XML 107 R15.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Note 8 - Benefit Plans
 12 Months Ended
Dec. 31, 2019
Notes to Financial Statements  
Pension and Other Postretirement Benefits Disclosure [Text Block]
NOTE
8
– Benefit Plans
:
 
Defined Benefit Plans
 
The Company is the sponsor of
two
noncontributory qualified defined benefit pension plans, providing for normal retirement at age
65,
covering all eligible employees (as defined). Periodic benefit payments on retirement are determined based on a fixed amount applied to service or determined as a percentage of earnings prior to retirement. The Company is also the sponsor of an unfunded supplemental executive retirement plan (“SERP”) in which several employees participate. Pension plan assets for retirement benefits consist primarily of fixed income securities and common stock equities.
 
Effective
June 30, 2013,
the Company
no
longer accrues additional benefits for future service or for future increases in compensation levels for the Company’s primary defined benefit pension plan. 
 
Effective
December 31, 2014,
the Company
no
longer accrues additional benefits for future service for the Company’s hourly defined benefit plan.
 
The Company recognizes the funded status of its defined benefit post retirement plans in the Company’s balance sheets.
 
At
December 31, 2019
, the fair value of plan assets for the noncontributory qualified defined benefit pension plans exceeded their projected benefit obligations by
$1.8
million and thus the plans are overfunded. The Company’s projected benefit obligation under the SERP exceeded the fair value of the plans’ assets by
$10.4
million and thus the plan is underfunded. 
 
It is our policy to make contributions to the various plans in accordance with statutory funding requirements and any additional funding that
may
be deemed appropriate.
 
The following tables present the changes in the benefit obligations and the various plan assets, the funded status of the plans, and the amounts recognized in the Company’s balance sheets
at
December 31, 2019
and
2018
(in thousands):
 
   
December 31,
  
   
2019
    
2018
  
Changes in benefit obligation:
      
 
      
 
Benefit obligation at beginning of year
   $
27,125
     $
28,386
  
Service cost
    
117
      
108
  
Interest cost
    
1,084
      
970
  
Actuarial (gain) loss
    
3,835
      
(1,597
 )
Benefits paid
    
(3,691
 )    
(742
 )
Benefit obligation at end of year
    
28,470
      
27,125
  
                 
Changes in plan assets:
      
 
      
 
Fair value of plan assets at beginning of year
    
19,980
      
22,145
  
Actual return on assets
    
3,547
      
(1,526
 )
Employer contributions
    
103
      
103
  
Benefits paid
    
(3,691
 )    
(742
 )
Fair value of plan assets at end of year
    
19,939
      
19,980
  
                 
Funded status at end of year
   $
(8,531
 )   $
(7,145
 )
                 
Amounts recognized in balance sheets:
      
 
      
 
Other assets
   $
1,825
     $
1,663
  
Other current liabilities
    
(103
 )    
(103
 )
Long-term pension liability
    
(10,253
 )    
(8,705
 )
Net amount recognized   $
(8,531
 )   $
(7,145
 )
                 
Amounts recognized in accumulated other comprehensive income consist of:
      
 
      
 
Net actuarial loss
   $
10,828
     $
11,417
  
 
Information for pension plans with projected benefit obligation in excess of plan assets depicted as follows (in thousands):
 
   
December 31,
  
   
2019
    
2018
  
Projected benefit obligation
   $
28,470
     $
27,125
  
Fair value of plan assets
    
(19,939
 )    
(19,980
 )
    $
8,531
     $
7,145
  
 
Components of net periodic benefit cost were as follows (in thousands):
 
   
Years Ended December 31,
  
   
2019
    
2018
    
2017
  
Service cost - benefits earned during the period
   $
117
     $
108
     $
65
  
Interest cost on projected benefit obligation
    
1,084
      
970
      
965
  
Expected return on plan assets
    
(1,491
 )    
(1,717
 )    
(1,218
 )
Recognized actuarial loss
    
1,259
      
1,132
      
1,042
  
Settlement loss
    
1,110
      
-
      
435
  
Net periodic pension cost after settlements
   $
2,079
     $
493
     $
1,289
  
 
The pension settlement losses included in the table above resulted from lump sum pension payments made to various employees upon their retirement or termination during the periods specified. The pension settlement losses did
not
require a cash outlay by the Company and did
not
increase the Company’s total pension expense over time, as the charge was an acceleration of costs that otherwise would be recognized as pension expense in future periods. The service cost component is included in selling and administrative expenses in our statements of comprehensive income and the other components of net periodic pension cost are included in other periodic pension costs in our statements of comprehensive income.
 
The estimated net actuarial loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is
$1.3
million.
 
The table below presents various assumptions used in determining the benefit obligation for each year and reflects the percentages for the various plans.
 
The following table presents the weighted-average assumptions used to determine benefit obligations as of
December 31, 2018
and 2019:
 
     
 
      
 
    
Long Term Rate
      
 
      
 
  
   
Discount Rate
    
of Return
    
Salary Scale
  
   
Corporate
    
Plants
    
Corporate
    
Plants
    
Corporate
    
Plants
  
2018
    
4.14
 %    
4.06
 %    
8.00
 %    
8.00
 %    
N/A
      
N/A
  
2019
    
3.12
 %    
3.02
 %    
8.00
 %    
8.00
 %    
N/A
      
N/A
  
 
The following table presents the weighted-average assumptions used to determine net periodic benefit cost for years ended
December 31,
2017
, 2018 and 2019:
 
     
 
      
 
    
Long Term Rate
      
 
      
 
  
   
Discount Rate
    
of Return
    
Salary Scale
  
   
Corporate
    
Plants
    
Corporate
    
Plants
    
Corporate
    
Plants
  
2017
    
4.04
 %    
3.91
 %    
8.00
 %    
8.00
 %    
N/A
      
N/A
  
2018
    
3.53
 %    
3.45
 %    
8.00
 %    
8.00
 %    
N/A
      
N/A
  
2019
    
4.14
 %    
4.06
 %    
8.00
 %    
8.00
 %    
N/A
      
N/A
  
 
The methodology used to determine the expected rate of return on the pension plan assets was based on a review of actual returns in the past and consideration of projected returns based upon our projected asset allocation. Our strategy with respect to our investments in pension plan assets is to be invested with a long-term outlook. Therefore, the risk and return balance of our asset portfolio should reflect a long-term horizon. Our pension plan asset allocation at
December 31, 2019
,
2018
 and target allocation for
2020
are as follows:
 
 
   
Percentage of Plan Assets
    
Target
  
   
December 31,
    
Allocation
  
Investment description
  
2019
    
2018
    
2020
  
Equity securities
    
68
 %    
59
 %    
60
 %
Fixed income
    
31
 %    
40
 %    
40
 %
Other
    
1
 %    
1
 %    
-
 %
Total
    
100
 %    
100
 %    
100
 %
 
The Company plans to contribute
$0.1
million to our defined benefit pension plans in
2020.
 
The following table includes projected benefit payments for the years indicated (in thousands):
 
Year
    
Projected Benefit Payments
  
2020
     $
1,115
  
2021
      
2,623
  
2022
      
1,479
  
2023
      
1,795
  
2024
      
1,678
  
2025-2029      
7,650
  
 
Rabbi Trust

In connection with the Company’s unfunded SERP, we have life insurance contracts on the lives of designated individuals. The insurance contracts associated with the SERP are held in a Rabbi trust. The trust is the owner and beneficiary of such insurance contracts. The policies are being utilized to help offset the costs and liabilities of the SERP. The cash surrender value of the life insurance contracts was
$3.6
million and
$2.7
million at
December 31, 2019
and
2018
, respectively. The cash surrender value of these policies is included in other assets in the balance sheets. During the years ended
December 31, 2019
, 
2018
and
2017
, we recognized an investment gain of
$0.7
million, investment loss of
$0.3
million and investment gain of
$0.3
 million, respectively, on the cash surrender value of these life insurance contracts.
 
In
2013,
we initiated a Non-Qualified Deferred Compensation Plan, and we have purchased life insurance contracts on the lives of designated individuals. The insurance contracts associated with the Non-Qualified Deferred Compensation Plan are also held in a Rabbi trust. The trust is the owner and beneficiary of such insurance contracts. The policies are being utilized to help offset the costs and liabilities of the Non-Qualified Deferred Compensation Plan. The cash surrender value of the life insurance contracts was
$4.3
million and
$2.9
million at
December 31, 2019
and
2018
, respectively. The cash surrender value of these policies is included in other assets in the balance sheets. The liability for participant deferrals was
$4.1
million and
$2.9
million as of
December 31, 2019
and
2018
, respectively, and is included in other long-term liabilities in the balance sheets.
 
Defined Contribution Plan
 
The Company provides a defined contribution plan covering qualified employees. The plan includes a provision that allows employees to make pre-tax contributions under Section
401
(k) of the Internal Revenue Code. The plan provides for the Company to make a guaranteed match equal to
25%
of each employee’s eligible contributions. The plan also provides the Company with the option of making an additional discretionary contribution to the plan each year. Currently the discretionary contribution is set at
3%
of eligible employees’ wages. The Company contributions for the years ended
December 31, 2019
, 
2018
and
2017
were approximately
$0.9
million,
$0.8
million and
$1.0
million, respectively.