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Employee Benefits | 3 Months Ended
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Mar. 31, 2022
Compensation And Retirement Disclosure [Abstract] |
Employee Benefits | 3. Employee Benefits Defined Contribution Plans We sponsor defined contribution 401(k) savings plans for certain hourly and salaried employees. Employees may contribute a portion of their compensation to the plans and we match a specified percentage of these contributions in equivalent form of the investments elected by the employee. Additionally, we make fixed annual contributions for certain hourly and salaried employees in varying amounts depending on hire date. Deferred Compensation Plan We sponsor a non-qualified, unfunded, unsecured plan of deferred compensation for certain employees who would otherwise suffer a loss of benefits under our defined contribution plan as a result of the limitations imposed by the Internal Revenue Code of 1986. Despite the plan being an unfunded plan, we make an annual contribution to a rabbi trust to fulfill future funding obligations, as contemplated by the terms of the plan. The assets in the trust are held in various investment funds at certain registered investment companies and are accounted for as equity investments with changes in fair value recorded within Other expense, net (see Note 8). Assets of our deferred compensation plan are included in Other assets, classified within Level 1 of the fair value hierarchy and are measured and recorded at fair value based on their quoted market prices. The fair value of these assets at March 31, 2022 and December 31, 2021 was $10.1 million and $10.5 million, respectively. Offsetting liabilities relating to the deferred compensation plan are included in Other accrued liabilities and Long-term liabilities. Other Benefits Short-Term Incentive Plans (“STI Plans”). We have annual short-term incentive compensation plans for senior management and certain other employees payable at our election in cash, shares of common stock or a combination of cash and shares of common stock. Amounts earned under STI Plans are based on our adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), modified for certain safety, quality, delivery, cost and individual performance factors. The Adjusted EBITDA targets are determined based on the return on adjusted net assets. Most of our production facilities have similar programs for both hourly and salaried employees. As of March 31, 2022, we had a liability of $4.8 million recorded within Accrued salaries, wages and related expenses for estimated probable future payments relating to the three month performance period of our 2022 STI Plan. We provide other benefits for certain members of senior management, including certain of our named executive officers, related to terminations of employment in specified circumstances, including in connection with a change in control, by us without cause and by the executive officer with good reason. Defined Benefit Plans Pension. We sponsor defined benefit pension plans for certain hourly bargaining unit employees and salaried employees. Pension benefits generally depend on length of service, job grade and remuneration. Substantially all benefits are paid through pension trusts that are sufficiently funded to ensure that all plans can pay benefits to retirees as they become due. We use a December 31 measurement date for our pension plans. We also provide contributions to multi-employer pension plans sponsored by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC, the International Association of Machinists and certain other unions at certain of our production facilities. OPEB. We sponsor a healthcare and life insurance postretirement benefit plan (“OPEB”) covering certain eligible retirees. Generally, the medical plans are unfunded and pay a percentage of medical expenses, reduced by deductibles and other coverage. Life benefits are generally provided by insurance contracts. We use a December 31 measurement date for our OPEB plan. Salaried VEBA Postretirement Obligation. Certain retirees who retired prior to 2004 and certain employees who were hired prior to February 2002 and have subsequently retired or will retire with the requisite age and service, along with their surviving spouses and eligible dependents, are eligible to participate in a voluntary employees’ beneficiary association (“VEBA”) that provides healthcare cost, medical cost and long-term care insurance cost reimbursement benefits (“Salaried VEBA”). We have an ongoing obligation with no express termination date to make annual variable cash contributions up to a maximum of $2.9 million to the Salaried VEBA. No payment was required with respect to 2021 during the quarter ended March 31, 2022. We account for the Salaried VEBA as a defined benefit plan in our financial statements. The following table presents the total expense related to all postretirement benefit plans (in millions of dollars):
|  | Quarter Ended March 31, |
|  | 2022 |  |  | 2021 |
Defined contribution plans1 |  | $ | 5.7 |  |  | $ | 3.4 |
Deferred compensation plan2 |  |  | (0.3 | ) |  |  | — |
Multiemployer pension plans1 |  |  | 1.2 |  |  |  | 1.1 |
Salaried VEBA2 |  |  | 0.9 |  |  |  | 0.6 |
Pension plans3 |  |  | 1.4 |  |  |  | — |
OPEB3 |  |  | 0.9 |  |  |  | — |
Total |  | $ | 9.8 |  |  | $ | 5.1 |
1 | Substantially all of the expense related to employee benefits are in Cost of products sold, excluding depreciation and amortization and other items (“Cost of products sold” or “COGS”) with the remaining balance in Selling, general, administrative, research and development (“SG&A and R&D”).
2 | The deferred compensation plan and the current service cost component of Net periodic postretirement benefit cost relating to Salaried VEBA are included within our Statements of Consolidated Income in SG&A and R&D for all periods presented. All other components of Net periodic postretirement benefit cost relating to Salaried VEBA are included within Other expense, net, on our Statements of Consolidated Income.
3 | The current service cost component of Net periodic postretirement benefit cost relating to both the pension plans and the OPEB are included within our Statements of Consolidated Income in COGS for all periods presented. All other components of Net periodic postretirement benefit cost relating to both the pension plans and the OPEB are included within Other expense, net, on our Statements of Consolidated Income.
Components of Net Periodic Postretirement Benefit Cost. Our results of operations included the following impacts associated with the Salaried VEBA, pension plans and OPEB: (i) a charge for service rendered by employees; (ii) a charge for accretion of interest; (iii) a benefit for the expected return on plan assets; (iv) amortization of prior service costs associated with plan amendments; and (v) amortization of net actuarial differences. The following table presents the components of Net periodic postretirement benefit cost (in millions of dollars):
|  | Pension Plans1 |  |  | OPEB |  | Salaried VEBA |
|  | Quarter Ended March 31, |  |  | Quarter Ended March 31, |  | Quarter Ended March 31, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |  | 2022 |  |  | 2021 |
Service cost |  | $ | 1.4 |  |  | $ | — |  |  | $ | 0.4 |  |  | n/a |  | $ | — |  |  | $ | — |
Interest cost |  |  | 0.2 |  |  |  | — |  |  |  | 0.5 |  |  | n/a |  |  | 0.5 |  |  |  | 0.4 |
Expected return on plan assets |  |  | (0.2 | ) |  |  | — |  |  |  | — |  |  | n/a |  |  | (0.8 | ) |  |  | (0.8 | )
Amortization of prior service cost2 |  |  | — |  |  |  | — |  |  |  | — |  |  | n/a |  |  | 1.2 |  |  |  | 0.9 |
Amortization of net actuarial loss |  |  | — |  |  |  | — |  |  |  | — |  |  | n/a |  |  | — |  |  |  | 0.1 |
Total net periodic postretirement benefit cost |  | $ | 1.4 |  |  | $ | — |  |  | $ | 0.9 |  |  | n/a |  | $ | 0.9 |  |  | $ | 0.6 |
1 | Net periodic benefit cost for the quarter ended March 31, 2021 included only the Canadian pension plan. Net periodic benefit cost for the U.S. pension plan was not included in our Statements of Consolidated Income until the March 31, 2021 acquisition date of our Warrick County, Indiana (“Warrick”) facility.
2 | We amortize prior service cost on a straight-line basis over the average remaining years of service to full eligibility for benefits of the active plan participants

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