XML 43 R17.htm IDEA: XBRL DOCUMENT

Employee Benefit Plans

12 Months Ended

Jun. 30, 2019

Compensation and Retirement Disclosure [Abstract]

9. Employee Benefit Plans

Domestic Pension Plan

We maintain a noncontributory defined benefit pension plan for all domestic nonunion employees employed on or prior to December 31, 2013, who meet certain requirements of age, length of service and hours worked per year. Plan benefits are based upon years of service and average compensation, as defined. The measurement dates for the plan were as of June 30, 2019, 2018 and 2017.

We amended the plan to eliminate credit for future service and compensation increases, effective September 2016. The amendment resulted in a pension curtailment gain of $6,822 recorded in other comprehensive income. Separately, we completed a partial settlement of the plan in November 2016 and recognized $1,702 of expense in the consolidated statements of operations.

Changes in the projected benefit obligation, plan assets and funded status of the plan were:

For the Year Ended June 30	2019			2018
Change in projected benefit obligation
Projected benefit obligation at beginning of year		$	61,557		$	63,260
Interest cost			2,407			2,157
Benefits paid			(1,758)			(2,196)
Actuarial (gain) loss			6,321			(1,664)
Projected benefit obligation at end of year		$	68,527		$	61,557

For the Year Ended June 30	2019			2018
Change in plan assets
Fair value of plan assets at beginning of year		$	58,648		$	57,110
Actual return on plan assets			6,860			965
Employer contributions			842			2,768
Benefits paid			(1,757)			(2,195)
Fair value of plan assets at end of year		$	64,593		$	58,648
Funded status at end of year		$	(3,934)		$	(2,909)

The funded status is included in other liabilities in the consolidated balance sheets.

The Company expects to contribute approximately $670 to the plan during 2020. We seek to maintain an asset balance that meets the long-term funding requirements identified by actuarial projections while also satisfying ERISA fiduciary responsibilities.

Accumulated other comprehensive income (loss) related to the plan was:

For the Year Ended June 30	2019			2018
Accumulated Other Comprehensive Income (Loss) Related to Pension Plan
Balance at beginning of period		$	(18,213)		$	(18,059)
Amortization of net actuarial loss			465			453
Current period net actuarial (loss) gain			(2,302)			(607)
Net change			(1,837)			(154)
Balance at end of period		$	(20,050)		$	(18,213)

Amortization of unrecognized net actuarial loss will be approximately $485 during 2020.

Net periodic pension expense was:

For the Year Ended June 30	2019			2018			2017
Service cost–benefits earned during the year		$	—		$	—		$	845
Interest cost on benefit obligation			2,407			2,157			2,045
Expected return on plan assets			(2,842)			(3,236)			(3,389)
Amortization of net actuarial loss			465			453			672
Curtailment expense			—			—			16
Settlement expense			—			—			1,702
Net periodic pension expense		$	30		$	(626)		$	1,891

Significant actuarial assumptions for the plan were:

For the Year Ended June 30	2019		2018		2017
Discount rate for service cost		N/A		N/A		4.0%
Discount rate for interest cost		3.1%		3.9%		3.2%
Expected rate of return on plan assets		4.9%		5.6%		6.1%
Discount rate for year-end benefit obligation		3.6%		4.2%		3.9%

The plan used the Aon Hewitt AA Bond Universe as a benchmark for its discount rate as of June 30, 2019, 2018 and 2017. The discount rate is determined by matching the plan’s timing and amount of expected cash outflows to a bond yield curve constructed from a population of AA-rated corporate bond issues that are generally non-callable and have at least $250 million par value outstanding. From this, the discount rate that results in the same present value is calculated.

Estimated future benefit payments are:

For the Year Ended June 30
2020	$	2,599
2021		2,878
2022		3,113
2023		3,318
2024		3,474
2025–2029		18,828

The plan’s target asset allocations for 2020 and the weighted-average asset allocation of plan assets as of June 30, 2019 and 2018 are:

	Target Allocation	Percentage of Plan Assets
For the Year Ended June 30	2020	2019		2018
Debt securities	57%–77%		67%		63%
Equity securities	18%–38%		28%		26%
Global asset allocation/risk parity(1)	0%–15%		4%		10%
Other	0%–10%		1%		1%

(1)

The global asset allocation/risk parity category consists of a variety of asset classes including, but not limited to, global bonds, global equities, real estate and commodities.

The expected long-term rate of return for the plan’s total assets is generally based on the plan’s asset mix. In determining the rate to use, we consider the expected long-term real returns on asset categories, expectations for inflation, estimates of the effect of active management and actual historical returns.

The investment policy and strategy is to earn a long-term investment return sufficient to meet the obligations of the plan, while assuming a moderate amount of risk in order to maximize investment return. In order to achieve this goal, assets are invested in a diversified portfolio consisting of equity securities, debt securities, and other investments in a manner consistent with ERISA’s fiduciary requirements.

The fair values of the plan assets by asset category were:

	Fair Value Measurements Using
As of June 30, 2019	Level 1			Level 2			Level 3			Total
Cash and cash equivalents		$	215		$	—		$	—		$	215
Common-collective funds
Global large cap equities			—			13,995			4,016			18,011
Fixed income securities			—			43,288			—			43,288
Global asset allocations/risk parity			—			1,446			—			1,446
Other
Global asset allocations/risk parity			—			—			1,447			1,447
Other			—			—			186			186
		$	215		$	58,729		$	5,649		$	64,593

	Fair Value Measurements Using
As of June 30, 2018	Level 1			Level 2			Level 3			Total
Cash and cash equivalents		$	428		$	—		$	—		$	428
Common-collective funds
Global large cap equities			—			11,632			3,811			15,443
Fixed income securities			—			36,671			—			36,671
Global asset allocations/risk parity			—			2,957			—			2,957
Other
Global asset allocations/risk parity			—			—			2,881			2,881
Other			—			—			268			268
		$	428		$	51,260		$	6,960		$	58,648

The table below provides a summary of the changes in the fair value of Level 3 assets:

Change in Fair Value of Level 3 assets	2019			2018
Balance at beginning of period		$	6,960		$	15,959
Redemptions			(4,336)			(9,901)
Purchases			2,800			—
Change in fair value			225			902
Balance at end of period		$	5,649		$	6,960

The following outlines the valuation methodologies used to estimate the fair value of plan assets:

•

Cash and cash equivalents are valued at $1 per unit;

•

Common-collective funds are determined based on current market values of the underlying assets of the fund;

•

Mutual funds and foreign currency deposits are valued using quoted market prices in active markets; and

•

For Level 3 managed assets, business appraisers use a combination of valuations and appraisal methodologies, as well as a number of assumptions to create a price that brokers evaluate. For Level 3 non-managed assets, pricing is provided by various sources, such as issuer or investment manager.

Other employee benefit plans

We provide a 401(k) retirement savings plan, under which United States employees may make pre-tax and post-tax contributions. The Company contributes: (i) a matching contribution equal to 100% of the first 6% of an employee’s contribution; and, (ii) an additional discretionary contribution of up to 4.5% of compensation, depending on the employee’s age and years of service, provided that such contributions comply with ERISA non-discrimination requirements. Employee and Company contributions are subject to certain ERISA limitations. Employees are immediately vested in Company contributions. Our contribution expense was $5,201, $4,937, and $4,154, in 2019, 2018 and 2017, respectively.

Our consolidated balance sheets include other employee-related liabilities of $17,391 and $15,536 as of June 30, 2019 and 2018, respectively, including international retirement plans, supplemental retirement benefits and long-term incentive arrangements. Expense under these plans was $5,685, $4,009, and $4,304 in 2019, 2018 and 2017, respectively.