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Note 7 - Pension and Other Postretirement Benefits
 6 Months Ended
Jun. 30, 2020
Notes to Financial Statements  
Retirement Benefits [Text Block]

NOTE 7 - PENSION AND OTHER POSTRETIREMENT BENEFITS

 

The Company sponsors a defined benefit pension plan (“Plan”) covering certain domestic employees. Benefits are based on each covered employee’s years of service and compensation. The Plan is funded in conformity with the funding requirements of applicable U.S. regulations. The Plan was closed to new participants effective January 1, 2008. Employees hired after this date, in eligible locations, participate in an enhanced 401(k) plan instead of the defined benefit pension plan. Employees hired prior to this date continue to accrue benefits.

 

Additionally, the Company sponsors defined contribution pension plans made available to all domestic and Canadian employees. The Company funds the cost of these benefits as incurred.

 

The Company also sponsors a non-contributory defined benefit postretirement health care plan that provides health benefits to certain domestic and Canadian retirees and eligible spouses and dependent children. The Company funds the cost of these benefits as incurred.

 

The following tables present the components of net periodic benefit costs:

 

  

Pension Benefits

  

Postretirement Benefits

 
  

Three Months Ended
June 30,

  

Three Months Ended
June 30,

 
  

2020

  

2019

  

2020

  

2019

 

Service cost

 $659  $535  $343  $270 

Interest cost

  555   581   194   236 

Expected return on plan assets

  (958

)

  (836

)

  -   - 

Amortization of prior service cost

  -   -   (282

)

  (282

)

Recognized actuarial loss

  621   472   77   7 

Settlement loss

  1,904   -   -   - 

Net periodic benefit cost (a)

 $2,781  $752  $332  $231 

 

  

Pension Benefits

  

Postretirement Benefits

 
  

Six Months Ended
June 30,

  

Six Months Ended
June 30,

 
  

2020

  

2019

  

2020

  

2019

 

Service cost

 $1,342  $1,102  $686  $541 

Interest cost

  1,091   1,227   389   471 

Expected return on plan assets

  (1,943

)

  (1,781

)

  -   - 

Amortization of prior service cost

  -   -   (564

)

  (564

)

Recognized actuarial loss

  1,134   863   153   14 

Settlement loss

  3,382   -   -   - 

Net periodic benefit cost (a)

 $5,006  $1,411  $664  $462 

 

(a)

The components of net periodic benefit cost other than the service cost component are included in Other income (expense), net in the Consolidated Statements of Income.

 

During the second quarter and six months ended June 30, 2020, the Company recorded a settlement loss relating to retirees that received lump-sum distributions from the Company’s defined benefit pension plan totaling $1.9 million and $3.4 million, respectively. This charge was the result of lump-sum payments to retirees which exceeded the Plan’s actuarial service and interest cost thresholds.