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Retirement and Benefit Plans | 12 Months Ended
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Dec. 31, 2020
Retirement Benefits [Abstract] |
Retirement and Benefit Plans | Retirement and Benefit Plans Our retirement plans consist of noncontributory defined benefit pension plans, contributory defined contribution savings plans, a deferred compensation plan, and a multiemployer health and welfare plan. Defined Benefit Plans Some of our employees are covered by noncontributory defined benefit pension plans, including a qualified defined benefit pension plan (Pension Plan) which was eliminated in December 2020 (Plan Termination). Benefits under the Pension Plan have been frozen for salaried employees since 2009 and substantially all eligible hourly employees since 2012. The following summarizes recent activity of each individual plan: •In conjunction with the Plan Termination, we purchased a buy-in group annuity contract (Buy-In) from The Prudential Insurance Company of America (Prudential), which was funded with plan assets on August 6, 2020. In addition, we froze accrual of all remaining benefits of hourly employees on our Pension Plan effective August 31, 2020. In anticipation of the Plan Termination, the Buy-In funded lump-sum payments made to eligible plan participants at their election, on or about December 2, 2020, after which, neither the Pension Plan nor Prudential has any further obligations to those participants. After completion of the lump-sum program, we exercised our option to convert the Buy-In to a buy-out group annuity contract (Buy-Out) for no additional premium. When the Buy-Out became effective on December 31, 2020, we irrevocably transferred to Prudential the future benefit obligations and annuity administration for all remaining plan participants (or their beneficiaries) in the Pension Plan. These transactions fully eliminated the liabilities of our Pension Plan, resulting in a non-cash settlement charge of $6.2 million in fourth quarter 2020. •On September 30, 2019, we transferred $19.8 million of our Pension Plan assets to Prudential for the purchase of a group annuity contract. Under the arrangement, Prudential assumed ongoing responsibility for administration and benefit payments for approximately 10% of our U.S. qualified pension plan projected benefit obligations at the time of the transaction. As a result of the transaction, we recognized a non-cash settlement charge of $1.3 million in third quarter 2019. •On April 25, 2018, and August 10, 2018, we transferred $151.8 million and $124.8 million, respectively, of our Pension Plan assets to Prudential for the purchase of group annuity contracts. Under the arrangements, Prudential assumed ongoing responsibility for administration and benefit payments for over 60% of our U.S. qualified pension plan projected benefit obligations. As a result of the transfers of pension plan assets, we recorded settlement expense in second and third quarters 2018 of $12.0 million and $11.3 million, respectively. See "Assumptions" below for the impact on our discount rate and expected return on plan asset assumptions. We also have nonqualified salaried pension plans, which were frozen so that no future benefits have accrued since December 31, 2009. Defined Contribution Plans We sponsor contributory defined contribution savings plans for most of our salaried and hourly employees, and we generally provide company contributions to the savings plans. Since March 1, 2010, we have contributed 4% of each salaried participant's eligible compensation to the plan as a nondiscretionary company contribution. In addition, beginning in 2012, for the years that a performance target is met, we contribute an additional amount of the employee's eligible compensation, depending on company performance and the employee's years of service. During the years ended December 31, 2020, 2019, and 2018, company performance resulted in additional contributions in the range of 2% to 4%, 1.6% to 3.1%, and 2% to 4%, respectively, of eligible compensation. The company contributions for union and nonunion hourly employees vary by location. Company contributions paid, or to be paid, to our defined contribution savings plans for the years ended December 31, 2020, 2019, and 2018, were $23.4 million, $19.8 million, and $22.2 million, respectively. Defined Contributory Trust We participated in a multiemployer defined contributory trust plan for certain union hourly employees since 2013. As of December 31, 2020, 2019, and 2018 approximately 735, 1,215, and 1,221, respectively, of our employees participated in this plan. For certain of these employees, per the terms of the representative collective bargaining agreements, we were required to contribute $0.90, $0.90, and $0.85, respectively, per hour per active employee during 2020, 2019, and 2018. For certain other of these employees, we were required to contribute 4.5% of the employee's earnings during 2020, 2019, and 2018. Company contributions to the multiemployer defined contributory trust plan were $2.4 million, $2.6 million, and $2.8 million, respectively, for each of the years ended December 31, 2020, 2019, and 2018. Effective fourth quarter 2020, through collective bargaining negotiations, some of our employees no longer participate in this plan. In addition, for the remaining plan participants, we expect to contribute 4.5% of the employees earnings. After required contributions, we have no further obligation to the plan. The plan and its assets are managed by a joint board of trustees. Deferred Compensation Plan We sponsor a deferred compensation plan. Under the plan, participating employees and directors irrevocably elect each year to defer receipt of a portion of their compensation. A participant's account is credited with imputed interest at a rate equal to 130% of Moody's Composite Average of Yields on Corporate Bonds. Participants may receive payment of their deferred compensation plan balance in a lump sum or in monthly installments over a specified period of years following the termination of their employment with the company. In addition, subject to plan revisions that became effective January 1, 2019, participants may also receive distributions of their deferred compensation accounts while still employed by the company. The deferred compensation plan is unfunded; therefore, benefits are paid from our general assets. For the years ended December 31, 2020, 2019, and 2018, we recognized $1.0 million, $1.1 million, and $1.0 million, respectively, of interest expense related to the plan. At December 31, 2020 and 2019, we had liabilities related to the plan of $5.9 million and $2.1 million, respectively, recorded in "Accrued liabilities, Compensation and benefits" and $19.8 million and $21.6 million, respectively, recorded in "Other, Compensation and benefits" on our Consolidated Balance Sheets. Multiemployer Health and Welfare Plan We have participated in a multiemployer health and welfare plan that covered medical, dental, and life insurance benefits for certain active employees as well as benefits for retired employees. Effective November 30, 2020, through collective bargaining negotiations, our employees no longer participate in this plan. As of December 31, 2019 and 2018, approximately 475 and 604, respectively, of our employees participated in this plan. Per the terms of the representative collective bargaining agreements, we were required to contribute $6.10 per hour per active employee from January 1, 2018, to May 31, 2018. From June 1, 2018, to May 31, 2019, we were required to contribute $6.40 per hour per active employee. From June 1, 2019, to May 31, 2020, we were required to contribute $6.70 per hour per active employee. From June 1, 2020, to November 30, 2020, we were required to contribute $7.00 per hour per active employee. During the years ended December 31, 2020, 2019, and 2018 company contributions to the multiemployer health and welfare plan were $5.8 million, $6.7 million, and $7.7 million, respectively. After required contributions, we have no further obligation to the plan. The trustees of the plan determine the allocation of benefits between active and retired employees. Defined Benefit Obligations and Funded Status The following table, which includes only company-sponsored defined benefit plans, reconciles the beginning and ending balances of our projected benefit obligation and fair value of plan assets. We recognize the underfunded status of our defined benefit pension plans on our Consolidated Balance Sheets. We recognize changes in funded status in the year changes occur through other comprehensive income (loss).
|  | December 31
|  | 2020 |  | 2019
|  | (thousands)
Change in benefit obligation |  |  |  |
Benefit obligation at beginning of year |  | $ | 192,061 |  |  | $ | 176,852 |
Service cost |  | 668 |  |  | 647 |
Interest cost |  | 5,893 |  |  | 7,210 |
Actuarial loss |  | 18,605 |  |  | 29,065 |
Group annuity transactions (a) |  | (76,650) |  |  | (19,848) |
Benefits paid (b) |  | (135,690) |  |  | (1,865) |
Benefit obligation at end of year |  | 4,887 |  |  | 192,061 |
Change in plan assets |  |  |  |
Fair value of plan assets at beginning of year |  | 168,651 |  |  | 154,801 |
Actual return on plan assets |  | 30,930 |  |  | 29,769 |
Employer contributions |  | 12,759 |  |  | 5,238 |
Group annuity transactions (a) |  | (76,650) |  |  | (19,292) |
Benefits paid (b) |  | (135,690) |  |  | (1,865) |
Fair value of plan assets at end of year |  | — |  |  | 168,651 |
Underfunded status |  | $ | (4,887) |  |  | $ | (23,410) |
Amounts recognized on our Consolidated Balance Sheets |  |  |  |
Current liabilities |  | $ | (367) |  |  | $ | (878) |
Noncurrent liabilities |  | (4,520) |  |  | (22,532) |
Net liability |  | $ | (4,887) |  |  | $ | (23,410) |
Amounts recognized in accumulated other comprehensive loss |  |  |  |
Net actuarial loss |  | $ | 1,443 |  |  | $ | 15,332 |
Prior service cost |  | — |  |  | — |
Net loss recognized |  | $ | 1,443 |  |  | $ | 15,332 |
______________________________________ (a) See Defined Benefits Plans above for description of group annuity transactions. (b) See Defined Benefits Plans above for description of lump-sum payments. The accumulated benefit obligation for all defined benefit pension plans was $4.9 million and $192.1 million at December 31, 2020 and 2019, respectively. After the Plan Termination, the remaining accumulated benefit obligations are from our unfunded nonqualified defined benefit pension plans. Net Periodic Benefit Cost and Other Comprehensive (Income) Loss The components of net periodic benefit cost and other amounts recognized in other comprehensive (income) loss are as follows:
| Year Ended December 31
| 2020 |  | 2019 |  | 2018
| (thousands)
Net periodic benefit cost |  |  |  |  |
Service cost | $ | 668 |  |  | $ | 647 |  |  | $ | 794 |
Interest cost | 5,893 |  |  | 7,210 |  |  | 11,344 |
Expected return on plan assets | (5,493) |  |  | (5,903) |  |  | (11,097) |
Amortization of actuarial (gain) loss | 807 |  |  | (175) |  |  | 1,497 |
Plan settlement expense (a) | 6,250 |  |  | 1,342 |  |  | 23,255 |
Net periodic benefit cost | 8,125 |  |  | 3,121 |  |  | 25,793 |
Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss |  |  |  |  |
Net actuarial (gain) loss | (6,832) |  |  | 4,642 |  |  | (14,178) |
Amortization of actuarial gain (loss) | (807) |  |  | 175 |  |  | (1,497) |
Effect of settlements | (6,250) |  |  | (1,342) |  |  | (23,255) |
Total recognized in other comprehensive (income) loss | (13,889) |  |  | 3,475 |  |  | (38,930) |
Total recognized in net periodic cost and other comprehensive (income) loss | $ | (5,764) |  |  | $ | 6,596 |  |  | $ | (13,137) |
______________________________________ (a) Plan settlement expense during the years ended December 31, 2020, 2019, and 2018 includes $6.3 million, $1.3 million and $23.3 million, respectively, of settlement charges related to the transfers of pension plan assets to Prudential for the purchase of group annuity contracts, as well as lump-sum payments in 2020. Assumptions The assumptions used in accounting for our plans are estimates of factors that will determine, among other things, the amount and timing of future contributions. The following table presents the assumptions used in the measurement of our benefit obligations:
| December 31
| 2020 |  | 2019
Weighted average assumptions |  |  |
Discount rate | 2.00 | % |  | 3.10 | %
Rate of compensation increases (a) | — | % |  | — | %
The following table presents the assumptions used in the measurement of net periodic benefit cost:
|  | December 31
|  | 2020 |  | 2019 |  | 2018 (b) |  |
Weighted average assumptions |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 3.10 | % |  | 4.15 | % |  | 3.95 | % | / | 4.05 | % | / | 3.40 | % |  |  |
Expected long-term rate of return on plan assets |  | 3.50 | % |  | 3.85 | % |  | 3.85 | % | / | 4.50 | % | / | 4.75 | % |  |  |
Rate of compensation increases (a) |  | — | % |  | — | % |  |  |  |  |  | — | % |  |
_______________________________________ (a) Pension benefits for all salaried employees are frozen, resulting in an assumption for the rate of compensation increase of zero. (b) Prior to the remeasurements of our qualified defined benefit pension plan on April 25, 2018, and August 10, 2018, the discount rates were 3.40% and 4.05%, respectively, and the expected rates of return on plan assets were 4.75% and 4.50%, respectively. The discount rate and expected rate of return on plan assets after the August 10, 2018 remeasurement were 3.95% and 3.85%, respectively. Discount Rate Assumption. The discount rate reflects the current rate at which the pension obligations could be settled at each measurement date of the plan. In all years presented, the discount rates were determined by matching the expected plan benefit payments against a spot rate yield curve constructed to replicate the yields of Aa-graded corporate bonds. Asset Return Assumption. Prior to the Plan Termination, we based our expected long-term rate of return on plan assets on a weighted average of our expected returns for the major asset classes in which we invest. The weights we assigned each asset class were based on our investment strategy. Expected returns for the asset classes were based on long-term historical returns, inflation expectations, forecasted gross domestic product, earnings growth, and other economic factors. We developed our return assumption based on a review of the fund manager's estimates of future market expectations by broad asset class and expected long-term rates of return from external investment managers. Retirement and Mortality Rates. These rates are developed to reflect actual and projected plan experience. In 2020, we used the Pri-2012 mortality tables projected forward using MP-2020 on a generational basis. In 2019, we used the Pri-2012 mortality tables projected forward using MP-2019 on a generational basis. Fair Value Measurements of Plan Assets The following table sets forth by level, within the fair value hierarchy, the pension plan assets, by major asset category, at fair value at December 31, 2019:
|  | December 31, 2019
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) (a) |  | Significant Unobservable Inputs (Level 3) |  | Total
|  | (thousands)
Fixed-income securities (b) |  | $ | — |  |  | $ | 152,530 |  |  | $ | — |  |  | $ | 152,530 |
Multi-asset class fund (c) |  | — |  |  | 16,361 |  |  | — |  |  | 16,361 |
Total investments at fair value |  | $ | — |  |  | $ | 168,891 |  |  | $ | — |  |  | 168,891 |
Receivables and accrued expenses, net |  |  |  |  |  |  |  | (240) |
Fair value of plan assets |  |  |  |  |  |  |  | $ | 168,651 |
_______________________________________ (a)Securities represent common collective trusts managed and valued by Russell Trust Company, the administrator of the funds. While the underlying assets are actively traded on an exchange, the funds are not. The investments in equity and fixed-income securities are considered to have a readily determinable fair value because the fair value per share (unit) is determined and published and is the basis for current transactions. We had the ability to redeem these securities with a 1 day notice. (b)Invested in the Russell Long Duration Fixed Income Fund, which is designed to provide current income and capital appreciation through diversified strategies including sector rotation, modest interest rate timing, security selection, and tactical use of high-yield, emerging market bonds and other non-index securities. In addition, our investments in this category included the Russell 14 Year LDI Fixed Income Fund. We also were invested in the Russell 8 Year LDI Fixed Income Fund. These LDI funds invest primarily in investment grade bonds that closely match those found in discount rate curves used to value U.S. pension liabilities and seeks to provide additional incremental return through modest interest rate timing, security selection, and tactical use of non-credit sectors. In addition, our investments in this category included Russell STRIPS Fixed Income Funds with duration profiles of 10, 15, and 28 years. These funds invest in a subset of the STRIPS universe with a similar duration profile as their respective Bloomberg Barclays U.S. STRIPS Index. (c)Invested in the Russell Multi-Asset Core Plus Fund, which is designed to provide long-term growth by providing a diversified portfolio of investments that has an overall strategic allocation of 75% global equity, 15% marketable real assets, and 10% global fixed income. Cash Flows Since 2012, we contributed a total of four company-owned real property locations from our Building Materials Distribution segment to our Pension Plan, which we then leased from the Pension Plan. These contributions constituted related party transactions. We determined that these contributed properties did not meet the accounting definition of a plan asset within the scope of Accounting Standards Codification 715, Compensation - Retirement Benefits, and, therefore, were not included in plan assets and had no impact on the net pension liability. However, the lease payments and payments for the repurchase of the contributed properties are recorded as pension contributions. During the years ended December 31, 2020, 2019, and 2018, we repurchased two, one, and one, respectively, of the real property locations we previously had contributed to our Pension Plan for approximately $11.4 million (the 2020 Repurchases), $3.6 million (the 2019 Repurchase) and $4.0 million (the 2018 Repurchase), respectively, which were recorded as pension contributions. Our practice is to fund the pension plans in amounts sufficient to meet the minimum requirements of U.S. federal laws and regulations. For the years ended December 31, 2020, 2019, and 2018, we made cash contributions to our pension plans totaling $12.8 million, $5.2 million, and $26.1 million, respectively. During 2020, cash contributions include $11.4 million for the 2020 Repurchases and $0.6 million of lease payments. During 2019, cash contributions include $3.6 million for the 2019 Repurchase and $1.1 million of lease payments. During 2018, cash contributions include a $20.0 million discretionary contribution, $4.0 million for the 2018 Repurchase, and $1.5 million of lease payments. After the Plan Termination, we will have no federally required contributions to the Pension Plan. For 2021, we expect to make cash contributions of approximately $0.4 million to our nonqualified pension plans, reflecting benefit payments to plan participants. Nonqualified pension benefit payments are paid by the company. The following benefit payments are expected to be paid to nonqualified plan participants (in thousands):
2021 |  | $ | 367 |
2022 |  | 380 |
2023 |  | 382 |
2024 |  | 368 |
2025 |  | 314 |
Years 2026-2030 |  | 1,373 |

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