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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2019
Employee Benefit Plans [Abstract] |
Employee Benefit Plans | 13. EMPLOYEE BENEFIT PLANS Defined Benefit Pension Plans. The Company maintains both qualified and non-qualified defined benefit pension plans for its U.S. employees employed prior to April 1, 2010. Generally, the Company computes the benefits based on average earnings over a period prescribed by the plans and credited length of service. The Company’s non-qualified defined benefit pension plan provided compensating pension benefits for participants whose benefits have been curtailed under the qualified plan due to Internal Revenue Code limitations. Effective January 1, 2018, participants of the Company’s non-qualified defined benefit pension plan may no longer accrue additional service benefits. Although not required to make contributions under IRS regulations, the following table summarizes the Company’s contributions to the defined benefit pension plans for the periods indicated:
| Years Ended December 31,
(Dollars in thousands) | 2019 |  | 2018 |  | 2017
Company contributions | $ | 4,750 |  | $ | 77,743 |  | $ | 10,534
The following table summarizes the Company’s pension expense for the periods indicated:
| Years Ended December 31,
(Dollars in thousands) | 2019 |  | 2018 |  | 2017
Pension expense | $ | 10,042 |  | $ | 9,728 |  | $ | 16,299
The following table summarizes the status of these defined benefit plans for U.S. employees for the periods indicated:
| Years Ended December 31,
(Dollars in thousands) | 2019 |  | 2018
Change in projected benefit obligation: |  |  |  |  |
Benefit obligation at beginning of year | $ | 300,244 |  | $ | 316,202
Service cost |  | 8,255 |  |  | 9,801
Interest cost |  | 11,712 |  |  | 10,290
Actuarial (gain)/loss |  | 46,206 |  |  | (29,966)
Curtailment |  | - |  |  | -
Benefits paid |  | (11,062) |  |  | (6,084)
Projected benefit obligation at end of year |  | 355,356 |  |  | 300,244
Change in plan assets: |  |  |  |  |
Fair value of plan assets at beginning of year |  | 260,531 |  |  | 210,267
Actual return on plan assets |  | 47,247 |  |  | (21,395)
Actual contributions during the year |  | 4,750 |  |  | 77,743
Administrative expenses paid |  | - |  |  | -
Benefits paid |  | (11,062) |  |  | (6,084)
Fair value of plan assets at end of year |  | 301,467 |  |  | 260,531
Funded status at end of year | $ | (53,889) |  | $ | (39,713)
(Some amounts may not reconcile due to rounding.)
Amounts recognized in the consolidated balance sheets for the periods indicated:
| At December 31,
(Dollars in thousands) | 2019 |  | 2018
Other assets (due beyond one year) | $ | - |  | $ | -
Other liabilities (due within one year) |  | (7,362) |  |  | (7,530)
Other liabilities (due beyond one year) |  | (46,527) |  |  | (32,182)
Net amount recognized in the consolidated balance sheets | $ | (53,889) |  | $ | (39,713)
(Some amounts may not reconcile due to rounding.)
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss) for the periods indicated:
| At December 31,
(Dollars in thousands) | 2019 |  | 2018
Accumulated income (loss) | $ | (97,466) |  | $ | (88,580)
Accumulated other comprehensive income (loss) | $ | (97,466) |  | $ | (88,580)
(Some amounts may not reconcile due to rounding.)
Other changes in other comprehensive income (loss) for the periods indicated are as follows:
| Years Ended December 31,
(Dollars in thousands) | 2019 |  | 2018
Other comprehensive income (loss) at December 31, prior year | $ | (88,580) |  | $ | (86,788)
Net gain (loss) arising during period |  | (16,927) |  |  | (8,631)
Recognition of amortizations in net periodic benefit cost: |  |  |  |  |
Actuarial loss |  | 8,042 |  |  | 6,839
Curtailment loss recognized |  | - |  |  | -
Other comprehensive income (loss) at December 31, current year | $ | (97,466) |  | $ | (88,580)
(Some amounts may not reconcile due to rounding.)
Net periodic benefit cost for U.S. employees included the following components for the periods indicated:
| Years Ended December 31,
(Dollars in thousands) | 2019 |  | 2018 |  | 2017
Service cost | $ | 8,255 |  | $ | 9,801 |  | $ | 10,949
Interest cost |  | 11,712 |  |  | 10,290 |  |  | 10,034
Expected return on assets |  | (17,968) |  |  | (17,202) |  |  | (13,050)
Amortization of actuarial loss from earlier periods |  | 7,635 |  |  | 6,839 |  |  | 8,366
Settlement |  | 408 |  |  | - |  |  | -
Net periodic benefit cost | $ | 10,042 |  | $ | 9,728 |  | $ | 16,299
Other changes recognized in other comprehensive income (loss): |  |  |  |  |  |  |  |
Other comprehensive income (loss) attributable to change from prior year |  | 8,885 |  |  | 1,792 |  |  |
Total recognized in net periodic benefit cost and other |  |  |  |  |  |  |  |
comprehensive income (loss) | $ | 18,927 |  | $ | 11,520 |  |  |
(Some amounts may not reconcile due to rounding.)
The estimated transition obligation, actuarial loss and prior service cost that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next year are $0 thousand, $9,461 thousand and $0 thousand, respectively. The weighted average discount rates used to determine net periodic benefit cost for 2019, 2018 and 2017 were 4.27%, 3.62% and 4.16%, respectively. The rate of compensation increase used to determine the net periodic benefit cost for 2019, 2018 and 2017 was 4.00%. The expected long-term rate of return on plan assets was 7.00% for 2019, 7.00% for 2018 and was 7.50% for 2017 based on expected portfolio returns and allocations. The weighted average discount rates used to determine the actuarial present value of the projected benefit obligation for years end 2019, 2018 and 2017 were 3.28%, 4.27% and 3.62%, respectively. The following table summarizes the accumulated benefit obligation for the periods indicated:
| At December 31,
(Dollars in thousands) | 2019 |  | 2018
Qualified Plan | $ | 288,328 |  | $ | 237,855
Non-qualified Plan |  | 21,642 |  |  | 24,472
Total | $ | 309,970 |  | $ | 262,327
(Some amounts may not reconcile due to rounding.)
The following table displays the plans with projected benefit obligations in excess of plan assets for the periods indicated:
| At December 31,
(Dollars in thousands) | 2019 |  | 2018
Qualified Plan |  |  |  |  |
Projected benefit obligation | $ | 333,715 |  | $ | 275,772
Fair value of plan assets |  | 301,467 |  |  | 260,531
Non-qualified Plan |  |  |  |  |
Projected benefit obligation | $ | 21,642 |  | $ | 24,472
Fair value of plan assets |  | - |  |  | -
The following table displays the plans with accumulated benefit obligations in excess of plan assets for the periods indicated:
| At December 31,
(Dollars in thousands) | 2019 |  | 2018
Qualified Plan |  |  |
Accumulated benefit obligation | $ | - |  | $ | -
Fair value of plan assets |  | - |  |  | -
Non-qualified Plan |  |  |  |  |
Accumulated benefit obligation | $ | 21,642 |  | $ | 24,472
Fair value of plan assets |  | - |  |  | -
The following table displays the expected benefit payments in the periods indicated:
(Dollars in thousands) |  |
2019 |  | 15,670
2020 |  | 11,458
2021 |  | 12,198
2022 |  | 12,902
2023 |  | 13,985
Next 5 years |  | 84,334
Plan assets consist of shares in investment trusts with 62%, 30%, 7% and 1% of the underlying assets consisting of equity securities, fixed maturities, limited partnerships and multi-strategy equity funds and cash, respectively. The Company manages the qualified plan investments for U.S. employees. The assets in the plan consist of debt and equity mutual funds. Due to the long term nature of the plan, the target asset allocation has historically been 70% equities and 30% bonds. The following tables present the fair value measurement levels for the qualified plan assets at fair value for the periods indicated:
|  |  | Fair Value Measurement Using:
|  |  | Quoted Prices |  |  |  |
|  |  | in Active |  | Significant |  |
|  |  | Markets for |  | Other |  | Significant
|  |  | Identical |  | Observable |  | Unobservable
|  |  | Assets |  | Inputs |  | Inputs
(Dollars in thousands) | December 31, 2019 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets: |  |  |  |  |  |  |  |  |  |  |
Short-term investments, which approximates fair value (a) | $ | 1,749 |  | $ | 1,749 |  | $ | - |  | $ | -
Mutual funds, fair value |  |  |  |  |  |  |  |  |  |  |
Fixed income (b) |  | 90,483 |  |  | 90,483 |  |  | - |  |  | -
Equities (c) |  | 188,884 |  |  | 188,884 |  |  | - |  |  | -
Total | $ | 281,116 |  | $ | 281,116 |  | $ | - |  | $ | -
(Some amounts may not reconcile due to rounding.)
(a) This category includes high quality, short-term money market instruments, which are issued and payable in U.S. dollars. (b) This category includes fixed income funds, which invest in investment grade securities of corporations, governments and government agencies with approximately 70% in U.S. securities and 30% in international securities. (c) This category includes funds, which invest in small, mid and multi-cap equity securities including common stocks, securities convertible into common stock and securities with common stock characteristics, such as rights and warrants, with approximately 50% in U.S. equities and 50% in international equities. There were no transfers between Level 1 and Level 2 for the twelve months ended December 31, 2018.
|  |  | Fair Value Measurement Using:
|  |  | Quoted Prices |  |  |  |
|  |  | in Active |  | Significant |  |
|  |  | Markets for |  | Other |  | Significant
|  |  | Identical |  | Observable |  | Unobservable
|  |  | Assets |  | Inputs |  | Inputs
(Dollars in thousands) | December 31, 2018 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets: |  |  |  |  |  |  |  |  |  |  |
Short-term investments, which approximates fair value (a) | $ | 2,872 |  | $ | 2,872 |  | $ | - |  | $ | -
Mutual funds, fair value |  |  |  |  |  |  |  |  |  |  |
Fixed income (b) |  | 82,633 |  |  | 82,633 |  |  | - |  |  | -
Equities (c) |  | 154,935 |  |  | 154,935 |  |  | - |  |  | -
Total | $ | 240,440 |  | $ | 240,440 |  | $ | - |  | $ | -
(Some amounts may not reconcile due to rounding.)
(a) This category includes high quality, short-term money market instruments, which are issued and payable in U.S. dollars. (b) This category includes fixed income funds, which invest in investment grade securities of corporations, governments and government agencies with approximately 70% in U.S. securities and 30% in international securities. (c) This category includes funds, which invest in small, mid and multi-cap equity securities including common stocks, securities convertible into common stock and securities with common stock characteristics, such as rights and warrants, with approximately 50% in U.S. equities and 50% in international equities. In addition, $20,351 thousand and $20,091 thousand of investments which were recorded as part of the qualified plan assets at December 31, 2019 and 2018, respectively, are not included within the fair value hierarchy tables as the assets are valued using the NAV practical expedient guidance within ASU 2015-07. The Company contributed $0 thousand and $77,000 thousand to the qualified pension benefit plan for the years ended December 31, 2019 and 2018, respectively. Defined Contribution Plans. The Company also maintains both qualified and non-qualified defined contribution plans (“Savings Plan” and “Non-Qualified Savings Plan”, respectively) covering U.S. employees. Under the plans, the Company contributes up to a maximum 3% of the participants’ compensation based on the contribution percentage of the employee. The Non-Qualified Savings Plan provides compensating savings plan benefits for participants whose benefits have been curtailed under the Savings Plan due to Internal Revenue Code limitations. In addition, effective for new hires (and rehires) on or after April 1, 2010, the Company will contribute between 3% and 8% of an employee’s earnings for each payroll period based on the employee’s age. These contributions will be 100% vested after three years. The following table presents the Company’s incurred expenses related to these plans for the periods indicated:
| Years Ended December 31,
(Dollars in thousands) | 2019 |  | 2018 |  | 2017
Incurred expenses | $ | 10,794 |  | $ | 9,301 |  | $ | 7,167
In addition, the Company maintains several defined contribution pension plans covering non-U.S. employees. Each non-U.S. office (Brazil, Canada, London, Belgium, Singapore, Ireland, Zurich and Bermuda) maintains a separate plan for the non-U.S. employees working in that location. The Company contributes various amounts based on salary, age and/or years of service. In the current year, the contributions as a percentage of salary for the branch offices ranged from 4.9% to 45.7%. The contributions are generally used to purchase pension benefits from local insurance providers. The following table presents the Company’s incurred expenses related to these plans for the periods indicated:
| Years Ended December 31,
(Dollars in thousands) | 2019 |  | 2018 |  | 2017
Incurred expenses | $ | 2,216 |  | $ | 2,057 |  | $ | 1,849
Post-Retirement Plan. The Company sponsors a Retiree Health Plan for employees employed prior to April 1, 2010. This plan provides healthcare benefits for eligible retired employees (and their eligible dependants), who have elected coverage. The Company anticipates that most covered employees will become eligible for these benefits if they retire while working for the Company. The cost of these benefits is shared with the retiree. The Company accrues the post-retirement benefit expense during the period of the employee’s service. A medical cost trend rate of 7.00% in 2019 was assumed to decrease gradually to 4.50% in 2029 and then remain at that level. Changes in the assumed healthcare cost trend can have a significant effect on the amounts reported for the healthcare plans. A one percent change in the rate would have the following effects on:
| Percentage |  | Percentage
| Point Increase |  | Point Decrease
(Dollars in thousands) | ($ Impact) |  | ($ Impact)
a. Effect on total service and interest cost components | $ | 434 |  | $ | (335)
b. Effect on accumulated post-retirement benefit obligation |  | 6,257 |  |  | (4,833)
The following table presents the post-retirement benefit expenses for the periods indicated:
| Years Ended December 31,
(Dollars in thousands) | 2019 |  | 2018 |  | 2017
Post-retirement benefit expenses | $ | 1,231 |  | $ | 1,829 |  | $ | 2,814
The following table summarizes the status of this plan for the periods indicated:
| At December 31,
(Dollars in thousands) | 2019 |  | 2018
Change in projected benefit obligation: |  |  |  |  |
Benefit obligation at beginning of year | $ | 28,483 |  | $ | 34,717
Service cost |  | 983 |  |  | 1,312
Interest cost |  | 980 |  |  | 999
Amendments |  | (582) |  |  | -
Actuarial (gain)/loss |  | - |  |  | (7,985)
Benefits paid |  | (488) |  |  | (561)
Benefit obligation at end of year |  | 29,376 |  |  | 28,483
Change in plan assets: |  |  |  |  |
Fair value of plan assets at beginning of year |  | - |  |  | -
Employer contributions |  | 488 |  |  | 561
Benefits paid |  | (488) |  |  | (561)
Fair value of plan assets at end of year |  | - |  |  | -
Funded status at end of year | $ | (29,376) |  | $ | (28,483)
Amounts recognized in the consolidated balance sheets for the periods indicated:
| At December 31,
(Dollars in thousands) | 2019 |  | 2018
Other liabilities (due within one year) | $ | (611) |  | $ | (608)
Other liabilities (due beyond one year) |  | (28,764) |  |  | (27,875)
Net amount recognized in the consolidated balance sheets | $ | (29,376) |  | $ | (28,483)
(Some amounts may not reconcile due to rounding.)
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss) for the periods indicated:
| At December 31,
(Dollars in thousands) | 2019 |  | 2018
Accumulated income (loss) | $ | 188 |  | $ | (238)
Accumulated prior service credit (cost) |  | 2,904 |  |  | 3,480
Accumulated other comprehensive income (loss) | $ | 3,092 |  | $ | 3,242
Other changes in other comprehensive income (loss) for the periods indicated are as follows:
| Years Ended December 31,
(Dollars in thousands) | 2019 |  | 2018
Other comprehensive income (loss) at December 31, prior year | $ | 3,242 |  | $ | (4,260)
Net gain (loss) arising during period |  | 582 |  |  | 7,985
Prior Service credit (cost) arising during period |  | - |  |  | -
Recognition of amortizations in net periodic benefit cost: |  |  |  |  |
Actuarial loss (gain) |  | (155) |  |  | 94
Prior service cost |  | (577) |  |  | (577)
Other comprehensive income (loss) at December 31, current year | $ | 3,092 |  | $ | 3,242
Net periodic benefit cost included the following components for the periods indicated:
| Years Ended December 31,
(Dollars in thousands) | 2019 |  | 2018 |  | 2017
Service cost | $ | 983 |  | $ | 1,312 |  | $ | 1,570
Interest cost |  | 980 |  |  | 999 |  |  | 1,184
Prior service credit recognition |  | (577) |  |  | (577) |  |  | (131)
Net gain recognition |  | (155) |  |  | 94 |  |  | 192
Net periodic cost | $ | 1,231 |  | $ | 1,829 |  | $ | 2,814
Other changes recognized in other comprehensive income (loss): |  |  |  |  |  |  |  |
Other comprehensive gain (loss) attributable to change from prior year |  | 150 |  |  | (7,502) |  |  |
Total recognized in net periodic benefit cost and |  |  |  |  |  |  |  |
other comprehensive income (loss) | $ | 1,381 |  | $ | (5,673) |  |  |
(Some amounts may not reconcile due to rounding.)
The estimated transition obligation, actuarial loss and prior service credit that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year are $0 thousand, $0 thousand and ($577) thousand, respectively. The weighted average discount rates used to determine net periodic benefit cost for 2019, 2018 and 2017 were 4.27 %, 3.62% and 4.16%, respectively. The weighted average discount rates used to determine the actuarial present value of the projected benefit obligation at year end 2019, 2018 and 2017 were 3.28%, 4.27% and 3.62%, respectively. The following table displays the expected benefit payments in the years indicated:
(Dollars in thousands) |
2019 | $ | 611
2020 |  | 673
2021 |  | 768
2022 |  | 851
2023 |  | 896
Next 5 years |  | 6,377

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -URI http://asc.fasb.org/topic&trid=2197446 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI http://asc.fasb.org/topic&trid=2127225 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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