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Employee Benefit Plans

12 Months Ended

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 were4.27 %, 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