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Pension and Post-retirement Plans | 12 Months Ended
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Dec. 31, 2022
Retirement Benefits [Abstract] |
Pension and Post-retirement Plans | Pension and Post-retirement PlansCertain PCLI employees are participants in union and non-union pension plans, which are closed to new entrants. Effective June 30, 2022, we ceased to accrue additional benefits under these plans, at which time the plan was fully frozen. We expect that benefits will be settled by the end of 2024, at which point settlement accounting will occur. In addition, Sonneborn employees in the Netherlands have a defined benefit pension plan which was frozen and all plan participants became inactive in 2016. The plan assets are in the form of a third-party insurance contract that is valued based on the assets held by the insurer and insures a value which approximates the accrued benefits related to the plan’s accumulated benefit obligation. At that time, a new plan was established to provide future indexation benefits to participants who had accrued benefits under the expiring arrangements. The following table sets forth the changes in the benefit obligation and plan assets of our PCLI pension plans and Sonneborn Netherlands plans for the years ended December 31, 2022 and 2021.
|  | Years Ended December 31,
|  | 2022 |  | 2021
|  | (In thousands)
Change in plans' benefit obligations |  |  |  |
Pension plans benefit obligation - beginning of period |  | $ | 120,414 |  |  | $ | 126,620 |
Service cost |  | 1,839 |  |  | 4,455 |
Interest cost |  | 3,086 |  |  | 2,740 |
Actuarial gain |  | (25,605) |  |  | (7,363) |
Benefits paid |  | (2,306) |  |  | (4,211) |
Transfer from other plans |  | 164 |  |  | 706 |
Foreign currency exchange rate changes |  | (7,149) |  |  | (2,533) |
Pension plans benefit obligation - end of year |  | $ | 90,443 |  |  | $ | 120,414 |
Change in pension plans assets |  |  |  |
Fair value of plans assets - beginning of period |  | $ | 119,325 |  |  | $ | 123,950 |
Return on plans assets |  | (26,218) |  |  | (2,228) |
Employer contributions |  | 3,486 |  |  | 3,542 |
Benefits paid |  | (2,306) |  |  | (4,211) |
Transfer payments |  | 164 |  |  | 706 |
Foreign currency exchange rate changes |  | (6,985) |  |  | (2,434) |
Fair value of plans assets - end of year |  | $ | 87,466 |  |  | $ | 119,325 |
Funded status |  |  |  |
Under-funded balance |  | $ | (2,977) |  |  | $ | (1,089) |
Amounts recognized in consolidated balance sheets |  |  |  |
Other long-term liabilities |  | $ | (2,977) |  |  | $ | (1,089) |
Amounts recognized in accumulated other comprehensive income (loss) |  |  |  |
Cumulative actuarial loss |  | $ | (3,872) |  |  | $ | (1) |
The accumulated benefit obligation was $90.4 million and $118.4 million at December 31, 2022 and 2021, respectively, which are also the measurement dates used for our pension plans. The following tables provide information regarding pension plans with a projected benefit obligation and accumulated benefit obligation in excess of the fair value of plan assets:
|  | December 31,
|  | 2022 |  | 2021
|  | (In thousands)
Projected benefit obligation |  | $ | 90,443 |  |  | $ | 35,963 |
Fair value of plan assets |  | $ | 87,466 |  |  | $ | 33,966 |
|  | December 31,
|  | 2022 |  | 2021
|  | (In thousands)
Accumulated benefit obligation |  | $ | 90,443 |  |  | $ | 35,249 |
Fair value of plan assets |  | $ | 87,466 |  |  | $ | 33,966 |
The weighted average assumption used to determine the end of period benefit obligation for the PCLI plans for the year ended December 31, 2022 were discount rates of 3.70% to 4.44%. The weighted average assumptions used to determine the end of period benefit obligation for the PCLI plans for the year ended December 31, 2021 were a discount rate 3.00% and the rate of future compensation increases of 3.00%. For the years ended December 31, 2022 and 2021, the weighted average assumption used to determine end of period benefit obligations for Sonneborn were discount rates of 4.20% and 1.40%, respectively. Net periodic pension expense consisted of the following components:
|  | Years Ended December 31,
|  | 2022 |  | 2021 |  | 2020
|  | (In thousands)
Service cost - benefit earned during the period |  | $ | 1,839 |  |  | $ | 4,455 |  |  | $ | 3,929 |
Interest cost on projected benefit obligations |  | 3,086 |  |  | 2,740 |  |  | 2,772 |
Expected return on plans assets |  | (3,223) |  |  | (3,031) |  |  | (4,578) |
Amortization of gain |  | (208) |  |  | (407) |  |  | (422) |
Curtailment |  | — |  |  | — |  |  | (137) |
Contractual termination benefits |  | — |  |  | — |  |  | 915 |
Net periodic pension expense |  | $ | 1,494 |  |  | $ | 3,757 |  |  | $ | 2,479 |
The components, other than service cost, of our net periodic pension expense are recorded in Other, net on our consolidated statements of operations. The following table presents the fair values of PCLI’s pension plans’ assets, by level within the fair value hierarchy, as of December 31, 2022 and 2021.
|  | December 31, 2022 |  | December 31, 2021
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
|  | (In thousands)
Equity securities |  | $ | — |  | $ | — |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6,802 |  |  | $ | — |  |  | $ | 6,802 |
Fixed income |  | 457 |  | 66,295 |  | — |  |  | 66,752 |  |  | 536 |  |  | 78,021 |  |  | — |  |  | 78,557 |
|  | $ | 457 |  | $ | 66,295 |  | $ | — |  |  | $ | 66,752 |  |  | $ | 536 |  |  | $ | 84,823 |  |  | $ | — |  |  | $ | 85,359 |
See Note 6 for additional information on Level 1 and 2 inputs. The expected long-term rate of return on plan assets is 3.50% for the PCLI pension plans and is based on a target investment of 100% in fixed income. We expect to contribute $1.5 million to the PCLI and Sonneborn pensions plans in 2023. Benefit payments, which reflect expected future service, are expected to be paid as follows: $3.6 million in 2023, $67.6 million in 2024, $0.8 million in 2025, $0.8 million in 2026, $0.9 million in 2027 and $5.4 million in 2028 to 2032. Benefit payments expected to be paid in 2024 include the estimate of the net present value of all expected benefit payments to be paid out once the PCLI union and non-union pension plans windup has been finalized. Post-retirement Healthcare Plans We have post-retirement healthcare and other benefits plans that are available to certain of our employees who satisfy certain age and service requirements. These plans are unfunded and provide differing levels of healthcare benefits dependent upon hire date and work location. Not all of our employees are covered by these plans at December 31, 2022. The following table sets forth the changes in the benefit obligation and plan assets of our post-retirement healthcare plans for the years ended December 31, 2022 and 2021:
|  | Years Ended December 31,
|  | 2022 |  | 2021
|  | (In thousands)
Change in plans' benefit obligation |  |  |  |
Post-retirement plans' benefit obligation - beginning of year |  | $ | 34,816 |  |  | $ | 33,478 |
Service cost |  | 2,081 |  |  | 2,324 |
Interest cost |  | 990 |  |  | 782 |
Benefits paid |  | (582) |  |  | (706) |
Actuarial gain |  | (7,884) |  |  | (1,133) |
Foreign currency exchange rate changes |  | (743) |  |  | 71 |
Post-retirement plans' benefit obligation - end of year |  | $ | 28,678 |  |  | $ | 34,816 |
Change in plan assets |  |  |  |
Fair value of plan assets - beginning of year |  | $ | — |  |  | $ | — |
Employer contributions |  | 572 |  |  | 673 |
Participant contributions |  | 10 |  |  | 33 |
Benefits paid |  | (582) |  |  | (706) |
Fair value of plan assets - end of year |  | $ | — |  |  | $ | — |
Funded status |  |  |  |
Under-funded balance |  | $ | (28,678) |  |  | $ | (34,816) |
Amounts recognized in consolidated balance sheets |  |  |  |
Accrued liabilities |  | $ | (1,706) |  |  | $ | (832) |
Other long-term liabilities |  | (26,972) |  |  | (33,984) |
|  | $ | (28,678) |  |  | $ | (34,816) |
Amounts recognized in accumulated other comprehensive income (loss) |  |  |  |
Cumulative actuarial gain (loss) |  | $ | 7,603 |  |  | $ | (271) |
Prior service credit |  | 11,550 |  |  | 15,031 |
Total |  | $ | 19,153 |  |  | $ | 14,760 |
Benefit payments, which reflect expected future service, are expected to be paid as follows: $1.7 million in 2023; $2.3 million in 2024; $2.5 million in 2025; $2.5 million in 2026; $2.5 million in 2027; and $12.5 million in 2028 through 2032. The weighted average assumptions used to determine end of period benefit obligations:
|  | December 31,
|  | 2022 |  | 2021
Discount rate |  | 4.95%-5.10% |  | 2.29% - 3.10%
Current health care trend rate |  | 6.00%-7.00% |  | 6.00% - 7.25%
Ultimate health care trend rate |  | 4.00%-4.00% |  | 4.00% - 4.50%
Year rate reaches ultimate trend rate |  | 2027-2041 |  | 2023 - 2041
Net periodic post-retirement credit consisted of the following components:
|  | Years Ended December 31,
|  | 2022 |  | 2021 |  | 2020
|  | (In thousands)
Service cost – benefit earned during the year |  | $ | 2,081 |  |  | $ | 2,324 |  |  | $ | 1,616 |
Interest cost on projected benefit obligations |  | 990 |  |  | 782 |  |  | 870 |
Amortization of prior service credit |  | (3,472) |  |  | (3,481) |  |  | (3,481) |
Amortization of (gain) loss |  | 32 |  |  | 153 |  |  | (83) |
Net periodic post-retirement credit |  | $ | (369) |  |  | $ | (222) |  |  | $ | (1,078) |
The components, other than service cost, of our net periodic post-retirement credit are recorded in Other, net on our consolidated statements of operations. Prior service credits are amortized over the average remaining effective period to obtain full benefit eligibility for participants. Retirement Restoration Plan We have an unfunded retirement restoration plan that provides for additional payments from us so that total retirement plan benefits for certain executives will be maintained at the levels provided in the retirement plan before the application of Internal Revenue Code limitations. We expensed $0.1 million for each of the years ended December 31, 2022, 2021 and 2020 in connection with this plan. The accrued liability reflected on the consolidated balance sheets was $1.8 million and $2.3 million at December 31, 2022 and 2021, respectively. As of December 31, 2022, the projected benefit obligation under this plan was $1.8 million. Annual benefit payments of $0.2 million are expected to be paid through 2032, which reflect expected future service. Defined Contribution Plans We have defined contribution plans that cover substantially all qualified employees in the U.S, Canada and the Netherlands. Our contributions are based on an employee's eligible compensation and years of service. We also partially match our employees’ contributions. We expense d $73.7 million, $45.0 million and $43.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, in connection with these plans.

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