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Pension and Other Postretirement Employee Benefits
 9 Months Ended
Sep. 30, 2020
General Discussion Of Pension And Other Postretirement Benefits [Abstract]  
Pension and Other Postretirement Employee Benefits

NOTE 14. PENSION AND OTHER POSTRETIREMENT EMPLOYEE BENEFITS

In February 2020, we purchased a group annuity contract from an insurance company to transfer $101.1 million of our outstanding pension benefit obligation related to our qualified pension plans to the insurance company. This transaction was funded with plan assets. As a result of the transaction, the insurance company assumed responsibility for annuity administration and benefit payments to select retirees, with no change to their monthly retirement benefit payment amounts. In connection with this transaction we recorded a non-cash pretax settlement charge of $43.0 million during the three months ended March 31, 2020 in non-operating expense, net, accelerating the recognition of actuarial losses included in accumulated other comprehensive loss that would have been recognized in future periods.

The settlement triggered a remeasurement of plan assets and liabilities. We updated the discount rate used to measure our projected benefit obligation for the qualified pension plans as of February 29, 2020 and to calculate the related net periodic benefit cost for the remainder of 2020 to 2.95% from 3.40%. All other pension assumptions remain unchanged. The net effect of the remeasurement was a reduction in the funded status of our qualified pension plans of approximately $26.2 million, primarily driven by the decrease in the discount rate.  

The following tables detail the components of net periodic cost (benefit) of our pension plans and other postretirement employee benefits (OPEB):

 

 

Three Months Ended September 30,

 

 

 

Pension

 

 

OPEB

 

(in thousands)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Service cost

 

$

2,233

 

 

$

1,942

 

 

$

127

 

 

$

93

 

Interest cost

 

 

3,066

 

 

 

4,618

 

 

 

376

 

 

 

397

 

Expected return on plan assets

 

 

(3,869

)

 

 

(5,548

)

 

 

—

 

 

 

—

 

Amortization of prior service cost (credit)

 

 

29

 

 

 

52

 

 

 

(319

)

 

 

(2,211

)

Amortization of actuarial loss

 

 

3,856

 

 

 

3,374

 

 

 

418

 

 

 

253

 

Total net periodic cost (benefit)

 

$

5,315

 

 

$

4,438

 

 

$

602

 

 

$

(1,468

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

Pension

 

 

OPEB

 

(in thousands)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Service cost

 

$

6,699

 

 

$

5,825

 

 

$

381

 

 

$

278

 

Interest cost

 

 

9,198

 

 

 

13,849

 

 

 

1,127

 

 

 

1,191

 

Expected return on plan assets

 

 

(11,606

)

 

 

(16,643

)

 

 

—

 

 

 

—

 

Amortization of prior service cost (credit)

 

 

85

 

 

 

158

 

 

 

(957

)

 

 

(6,633

)

Amortization of actuarial loss

 

 

11,569

 

 

 

10,122

 

 

 

1,254

 

 

 

760

 

Net periodic cost (benefit) before pension settlement charge

 

 

15,945

 

 

 

13,311

 

 

 

1,805

 

 

 

(4,404

)

Pension settlement charge

 

 

42,988

 

 

 

—

 

 

 

—

 

 

 

—

 

Net periodic cost (benefit)

 

$

58,933

 

 

$

13,311

 

 

$

1,805

 

 

$

(4,404

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

During the nine months ended September 30, 2020 and 2019, funding of pension and other postretirement employee benefit plans was $8.5 million and $4.6 million, respectively.