Pension Plan

12 Months Ended

Dec. 31, 2022

Pension Plan [Line Items]

Retirement Benefits [Text Block]

15.  Pension Plan

All eligible salaried employees of Trans-Lux Corporation and certain of its subsidiaries are covered by a non-contributory defined benefit pension plan.  Pension benefits vest after five years of service and are based on years of service and final average salary.  The Company’s general funding policy is to contribute at least the required minimum amounts sufficient to satisfy regulatory funding standards, but not more than the maximum tax-deductible amount.  The benefit service under the pension plan had been frozen since 2003 and, accordingly, there was no service cost for the years ended December 31, 2022 and 2021.  In 2009, the compensation increments were frozen, and accordingly, no additional benefits are being accrued under the plan.  For 2022 and 2021, the accrued benefit obligation of the plan exceeded the fair value of plan assets, due primarily to the plan’s investment performance and updates to actuarial longevity tables.  The Company’s obligations under its pension plan exceeded plan assets by $2.9 million at December 31, 2022.

The Company employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk.  The intent of this strategy is to minimize plan expenses by outperforming plan liabilities over the long run.  Risk tolerance is established through careful consideration of plan liabilities, plan funded status and corporate financial condition.  The portfolio contains a diversified blend of equity and fixed income investments.  Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews.

At December 31, 2022 and 2021, the Company’s pension plan weighted-average asset allocations by asset category are as follows:

	2022	2021
Equity and index funds	69.0%	68.8%
Fixed income funds	31.0	31.2
	100.0%	100.0%

The pension plan asset information included below is presented at fair value as established by ASC 820.

The following table presents the pension plan assets by level within the fair value hierarchy as of December 31, 2022 and 2021:

In thousands	2022		2020
Level 1:    Equity and index funds	$	5,299	$	7,267
Fixed income funds		2,383		3,294
Total Level 1		7,682		10,561
Level 2		-		-
Level 3		-		-
Total pension plan assets	$	7,682	$	10,561

The funded status of the plan as of December 31, 2022 and 2021 is as follows:

In thousands	2022		2021
Change in benefit obligation: Projected benefit obligation at   beginning of year	$	14,055	$	15,145
Interest cost		372		351
Actuarial (gain) loss		(3,163)		(311)
Settlements		-		(519)
Benefits paid		(719)		(611)
Projected benefit obligation at   end of year		10,545		14,055
Change in plan assets: Fair value of plan assets at   beginning of year		10,561		10,475
Actual return on plan assets		(2,298)		911
Company contributions		138		305
Settlements		-		(519)
Benefits paid		(719)		(611)
Fair value of plan assets at end of   year		7,682		10,561
Funded status (underfunded)	$	(2,863)	$	(3,494)
Amounts recognized in other   accumulated comprehensive loss:
Net actuarial loss	$	7,649	$	8,001
Weighted average assumptions as of    December 31:
Discount rate:
Components of cost		2.75%		2.41%
Benefit obligations		5.40%		2.75%
Expected return on plan assets		8.00%		8.00%
Rate of compensation increase		N/A		N/A

The Company determines the long-term rate of return for plan assets by studying historical markets and the long-term relationships between equity securities and fixed income securities, with the widely-accepted capital market principal that assets with higher volatility generate higher returns over the long run.  The 8.0% expected long-term rate of return on plan assets is determined based on long-term historical performance of plan assets, current asset allocation and projected long-term rates of return.

In 2023, the Company expects to amortize $295,000 of actuarial losses to pension expense.  The accumulated benefit obligation at December 31, 2022 and 2021 was $10.5 million and $14.1 million, respectively.  The minimum required contribution in 2023 is expected to be $0, which is included in Accrued liabilities in the Consolidated Balance Sheets.  The long-term pension liability is $2.9 million and is included in Deferred pension liability and other in the Consolidated Balance Sheets.

The minimum required pension plan contribution for 2022 was $138,000, which the Company fully contributed.  There are no minimum required contributions owed to the pension benefit plan in 2023.  If we are unable to fulfill our related obligations, the implementation of any such enforcement remedies would have a material adverse impact on our financial condition, results of operations, and liquidity.

The following estimated benefit payments are expected to be paid by the Company’s pension plan in the next 5 years:

In thousands	2023		2024		2025		2026		2027
	$	850	$	906	$	856	$	933	$	907

The following table presents the components of the net periodic pension cost for the years ended December 31, 2022 and 2021:

In thousands	2022		2021
Interest cost	$	372	$	351
Expected return on plan assets		(804)		(794)
Recognized loss due to settlements		-		297
Amortization of net actuarial loss		290		327
Net periodic pension (benefit) cost	$	(142)	$	181

The following table presents the change in unrecognized pension costs recorded in other comprehensive loss as of December 31, 2022 and 2021:

In thousands	2022		2021
Balance at beginning of year	$	8,001	$	9,051
Net actuarial loss		(62)		(428)
Recognized loss		(290)		(622)
Balance at end of year	$	7,649	$	8,001