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Pension Plans and Other Postretirement Benefits | 12 Months Ended
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Dec. 31, 2020
Retirement Benefits [Abstract] |
Pension Plans and Other Postretirement Benefits | Pension Plans and Other Postretirement Benefits NewMarket uses a December 31 measurement date for all of our plans. U.S. Retirement Plans NewMarket sponsors four pension plans for all full-time U.S. employees that offer a benefit based primarily on years of service and compensation. Employees do not contribute to these pension plans. The plans are as follows: •Salaried employees pension plan; •Afton pension plan for union employees (the Sauget plan); •NewMarket retirement income plan for union employees in Houston, Texas (the Houston plan); and •Afton Chemical Additives pension plan for union employees in Port Arthur, Texas (the Port Arthur plan). In addition, we offer an unfunded, nonqualified supplemental pension plan. This plan restores the pension benefits from our regular pension plans that would have been payable to designated participants if it were not for limitations imposed by U.S. federal income tax regulations. We also provide postretirement health care benefits and life insurance to eligible retired employees. The service cost component of net periodic benefit cost (income) is included in cost of goods sold; selling, general, and administrative expenses; or research, development, and testing expenses, to reflect where other compensation costs arising from services rendered by the pertinent employee are recorded on the Consolidated Statements of Income. The remaining components of net periodic benefit cost (income) are recorded in other income (expense), net on the Consolidated Statements of Income. The components of net periodic pension and postretirement benefit cost (income), as well as other amounts recognized in other comprehensive income (loss), are shown below.
|  | Years Ended December 31,
|  | Pension Benefits |  | Postretirement Benefits
(in thousands) |  | 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Net periodic benefit cost (income) |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 16,544 |  |  | $ | 13,471 |  |  | $ | 15,391 |  |  | $ | 912 |  |  | $ | 718 |  |  | $ | 896 |
Interest cost |  | 13,771 |  |  | 14,509 |  |  | 13,256 |  |  | 1,340 |  |  | 1,514 |  |  | 1,458 |
Expected return on plan assets |  | (37,226) |  |  | (34,632) |  |  | (29,883) |  |  | (938) |  |  | (947) |  |  | (969) |
Amortization of prior service cost (credit) |  | 271 |  |  | 178 |  |  | 25 |  |  | (3,028) |  |  | (3,028) |  |  | (3,028) |
Amortization of actuarial net (gain) loss |  | 4,674 |  |  | 2,951 |  |  | 5,139 |  |  | 0 |  |  | 0 |  |  | 0 |
Net periodic benefit cost (income) |  | (1,966) |  |  | (3,523) |  |  | 3,928 |  |  | (1,714) |  |  | (1,743) |  |  | (1,643) |
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) |  |  |  |  |  |  |  |  |  |  |  |
Actuarial net (gain) loss |  | (4,933) |  |  | (36,814) |  |  | 29,215 |  |  | 2,410 |  |  | 3,049 |  |  | (2,190) |
Prior service cost (credit) |  | 65 |  |  | 1,013 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Amortization of actuarial net gain (loss) |  | (4,674) |  |  | (2,951) |  |  | (5,139) |  |  | 0 |  |  | 0 |  |  | 0 |
Amortization of prior service (cost) credit |  | (271) |  |  | (178) |  |  | (25) |  |  | 3,028 |  |  | 3,028 |  |  | 3,028 |
Total recognized in other comprehensive income (loss) |  | (9,813) |  |  | (38,930) |  |  | 24,051 |  |  | 5,438 |  |  | 6,077 |  |  | 838 |
Total recognized in net periodic benefit cost (income) and other comprehensive income (loss) |  | $ | (11,779) |  |  | $ | (42,453) |  |  | $ | 27,979 |  |  | $ | 3,724 |  |  | $ | 4,334 |  |  | $ | (805) |
Changes in the plans’ benefit obligations and assets follow.
|  | December 31,
|  | Pension Benefits |  | Postretirement Benefits
(in thousands) |  | 2020 |  | 2019 |  | 2020 |  | 2019
Change in benefit obligation |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 403,056 |  |  | $ | 349,212 |  |  | $ | 40,320 |  |  | $ | 37,512 |
Service cost |  | 16,544 |  |  | 13,471 |  |  | 912 |  |  | 718 |
Interest cost |  | 13,771 |  |  | 14,509 |  |  | 1,340 |  |  | 1,514 |
Actuarial net (gain) loss |  | 37,978 |  |  | 38,045 |  |  | 2,221 |  |  | 3,165 |
Plan amendment |  | 65 |  |  | 1,014 |  |  | 0 |  |  | 0 |
Benefits paid |  | (13,693) |  |  | (13,195) |  |  | (3,086) |  |  | (2,589) |
Benefit obligation at end of year |  | 457,721 |  |  | 403,056 |  |  | 41,707 |  |  | 40,320 |
Change in plan assets |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | 483,823 |  |  | 384,552 |  |  | 22,092 |  |  | 22,378 |
Actual return on plan assets |  | 80,137 |  |  | 109,493 |  |  | 750 |  |  | 1,063 |
Employer contributions |  | 2,904 |  |  | 2,973 |  |  | 1,616 |  |  | 1,240 |
Benefits paid |  | (13,693) |  |  | (13,195) |  |  | (3,086) |  |  | (2,589) |
Fair value of plan assets at end of year |  | 553,171 |  |  | 483,823 |  |  | 21,372 |  |  | 22,092 |
Funded status |  | $ | 95,450 |  |  | $ | 80,767 |  |  | $ | (20,335) |  |  | $ | (18,228) |
Amounts recognized in the Consolidated Balance Sheets |  |  |  |  |  |  |  |
Noncurrent assets |  | $ | 136,530 |  |  | $ | 121,968 |  |  | $ | 0 |  |  | $ | 0 |
Current liabilities |  | (2,849) |  |  | (2,920) |  |  | (1,074) |  |  | (1,164) |
Noncurrent liabilities |  | (38,231) |  |  | (38,281) |  |  | (19,261) |  |  | (17,064) |
|  | $ | 95,450 |  |  | $ | 80,767 |  |  | $ | (20,335) |  |  | $ | (18,228) |
Amounts recognized in accumulated other comprehensive loss |  |  |  |  |  |  |  |
Actuarial net (gain) loss |  | $ | 63,654 |  |  | $ | 73,261 |  |  | $ | 4,979 |  |  | $ | 2,569 |
Prior service cost (credit) |  | 636 |  |  | 842 |  |  | (19,619) |  |  | (22,647) |
|  | $ | 64,290 |  |  | $ | 74,103 |  |  | $ | (14,640) |  |  | $ | (20,078) |
The accumulated benefit obligation for all domestic defined benefit pension plans was $392 million at December 31, 2020 and $346 million at December 31, 2019. The fair market value of plan assets exceeded both the accumulated benefit obligation and projected benefit obligation for all domestic plans, except the nonqualified plan, at December 31, 2020 and December 31, 2019. The net asset position for plans in which assets exceeded the projected benefit obligation is included in prepaid pension cost on the Consolidated Balance Sheets. The net liability position of plans in which the projected benefit obligation exceeded assets is included in other noncurrent liabilities on the Consolidated Balance Sheets. A portion of the accrued benefit cost for the nonqualified plan is included in current liabilities at both December 31, 2020 and December 31, 2019. As the nonqualified plan is unfunded, the amount reflected in current liabilities represents the expected benefit payments related to the nonqualified plan during 2021. The table below shows selected information on domestic pension and postretirement benefit plans.
|  | December 31,
(in thousands) |  | 2020 |  | 2019
Pension plans with the accumulated benefit obligation in excess of the fair market value of plan assets |  |  |  |
Accumulated benefit obligation |  | $ | 39,016 |  |  | $ | 38,167 |
Fair market value of plan assets |  | 0 |  |  | 0 |
Pension plans with the projected benefit obligation in excess of the fair market value of plan assets |  |  |  |
Projected benefit obligation |  | 41,081 |  |  | 41,201 |
Fair market value of plan assets |  | 0 |  |  | 0 |
Postretirement benefit plans with the accumulated postretirement benefit obligation in excess of the fair market value of plan assets |  |  |  |
Accumulated postretirement benefit obligation |  | 25,584 |  |  | 24,651 |
Fair market value of plan assets |  | 0 |  |  | 0 |
There are no assets held by the trustee for the retired beneficiaries of the nonqualified plan. Payments to retired beneficiaries of the nonqualified plan are made with cash from operations. The postretirement healthcare benefits are also unfunded and paid with cash from operations. The benefits from the postretirement life insurance are funded through an insurance contract. Assumptions—We used the following assumptions to calculate the results of our retirement plans:
|  | Pension Benefits |  | Postretirement Benefits
|  | 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Weighted-average assumptions used to determine net periodic benefit cost (income) for years ended December 31, |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 3.50 | % |  | 4.25 | % |  | 3.75 | % |  | 3.50 | % |  | 4.25 | % |  | 3.75 | %
Expected long-term rate of return on plan assets |  | 8.50 | % |  | 8.50 | % |  | 8.50 | % |  | 4.50 | % |  | 4.50 | % |  | 4.50 | %
Rate of projected compensation increase |  | 3.50 | % |  | 3.50 | % |  | 3.50 | % |  |  |  |  |  |
Weighted-average assumptions used to determine benefit obligations at December 31, |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 2.875 | % |  | 3.50 | % |  | 4.25 | % |  | 2.875 | % |  | 3.50 | % |  | 4.25 | %
Rate of projected compensation increase |  | 3.50 | % |  | 3.50 | % |  | 3.50 | % |  |  |  |  |  |
For pension plans, we base the assumed expected long-term rate of return for plan assets on an analysis of our actual investments, including our asset allocation, as well as an analysis of expected returns. This analysis reflects the expected long-term rates of return for each significant asset class and economic indicator. The range of returns relies both on forecasts and on broad-market historical benchmarks for expected return, correlation, and volatility for each asset class. Our asset allocation is predominantly weighted toward equities. Through our ongoing monitoring of our investments and review of market data, we have determined that we should reduce the expected long-term rate of return for our U.S. plans to 8.0% for the year beginning January 1, 2021. For the postretirement plan, we based the assumed expected long-term rate of return for plan assets on an evaluation of projected interest rates, as well as the guaranteed interest rate for our insurance contract. Plan Assets—Pension plan assets are held and distributed by trusts and consist principally of equity securities and investment-grade fixed income securities. We invest directly in equity securities, as well as in funds which primarily hold equity and debt securities. Our target allocation is 90% to 97% in equities, 3% to 10% in debt securities and 1% to 5% in cash. The pension obligation is long-term in nature and the investment philosophy followed by the Pension Investment Committee is likewise long-term in its approach. The majority of the pension funds are invested in equity securities as historically, equity securities have outperformed debt securities and cash investments, resulting in a higher investment return over the long-term. While in the short-term, equity securities may underperform other investment classes, we are less concerned with short-term results and more concerned with long-term improvement. The pension funds are managed by several different investment companies who predominantly invest in U.S. and international equities. Each investment company’s performance is reviewed quarterly. A small portion of the funds is in investments such as cash or short-term bonds, which historically has been less vulnerable to short-term market swings. These funds are used to provide the cash needed to meet our monthly obligations. There are no significant concentrations of risk within plan assets, nor do the equity securities include any NewMarket common stock for any year presented. The assets of the postretirement benefit plan are invested completely in an insurance contract. No NewMarket common stock is included in these assets. The following table provides information on the fair value of our pension and postretirement benefit plans assets, as well as the related level within the fair value hierarchy. Investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified by level in the fair value hierarchy.
|  | December 31, 2020 |  | December 31, 2019
|  |  |  | Fair Value Measurements Using |  |  |  | Fair Value Measurements Using
(in thousands) |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3 |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Pension Plans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U. S. companies |  | $ | 397,981 |  |  | $ | 397,981 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 338,564 |  |  | $ | 338,564 |  |  | $ | 0 |  |  | $ | 0 |
International companies |  | 21,313 |  |  | 21,313 |  |  | 0 |  |  | 0 |  |  | 20,751 |  |  | 20,751 |  |  | 0 |  |  | 0 |
Money market instruments |  | 6,771 |  |  | 6,771 |  |  | 0 |  |  | 0 |  |  | 17,618 |  |  | 17,618 |  |  | 0 |  |  | 0 |
Pooled investment funds: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed income securities—mutual funds |  | 18,420 |  |  | 18,420 |  |  | 0 |  |  | 0 |  |  | 9,576 |  |  | 9,576 |  |  | 0 |  |  | 0 |
International equities—mutual fund |  | 19,341 |  |  | 19,341 |  |  | 0 |  |  | 0 |  |  | 17,378 |  |  | 17,378 |  |  | 0 |  |  | 0 |
Common collective trusts measured at net asset value |  | 89,275 |  |  |  |  |  |  |  |  | 78,256 |  |  |  |  |  |  |
Cash |  | 70 |  |  | 70 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Insurance contract |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 1,680 |  |  | 0 |  |  | 1,680 |  |  | 0 |
|  | $ | 553,171 |  |  | $ | 463,896 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 483,823 |  |  | $ | 403,887 |  |  | $ | 1,680 |  |  | $ | 0 |
Postretirement Plans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Insurance contract |  | $ | 21,372 |  |  | $ | 0 |  |  | $ | 21,372 |  |  | $ | 0 |  |  | $ | 22,092 |  |  | $ | 0 |  |  | $ | 22,092 |  |  | $ | 0 |
The valuation methodologies used to develop the fair value measurements for the investments in the table above are outlined below. There have been no changes in the valuation techniques used to value the investments. •Equity securities, including common stock and real estate investment trusts, are valued at the closing price reported on a national exchange. •Money market instruments are valued at cost, which approximates fair value. •Pooled investment funds—Mutual funds are valued at the closing price reported on a national exchange. •The common collective trusts (the trusts) are valued at the net asset value of units held based on the quoted market value of the underlying investments held by the funds. One of the trusts invests primarily in a diversified portfolio of equity securities of companies located outside of the United States and Canada, as determined by a company's jurisdiction of incorporation. We may make withdrawals from this trust on the first business day of each month with at least 10 days notice. Another trust invests primarily in a diversified portfolio of equity securities included in the S&P 500 index and a third trust invests primarily in a diversified portfolio of equity securities included in the Russell 1000 Value index. There are no restrictions on redemption for the index trusts and there were no unfunded commitments. •Cash and cash equivalents are valued at cost. •The insurance contracts are unallocated funds deposited with an insurance company and are stated at an amount equal to the sum of all amounts deposited less the sum of all amounts withdrawn, adjusted for investment return. Cash Flows—For U.S. plans, NewMarket expects to contribute $3 million to our pension plans and $2 million to our postretirement benefit plan in 2021. The expected benefit payments for the next ten years are as follows.
(in thousands) |  | Expected Pension Benefit Payments |  | Expected Postretirement Benefit Payments
2021 |  | $ | 13,671 |  |  | $ | 2,338 |
2022 |  | 14,523 |  |  | 2,203 |
2023 |  | 15,475 |  |  | 2,096 |
2024 |  | 16,527 |  |  | 1,994 |
2025 |  | 17,588 |  |  | 1,940 |
2026 through 2030 |  | 103,131 |  |  | 9,235 |
Foreign Retirement Plans For most employees of our foreign subsidiaries, NewMarket has defined benefit pension plans that offer benefits based primarily on years of service and compensation. These defined benefit plans provide benefits for employees of our foreign subsidiaries located in Belgium, the U.K., Germany, Canada, and Mexico. NewMarket generally contributes to investment trusts and insurance accounts to provide for these plans. The components of net periodic pension cost (income), as well as other amounts recognized in other comprehensive income (loss), for these foreign defined benefit pension plans are shown below.
|  | Years Ended December 31,
(in thousands) |  | 2020 |  | 2019 |  | 2018
Net periodic benefit cost (income) |  |  |  |  |  |
Service cost |  | $ | 8,544 |  |  | $ | 6,430 |  |  | $ | 7,271 |
Interest cost |  | 3,866 |  |  | 4,768 |  |  | 4,514 |
Expected return on plan assets |  | (9,729) |  |  | (9,084) |  |  | (9,918) |
Amortization of prior service cost (credit) |  | (43) |  |  | (42) |  |  | (81) |
Amortization of actuarial net (gain) loss |  | 1,420 |  |  | 938 |  |  | 597 |
Net periodic benefit cost (income) |  | 4,058 |  |  | 3,010 |  |  | 2,383 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) |  |  |  |  |  |
Actuarial net (gain) loss |  | 33,816 |  |  | 11,074 |  |  | 4,532 |
Prior service cost (credit) |  | 0 |  |  | 0 |  |  | 537 |
Amortization of actuarial net gain (loss) |  | (1,420) |  |  | (938) |  |  | (597) |
Amortization of prior service (cost) credit |  | 43 |  |  | 42 |  |  | 81 |
Total recognized in other comprehensive income (loss) |  | 32,439 |  |  | 10,178 |  |  | 4,553 |
Total recognized in net periodic benefit cost (income) and other comprehensive income (loss) |  | $ | 36,497 |  |  | $ | 13,188 |  |  | $ | 6,936 |
Changes in the benefit obligations and assets of the foreign defined benefit pension plans follow.
|  | December 31,
(in thousands) |  | 2020 |  | 2019
Change in benefit obligation |  |  |  |
Benefit obligation at beginning of year |  | $ | 206,058 |  |  | $ | 173,620 |
Service cost |  | 8,544 |  |  | 6,430 |
Interest cost |  | 3,866 |  |  | 4,768 |
Employee contributions |  | 714 |  |  | 680 |
Actuarial net (gain) loss |  | 36,463 |  |  | 21,558 |
Benefits paid |  | (5,059) |  |  | (5,977) |
Foreign currency translation |  | 12,003 |  |  | 4,979 |
Benefit obligation at end of year |  | 262,589 |  |  | 206,058 |
Change in plan assets |  |  |  |
Fair value of plan assets at beginning of year |  | 189,455 |  |  | 163,746 |
Actual return on plan assets |  | 13,590 |  |  | 19,591 |
Employer contributions |  | 5,913 |  |  | 5,586 |
Employee contributions |  | 714 |  |  | 680 |
Benefits paid |  | (5,059) |  |  | (5,977) |
Foreign currency translation |  | 8,004 |  |  | 5,829 |
Fair value of plan assets at end of year |  | 212,617 |  |  | 189,455 |
Funded status |  | $ | (49,972) |  |  | $ | (16,603) |
Amounts recognized in the Consolidated Balance Sheets |  |  |  |
Noncurrent assets |  | $ | 539 |  |  | $ | 11,880 |
Current liabilities |  | (407) |  |  | (297) |
Noncurrent liabilities |  | (50,104) |  |  | (28,186) |
|  | $ | (49,972) |  |  | $ | (16,603) |
Amounts recognized in accumulated other comprehensive loss |  |  |  |
Actuarial net (gain) loss |  | $ | 85,298 |  |  | $ | 52,902 |
Prior service cost (credit) |  | 821 |  |  | 778 |
|  | $ | 86,119 |  |  | $ | 53,680 |
The accumulated benefit obligation for all foreign defined benefit pension plans was $224 million at December 31, 2020 and $171 million at December 31, 2019. The fair market value of plan assets exceeded both the accumulated benefit obligation and projected benefit obligation for the Canada plan at both year-end 2020 and 2019. The net asset position of the Canada plan is included in prepaid pension cost on the Consolidated Balance Sheets at December 31, 2020 and December 31, 2019. The fair market value of plan assets for the U.K. plan exceeded the accumulated benefit obligation but not the projected benefit obligation at yearend 2020. For yearend 2019, the fair market value of plan assets of the U.K. plan exceeded both the accumulated benefit obligation and projected benefit obligation. The accrued benefit cost of the U.K. plan is included in other noncurrent liabilities on the Consolidated Balance Sheets at December 31, 2020 and the net asset position is included in prepaid pension cost on the Consolidated Balance Sheets at December 31, 2019. The accumulated benefit obligation and projected benefit obligation exceeded the fair market value of plan assets for the Germany, Belgium, and the two Mexico plans at December 31, 2020 and December 31, 2019. The accrued benefit cost of these plans is included in other noncurrent liabilities on the Consolidated Balance Sheets for both years. As the Germany plan is unfunded, a portion of the accrued benefit cost is included in current liabilities at year-end 2020 and 2019, reflecting the expected benefit payments related to the plan for the following year. The table below shows selected information on foreign pension plans.
|  | December 31,
(in thousands) |  | 2020 |  | 2019
Pension plans with the accumulated benefit obligation in excess of the fair market value of plan assets |  |  |  |
Accumulated benefit obligation |  | $ | 32,176 |  |  | $ | 27,879 |
Fair market value of plan assets |  | 14,527 |  |  | 12,642 |
Pension plans with the projected benefit obligation in excess of the fair market value of plan assets |  |  |  |
Projected benefit obligation |  | 257,642 |  |  | 41,126 |
Fair market value of plan assets |  | 207,131 |  |  | 12,642 |
Assumptions—The information in the table below provides the weighted-average assumptions used to calculate the results of our foreign defined benefit pension plans.
|  | 2020 |  | 2019 |  | 2018
Weighted-average assumptions used to determine net periodic benefit cost (income) for the years ended December 31, |  |  |  |  |  |
Discount rate |  | 1.81 | % |  | 2.67 | % |  | 2.36 | %
Expected long-term rate of return on plan assets |  | 5.23 | % |  | 5.58 | % |  | 5.50 | %
Rate of projected compensation increase |  | 3.96 | % |  | 4.10 | % |  | 4.14 | %
Weighted-average assumptions used to determine benefit obligations at December 31, |  |  |  |  |  |
Discount rate |  | 1.14 | % |  | 1.81 | % |  | 2.67 | %
Rate of projected compensation increase |  | 3.94 | % |  | 3.96 | % |  | 4.10 | %
The actuarial assumptions used by the various foreign locations are based upon the circumstances of each particular country and pension plan. The factors impacting the determination of the long-term rate of return for a particular foreign pension plan include the market conditions within a particular country, as well as the investment strategy and asset allocation of the specific plan. Plan Assets—Pension plan assets vary by foreign location and plan. Assets are held and distributed by trusts and, depending upon the foreign location and plan, consist primarily of pooled equity funds, pooled debt securities funds, pooled diversified funds, equity securities, debt securities, cash, and insurance contracts. The combined weighted-average target allocation of our foreign pension plans is 38% in equities (including pooled funds), 37% in debt securities (including pooled funds), 6% in insurance contracts, and 19% in pooled diversified funds. While the pension obligation is long-term in nature for each of our foreign plans, the investment strategies followed by each plan vary to some degree based upon the laws of a particular country, as well as the provisions of the specific pension trust. The U.K. and Canada plans are invested predominantly in equity securities funds, diversified funds, and debt securities funds. The funds of these plans are managed by various trustees and investment companies whose performance is reviewed throughout the year. The Belgium plan is invested in an insurance contract. The Mexico plans are invested in various mutual funds, equities, and debt securities. The Germany plan has no assets. There are no significant concentrations of risk within plan assets, nor do the equity securities include any NewMarket common stock for any year presented. The following table provides information on the fair value of our foreign pension plans assets, as well as the related level within the fair value hierarchy. Investments that are measured at fair value using net asset value per share (or its equivalent) have not been classified by level in the fair value hierarchy.
|  | December 31, 2020 |  | December 31, 2019
|  |  |  | Fair Value Measurements Using |  |  |  | Fair Value Measurements Using
(in thousands) |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3 |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Insurance contract |  | $ | 12,579 |  |  | $ | 0 |  |  | $ | 12,579 |  |  | $ | 0 |  |  | $ | 10,706 |  |  | $ | 0 |  |  | $ | 10,706 |  |  | $ | 0 |
Equity securities—international companies |  | 714 |  |  | 714 |  |  | 0 |  |  | 0 |  |  | 691 |  |  | 691 |  |  | 0 |  |  | 0 |
Debt securities |  | 575 |  |  | 470 |  |  | 105 |  |  | 0 |  |  | 663 |  |  | 646 |  |  | 17 |  |  | 0 |
Pooled investment funds—mutual funds |  | 639 |  |  | 639 |  |  | 0 |  |  | 0 |  |  | 582 |  |  | 582 |  |  | 0 |  |  | 0 |
Cash and cash equivalents |  | 659 |  |  | 659 |  |  | 0 |  |  | 0 |  |  | 131 |  |  | 131 |  |  | 0 |  |  | 0 |
Pooled investment funds (measured at net asset value): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities—U.S. companies |  | 13,062 |  |  |  |  |  |  |  |  | 13,074 |  |  |  |  |  |  |
Equity securities—international companies |  | 67,593 |  |  |  |  |  |  |  |  | 60,945 |  |  |  |  |  |  |
Debt securities |  | 77,766 |  |  |  |  |  |  |  |  | 67,094 |  |  |  |  |  |  |
Diversified growth funds |  | 39,030 |  |  |  |  |  |  |  |  | 35,569 |  |  |  |  |  |  |
|  | $ | 212,617 |  |  | $ | 2,482 |  |  | $ | 12,684 |  |  | $ | 0 |  |  | $ | 189,455 |  |  | $ | 2,050 |  |  | $ | 10,723 |  |  | $ | 0 |
The valuation methodologies used to develop the fair value measurements for the investments in the table above are outlined below. There have been no changes in the valuation techniques used to value the investments. •The insurance contract represents funds deposited with an insurance company and is stated at an amount equal to the sum of all amounts deposited less the sum of all amounts withdrawn, adjusted for investment return. •Equity securities are valued at the closing price reported on a national exchange. •Debt securities are valued by quoted market prices or valued based on yields currently available on comparable securities of issuers with similar credit ratings. •Pooled investment funds that are mutual funds are valued at the closing price reported on a national exchange. •Cash and cash equivalents are valued at cost. •The pooled investment funds are valued at the net asset value of units held by the plans based on the quoted market value of the underlying investments held by the fund. The U.K. pension plan is invested in units of life insurance policies that are linked to equity securities funds, government bond funds and diversified growth funds. The underlying assets of the equity funds, bond funds, and diversified growth funds are traded on a national exchange and are based on tracking various indices of the London Stock Exchange. There are no redemption restrictions on these funds. There were no unfunded commitments for the U.K. pension plan funds. The Canada pension plan is invested in a pooled Canadian equity fund and a pooled diversified fund. The Canadian equity fund invests in a diversification (sector and industry) of equities listed on a recognized Canadian exchange. The diversified fund invests in a diversified mix of equities, fixed income securities, cash, and cash equivalent securities. There are no redemption restrictions on the pooled Canadian funds and there were no unfunded commitments. Cash Flows—For foreign pension plans, NewMarket expects to contribute $7 million to the plans in 2021. The expected benefit payments for the next ten years for our foreign pension plans are shown in the table below.
(in thousands) |  | Expected Pension Benefit Payments
2021 |  | $ | 6,461 |
2022 |  | 4,726 |
2023 |  | 6,566 |
2024 |  | 8,517 |
2025 |  | 6,941 |
2026 through 2030 |  | 38,075 |

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