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EMPLOYEE BENEFIT PLANS | 12 Months Ended
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Dec. 31, 2021
Retirement Benefits [Abstract] |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS DEFINED BENEFIT PLANS We have one qualified non-contributory defined benefit pension plan covering a portion of its employees and an unfunded plan that provides benefits in excess of amounts allowable under current tax law in the qualified plans. We closed enrollment in the pension plans to salaried employees hired after December 31, 2005. Effective December 31, 2016, we froze benefits for all employees participating in the pension plan. In lieu of the pension plan, we provide those employees with an enhanced 401(k) plan match similar to what is currently provided to employees hired after December 31, 2005. Employee benefit plan liabilities are calculated using actuarial estimates and management assumptions. These estimates are based on historical information, along with certain assumptions about future events. Changes in assumptions, as well as changes in actual experience, could cause the estimates to change. The following tables set forth the change in the projected benefit obligation and plan assets and reconcile the funded status and the amounts recognized in the Consolidated Balance Sheets for the pension and postretirement benefit plans for the two years ended December 31:
| Pension |  | Postretirement
| 2021 |  | 2020 |  | 2021 |  | 2020
Change in Projected Benefit Obligation |  |  |  |  |  |  |
Projected benefit obligation at beginning of year | $100,469 |  |  | $90,261 |  |  | $1,886 |  |  | $1,634 |
Service cost | — |  |  | — |  |  | 8 |  |  | 6 |
Interest cost | 2,228 |  |  | 2,706 |  |  | 45 |  |  | 51 |
Actuarial loss (gain) | (5,112) |  |  | 11,413 |  |  | (35) |  |  | 209 |
Benefits paid | (3,519) |  |  | (3,413) |  |  | (14) |  |  | (14) |
Expenses paid | (267) |  |  | (498) |  |  | — |  |  | — |
Projected benefit obligation at end of year | $93,799 |  |  | $100,469 |  |  | $1,890 |  |  | $1,886 |
Change in Plan Assets |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | $78,883 |  |  | $66,460 |  |  | — |  |  | — |
Actual return on plan assets | 9,896 |  |  | 13,329 |  |  | — |  |  | — |
Employer contributions | 86 |  |  | 3,005 |  |  | 14 |  |  | 14 |
Benefits paid | (3,519) |  |  | (3,413) |  |  | (14) |  |  | (14) |
Other expense | (267) |  |  | (498) |  |  | — |  |  | — |
Fair value of plan assets at end of year | $85,079 |  |  | $78,883 |  |  | — |  |  | — |
Funded Status at End of Year: |  |  |  |  |  |  |
Net accrued benefit cost | ($8,720) |  |  | ($21,586) |  |  | ($1,890) |  |  | ($1,886) |
Amounts Recognized in the Consolidated |  |  |  |  |  |  |
Balance Sheets Consist of: |  |  |  |  |  |  |
Current liabilities | ($86) |  |  | ($86) |  |  | ($46) |  |  | ($41) |
Noncurrent liabilities | (8,634) |  |  | (21,500) |  |  | (1,844) |  |  | (1,845) |
Net amount recognized | ($8,720) |  |  | ($21,586) |  |  | ($1,890) |  |  | ($1,886) |
For pension and postretirement plans with accumulated benefit obligations in excess of plan assets, the following table sets forth the projected and accumulated benefit obligations and the fair value of plan assets for the two years ended December 31:
| 2021 |  | 2020
Projected benefit obligation | $93,799 |  |  | $100,469 |
Accumulated benefit obligation | 93,799 |  |  | 100,469 |
Accumulated postretirement benefit obligation | 1,890 |  |  | 1,886 |
Fair value of plan assets | 85,079 |  |  | 78,883 |
ACTUARIAL (GAIN) LOSS PENSION Key components of the actuarial gains and losses contributing to the period change in the benefit obligation are as follows: •Changes in participant demographics resulted in an actuarial gain of approximately $0.5 million, which is primarily due to high mortality among participants. •Changes in mortality assumptions resulted in an actuarial loss of approximately $0.3 million. •Changes in the discount rate from 2.26% to 2.65% resulted in an actuarial gain of approximately $5.1 million. POSTRETIREMENT Key components of the actuarial gains and losses contributing to the period change in the benefit obligation are as follows: •Re-measurement of current census data resulted in a demographic loss of $0.1 million. •Changes in the discount rate from 2.42% to 2.75% resulted in an actuarial gain of approximately $0.1 million. OTHER COMPREHENSIVE INCOME Net gains or losses recognized in other comprehensive (loss) income for the three years ended December 31 are as follows:
| Pension |  | Postretirement
| 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019
Net gains (losses) | $11,262 |  |  | ($1,587) |  |  | ($1,514) |  |  | $40 |  |  | ($207) |  |  | ($285) |
Net gains or losses reclassified from other comprehensive income and recognized as a component of pension and postretirement expense for the three years ended December 31 are as follows:
| Pension |  | Postretirement
| 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019
Amortization of losses (gains) | $1,154 |  |  | $861 |  |  | $449 |  |  | $20 |  |  | $8 |  |  | — |
ACCUMULATED OTHER COMPREHENSIVE INCOME (AOCI) Net losses that have not yet been included in pension and postretirement expense for the two years ended December 31, but have been recognized as a component of AOCI are as follows:
| Pension |  | Postretirement
| 2021 |  | 2020 |  | 2021 |  | 2020
Net losses | ($12,627) |  |  | ($25,043) |  |  | ($431) |  |  | ($491) |
Deferred income tax benefit | 1,216 |  |  | 1,216 |  |  | 6 |  |  | 6 |
AOCI | ($11,411) |  |  | ($23,827) |  |  | ($425) |  |  | ($485) |
NET PENSION AND POSTRETIREMENT BENEFIT (CREDIT) COST The following tables set forth the components of net pension and postretirement benefit (credit) cost that have been recognized during the three years ended December 31:
| Pension |  | Postretirement
| 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019
Components of Net Periodic Benefit (Credit) Cost |  |  |  |  |  |  |  |  |  |  |
Service cost | — |  |  | — |  |  | — |  |  | $8 |  |  | $6 |  |  | $6 |
Interest cost | 2,228 |  |  | 2,706 |  |  | 3,197 |  |  | 45 |  |  | 51 |  |  | 54 |
Expected return on plan assets | (3,746) |  |  | (3,504) |  |  | (3,107) |  |  | — |  |  | — |  |  | — |
Amortization of losses (gains) | 1,154 |  |  | 861 |  |  | 449 |  |  | 20 |  |  | 8 |  |  | — |
Net periodic benefit (credit) cost | ($364) |  |  | $63 |  |  | $539 |  |  | $73 |  |  | $65 |  |  | $60 |
The service cost component of our benefit expense is recorded within the operating expense line item “Selling and general expenses” within the Consolidated Statements of Income. All other components of the benefit costs expense are included within the “Interest and miscellaneous income, net” line item of the Consolidated Statements of Income. VALUATION ASSUMPTIONS The following table sets forth the principal assumptions inherent in the determination of benefit obligations and net periodic benefit cost of the pension and postretirement benefit plans as of December 31:
| Pension |  | Postretirement
| 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019
Assumptions used to determine benefit obligations at December 31: |  |  |  |  |  |  |  |  |  |  |
Discount rate | 2.65 | % |  | 2.26 | % |  | 3.06 | % |  | 2.75 | % |  | 2.42 | % |  | 3.16 | %
Assumptions used to determine net periodic benefit cost for years ended December 31: |  |  |  |  |  |  |  |  |  |  |
Discount rate | 2.26 | % |  | 3.06 | % |  | 4.11 | % |  | 2.42 | % |  | 3.16 | % |  | 4.18 | %
Expected long-term return on plan assets | 5.72 | % |  | 5.72 | % |  | 5.72 | % |  | — |  |  | — |  |  | — |
DISCOUNT RATE At December 31, 2021, the pension plan’s discount rate was 2.7%. The discount rate is derived from the Financial Times Stock Exchange (FTSE) Pension Discount Curve (f/k/a Citigroup). The Pension Discount Curve (PDC) is a set of yields on hypothetical AA, zero coupon bonds whose maturities range from 6 months up to 30 years. The yields of the PDC are used to discount pension liabilities. The PDC is calculated based on a universe of AA rated corporate bonds from the FTSE US Broad Investment-Grade Bond Index and the yields of the FTSE Treasury model curve. The pension plan's future expected cash flows are then matched to the spot rates on the yield curve and a single equivalent discount rate is determined, which produces the same present value as the spot rates. EXPECTED LONG-TERM RETURN ON PLAN ASSETS In 2021, the expected return on plan assets remained at 5.7%, which is based on historical returns on current asset allocations and expected returns using the Black-Litterman method. INVESTMENT OF PLAN ASSETS Our Pension and Savings Plan Committee and the Audit Committee of the Board of Directors oversee the pension plans’ investment program, which is designed to maximize returns and provide sufficient liquidity to meet plan obligations while maintaining acceptable risk levels. The investment approach emphasizes diversification by allocating the plans’ assets among asset categories and selecting investment managers whose various investment methodologies will be minimally correlative with each other. In 2020, we transitioned to a liability-driven investment (“LDI”) strategy. An LDI strategy focuses on maintaining a close to fully-funded status over the long-term with minimal funded status risk. This is achieved by investing more of the plan assets in fixed income instruments to more closely match the duration of the plan liability. The investment allocation to fixed income instruments will increase as the plans' funded status increases. Investment target allocation percentages for equity securities can range up to 80 percent. Our pension plans’ asset allocation (excluding short-term investments) at December 31, 2021 and 2020 are as follows:
| Percentage of Plan Assets |
Asset Category | 2021 |  | 2020
Domestic equity securities | 29 | % |  | 44 | % |
International equity securities | 18 | % |  | 30 | % |
Domestic fixed income securities | 51 | % |  | 21 | % |
International fixed income securities | — |  |  | 3 | % |
Real estate fund | 2 | % |  | 2 | % |
Total | 100 | % |  | 100 | % |
Investments within the equity categories may include large capitalization, small capitalization and emerging market securities. Pension assets did not include a direct investment in Rayonier common shares during the years ended December 31, 2021 and 2020. NET ASSET VALUE MEASUREMENTS Separate investment accounts are measured using the unit value calculated based on the Net Asset Value (“NAV”) of the underlying assets. The NAV is based on the fair value of the underlying investments held by each fund less liabilities divided by the units outstanding as of the valuation date. These funds are not publicly traded; however, the unit price calculation is based on observable market inputs of the funds’ underlying assets. The following table sets forth the net asset value of the plan assets as of December 31, 2021 or 2020:
| December 31, 2021 |  | December 31, 2020
Asset Category |  |  |
Investments at Net Asset Value: |  |  |
Separate Investment Accounts | $85,079 |  |  | $78,883 |
Total Investments at Net Asset Value | $85,079 |  |  | $78,883 |
CASH FLOWS Our expected benefit payments to be made for the next 10 years are as follows:
| Pension Benefits |  | Postretirement Benefits
2022 | $3,896 |  |  | $46 |
2023 | 4,077 |  |  | 50 |
2024 | 4,242 |  |  | 53 |
2025 | 4,389 |  |  | 56 |
2026 | 4,498 |  |  | 60 |
2027-2031 | 23,525 |  |  | 359 |
We have no mandatory pension contribution requirements in 2022. DEFINED CONTRIBUTION PLANS We provide a defined contribution plan to all of our eligible employees. Upon completion of the merger with Pope Resources, former eligible Pope Resource employees were immediately eligible to participate in the Rayonier 401(k) plan. Pope Resources employees’ year of service were credited to the 401(k) plan for vesting purposes. Company match contributions charged to expense for these plans were $1.1 million, $1.1 million and $1.0 million for the years ended December 31, 2021, 2020 and 2019, respectively. The defined contribution plan includes Rayonier common shares with a fair market value of $11.0 million and $8.5 million at December 31, 2021 and 2020, respectively. As of June 1, 2016, the Rayonier Inc. Common Stock Fund was closed to new contributions. Transfers out of the fund will continue to be permitted, but no new investments or transfers into the fund are allowed. As discussed above, the defined benefit pension plan is currently frozen. In lieu of the pension plan, employees are eligible to receive an enhanced match contribution. Company enhanced match contributions charged to expense for the years ended December 31, 2021, 2020 and 2019 were $1.2 million, $1.0 million and $0.9 million, respectively.

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