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Benefit Plans
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Benefit Plans
13.
Benefit Plans

The Company’s employees participate in an Employee Retirement Savings Plan (the “Retirement Plan”) under Section 401(k) of the Internal Revenue Code that covers substantially all U.S. based salaried employees. Employees may contribute a percentage of eligible compensation to the plan, subject to certain limits under the Internal Revenue Code. For the years ended December 31, 2023, 2022 and 2021, the Company provided matching contributions of $8.5 million, $7.2 million and $7.3 million, respectively.

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. There were no significant transactions between the employer or related parties and the plans during 2023, 2022 or 2021.

 

The Company had a non-qualified deferred compensation agreement with its Executive Chairman. The agreement provided for a lump sum payment upon retirement, no sooner than age 55. As of December 31, 2023, the Executive Chairman had reached age 55 and was eligible to receive the payment upon retirement.

 

 

 

The Company and its Executive Chairman entered into on May 27, 2021, and effective July 1, 2021, an Amended and Restated Executive Retirement Agreement. Pursuant to the terms of the Amended and Restated Executive Retirement Agreement, upon the date that the Executive Chairman ceases to provide services to the Company, the Company will pay to the Executive Chairman 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 Executive Chairman is still providing services to GEO pursuant to the Executive Chairman Employment Agreement, GEO will credit an amount equal to $1,000,000 (the "Employment Contributions Account"). The Employment Contributions Account will be credited with interest at the rate of 5% compounded quarterly. As the Executive Chairman's retirement payment will no longer be settled with a fixed number of shares of GEO’s common stock (as per the Executive Chairman's former retirement agreement), $3,600,000 has been reclassified from equity to other non-current liabilities in 2021. The balance of the Amended and Restated Executive Retirement Agreement was approximately $9.6 million at December 31, 2023 which is fully funded. On November 29, 2023, the Company confirmed that the Company's Founder and Executive Chairman, will step down as Executive Chairman on June 30, 2026, at the end of his current employment term under his Executive Chairman Employment Agreement. Refer to Note 16 - Commitments, Contingencies and Other Matters for further information. The following table presents the balance due to the Executive Chairman at the end of the next two and a half years under the Amended and Restated Executive Retirement Agreement provided that the Executive Chairman is still providing services to the Company under his Executive Chairman Employment Agreement:

 

 

Period End

 

Retirement
Obligation

 

 

 

(In thousands)

 

12/31/2024

 

$

12,617

 

12/31/2025

 

$

16,336

 

6/30/2026

 

$

18,010

 

 

 

The Company had 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.

The following table summarizes key information related to the Company’s defined benefit pension plans. The table illustrates the reconciliation of the beginning and ending balances of the benefit obligation showing the effects during the periods presented attributable to service cost, interest cost, plan amendments, termination benefits, actuarial gains and losses. The assumptions used in the Company’s calculation of accrued pension costs are based on market information and the Company’s historical rates for employment compensation and discount rates. The vested benefit obligation is determined as the actuarial present value of the vested benefits to which the employee is currently entitled to but based on the employee's expected date of separation or retirement.

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Accumulated Benefit Obligation, End of Year

 

$

23,882

 

 

$

21,612

 

 

 

 

 

 

 

Change in Projected Benefit Obligation

 

 

 

 

 

 

Projected Benefit Obligation, Beginning of Year

 

$

26,207

 

 

$

31,830

 

Service Cost

 

 

745

 

 

 

1,118

 

Interest Cost

 

 

1,345

 

 

 

962

 

Actuarial Gain

 

 

421

 

 

 

(6,710

)

Benefits Paid

 

 

(928

)

 

 

(993

)

Projected Benefit Obligation, End of Year

 

$

27,790

 

 

$

26,207

 

Change in Plan Assets

 

 

 

 

 

 

Plan Assets at Fair Value, Beginning of Year

 

$

—

 

 

$

—

 

Company Contributions

 

 

928

 

 

 

993

 

Benefits Paid

 

 

(928

)

 

 

(993

)

Plan Assets at Fair Value, End of Year

 

$

—

 

 

$

—

 

Unfunded Status of the Plan

 

$

(27,790

)

 

$

(26,207

)

Amounts Recognized in Accumulated Other Comprehensive Income

 

 

 

 

 

 

Net Loss

 

 

(90

)

 

 

(511

)

Total Pension Cost

 

$

(90

)

 

$

(511

)

 

 

 

2023

 

 

2022

 

Components of Net Periodic Benefit Cost

 

 

 

 

 

 

Service Cost

 

$

745

 

 

$

1,118

 

Interest Cost

 

 

1,345

 

 

 

962

 

Amortization of:

 

 

 

 

 

 

Net Loss

 

 

—

 

 

 

431

 

Net Periodic Pension Cost

 

$

2,090

 

 

$

2,511

 

Weighted Average Assumptions for Expense

 

 

 

 

 

 

Discount Rate

 

 

5.00

%

 

 

5.20

%

Expected Return on Plan Assets

 

N/A

 

 

N/A

 

Rate of Compensation Increase

 

 

4.40

%

 

 

4.40

%

 

The long-term portion of the pension liability related to the defined benefit plan as of December 31, 2023 and 2022 was $27 million and $25.4 million, respectively, and is included in Other Non-Current liabilities in the accompanying consolidated balance sheets.

 

The amount included in accumulated other comprehensive income as of December 31, 2023 that has not yet been recognized as a component of net periodic benefit cost is $0.1 million. There was no amount included in other accumulated comprehensive income as of December 31, 2023 that is expected to be recognized as a component of net periodic benefit cost in fiscal year 2024.

The benefit payments reflected in the table below represent the Company’s obligations to employees that are eligible for retirement or have already retired and are receiving deferred compensation benefits:

 

Fiscal Year

 

Pension
Benefits

 

 

 

(In thousands)

 

2024

 

$

1,029

 

2025

 

 

1,104

 

2026

 

 

1,315

 

2027

 

 

1,525

 

2028

 

 

1,675

 

Thereafter

 

 

21,142

 

 

$

27,790

 

 

The Company also maintains The GEO Group Inc. Deferred Compensation Plan (“Deferred Compensation Plan”), a non-qualified deferred compensation plan for employees who are ineligible to participate in its qualified 401(k) plan. Eligible employees may defer a fixed percentage of their salary and the Company matches employee contributions up to a certain amount based on the employee’s years of service. Payments will be made at retirement age of 65, at termination of employment or earlier depending on the employees’ elections. The Company established a rabbi trust; the purpose of which is to segregate the assets of the Deferred Compensation Plan from the Company’s cash balances. The funds in the rabbi trust are included in Restricted Cash and Investments in the accompanying Consolidated Balance Sheets. These funds are not available to the Company for any purpose other than to fund the Deferred Compensation Plan; however, these funds may be available to the Company’s creditors in the event the Company becomes insolvent. The rabbi trust had a balance of approximately $41.7 million at December 31, 2023. All employee and employer contributions relative to the Deferred Compensation Plan are made directly to the rabbi trust. The Company recognized expense related to its contributions of $0.7 million, $0.7 million and $0.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. The total liability for this plan at December 31, 2023 and 2022 was approximately $38.6 million and $32.3 million, respectively, and is included in Other Non-Current Liabilities in the accompanying Consolidated Balance Sheets. The current portion of this liability was $2.8 million and $1.8 million as of December 31, 2023 and 2022, respectively.