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Benefit Plans
 3 Months Ended
Mar. 31, 2022
Compensation And Retirement Disclosure [Abstract]  
Benefit Plans

13. BENEFIT PLANS

The Company has two non-contributory defined benefit pension plans covering certain of the Company’s executives. Retirement benefits are based on years of service, employees’ average compensation for the last five years prior to retirement and social security benefits. Currently, the plans are not funded. The Company purchased and is the beneficiary of life insurance policies for certain participants enrolled in the plans. The following table summarizes key information related to the Company’s defined benefit pension plans (in thousands):

 

 

 

Three Months Ended

March 31,

2022

 

 

Year Ended

December 31,

2021

 

Change in Projected Benefit Obligation

 

 

 

 

 

 

 

 

Projected benefit obligation, beginning of period

 

$

31,830

 

 

$

33,530

 

Service cost

 

 

280

 

 

 

1,404

 

Interest cost

 

 

240

 

 

 

1,274

 

Actuarial gain

 

 

—

 

 

 

(3,505

)

Benefits paid

 

 

(224

)

 

 

(873

)

Projected benefit obligation, end of period

 

$

32,126

 

 

$

31,830

 

Change in Plan Assets

 

 

 

 

 

 

 

 

Plan assets at fair value, beginning of period

 

$

—

 

 

$

—

 

Company contributions

 

 

224

 

 

 

873

 

Benefits paid

 

 

(224

)

 

 

(873

)

Plan assets at fair value, end of period

 

$

—

 

 

$

—

 

Unfunded Status of the Plan

 

$

32,126

 

 

$

31,830

 

 

 

 

 

 

Three Months Ended

 

 

 

 

March 31,

2022

 

 

March 31,

2021

 

 

Components of Net Periodic Benefit Cost

 

 

 

 

 

 

 

 

 

Service cost

 

$

280

 

 

$

351

 

 

Interest cost

 

 

240

 

 

 

319

 

 

Net loss

 

 

108

 

 

 

197

 

 

Net periodic pension cost

 

$

628

 

 

$

867

 

 

 

 

 

The long-term portion of the pension liability above as of March 31, 2022 and December 31, 2021 was $31.3 million and $31.5 million, respectively, and is included in Other Non-Current Liabilities in the accompanying consolidated balance sheets.

 

Amended and Restated Executive Retirement Agreement

The Company also has a non-qualified deferred compensation agreement with its former CEO. The agreement provides for a lump sum cash payment upon retirement, no sooner than age 55. As of March 31, 2022, the former CEO had reached age 55 and was eligible to receive the payment upon retirement.

 

On May 27, 2021, the Company and its former CEO entered into an Amended and Restated Executive Retirement Agreement which replaced the former CEO’s previous agreement, effective July 1, 2021. Pursuant to the terms of the Amended and Restated Executive Retirement Agreement, upon the date that the former CEO ceases to provide services to the Company, the Company will pay to the former CEO an amount equal to $3,600,000 which shall be paid in cash. The payment shall be credited with interest at a rate of 5% compounded quarterly. Additionally, at the end of each calendar year provided that the former CEO is still providing services to GEO pursuant to the Executive Chairman Agreement, GEO will credit an amount equal to $1,000,000 at the end of each calendar year (the “Employment Contributions Account”). The Employment Contributions Account will be credited with interest at the rate of 5% compounded quarterly. The balance of the Amended and Restated Executive Retirement Agreement was approximately $5.2 million at March 31, 2022.

 

The Company has established several trusts for the purpose of paying the retirement benefit pursuant to the Amended and Restated Executive Retirement Agreement. The trusts are revocable “rabbi trusts” and the assets of the trusts are subject to the claims of the Company’s creditors in the event of the Company’s insolvency.