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EMPLOYEE BENEFIT PLANS | 12 Months Ended
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Dec. 31, 2019
EMPLOYEE BENEFIT PLANS |
EMPLOYEE BENEFIT PLANS | NOTE I – EMPLOYEE BENEFIT PLANS ​ Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans ​ The Company had a noncontributory defined benefit pension plan covering substantially all noncontractual employees hired before January 1, 2006. Benefits under the defined benefit pension plan are generally based on years of service and employee compensation. In June 2013, the Company amended the nonunion defined benefit pension plan to freeze the participants’ final average compensation and years of credited service as of July 1, 2013. The amendment resulted in a plan curtailment and eliminated the service cost of the plan. The plan amendment did not impact the vested benefits of retirees or former employees whose benefits had not yet been paid from the plan. Effective July 1, 2013, participants of the nonunion defined benefit pension plan who were active employees of the Company became eligible for the discretionary defined contribution feature of the Company’s nonunion 401(k) and defined contribution plan in which all eligible noncontractual employees hired subsequent to December 31, 2005 also participate (see Defined Contribution Plans section within this Note). ​ In November 2017, an amendment was executed to terminate the nonunion defined benefit pension plan with a termination date of December 31, 2017. In September 2018, the plan received a favorable determination letter from the IRS regarding qualification of the plan termination. Following receipt of the determination letter, the plan’s actuarial assumptions were updated to remeasure the benefit obligation on a plan termination basis as of September 30, 2018 in connection with recognition of the quarterly pension settlement charge. The Company made assumptions for participant benefit elections, rate of return, and discount rates, including the annuity contract interest rate. Benefit election forms were provided to plan participants and they had an election window during the fourth quarter of 2018 in which they could choose any form of payment allowed by the plan for immediate commencement of payment or defer payment until a later date. ​ The plan began distributing immediate lump sum benefit payments related to the plan termination in fourth quarter 2018 and continued making these distributions through third quarter 2019. During third quarter 2019, the plan purchased a nonparticipating annuity contract from an insurance company for $14.0 million to settle the pension obligation related to the vested benefits of approximately 120 plan participants and beneficiaries who were either receiving monthly benefit payments at the time of the contract purchase or who did not elect to receive a lump sum benefit upon plan termination. The remaining benefit obligation of $1.5 million for the vested benefits of 30 plan participants who could not be located for payment was transferred to the Pension Benefit Guaranty Corporation (the “PBGC”) during third quarter 2019. The Company made $7.7 million of tax-deductible cash contributions to the plan in third quarter 2019 to fund the plan benefit and expense distributions in excess of plan assets. Termination of the nonunion defined benefit plan was completed in 2019 and the plan was liquidated as of December 31, 2019. ​ The plan had previously purchased a $7.6 million nonparticipating annuity contract from an insurance company during 2017 to settle the pension obligation related to the vested benefits of approximately 50 plan participants and beneficiaries receiving monthly benefit payments at the time of the contract purchase. The Company recognized pension settlement expense as a component of net periodic benefit cost related to the nonparticipating annuity contract purchases in 2019 and 2017, the transfer of the remaining benefit obligation to the PBGC in 2019, and lump-sum benefit distributions from the plan in 2019, 2018, and 2017. The pension settlement expense amounts are presented in the tables within this Note. In 2019, an additional $4.0 million pension termination expense (with no tax benefit) was recorded with pension settlement expense in the “Other, net” line of other income (costs) in the consolidated statements of operations. This noncash charge was related to an amount which was stranded in accumulated other comprehensive loss until the nonunion defined benefit pension obligation was settled upon plan termination. The stranded amount originally related to a previous valuation allowance on deferred tax assets for nonunion defined benefit pension liabilities. ​ The Company also has an unfunded supplemental benefit plan (“SBP”) for the purpose of supplementing benefits under the Company’s nonunion defined benefit pension plan for executive officers designated as participants in the SBP by the Company’s Board of Directors. The Compensation Committee of the Company’s Board of Directors (“Compensation Committee”) elected to close the SBP to new entrants and to place a cap on the maximum payment per participant to existing participants in the SBP effective January 1, 2006. In place of the SBP, eligible officers of the Company appointed after 2005 participate in a long-term cash incentive plan (see Cash Long-Term Incentive Compensation Plan section within this Note). Effective December 31, 2009, the Compensation Committee elected to freeze the accrual of benefits for remaining participants under the SBP. With the exception of early retirement penalties that may apply in certain cases, the valuation inputs for calculating the frozen SBP benefits to be paid to participants, including final average salary and the interest rate, were frozen at December 31, 2009. As presented in the tables within this Note, pension settlement expense and a corresponding reduction in the net actuarial loss was recorded in 2019 related to lump-sum SBP benefit distributions. The SBP did not incur pension settlement expense in 2018 or 2017. ​ The Company sponsors an insured postretirement health benefit plan that provides supplemental medical benefits and dental and vision benefits primarily to certain officers of the Company and certain subsidiaries. Effective January 1, 2011, retirees began paying a portion of the premiums under the plan according to age and coverage levels. The amendment to the plan to implement retiree premiums resulted in an unrecognized prior service credit which was recorded in accumulated other comprehensive loss and is being amortized over approximately nine years. ​ The following table discloses the changes in benefit obligations and plan assets of the Company’s nonunion defined benefit plans for years ended December 31, the measurement date of the plans: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nonunion Defined | ​ | Supplemental | ​ | Postretirement |
​ | ​ | Benefit Pension Plan | ​ | Benefit Plan | ​ | Health Benefit Plan |
​ |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018 |
​ | ​ | (in thousands) |
Change in benefit obligations | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Benefit obligations at December 31, 2018 | ​ | $ | 33,373 | ​ | $ | 137,417 | ​ | $ | 3,948 | ​ | $ | 3,897 | ​ | $ | 29,488 | ​ | $ | 24,097 | ​
Service cost | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 320 | ​ |  | 366 | ​
Interest cost | ​ |  | 624 | ​ |  | 4,269 | ​ |  | 39 | ​ |  | 108 | ​ |  | 1,212 | ​ |  | 837 | ​
Actuarial (gain) loss(1) | ​ |  | 300 | ​ |  | (3,685) | ​ |  | 186 | ​ |  | (57) | ​ |  | (9,542) | ​ |  | 4,957 | ​
Benefits paid | ​ |  | (34,297) | ​ |  | (105,522) | ​ |  | (937) | ​ |  | — | ​ |  | (848) | ​ |  | (769) | ​
Settlement loss | ​ |  | — | ​ |  | 894 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​
Benefit obligations at December 31, 2019 | ​ |  | — | ​ |  | 33,373 | ​ |  | 3,236 | ​ |  | 3,948 | ​ |  | 20,630 | ​ |  | 29,488 | ​
Change in plan assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Fair value of plan assets at December 31, 2018 | ​ |  | 26,646 | ​ |  | 124,831 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​
Actual return on plan assets | ​ |  | (59) | ​ |  | 1,837 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​
Employer contributions | ​ |  | 7,710 | ​ |  | 5,500 | ​ |  | 937 | ​ |  | — | ​ |  | 848 | ​ |  | 769 | ​
Benefits paid | ​ |  | (34,297) | ​ |  | (105,522) | ​ |  | (937) | ​ |  | — | ​ |  | (848) | ​ |  | (769) | ​
Fair value of plan assets at December 31, 2019 | ​ |  | — | ​ |  | 26,646 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​
Funded status at period end | ​ | $ | — | ​ | $ | (6,727) | ​ | $ | (3,236) | ​ | $ | (3,948) | ​ | $ | (20,630) | ​ | $ | (29,488) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accumulated benefit obligation | ​ | $ | — | ​ | $ | 33,373 | ​ | $ | 3,236 | ​ | $ | 3,948 | ​ | $ | 20,630 | ​ | $ | 29,488 | ​
(1) | The actuarial gain on the nonunion defined benefit pension plan for 2018 was primarily due to an increase in the discount rate used to remeasure the plan obligation at December 31, 2018 versus December 31, 2017. The actuarial gain on the postretirement health benefit plan for 2019 is primarily related to the impact of a lower cost prescription drug plan effective January 1, 2020, versus the actuarial loss for 2018 which was primarily related to changes in the medical trend rate assumption used to measure the plan obligation at the measurement date.
​ Amounts recognized in the consolidated balance sheets at December 31 consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nonunion Defined | ​ | Supplemental | ​ | Postretirement |
​ | ​ | Benefit Pension Plan | ​ | Benefit Plan | ​ | Health Benefit Plan |
​ |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018 |
​ | ​ | (in thousands) |
Current portion of pension and postretirement liabilities | ​ | $ | — | ​ | $ | (6,727) | ​ | $ | (2,886) | ​ | $ | (937) | ​ | $ | (686) | ​ | $ | (995) | ​
Pension and postretirement liabilities, less current portion | ​ |  | — | ​ |  | — | ​ |  | (350) | ​ |  | (3,011) | ​ |  | (19,944) | ​ |  | (28,493) | ​
Liabilities recognized | ​ | $ | — | ​ | $ | (6,727) | ​ | $ | (3,236) | ​ | $ | (3,948) | ​ | $ | (20,630) | ​ | $ | (29,488) | ​
​ The following is a summary of the components of net periodic benefit cost for the Company’s nonunion benefit plans for the years ended December 31: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nonunion Defined | ​ | Supplemental | ​ | Postretirement | ​
​ | ​ | Benefit Pension Plan | ​ | Benefit Plan | ​ | Health Benefit Plan | ​
​ |  | 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017 |
​ | ​ | (in thousands) | ​ |  | ​ | ​
Service cost | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 320 | ​ | $ | 366 | ​ | $ | 489 | ​
Interest cost | ​ |  | 624 | ​ |  | 4,269 | ​ |  | 4,514 | ​ |  | 39 | ​ |  | 108 | ​ |  | 102 | ​ |  | 1,212 | ​ |  | 837 | ​ |  | 1,060 | ​
Expected return on plan assets | ​ |  | (31) | ​ |  | (1,582) | ​ |  | (5,712) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​
Amortization of prior service credit | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (33) | ​ |  | (93) | ​ |  | (190) | ​
Pension settlement expense(1) | ​ |  | 4,164 | ​ |  | 12,925 | ​ |  | 4,156 | ​ |  | 370 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​
Amortization of net actuarial loss(2) | ​ |  | 260 | ​ |  | 2,583 | ​ |  | 3,132 | ​ |  | 95 | ​ |  | 81 | ​ |  | 82 | ​ |  | 898 | ​ |  | 304 | ​ |  | 694 | ​
Net periodic benefit cost | ​ | $ | 5,017 | ​ | $ | 18,195 | ​ | $ | 6,090 | ​ | $ | 504 | ​ | $ | 189 | ​ | $ | 184 | ​ | $ | 2,397 | ​ | $ | 1,414 | ​ | $ | 2,053 | ​
(1) | For 2019, the presentation of pension settlement expense excludes a $4.0 million noncash pension termination expense which is further described within this Note.
(2) | The Company amortizes actuarial losses over the average remaining active service period of the plan participants and does not use a corridor approach.
​ The following is a summary of the pension settlement distributions and pension settlement expense for the years ended December 31: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nonunion Defined | ​ | Supplemental |
​ | ​ | Benefit Pension Plan | ​ | Benefit Plan |
​ |  | 2019(1) |  | 2018(2) |  | 2017(3) |  | 2019(4) |  | 2018 |  | 2017(5) |
​ | ​ | (in thousands, except per share data) |
Pension settlement distributions | ​ | $ | 33,938 | ​ | $ | 105,279 | ​ | $ | 26,261 | ​ | $ | 937 | ​ | $ | — | ​ | $ | 989 | ​
Pension settlement expense, pre-tax(6) | ​ | $ | 4,164 | ​ | $ | 12,925 | ​ | $ | 4,156 | ​ | $ | 370 | ​ | $ | — | ​ | $ | — | ​
Pension settlement expense per diluted share, net of taxes | ​ | $ | 0.12 | ​ | $ | 0.36 | ​ | $ | 0.10 | ​ | $ | 0.01 | ​ | $ | — | ​ | $ | — | ​
(1) | Pension settlement distributions for 2019 represent $18.4 million of lump-sum benefit distributions, including participant-elected distributions associated with the plan’s termination, a $14.0 million nonparticipating annuity contract purchase, and a $1.5 million transfer of benefit obligations to the PBGC.
(2) | Pension settlement distributions for 2018 represent lump-sum benefit distributions, including participant-elected distributions associated with the plan’s termination.
(3) | Pension settlement distributions for 2017 represent $18.7 million of lump-sum benefit distributions and a $7.6 million nonparticipating annuity contract purchase.
(4) | The 2019 SBP distribution excludes the portion of the benefit related to an officer retirement which is delayed for six months after retirement in accordance with IRC Section 409A. The pension settlement expense related to the delayed distribution is recognized in 2019.
(5) | The 2017 SBP distribution represents the portion of a benefit related to an officer retirement that occurred in 2016 which was delayed for six months after retirement in accordance with IRC Section 409A. The pension settlement expense related to this distribution was recognized in 2016.
(6) | For 2019, the presentation of pension settlement expense excludes a $4.0 million noncash pension termination expense which is further described within this Note.
​ Included in accumulated other comprehensive loss at December 31 were the following pre-tax amounts that have not yet been recognized in net periodic benefit cost: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nonunion Defined | ​ | Supplemental | ​ | Postretirement |
​ | ​ | Benefit Pension Plan | ​ | Benefit Plan | ​ | Health Benefit Plan |
​ |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018 |
​ | ​ | (in thousands) |
Unrecognized net actuarial (gain) loss | ​ | $ | — | ​ | $ | 4,034 | ​ | $ | 127 | ​ | $ | 405 | ​ | $ | (3,024) | ​ | $ | 7,416 | ​
Unrecognized prior service credit | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (1) | ​ |  | (34) | ​
Total | ​ | $ | — | ​ | $ | 4,034 | ​ | $ | 127 | ​ | $ | 405 | ​ | $ | (3,025) | ​ | $ | 7,382 | ​
​ ​ For ongoing plans, the discount rate is determined by matching projected cash distributions with appropriate high-quality corporate bond yields in a yield curve analysis. After updating actuarial assumptions for the nonunion defined benefit pension plan on a termination basis (as presented for 2018 in the table below), a short-term discount rate which represented the Company’s current borrowing rate was utilized to discount the plan’s annuity contract obligation from the expected date to settle the plan obligation back to the December 31, 2018 measurement date. Weighted-average assumptions used to determine nonunion benefit obligations at December 31 were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nonunion Defined | ​ | Supplemental | ​ | Postretirement |
​ | ​ | Benefit Pension Plan | ​ | Benefit Plan | ​ | Health Benefit Plan |
​ |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018 |
Discount rate | ​ | N/A | ​ | 3.9 | % | 2.4 | % | 3.6 | % | 3.1 | % | 4.2 | %
​ Weighted-average assumptions used to determine net periodic benefit cost for the Company’s nonunion benefit plans for the years ended December 31 were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nonunion Defined | ​ | Supplemental | ​ | Postretirement |
​ | ​ | Benefit Pension Plan | ​ | Benefit Plan | ​ | Health Benefit Plan |
​ |  | 2019(1) |  | 2018(2) |  | 2017(3) |  | 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017 |
Discount rate | ​ | 3.9 | % | 3.1 | % | 3.4 | % | 3.6 | % | 2.8 | % | 2.7 | % | 4.2 | % | 3.5 | % | 4.0 | %
Expected return on plan assets | ​ | 1.4 | % | 1.4 | % | 6.5 | % | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A | ​
(1) | The discount rate presented was used to determine the first quarter 2019 expense, and the short-term discount rate established upon quarterly settlements in 2019 of 3.8% and 3.7%, was used to calculate the expense for the second and third quarter of 2019, respectively. The expected return on plan assets presented was used to determine nonunion pension expense for first quarter 2019, and a 0.0% expected return on plan assets was used to determine nonunion pension expense for the second and third quarters of 2019, as further discussed in the following Nonunion Defined Benefit Pension Plan Assets section within this Note.
(2) | The discount rate presented was used to determine the first quarter 2018 credit, and the interim discount rate established upon each quarterly settlement in 2018 of 3.6%, 3.8%, and 3.6% was used to calculate the expense for the second, third, and fourth quarter of 2018, respectively.
(3) | The discount rate presented was used to determine the first quarter 2017 credit, and the interim discount rate established upon each quarterly settlement in 2017 of 3.4%, 3.2%, and 3.1% was used to calculate the expense/credit for the second, third, and fourth quarter of 2017, respectively. The expected return on plan assets presented was used to determine the nonunion pension credit for the first half of 2017, and a 2.5% expected return on plan assets was used to determine nonunion pension expense for the second half of 2017, as further discussed in the following Nonunion Defined Benefit Pension Plan Assets section within this Note.
​ The assumed health care cost trend rates for the Company’s postretirement health benefit plan at December 31 were as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​
​ |  | 2019 |  | 2018 |
Health care cost trend rate assumed for next year(1) | ​ | 7.5 | % | 8.0 | %
Rate to which the cost trend rate is assumed to decline | ​ | 5.0 | % | 5.0 | %
Year that the rate reaches the cost trend assumed rate |  | 2026 |  | 2026 |
(1) | At each December 31 measurement date, health care cost rates for the following year are based on known premiums for the fully-insured postretirement health benefit plan. Therefore, the first year of assumed health care cost trend rates presented as of December 31, 2019 and 2018 are for 2021 and 2020, respectively.
​ Estimated future benefit payments from the Company’s SBP and postretirement health benefit plans, which reflect expected future service as appropriate, as of December 31, 2019 are as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Supplemental |  | Postretirement |
​ | ​ | Benefit | ​ | Health |
​ | ​ | Plan | ​ | Benefit Plan |
​ | ​ | ​ | ​ | ​ | ​ | ​ |
2020 | ​ | $ | 2,886 | ​ | $ | 686 | ​
2021 | ​ | $ | — | ​ | $ | 735 | ​
2022 | ​ | $ | — | ​ | $ | 754 | ​
2023 | ​ | $ | — | ​ | $ | 849 | ​
2024 | ​ | $ | — | ​ | $ | 815 | ​
2025-2029 | ​ | $ | 424 | ​ | $ | 4,428 | ​
​ Nonunion Defined Benefit Pension Plan Assets Prior to plan termination, the Company established the expected rate of return on nonunion defined benefit pension plan assets, which are held in trust, by considering the historical and expected returns for the plan’s current mix of investments. ​ In consideration of plan termination in recent years, the overall objectives of the investment strategy for the Company’s nonunion defined benefit pension plan became more focused on asset preservation, while continuing to ensure the plan would provide for required benefits under the plan in a manner that satisfies the fiduciary requirements of ERISA and limit the possibility of experiencing a substantial investment loss over a one-year period. During the second half of 2017, a more conservative approach was taken to minimize the impact of market volatility by transferring the plan’s equity investments to short-duration debt instruments. The plan began liquidating its fixed income securities held in trust during fourth quarter 2018 to fund lump sum benefit distributions related to plan termination benefit elections of participants and in anticipation of distributing the remainder of nonunion defined benefit pension plan assets during 2019. ​ As a result of the changes to the plan’s asset allocation, the plan’s investment rate of return assumption was lowered for the second half of 2017, from 6.5% as of January 1, 2017 to 2.5% as of July 1, 2017. The Company’s long-term expected rate of return utilized in determining its 2018 nonunion defined benefit pension plan expense was 1.4%, net of estimated expenses expected to be paid from plan assets in 2018, and this rate was maintained as the short-term rate of return assumption under plan termination assumptions for the fourth quarter of 2018 and the first quarter of 2019. The Company’s short-term rate of return assumption, net of estimated expenses expected to be paid from plan assets, was lowered to 0.0% for the second and third quarters of 2019, as estimated expenses expected to be paid from plan assets were expected to offset investment returns on plan assets which were held in money market mutual funds during 2019. ​ As previously discussed, the plan began liquidating its income securities in the fourth quarter of 2018 and held investments primarily in cash equivalents as of December 31, 2018. Termination of the nonunion defined benefit plan was completed in 2019 and the plan was liquidated as of December 31, 2019. ​ The fair value of the Company’s nonunion defined benefit pension plan assets at December 31, 2018, by major asset category and fair value hierarchy level (see Fair Value Measurements accounting policy in Note B), were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Fair Value Measurements Using | ​
​ | ​ | ​ | ​ | ​ | Quoted Prices |  | Significant |  | Significant | ​
​ | ​ | ​ | ​ | ​ | In Active | ​ | Observable | ​ | Unobservable | ​
​ | ​ | ​ | ​ | ​ | Markets | ​ | Inputs | ​ | Inputs | ​
​ |  | Total |  | (Level 1) |  | (Level 2) |  | (Level 3) |
​ | ​ | (in thousands) | ​
Cash and cash equivalents(1) | ​ | $ | 19,856 | ​ | $ | 19,856 | ​ | $ | — | ​ | $ | — | ​
Debt instruments(2) | ​ |  | 10 | ​ |  | — | ​ |  | 10 | ​ |  | — | ​
Floating rate loans(3) | ​ |  | 6,780 | ​ |  | 6,780 | ​ |  | — | ​ |  | — | ​
Fair value of plan assets at December 31, 2018 | ​ | $ | 26,646 | ​ | $ | 26,636 | ​ | $ | 10 | ​ | $ | — | ​
(1) | Consists primarily of money market mutual funds.
(2) | Includes a debt income security which was liquidated subsequent to December 31, 2018. The sale price of the security was used to determine the fair value at December 31, 2018.
(3) | Consists of a floating rate loan mutual fund.
​ Deferred Compensation Plans ​ The Company has deferred salary agreements with certain executives for which liabilities of $2.1 million and $2.5 million were recorded as of December 31, 2019 and 2018, respectively. The deferred salary agreements include a provision that immediately vests all benefits and provides for a lump-sum payment upon a change in control of the Company that is followed by a termination of the executive. The Compensation Committee elected to close the deferred salary agreement program to new entrants effective January 1, 2006. In place of the deferred salary agreement program, officers appointed after 2005 participate in the Cash Long-Term Incentive Plan (see Cash Long-Term Incentive Compensation Plan section within this Note). ​ The Company maintains a Voluntary Savings Plan (“VSP”), a nonqualified deferred compensation program for the benefit of certain executives of the Company and certain subsidiaries. Eligible employees may defer receipt of a portion of their salary and incentive compensation into the VSP by making an election prior to the beginning of the year in which the salary compensation is payable and, for incentive compensation, by making an election at least six months prior to the end of the performance period to which the incentive relates. The Company credits participants’ accounts with applicable rates of return based on a portfolio selected by the participants from the investments available in the plan. The Company match related to the VSP was suspended beginning January 1, 2010. All deferrals, Company match, and investment earnings are considered part of the general assets of the Company until paid. Accordingly, the consolidated balance sheets reflect the fair value of the aggregate participant balances, based on quoted prices of the mutual fund investments, as both an asset and a liability of the Company. As of December 31, 2019 and 2018, VSP balances of $2.4 million and $2.3 million, respectively, were included in other long-term assets with a corresponding amount recorded in other long-term liabilities. ​ Defined Contribution Plans ​ The Company and its subsidiaries have various defined contribution 401(k) plans that cover substantially all employees. The plans permit participants to defer a portion of their salary up to a maximum of 69% as determined under Section 401(k) of the IRC. For certain participating subsidiaries, the Company matches 50% of nonunion participant contributions up to the first 6% of annual compensation. The plans also allow for discretionary 401(k) Company contributions determined annually. The Company’s matching expense for the 401(k) plans totaled $6.8 million, $6.1 million, and $5.6 million for 2019, 2018, and 2017, respectively. ​ Effective July 1, 2013, participants in the nonunion defined benefit pension plan who were active employees of the Company became eligible for the discretionary defined contribution feature of Company’s nonunion 401(k) and defined contribution plan in which all eligible noncontractual employees hired subsequent to December 31, 2005 also participate. Participants are fully vested in their benefits under the defined contribution plan after three years of service. The Company recognized expense of $10.9 million, $11.6 million, and $8.3 million in 2019, 2018, and 2017, respectively, related to its discretionary contributions to the defined contribution plan. ​ Cash Long-Term Incentive Compensation Plan ​ The Company maintains a performance-based Cash Long-Term Incentive Compensation Plan (“LTIP”) for officers of the Company or its subsidiaries who are not active participants in the deferred salary agreement program. The LTIP incentive, which is earned over three years, is based, in part, upon a proportionate weighting of return on capital employed and shareholder returns compared to a peer group, as specifically defined in the plan document. As of December 31, 2019, 2018, and 2017, $13.7 million, $18.3 million, $6.6 million, respectively, were accrued for future payments under the plans. ​ Other Plans ​ Other long-term assets include $53.2 million and $49.3 million at December 31, 2019 and 2018, respectively, in the cash surrender value of life insurance policies. These policies are intended to provide funding for long-term nonunion benefit arrangements such as the Company’s SBP and deferred compensation plans. A portion of the Company’s cash surrender value of variable life insurance policies have investments, through separate accounts, in equity and fixed income securities and, therefore, are subject to market volatility. The Company recognized a gain of $3.7 million during 2019, a loss of less than $0.1 million during 2018, and a gain of $2.6 million during 2017, associated with changes in the cash surrender value and proceeds from life insurance policies. ​ Multiemployer Plans ​ ABF Freight System, Inc. and certain other subsidiaries reported in the Company’s Asset-Based operating segment (“ABF Freight”) contribute to multiemployer pension and health and welfare plans, which have been established pursuant to the Taft-Hartley Act, to provide benefits for its contractual employees. ABF Freight’s contributions generally are based on the time worked by its contractual employees, in accordance with the 2018 ABF NMFA and other related supplemental agreements. ABF Freight recognizes as expense the contractually required contributions for each period and recognizes as a liability any contributions due and unpaid. ​ The multiemployer plans to which ABF Freight segment primarily contributes are jointly-trusteed (half of the trustees of each plan are selected by the participating employers, the other half by the IBT) and cover collectively-bargained employees of multiple unrelated employers. Due to the inherent nature of multiemployer plans, there are risks associated with participation in these plans that differ from single-employer plans. Assets received by the plans are not segregated by employer, and contributions made by one employer can be and are used to provide benefits to current and former employees of other employers. If a participating employer in a multiemployer pension plan no longer contributes to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. If a participating employer in a multiemployer pension plan completely withdraws from the plan, it owes to the plan its proportionate share of the plan’s unfunded vested benefits, referred to as a withdrawal liability. A complete withdrawal generally occurs when the employer permanently ceases to have an obligation to contribute to the plan. Withdrawal liability is also owed in the event the employer withdraws from a plan in connection with a mass withdrawal, which generally occurs when all or substantially all employers withdraw from the plan pursuant to an agreement in a relatively short period of time. Were ABF Freight to completely withdraw from certain multiemployer pension plans, whether in connection with a mass withdrawal or otherwise, under current law, ABF Freight would have material liabilities for its share of the unfunded vested liabilities of each such plan. ​ Pension Plans The 25 multiemployer pension plans to which ABF Freight contributes vary greatly in size and in funded status. Contribution obligations to these plans are generally specified in the 2018 ABF NMFA, which will remain in effect through June 30, 2023. The funding obligations to the pension plans are intended to satisfy the requirements imposed by the Pension Protection Act of 2006 (the “PPA”), which was permanently extended by the Multiemployer Pension Reform Act (the “Reform Act”) included in the Consolidated and Further Continuing Appropriations Act of 2015. Through the term of its current collective bargaining agreement, ABF Freight’s contribution obligations generally will be satisfied by making the specified contributions when due. However, the Company cannot determine with any certainty the contributions that will be required under future collective bargaining agreements for ABF Freight’s contractual employees. ​ The PPA requires that “endangered” (generally less than 80% funded and commonly called “yellow zone”) plans adopt “funding improvement plans” and that “critical” (generally less than 65% funded and commonly called “red zone”) plans adopt “rehabilitation plans” that are intended to improve the plan’s funded status over time. The Reform Act includes provisions to address the funding of multiemployer pension plans in “critical and declining” status, including certain of those in which ABF Freight participates. Critical and declining status is applicable to critical status plans that are projected to become insolvent anytime within the next 14 plan years, or if the plan is projected to become insolvent within the next 19 plan years and either the plan’s ratio of inactive participants to active participants exceeds two to one or the plan’s funded percentage is less than 80%. Provisions of the Reform Act include, among others, providing qualifying plans the ability to self-correct funding issues, subject to various requirements and restrictions, including applying to the U.S. Department of Treasury (the “Treasury Department”) for the reduction of certain accrued benefits. ​ Based on the most recent annual funding notices the Company has received, most of which are for plan year ended December 31, 2018, approximately 57% of ABF Freight’s multiemployer pension plan contributions for the year ended December 31, 2019 were made to plans that are in “critical and declining status,” including the Central States, Southeast and Southwest Areas Pension Plan (the “Central States Pension Plan”) discussed below, approximately 3% were made to plans that are in “critical status” but not “critical and declining status,” and approximately 4% were made to plans that are in “endangered status,” each as defined by the PPA. ABF Freight’s participation in multiemployer pension plans is summarized in the table below. The multiemployer pension plans listed separately in the table represent plans that are individually significant to the Asset-Based segment based on the amount of plan contributions. The severity of a plan’s underfunded status was also considered in the analysis of individually significant funds to be separately disclosed. ​ Significant multiemployer pension funds and key participation information were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Pension | ​ | FIP/RP | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
​ | ​ | ​ | ​ | Protection Act | ​ | Status | ​ | Contributions (d) | ​ | ​
​ | ​ | EIN/Pension | ​ | Zone Status (b) | ​ | Pending/ | ​ | (in thousands) | ​ | Surcharge
Legal Name of Plan |  | Plan Number (a) |  | 2019 |  | 2018 |  | Implemented (c) |  | 2019 |  | 2018 |  | 2017 |  | Imposed (e)
Central States, Southeast and Southwest Areas Pension Plan(1)(2) |  | 36-6044243 |  | Critical and Declining |  | Critical and Declining |  | Implemented(3) | ​ | $ | 75,803 | ​ | $ | 74,177 | ​ | $ | 78,230 |  | No
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Western Conference of Teamsters Pension Plan(2) |  | 91-6145047 |  | Green |  | Green |  | No | ​ |  | 24,860 | ​ |  | 25,268 | ​ |  | 26,320 |  | No
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Central Pennsylvania Teamsters Defined Benefit Plan(1)(2) |  | 23-6262789 |  | Green |  | Green |  | No | ​ |  | 13,907 | ​ |  | 13,393 | ​ |  | 13,391 |  | No
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
I. B. of T. Union Local No. 710 Pension Fund(5)(6) |  | 36-2377656 |  | Green(4) |  | Green(4) |  | No | ​ |  | 10,164 | ​ |  | 9,929 | ​ |  | 10,054 |  | No
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
New England Teamsters Pension Fund(7)(8) |  | 04-6372430 |  | Critical and Declining(9) |  | Critical and Declining(9) |  | Implemented(10) | ​ |  | 4,802 | ​ |  | 20,090 | ​ |  | 5,026 | ​ | No
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
All other plans in the aggregate | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | 24,210 | ​ |  | 24,392 | ​ |  | 25,395 | ​ | ​
Total multiemployer pension contributions paid(11) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 153,746 | ​ | $ | 167,249 | ​ | $ | 158,416 | ​ | ​
Table Heading Definitions ​
(a) | The “EIN/Pension Plan Number” column provides the Federal Employer Identification Number (EIN) and the three-digit plan number, if applicable.
(b) | Unless otherwise noted, the most recent PPA zone status available in 2019 and 2018 is for the plan’s year-end status at December 31, 2018 and 2017, respectively. The zone status is based on information received from the plan and was certified by the plan’s actuary. Green zone funds are those that are in neither endangered, critical, or critical and declining status and generally have a funded percentage of at least 80%.
(c) | The “FIP/RP Status Pending/Implemented” column indicates if a funding improvement plan (FIP) or a rehabilitation plan (RP), if applicable, is pending or has been implemented.
(d) | Amounts reflect contributions made in the respective year and differ from amounts expensed during the year.
(e) | The surcharge column indicates if a surcharge was paid by ABF Freight to the plan.
​
| (1) | ABF Freight System, Inc. was listed by the plan as providing more than 5% of the total contributions to the plan for the plan years ended December 31, 2018 and 2017.
| (2) | Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500 filed for the plan years ended December 31, 2018 and 2017.
| (3) | Adopted a rehabilitation plan effective March 25, 2008 as updated. Utilized amortization extension granted by the IRS effective December 31, 2003.
| (4) | PPA zone status relates to plan years February 1, 2018 – January 31, 2019 and February 1, 2017 – January 31, 2018.
| (5) | The Company was listed by the plan as providing more than 5% of the total contributions to the plan for the plan years ended January 31, 2019 and 2018.
| (6) | Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500 filed for the plan years ended January 31, 2019 and 2018.
| (7) | Contributions include $1.6 million and $15.7 million for 2019 and 2018, respectively, related to the multiemployer pension fund withdrawal liability which is further discussed in this Note.
| (8) | Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500 filed for the plan years ended September 30, 2018 and 2017.
| (9) | PPA zone status relates to plan years October 1, 2018 – September 30, 2019 and October 1, 2017 – September 30, 2018.
| (10) | Adopted a rehabilitation plan effective January 1, 2009.
| (11) | Contribution levels can be impacted by several factors such as changes in business levels and the related time worked by contractual employees, contractual rate increases for pension benefits, and the specific funding structure, which differs among funds. The 2018 ABF NMFA and the related supplemental agreements provided for contributions to multiemployer pension plans to be frozen at the current rates for each fund. The year-over-year changes in multiemployer pension plan contributions presented above were influenced by the previously mentioned payments related to the New England Pension Fund and changes in Asset-Based business levels.
​ For 2019, 2018, and 2017, approximately one half of ABF Freight’s multiemployer pension contributions were made to the Central States Pension Plan. The funded percentages of the Central States Pension Plan, as set forth in information provided by the Central States Pension Plan, were 27.2%, and 37.8% as of January 1, 2018 and 2017, respectively. ABF Freight received a Notice of Critical and Declining Status for the Central States Pension Plan dated March 29, 2019, in which the plan’s actuary certified that, as of January 1, 2019, the plan is in critical and declining status, as defined by the Reform Act. Although the future of the Central States Pension Plan is impacted by a number of factors, without legislative action, the plan is currently projected to become insolvent within 6 years. ​ On July 9, 2018, ABF Freight reached a tentative agreement with the IBT bargaining representatives for the Northern and Southern New England Supplemental Agreements on terms for new supplemental agreements to the 2018 ABF NMFA for 2018 to 2023 (the “New England Supplemental Agreements”). The New England Supplemental Agreements were ratified by the local unions in the region covered by the supplements on July 25, 2018. In accordance with the New England Supplemental Agreements, ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund (the “New England Pension Fund”) was restructured under a transition agreement effective on August 1, 2018. The New England Pension Fund was previously restructured to utilize a “two pool approach,” which effectively subdivides the plan assets and liabilities between two groups of beneficiaries. In accordance with ABF Freight’s transition agreement with the New England Pension Fund, ABF Freight agreed to withdraw from the original pool to which it has historically been a participant (the “Existing Employer Pool”) and transition to a new liability pool (the “New Employer Pool”), which does not have an associated unfunded liability. The terms of the transition are pursuant to the Second Chance Policy on Retroactive Withdrawal Liability, as adopted by the New England Pension Fund. ​ ABF Freight’s transition agreement with the New England Pension Fund triggered a withdrawal liability settlement which satisfies ABF Freight’s existing potential withdrawal liability obligations to the Existing Employer Pool and minimizes the potential for future increases in withdrawal liability under the New Employer Pool. ABF Freight transitioned to the New Employer Pool at a lower pension contribution rate than its previous contribution rate under the Existing Employer Pool, and the new contribution rate will be frozen for a period of 10 years. ​ ABF Freight recognized a one-time charge of $37.9 million (pre-tax) to record the withdrawal liability as of June 30, 2018 when the transition agreement was determined to be probable. The withdrawal liability was partially settled through the initial lump sum cash payment of $15.1 million made in third quarter 2018, and the remainder will be settled with monthly payments to the New England Pension Fund over a period of 23 years with an initial aggregate present value of $22.8 million. In accordance with current tax law, these payments are deductible for income taxes when paid. ​ As of December 31, 2019, the outstanding withdrawal liability totaled $22.0 million, of which $0.6 million and $21.4 million was recorded in accrued expenses and other long-term liabilities, respectively. The fair value of the obligation was $24.5 million at December 31, 2019, which is equal to the present value of the future withdrawal liability payments, discounted at a 3.4% interest rate determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). ​ On May 7, 2019, the Treasury Department approved a benefit reduction rescue plan filed by the trustees of the Western Pennsylvania Teamsters and Employers Pension Fund (the “Western Pennsylvania Pension Fund”). As certified by the plan's actuary, the Western Pennsylvania Pension Fund was in critical and declining status for the plan year beginning January 1, 2019. Prior to the approval of the rescue plan, the Western Pennsylvania Pension Fund was projected to become insolvent in 2028. The authorization to reduce benefits issued by the Treasury Department was effective August 1, 2019. Approximately 1% of ABF Freight’s total multiemployer pension contributions for the year ended December 31, 2019 were made to the Western Pennsylvania Pension Fund. ​ As certified by the plan's actuary, the New York State Teamsters Conference Pension and Retirement Fund (the “New York State Pension Fund”) was in critical status for the plan year beginning January 1, 2019 and in critical and declining status for the plan year beginning January 1, 2018. The Treasury Department issued an authorization to reduce benefits under the New York State Pension Fund effective October 1, 2017. The plan sponsor of the New York State Pension Fund must make an annual determination that, despite all reasonable measures to avoid insolvency, the fund is projected to become insolvent unless a benefit reduction continues. Approximately 1% of ABF Freight’s total multiemployer pension contributions for the year ended December 31, 2019 were made to the New York State Pension Fund. ​ Approximately 1% of ABF Freight’s total multiemployer pension contributions for the year ended December 31, 2019 were made to the Road Carriers Local 707 Pension Fund (the “707 Pension Fund”), which was declared insolvent for the plan year beginning February 1, 2016. While the 707 Pension Fund will continue to administer the fund, the PBGC will provide financial assistance to the fund by paying retiree benefits not to exceed the PBGC guarantee limits for insolvent multiemployer plans. ABF Freight has not received any other notification of plan reorganization or plan insolvency with respect to any multiemployer pension plan to which it contributes. ​ Health and Welfare Plans ABF Freight contributes to 38 multiemployer health and welfare plans which provide health care benefits for active employees and retirees covered under labor agreements. Contributions to multiemployer health and welfare plans totaled $172.0 million, $162.1 million, and $162.2 million, for the year ended December 31, 2019, 2018, and 2017, respectively. The benefit contribution rate for health and welfare benefits increased by an average of approximately 4.0%, 4.1%, and 3.7% primarily on August 1, 2019, 2018, and 2017, respectively, under the ABF Freight’s collective bargaining agreement with the IBT. Other than changes to benefit contribution rates and variances in rates and time worked, there have been no other significant items that affect the comparability of the Company’s 2019, 2018, and 2017 multiemployer health and welfare plan contributions.

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