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Note 7 - Pension and Other Postretirement Benefits
 9 Months Ended
Sep. 30, 2022
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
September 30,

    

Three Months Ended
September 30,

  
   

2022

    

2021

    

2022

    

2021

 

Service cost

   $ 496     $ 636     $ 287     $ 365  

Interest cost

     580       467       190       163  

Expected return on plan assets

     (665

)

     (907

)

     -       -  

Amortization of prior service cost

     -       -       (282

)

     (282

)

Recognized actuarial loss

     379       423       92       145  

Settlement loss

     4,759       388       -       -  

Net periodic benefit cost (a)

   $ 5,549     $ 1,007     $ 287     $ 391  

 

 

   

Pension Benefits

    

Postretirement Benefits

  
   

Nine Months Ended
September 30,

    

Nine Months Ended
September 30,

  
   

2022

    

2021

    

2022

    

2021

 

Service cost

   $ 1,642     $ 2,034     $ 860     $ 1,096  

Interest cost

     1,745       1,252       570       490  

Expected return on plan assets

     (2,169 )     (2,707

)

     -       -  

Amortization of prior service cost

     -       -       (847

)

     (847

)

Recognized actuarial loss

     1,314       1,482       276       435  

Settlement loss

     6,355       2,116       -       -  

Net periodic benefit cost (a)

   $ 8,887     $ 4,177     $ 859     $ 1,174  

 

   (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 three and nine months ended September 30, 2022, the Company recorded a settlement loss relating to retirees that received lump-sum distributions from the Company’s defined benefit pension plan totaling $4.8 million and $6.4 million, respectively. The Company recorded settlement losses of $0.4 million and $2.1 million for the three and nine month periods ended September 30, 2021, respectively. These charges were the result of lump-sum distributions to retirees exceeding the Plan’s actuarial service and interest cost thresholds.

 

As part of the agreement to purchase the assets of Fill-Rite, the Company is required to establish a defined benefit pension plan for certain Fill-Rite employees as of June 1, 2022. No pension or other postretirement benefit plan liabilities existing as of the acquisition date were assumed as part of the transaction. The obligation under the new plan as of September 30, 2022 is not material.