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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2020
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) | 2020 |  | 2019 |  | 2018
Company contributions | $ | 6,825 |  | $ | 4,750 |  | $ | 77,743
The following table summarizes the Company’s pension expense for the periods indicated:
| Years Ended December 31,
(Dollars in thousands) | 2020 |  | 2019 |  | 2018
Pension expense | $ | 8,429 |  | $ | 10,042 |  | $ | 9,728
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) | 2020 |  | 2019
Change in projected benefit obligation: |  |  |  |  |
Benefit obligation at beginning of year | $ | 355,356 |  | $ | 300,244
Service cost |  | 9,522 |  |  | 8,255
Interest cost |  | 10,112 |  |  | 11,712
Actuarial (gain)/loss |  | 43,595 |  |  | 46,206
Curtailment |  | - |  |  | -
Benefits paid |  | (14,115) |  |  | (11,062)
Projected benefit obligation at end of year |  | 404,471 |  |  | 355,356
Change in plan assets: |  |  |  |  |
Fair value of plan assets at beginning of year |  | 301,467 |  |  | 260,531
Actual return on plan assets |  | 60,286 |  |  | 47,247
Actual contributions during the year |  | 6,825 |  |  | 4,750
Administrative expenses paid |  | - |  |  | -
Benefits paid |  | (14,115) |  |  | (11,062)
Fair value of plan assets at end of year |  | 354,464 |  |  | 301,467
Funded status at end of year | $ | (50,007) |  | $ | (53,889)
(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) | 2020 |  | 2019
Other assets (due beyond one year) | $ | - |  | $ | -
Other liabilities (due within one year) |  | (2,197) |  |  | (7,362)
Other liabilities (due beyond one year) |  | (47,810) |  |  | (46,527)
Net amount recognized in the consolidated balance sheets | $ | (50,007) |  | $ | (53,889)
(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) | 2020 |  | 2019
Accumulated income (loss) | $ | (91,979) |  | $ | (97,466)
Accumulated other comprehensive income (loss) | $ | (91,979) |  | $ | (97,466)
(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) | 2020 |  | 2019
Other comprehensive income (loss) at December 31, prior year | $ | (97,466) |  | $ | (88,580)
Net gain (loss) arising during period |  | (4,090) |  |  | (16,927)
Recognition of amortizations in net periodic benefit cost: |  |  |  |  |
Actuarial loss |  | 9,576 |  |  | 8,042
Curtailment loss recognized |  | - |  |  | -
Other comprehensive income (loss) at December 31, current year | $ | (91,979) |  | $ | (97,466)
(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) | 2020 |  | 2019 |  | 2018
Service cost | $ | 9,522 |  | $ | 8,255 |  | $ | 9,801
Interest cost |  | 10,112 |  |  | 11,712 |  |  | 10,290
Expected return on assets |  | (20,781) |  |  | (17,968) |  |  | (17,202)
Amortization of actuarial loss from earlier periods |  | 8,551 |  |  | 7,635 |  |  | 6,839
Settlement |  | 1,025 |  |  | 408 |  |  | -
Net periodic benefit cost | $ | 8,429 |  | $ | 10,042 |  | $ | 9,728
Other changes recognized in other comprehensive income (loss): |  |  |  |  |  |  |  |
Other comprehensive income (loss) attributable to change from prior year |  | (5,486) |  |  | 8,885 |  |  |
Total recognized in net periodic benefit cost and other |  |  |  |  |  |  |  |
comprehensive income (loss) | $ | 2,943 |  | $ | 18,927 |  |  |
(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, $7,709 thousand and $0 thousand, respectively. The weighted average discount rates used to determine net periodic benefit cost for 2020, 2019 and 2018 were 3.28%, 4.27% and 3.62%, respectively. The rate of compensation increase used to determine the net periodic benefit cost for 2020, 2019 and 2018 was 4.00%. The expected long-term rate of return on plan assets was 7.00% for 2020, 2019 and 2018 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 2020, 2019 and 2018 were 2.55%, 3.28% and 4.27%, respectively. The following table summarizes the accumulated benefit obligation for the periods indicated:
| At December 31,
(Dollars in thousands) | 2020 |  | 2019
Qualified Plan | $ | 336,027 |  | $ | 288,328
Non-qualified Plan |  | 16,258 |  |  | 21,642
Total | $ | 352,285 |  | $ | 309,970
(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) | 2020 |  | 2019
Qualified Plan |  |  |  |  |
Projected benefit obligation | $ | 388,213 |  | $ | 333,715
Fair value of plan assets |  | 354,464 |  |  | 301,467
Non-qualified Plan |  |  |  |  |
Projected benefit obligation | $ | 16,258 |  | $ | 21,642
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) | 2020 |  | 2019
Qualified Plan |  |  |
Accumulated benefit obligation | $ | - |  | $ | -
Fair value of plan assets |  | - |  |  | -
Non-qualified Plan |  |  |  |  |
Accumulated benefit obligation | $ | 16,258 |  | $ | 21,642
Fair value of plan assets |  | - |  |  | -
The following table displays the expected benefit payments in the periods indicated:
(Dollars in thousands) |  |
2021 | $ | 11,757
2022 |  | 12,220
2023 |  | 13,064
2024 |  | 14,100
2025 |  | 15,190
Next 5 years |  | 90,808
Plan assets consist of shares in investment trusts with 72%, 27%, 1% and 0% 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, 2020 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets: |  |  |  |  |  |  |  |  |  |  |
Short-term investments, which approximates fair value (a) | $ | 1,204 |  | $ | 1,204 |  | $ | - |  | $ | -
Mutual funds, fair value |  |  |  |  |  |  |  |  |  |  |
Fixed income (b) |  | 93,609 |  |  | 93,609 |  |  | - |  |  | -
Equities (c) |  | 255,054 |  |  | 255,054 |  |  | - |  |  | -
Total | $ | 349,867 |  | $ | 349,867 |  | $ | - |  | $ | -
(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, 2020.
|  |  | 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. In addition, $4,596 thousand and $20,351 thousand of investments which were recorded as part of the qualified plan assets at December 31, 2020 and 2019, 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 to the qualified pension benefit plan for the years ended December 31, 2020 and 2019. 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) | 2020 |  | 2019 |  | 2018
Incurred expenses | $ | 14,386 |  | $ | 10,794 |  | $ | 9,301
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 5.1% to 64.8%. 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) | 2020 |  | 2019 |  | 2018
Incurred expenses | $ | 3,039 |  | $ | 2,216 |  | $ | 2,057
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 dependents), 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 6.75% in 2020 was assumed to decrease gradually to 4.75% in 2030 and then remain at that level. The following table presents the post-retirement benefit expenses for the periods indicated:
| Years Ended December 31,
(Dollars in thousands) | 2020 |  | 2019 |  | 2018
Post-retirement benefit expenses | $ | 1,334 |  | $ | 1,231 |  | $ | 1,829
The following table summarizes the status of this plan for the periods indicated:
| At December 31,
(Dollars in thousands) | 2020 |  | 2019
Change in projected benefit obligation: |  |  |  |  |
Benefit obligation at beginning of year | $ | 29,376 |  | $ | 28,483
Service cost |  | 1,066 |  |  | 983
Interest cost |  | 845 |  |  | 980
Amendments |  | - |  |  | -
Actuarial (gain)/loss |  | 4,042 |  |  | (582)
Benefits paid |  | (232) |  |  | (488)
Benefit obligation at end of year |  | 35,098 |  |  | 29,376
Change in plan assets: |  |  |  |  |
Fair value of plan assets at beginning of year |  | - |  |  | -
Employer contributions |  | 232 |  |  | 488
Benefits paid |  | (232) |  |  | (488)
Fair value of plan assets at end of year |  | - |  |  | -
Funded status at end of year | $ | (35,098) |  | $ | (29,376)
Amounts recognized in the consolidated balance sheets for the periods indicated:
| At December 31,
(Dollars in thousands) | 2020 |  | 2019
Other liabilities (due within one year) | $ | (613) |  | $ | (611)
Other liabilities (due beyond one year) |  | (34,484) |  |  | (28,764)
Net amount recognized in the consolidated balance sheets | $ | (35,098) |  | $ | (29,376)
(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) | 2020 |  | 2019
Accumulated income (loss) | $ | (3,854) |  | $ | 188
Accumulated prior service credit (cost) |  | 2,327 |  |  | 2,904
Accumulated other comprehensive income (loss) | $ | (1,527) |  | $ | 3,092
Other changes in other comprehensive income (loss) for the periods indicated are as follows:
| Years Ended December 31,
(Dollars in thousands) | 2020 |  | 2019
Other comprehensive income (loss) at December 31, prior year | $ | 3,092 |  | $ | 3,242
Net gain (loss) arising during period |  | (4,042) |  |  | 582
Prior Service credit (cost) arising during period |  | - |  |  | -
Recognition of amortizations in net periodic benefit cost: |  |  |  |  |
Actuarial loss (gain) |  | - |  |  | (155)
Prior service cost |  | (577) |  |  | (577)
Other comprehensive income (loss) at December 31, current year | $ | (1,527) |  | $ | 3,092
Net periodic benefit cost included the following components for the periods indicated:
| Years Ended December 31,
(Dollars in thousands) | 2020 |  | 2019 |  | 2018
Service cost | $ | 1,066 |  | $ | 983 |  | $ | 1,312
Interest cost |  | 845 |  |  | 980 |  |  | 999
Prior service credit recognition |  | (577) |  |  | (577) |  |  | (577)
Net gain recognition |  | - |  |  | (155) |  |  | 94
Net periodic cost | $ | 1,334 |  | $ | 1,231 |  | $ | 1,829
Other changes recognized in other comprehensive income (loss): |  |  |  |  |  |  |  |
Other comprehensive gain (loss) attributable to change from prior year |  | 4,619 |  |  | 150 |  |  |
Total recognized in net periodic benefit cost and |  |  |  |  |  |  |  |
other comprehensive income (loss) | $ | 5,953 |  | $ | 1,381 |  |  |
(Some amounts may not reconcile due to rounding.)
The estimated transition obligation, actuarial gain 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, $46 thousand and $577 thousand, respectively. The weighted average discount rates used to determine net periodic benefit cost for 2020, 2019 and 2018 were 3.28%, 4.27% and 3.62%, respectively. The weighted average discount rates used to determine the actuarial present value of the projected benefit obligation at year end 2020, 2019 and 2018 were 2.55%, 3.28% and 4.27%, respectively. The following table displays the expected benefit payments in the years indicated:
(Dollars in thousands) |
2021 | $ | 613
2022 |  | 715
2023 |  | 806
2024 |  | 851
2025 |  | 989
Next 5 years |  | 6,955

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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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