domestic pension plan is diversified, consisting primarily of investments in equity and debt securities. The Company seeks a long-term investment return that is given reasonable prevailing capital market expectations. Target allocations are 40% to 70% in equities (including 10% to 20% in Company stock), and 30% to 60% in cash and debt securities.
In fiscal 2023, the Company will use an expected long-term rate of return assumption of 4.8% for the U.S. domestic pension plan, and 3.8% for the U.K. plan. In determining these assumptions, the Company considers the historical returns and expectations for future returns for each asset class as well as the target asset allocation of the pension portfolio as a whole. In fiscal 2022 and 2021, the Company used a discount rate assumption of 4.8% and 2.7%, respectively for the U.S. plan and 3.8% and 1.9%, respectively for the U.K. plan. In determining these assumptions, the Company considers published third party data appropriate for the plans.
Other than the discount rate, pension valuation assumptions are generally long-term and not subject to short-term market fluctuations, although they may be adjusted as warranted by structural shifts in economic or demographic outlooks. Long-term assumptions are reviewed annually to ensure they do not produce results inconsistent with current market conditions. The discount rate is adjusted annually based on corporate investment grade (rated AA or better) bond yields, the maturities of which are correlated with the expected timing of future benefit payments, as of the measurement date.

As a result of the American Rescue Plan Act of 2021, the minimum required company contribution for the U.S. Plan in fiscal 2022 was reduced from $5.6 million to $0.6 million. The Company contributed $2.5 million to the Plans Combined with $1.0 million in the U.K. and $1.5 million in the U.S.. Based upon the actuarial valuations performed on the Company’s defined benefit plans as of June 30, 2022, the contribution for fiscal 2023 for the U.S. plans would require a contribution of $1.4 million and the U.K. plan would require $0.8 million. The Company feels that government regulation combined with the actuarial estimates are two important factors and continues to evaluate its contribution into the plans on an ongoing basis.
The table below sets forth the actual asset allocation for the assets within the Company’s plans.
20222021
Asset category:
Cash equivalents2 %2 %
Fixed income40 %28 %
Equities32 %39 %
Mutual and pooled funds26 %31 %
100 %100 %
The Company determines its investments strategies based upon the composition of the beneficiaries in its defined benefit plans and the relative time horizons that those beneficiaries are projected to receive payouts from the plans. The Company engages an independent investment firm to manage the U.S. pension assets.
Cash equivalents are held in money market funds.
The Company’s fixed income portfolio includes mutual funds that hold a combination of short-term, investment-grade fixed income securities and a diversified selection of investment-grade, fixed income securities, including corporate securities and U.S. government securities.
The Company invests in equity securities, which are diversified across a spectrum of value and growth in large, medium and small capitalization funds and companies, as appropriate to achieve the objective of a balanced portfolio, optimize the expected returns and minimize volatility in the various asset classes.
Other assets include pooled investment funds whose underlying assets consist primarily of property holdings as well as financial instruments designed to offset the long-term impact of inflation and interest rate fluctuations.
The Company has categorized its financial assets (including its pension plan assets), based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below. If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
Financial assets are categorized based on the inputs to the valuation techniques as follows:
◦Level 1 – Financial assets whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market which the Company has the ability to access at the measurement date.
◦Level 2 – Financial assets whose value are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets.
◦Level 3 – Financial assets whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own view about the assumptions a market participant would use in pricing the asset.
The tables below show the portfolio by valuation category as of June 30, 2022 and June 30, 2021 (in thousands):
June 30, 2022
Asset CategoryLevel 1Level 2Level 3Total%
Cash Equivalents$2,620 $— $— $2,620 2 %
Fixed Income— 44,562 — 44,562 40 %
Equities33,869 965 — 34,834 31 %
Mutual & Pooled Funds— 28,598 — 28,598 26 %
Total$36,489 $74,125 $— $110,614 100 %
Included in equity securities at June 30, 2022 and 2021 are shares of the Company’s common stock having a fair value of $3.8 million and $5.6 million, respectively.
June 30, 2021
Asset CategoryLevel 1Level 2Level 3Total%
Cash Equivalents$2,457 $— $— $2,457 2 %
Fixed Income— 38,155 — 38,155 28 %
Equities51,095 1,887 — 52,982 39 %
Mutual & Pooled Funds1,703 39,895 — 41,598 31 %
Total$55,255 $79,937 $— $135,192 100 %
U.S. and U.K. Plans Combined: 
The status of these defined benefit plans is as follows (in thousands): 
202220212020
Change in benefit obligation
Benefit obligation at beginning of year$172,617 $184,190 $169,680 
Interest cost4,113 4,476 5,417 
Plan Settlement— (11,411)— 
Exchange rate changes(4,985)5,238 (1,013)
Benefits paid(6,941)(9,019)(7,203)
Actuarial (gain) loss(30,501)(857)17,309 
Benefit obligation at end of year$134,303 $172,617 $184,190 
Change in plan assets
Fair value of plan assets at beginning of year135,192 123,826 122,033 
Actual return on plan assets(15,941)19,616 2,163 
Employer contributions2,517 7,999 7,687 
   Plan Settlement— (11,411)— 
Benefits paid(6,941)(9,019)(7,203)
Exchange rate changes(4,213)4,181 (854)
Fair value of plan assets at end of year110,614 135,192 123,826 
Funded status at end of year$(23,689)$(37,425)$(60,364)
Amounts recognized in balance sheet
Current liability$(1,157)$(1,556)$(373)
Non-current liability(22,532)(35,869)(59,991)
Net amount recognized in balance sheet$(23,689)$(37,425)$(60,364)
Amounts not yet reflected in net periodic benefit costs and included in accumulated other comprehensive loss
Accumulated loss$6,883 $(3,685)$(19,115)
Amounts not yet recognized as a component of net periodic benefit cost6,883 (3,685)(19,115)
Accumulated net periodic benefit cost in excess of contributions(30,572)(33,740)(41,249)
Net amount recognized$(23,689)$(37,425)$(60,364)
Components of net periodic benefit cost
Interest cost$4,113 $4,476 $5,417 
Expected return on plan assets(4,378)(4,457)(5,193)
Settlement (gain) recognized— (130)— 
Recognized actuarial loss57 53 16,753 
Net periodic (benefit)cost$(208)$(58)$16,977 
Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year
Net loss$(57)$(57)$(38)
Information for pension plans with accumulated benefits in excess of plan assets
Projected benefit obligation$134,303 $172,617 $184,190 
Accumulated benefit obligation$134,303 $172,617 $184,190 
Fair value of assets$110,614 $135,192 $123,826 
U.S. Plan:
The status of the U.S. defined benefit plan is as follows (in thousands):
202220212020
Change in benefit obligation
Benefit obligation at beginning of year$124,633 $138,131 $126,380 
Interest cost3,274 3,689 4,417 
Plan Settlement— (11,411)— 
Benefits paid(5,191)(5,880)(5,682)
Actuarial loss(22,136)104 13,016 
Benefit obligation at end of year$100,580 $124,633 $138,131 
Weighted average assumptions – benefit obligation
Discount rate4.77 %2.69 %2.73 %
Rate of compensation increasen/an/an/a
Change in plan assets
Fair value of plan assets at beginning of year$95,848 $87,292 $85,150 
Actual return on plan assets(10,633)18,864 1,071 
Employer contributions1,523 6,983 6,753 
   Plan Settlement— (11,411)— 
Benefits paid(5,191)(5,880)(5,682)
Fair value of plan assets at end of year81,547 95,848 87,292 
Funded status at end of year$(19,033)$(28,785)$(50,839)
Amounts recognized in balance sheet
Current liability$(1,157)$(1,556)$(373)
Noncurrent liability(17,876)(27,229)(50,466)
Net amount recognized in balance sheet$(19,033)$(28,785)$(50,839)
Weighted average assumptions – net periodic benefit cost
Discount rate2.69 %2.73 %3.56 %
Rate of compensation increaseVariesVariesVaries
Return on plan assets3.56 %4.25 %5.00 %
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive loss
 Income (loss)$8,650 $464 $(14,507)
Amounts not yet recognized as a component of net periodic benefit cost8,650 464 (14,507)
Accumulated contributions less than net periodic benefit cost(27,683)(29,249)(36,332)
Net amount recognized$(19,033)$(28,785)$(50,839)
Components of net periodic benefit cost
Interest cost$3,274 $3,689 $4,417 
Expected return on plan assets(3,374)(3,712)(4,249)
Settlement (gain) recognized— (130)— 
Recognized actuarial loss57 53 14,883 
Net periodic (benefit) cost$(43)$(100)$15,051 
Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year
Net loss(57)(57)(53)
Information for plan with accumulated benefits in excess of plan assets
Projected benefit obligation$100,580 $124,633 $138,131 
Accumulated benefit obligation$100,580 $124,633 $138,131 
Fair value of assets$81,547 $95,848 $87,292 
U.K. Plan:
The status of the U.K. defined benefit plan is as follows (in thousands):
202220212020
Change in benefit obligation
Benefit obligation at beginning of year$47,984 $46,059 $43,300 
Interest cost839 787 1,000 
Exchange rate changes(4,985)5,238 (1,013)
Benefits paid(1,750)(3,139)(1,521)
Actuarial (gain) loss(8,365)(961)4,293 
Benefit obligation at end of year$33,723 $47,984 $46,059 
Weighted average assumptions - benefit obligation
Discount rate3.82 %1.86 %1.59 %
Rate of compensation increasen/an/an/a
Change in plan assets
Fair value of plan assets at beginning of year$39,344 $36,534 $36,883 
Actual return on plan assets(5,308)752 1,092 
Employer contributions994 1,016 934 
Benefits paid(1,750)(3,139)(1,521)
Exchange rate changes(4,212)4,181 (854)
Fair value of plan assets at end of year29,068 39,344 36,534 
Funded status at end of year$(4,655)$(8,640)$(9,525)
Amounts recognized in balance sheet
Noncurrent liability(4,655)(8,640)(9,525)
Net amount recognized in balance sheet(4,655)(8,640)(9,525)
Weighted average assumptions – net periodic benefit cost
Discount rate1.86 %1.59 %2.39 %
Rate of compensation increasen/an/an/a
Return on plan assets2.69 %1.88 %2.62 %
Amounts not yet reflected in net periodic benefit costs and included in accumulated other comprehensive loss
Accumulated loss$(1,766)$(4,149)$(4,608)
Amounts not yet recognized as a component of net periodic benefit cost(1,766)(4,149)(4,608)
Accumulated net periodic benefit cost in excess of contributions(2,889)(4,491)(4,917)
Net amount recognized$(4,655)$(8,640)$(9,525)
Components of net periodic benefit cost
Interest cost839 787 1,000 
Expected return on plan assets(1,004)(745)(944)
Amortization of net loss— — 1,870 
Net periodic benefit cost$(165)$42 $1,926 
Information for plan with accumulated benefits in excess of plan assets
Projected benefit obligation$33,723 $47,984 $46,059 
Accumulated benefit obligation$33,723 $47,984 $46,059 
Fair value of assets$29,068 $39,344 $36,534 
Postretirement Medical and Life Insurance Benefits:
The status of the U.S. postretirement medical and life insurance benefit plan is as follows (in thousands):
202220212020
Change in benefit obligation:
Benefit obligation at beginning of year$1,890 $7,705 $6,930 
Service cost36 65 73 
Interest cost49 141 240 
   Plan amendments— (5,585)— 
Benefits paid(95)(206)(329)
Actuarial (gain) loss(366)(230)791 
Benefit obligation at end of year$1,514 $1,890 $7,705 
Weighted average assumptions: benefit obligations
Discount rate4.77 %2.69 %2.73 %
Rate of compensation increasen/an/a2.64 %
Change in plan assets
Employer contributions95 206 329 
Benefits paid, net of employee contributions(95)(206)(329)
Fair value of plan assets at end of year— — — 
Amounts recognized in balance sheet
Current postretirement benefit obligation$(108)$(107)$(358)
Non-current postretirement benefit obligation(1,406)(1,783)(7,347)
Net amount recognized in balance sheet$(1,514)$(1,890)$(7,705)
Weighted average assumptions – net periodic benefit cost
Discount rate2.69 %2.73 %3.56 %
Rate of compensation increasen/an/a2.64 %
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive loss
Prior service credit$5,424 $6,898 $2,240 
Accumulated gain (loss)(1,181)(1,736)(2,160)
Amounts not yet recognized as a component of net periodic benefit cost4,243 5,162 80 
Net periodic benefit cost in excess of accumulated contributions(5,757)(7,052)(7,785)
Net amount recognized$(1,514)$(1,890)$(7,705)
Components of net periodic benefit cost
Service cost$36 $65 $73 
Interest cost49 141 240 
Amortization of prior service credit(1,474)(927)(537)
Amortization of accumulated loss189 194 83 
Net periodic benefit $(1,200)$(527)$(141)
Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year
Prior service credit$(1,474)$(1,474)$537 
Net loss189 189 (166)
$(1,285)$(1,285)$371 
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one percentage point change in assumed health care cost trend rates would have the following effects (in thousands):
1% Increase
202220212020
Effect on postretirement benefit obligation$1 $1 $1 
1% Decrease
202220212020
Effect on postretirement benefit obligation$(1)$(1)$(1)
Future pension and other benefit payments are as follows (in thousands):
Fiscal YearPensionOther
Benefits
2023$9,158 $108 
20248,295 108 
20258,353 108 
20268,462 109 
20278,807 109 
After50,754 529 
$93,829 $1,071