. EMPLOYEE BENEFIT AND RETIREMENT PLANS

The Company has

two

defined benefit pension plans,

one

for U.S. employees and another for U.K. employees. The UK plan was closed to new entrants in fiscal

2009.

The Company has a postretirement medical and life insurance benefit plan for U.S. employees. The Company also has defined contribution plans.

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

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

64.

For retirees

and older, the Company's contribution is fixed at

$28.50

$23.00

per month depending upon the plan the retiree has chosen.

The total cost of all such plans for fiscal

2020,

2019

and

2018

was

$18.6

million,

$2.8

million and

$2.7

million, respectively. Included in these amounts are the Company's contributions to the defined contribution plans amounting to

$1.6

million,

$1.7

million and

$1.8

million in fiscal

2020,

2019

and

2018,

respectively. The financial markets also had an adverse impact on earnings in fiscal

2020

as the increased demand for bonds and the associated decrease in interest rates significantly contributed to a

$16.8

million non-cash pension expense due to higher liabilities. The pension liability is based upon the

ten

-year Corporate Bond Rate and is set on the last day of the fiscal year. This generally accepted accounting principle coupled with the historically low interest rates are driven by financial markets, economic policy and financial conditions. The discount rate to determine net cost for the US pension liability was lowered from

3.56%

June 2019

2.73%

June 2020.

The amortization of the net pension loss was

$0.3

million in fiscal year

2019

compared to

$16.8

million in fiscal

2020.

Under both U.S and U.K. defined benefit plans, 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%

70%

in equities (including

10%

20%

in Company stock), and

30%

60%

in cash and debt securities.

In fiscal

2021,

the Company will use an expected long-term rate of return assumption of

5.0%

for the U.S. domestic pension plan, and

2.6%

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

2020

and

2019,

the Company used a discount rate assumption of

3.6%

and

4.3%

for the U.S. plan and

2.4%

and

2.8%

for the U.K. plan, respectively. 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.

Based upon the actuarial valuations performed on the Company's defined benefit plans as of

June 30, 2020

the contribution for fiscal

2021

for the U.S. plans will require a contribution of

$7.0

million and the U.K. plan will require

one

$0.9

million.

The table below sets forth the actual asset allocation for the assets within the Company's plans.

	20 20			201 9
Asset category:
Cash equivalents		4	%		2	%
Fixed income		27	%		31	%
Equities		40	%		35	%
Mutual and pooled funds		29	%		32	%
		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

– 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

– 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

– 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, 2020

and

June 30, 2019 (

in thousands):

June 30, 2020
Asset Category	Level 1		Level 2		Level 3		Total		%
Cash Equivalents	$	5,165	$	-	$	-	$	5,165		4	%
Fixed Income		-		32,740		-		32,740		27	%
Equities		48,947		888		-		49,835		40	%
Mutual & Pooled Funds		-		30,687		-		30,687		29	%
Total	$	54,112	$	64,315	$	-	$	118,427		100	%

June 30, 2020

in the U.K. Pension plan a fund in the amount of

$5.4

million was excluded from above and valued under NAV practical expedient. The value of the combined plan assets at end of year was

$123,826.

Included in equity securities at

June 30, 2020

and

2019

are shares of the Company's common stock having a fair value of

$2.2

million and

$4.6

million, respectively.

June 30, 201 9
Asset Category	Level 1		Level 2		Level 3		Total		%
Cash Equivalents	$	1,818	$	-	$	-	$	1,818		2	%
Fixed Income		-		38,232		-		38,232		31	%
Equities		41,629		1,482		-		43,111		35	%
Mutual & Pooled Funds		2,362		36,510		-		38,872		32	%
Total	$	45,809	$	76,224	$	-	$	122,033		100	%

U.S. and U.K. Plans Combined:

The status of these defined benefit plans is as follows (in thousands):

	20 20			201 9			201 8
Change in benefit obligation
Benefit obligation at beginning of year	$	169,680		$	159,213		$	169,696
Interest cost		5,417			6,013			6,077
Exchange rate changes		(1,013	)		(1,697	)		707
Benefits paid		(7,203	)		(7,217	)		(6,489	)
Actuarial (gain) loss		17,309			13,368			(10,778	)
Benefit obligation at end of year	$	184,190		$	169,680		$	159,213

Change in plan assets
Fair value of plan assets at beginning of year		122,033			118,693			117,778
Actual return on plan assets		2,163			6,589			2,545
Employer contributions		7,687			5,413			4,366
Benefits paid		(7,203	)		(7,217	)		(6,489	)
Exchange rate changes		(845	)		(1,445	)		493
Fair value of plan assets at end of year		123,826			122,033			118,693
Funded status at end of year	$	(60,364	)	$	(47,647	)	$	(40,520	)
Amounts recognized in balance sheet
Current liability	$	(373	)	$	(324	)	$	(67	)
Noncurrent liability		(59,991	)		(47,323	)		(40,453	)
Net amount recognized in balance sheet	$	(60,364	)	$	(47,647	)	$	(40,520	)

Amounts not yet reflected in net periodic benefit costs and included in accumulated other comprehensive loss
Accumulated loss	$	(19,113	)	$	(15,590	)	$	(4,038	)
Amounts not yet recognized as a component of net periodic benefit cost		(19,113	)		(15,590	)		(4,038	)
Accumulated net periodic benefit cost in excess of contributions		(41,249	)		(32,057	)		(36,482	)
Net amount recognized	$	(60,634	)	$	(47,647	)	$	(40,520	)



Components of net periodic benefit cost
Interest cost	$	5,417		$	6,013		$	6,077
Expected return on plan assets		(5,193	)		(5,129	)		(5,140	)
Recognized actuarial loss		16,753			284			26
Net periodic benefit cost	$	16,977		$	1,168		$	963

Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year
Net loss	$	(53	)	$	(38	)	$	(28	)

Information for pension plans with accumulated benefits in excess of plan assets
Projected benefit obligation	$	184,190		$	169,680		$	159,213
Accumulated benefit obligation	$	184,190		$	169,680		$	159,213
Fair value of assets	$	123,826		$	122,033		$	118,693

U.S. Plan:

The status of the U.S. defined benefit plan is as follows (in thousands):

	20 20			201 9			201 8
Change in benefit obligation
Benefit obligation at beginning of year	$	126,380		$	116,277		$	124,138
Service cost		-			-			-
Interest cost		4,417			4,854			4,804
Plan curtailment		-			-			-
Benefits paid		(5,682	)		(5,565	)		(4,786	)
Actuarial (gain) loss		13,016			10,814			(7,879	)
Benefit obligation at end of year	$	138,131		$	126,380		$	116,277

Weighted average assumptions – benefit obligation
Discount rate		2.73	%		3.56	%		4.27	%
Rate of compensation increase		n/a			n/a			n/a

Change in plan assets
Fair value of plan assets at beginning of year	$	85,150		$	82,140		$	81,928
Actual return on plan assets		1,071			4,132			1,645
Employer contributions		6,753			4,443			3,353
Benefits paid		(5,682	)		(5,565	)		(4,786	)
Fair value of plan assets at end of year		87,292			85,150			82,140
Funded status at end of year	$	(50,839	)	$	(41,230	)	$	(34,137	)

Amounts recognized in balance sheet
Current liability	$	(373	)	$	(324	)	$	(67	)
Noncurrent liability		(50,466	)		(40,906	)		(34,070	)
Net amount recognized in balance sheet	$	(50,839	)	$	(41,230	)	$	(34,137	)

Weighted average assumptions – net periodic benefit cost
Discount rate		3.56	%		4.27	%		3.92	%
Rate of compensation increase	Varies			Varies			Varies
Return on plan assets		5.00	%		5.00	%		5.00	%

Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive loss
Accumulated loss	$	(14,507	)	$	(13,196	)	$	(2,731	)
Amounts not yet recognized as a component of net periodic benefit cost		(14,507	)		(13,196	)		(2,731	)
Accumulated contributions less than net periodic benefit cost		(36,332	)		(28,034	)		(31,406	)
Net amount recognized	$	(50,839	)	$	(41,230	)	$	(34,137	)
Components of net periodic benefit cost
Interest cost	$	4,417		$	4,854		$	4,804
Expected return on plan assets		(4,249	)		(4,067	)		(4,026	)
Recognized actuarial loss		14,883			284			26
Net periodic benefit cost	$	15,051		$	1,071		$	804

Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year
Net loss		(38	)		(38	)		(28	)

Information for plan with accumulated benefits in excess of plan assets
Projected benefit obligation	$	138,131		$	126,380		$	116,277
Accumulated benefit obligation	$	138,131		$	126,380		$	116,277
Fair value of assets	$	87,292		$	85,150		$	82,140

U.K. Plan:

The status of the U.K. defined benefit plan is as follows (in thousands):

	20 20			201 9			201 8
Change in benefit obligation
Benefit obligation at beginning of year	$	43,300		$	42,936		$	45,558
Interest cost		1,000			1,159			1,273
Exchange rate changes		(1,013	)		(1,697	)		707
Benefits paid		(1,521	)		(1,652	)		(1,703	)
Actuarial (gain) loss		4,293			2,554			(2,899	)
Benefit obligation at end of year	$	46,059		$	43,300		$	42,936
Weighted average assumptions - benefit obligation
Discount rate		1.59	%		2.39	%		2.80	%
Rate of compensation increase		n/a			n/a			n/a

Change in plan assets
Fair value of plan assets at beginning of year	$	36,883		$	36,553		$	35,850
Actual return on plan assets		1,092			2,457			900
Employer contributions		934			970			1,013
Benefits paid		(1,521	)		(1,652	)		(1,703	)
Exchange rate changes		(854	)		(1,445	)		493
Fair value of plan assets at end of year		36,534			36,883			36,553
Funded status at end of year	$	(9,525	)	$	(6,417	)		(6,383	)
Amounts recognized in balance sheet
Noncurrent liability		(9,525	)		(6,417	)		(6,383	)
Net amount recognized in balance sheet	$	(9,525	)	$	(6,417	)	$	(6,383	)

Weighted average assumptions – net periodic benefit cost

Discount rate		2.39	%		2.80	%		2.73	%
Rate of compensation increase		n/a			n/a			n/a
Return on plan assets		2.62	%		2.98	%		3.01	%

Amounts not yet reflected in net periodic benefit costs and included in accumulated other comprehensive loss
Accumulated loss	$	(4,608	)	$	(2,394	)	$	(1,307	)
Amounts not yet recognized as a component of net periodic benefit cost		(4,608	)		(2,394	)		(1,307	)
Accumulated net periodic benefit cost in excess of contributions		(4,917	)		(4,023	)		(5,076	)
Net amount recognized	$	(9,525	)	$	(6,417	)	$	(6,383	)



Components of net periodic benefit cost
Interest cost		1,000			1,159			1,273
Expected return on plan assets		(944	)		(1,062	)		(1,114	)
Amortization of net loss		1,870			—			—
Net periodic benefit cost	$	1,926		$	97		$	159

Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year	$	-		$	-		$	-

Information for plan with accumulated benefits in excess of plan assets
Projected benefit obligation	$	46,059		$	43,300		$	42,936
Accumulated benefit obligation	$	46,059		$	43,300		$	42,936
Fair value of assets	$	36,534		$	36,883		$	36,553

Postretirement Medical and Life Insurance Benefits:

The status of the U.S. postretirement medical and life insurance benefit plan is as follows (in thousands):

	20 20			201 9			201 8
Change in benefit obligation:
Benefit obligation at beginning of year	$	6,930		$	6,385		$	7,086
Service cost		73			72			85
Interest cost		240			265			270
Benefits paid		(329	)		(346	)		(388	)
Actuarial (gain) loss		791			554			(668	)
Benefit obligation at end of year	$	7,705		$	6,930		$	6,385

Weighted average assumptions: benefit obligations
Discount rate		2.73	%		3.56	%		4.27	%
Rate of compensation increase		2.64	%		2.64	%		2.64	%

Change in plan assets
Employer contributions		329			346			388
Benefits paid, net of employee contributions		(329	)		(346	)		(388	)
Fair value of plan assets at end of year		—			—			—

Amounts recognized in balance sheet
Current postretirement benefit obligation	$	(358	)	$	(353	)	$	(339	)
Non-current postretirement benefit obligation		(7,347	)		(6,577	)		(6,046	)
Net amount recognized in balance sheet	$	(7,705	)	$	(6,930	)	$	(6,385	)

Weighted average assumptions – net periodic benefit cost
Discount rate		3.56	%		4.27	%		3.92	%
Rate of compensation increase		2.64	%		2.64	%		2.64	%

Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive loss
Prior service credit	$	2,240		$	2,777		$	3,314
Accumulated gain (loss)		(2,160	)		(1,452	)		(928	)
Amounts not yet recognized as a component of net periodic benefit cost		80			1,325			2,386
Net periodic benefit cost in excess of accumulated contributions		(7,785	)		(8,255	)		(8,771	)
Net amount recognized	$	(7,705	)	$	(6,390	)	$	(6,385	)
Components of net periodic benefit cost
Service cost	$	73		$	72		$	85
Interest cost		240			265			270
Amortization of prior service credit		(537	)		(537	)		(537	)
Amortization of accumulated loss		83			30			99
Net periodic benefit cost	$	(141	)	$	(170	)	$	(83	)
Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year
Prior service credit	$	537		$	537		$	537
Net loss		(166	)		(83	)		(30	)
	$	371		$	454		$	507

Healthcare cost trend rate assumed for next year		n/a			6.60	%		6.60	%
Rate to which the cost trend rate gradually declines		n/a			4.50	%		4.50	%
Year that the rate reaches the rate at which it is assumed to remain		n/a			2037			2037

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
	20 20		201 9		201 8
Effect on postretirement benefit obligation	$	1	$	1	$	1

	1% Decrease
	20 20			201 9			201 8
Effect on postretirement benefit obligation	$	(1	)	$	(1	)	$	(1	)

Future pension and other benefit payments are as follows (in thousands):

Fiscal Year	Pension		Other Benefits
2021	$	7,913	$	358
2022		8,250		363
2023		8,610		353
2024		8,643		358
2025		9,150		364
After		56,032		1,889
	$	98,598	$	3,685