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Retirement Plans | 9 Months Ended
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Sep. 30, 2021
Compensation And Retirement Disclosure [Abstract] |
Retirement Plans | NOTE 7 – Retirement Plans Pension Plans Net pension expense for our domestic and foreign plans included in other (expense) income, net in the Condensed Consolidated Statements of (Loss) Earnings is as follows:
|  | Three months ended |  |  | Nine months ended |
|  | September 30, |  |  | September 30, |  |  | September 30, |  |  | September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Net pension expense |  | $ | 107,447 |  |  | $ | 666 |  |  | $ | 131,227 |  |  | $ | 1,996 |
The components of net pension expense for our domestic and foreign plans include the following:
|  | Domestic Pension Plans |  |  | Foreign Pension Plans |
|  | Three Months Ended |  |  | Three Months Ended |
|  | September 30, |  |  | September 30, |  |  | September 30, |  |  | September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Service cost |  | $ | — |  |  | $ | — |  |  | $ | 6 |  |  | $ | 8 |
Interest cost |  |  | 385 |  |  |  | 1,443 |  |  |  | 4 |  |  |  | 6 |
Expected return on plan assets(1) |  |  | 429 |  |  |  | (2,454 | ) |  |  | (3 | ) |  |  | (3 | )
Amortization of loss |  |  | 377 |  |  |  | 1,622 |  |  |  | 43 |  |  |  | 44 |
Settlement charges |  |  | 106,206 |  |  |  | — |  |  |  | — |  |  |  | — |
Total expense, net |  | $ | 107,397 |  |  | $ | 611 |  |  | $ | 50 |  |  | $ | 55 |
(1) | Expected return on plan assets is net of expected investment expenses and certain administrative expenses.
|  | Domestic Pension Plans |  |  | Foreign Pension Plans |
|  | Nine Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |  |  | September 30, |  |  | September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Service cost |  | $ | — |  |  | $ | — |  |  | $ | 18 |  |  | $ | 23 |
Interest cost |  |  | 2,856 |  |  |  | 4,329 |  |  |  | 12 |  |  |  | 19 |
Expected return on plan assets(1) |  |  | (1,742 | ) |  |  | (7,362 | ) |  |  | (9 | ) |  |  | (10 | )
Amortization of loss |  |  | 3,694 |  |  |  | 4,866 |  |  |  | 129 |  |  |  | 131 |
Settlement charges |  |  | 126,269 |  |  |  | — |  |  |  | — |  |  |  | — |
Total expense, net |  | $ | 131,077 |  |  | $ | 1,833 |  |  | $ | 150 |  |  | $ | 163 |
(1) | Expected return on plan assets is net of expected investment expenses and certain administrative expenses.
In February 2020, the CTS Board of Directors authorized management to explore termination of the U.S.-based pension plan ("Plan"), subject to certain conditions. On June 1, 2020, we entered into the Fifth Amendment to the Plan whereby we set an effective termination date for the Plan of July 31, 2020. In February 2021, we received a determination letter from the Internal Revenue Service that allowed us to proceed with the termination process for the Plan. During the second quarter of 2021, the Company offered the option of receiving a lump sum payment to eligible participants with vested qualified Plan benefits in lieu of receiving monthly annuity payments. Approximately 365 participants elected to receive the settlement, and lump sum payments of approximately $35,594 were made from Plan assets to these participants in June 2021. As required under U.S. GAAP, the Company recognizes a settlement gain or loss when the aggregate amount of lump-sum distributions to participants equals or exceeds the sum of the service and interest cost components of the net periodic pension cost. The amount of settlement gain or loss recognized is the pro rata amount of the existing unrealized gain or loss immediately prior to the settlement. In general, both the projected benefit obligation and fair value of plan assets are required to be remeasured in order to determine the settlement gain or loss. Upon the partial settlement of the pension liability due to the lump sum offering in the second quarter of 2021, the Company recognized a non-cash and non-operating settlement charge of $20,063 related to pension losses, reclassified from accumulated other comprehensive loss to other (income) expense in the Company's Condensed Consolidated Statements of (Loss) Earnings. On July 29, 2021, the Plan purchased a group annuity contract that transferred our benefit obligations for approximately 2,700 CTS participants and beneficiaries in the United States (“Transferred Participants”). As part of the purchase of the group annuity contract, Plan benefit obligations and related annuity administration services for Transferred Participants were irrevocably assumed and guaranteed by the insurance company effective as of August 3, 2021. There will be no change to pension benefits for Transferred Participants. The purchase of the group annuity contract was fully funded directly by Plan assets. As a result of the final settlement of the pension liability with the purchase of annuities, we reclassified the remaining related unrecognized pension losses of $106,206 that were previously recorded in accumulated other comprehensive loss to the Condensed Consolidated Statements of (Loss) Earnings. The Plan assets of $50,638 as of September 30, 2021, will remain in the Plan until final administrative tasks are completed. This process is expected to be completed in the first quarter of 2022, whereby the Plan assets will liquidate and revert to CTS. At that time, the funds will be subject to income and excise taxes. We continue to evaluate potential plans to optimize tax implications as well as the use of the surplus cash. Other Post-retirement Benefit Plan Net post-retirement expense for our other post-retirement plan includes the following components:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |  |  | September 30, |  |  | September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Service cost |  | $ | — |  |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |
Interest cost |  |  | 20 |  |  |  | 30 |  |  |  | 63 |  |  |  | 90 |
Amortization of gain |  |  | — |  |  |  | (20 | ) |  |  | — |  |  |  | (64 | )
Total expense, net |  | $ | 20 |  |  | $ | 11 |  |  | $ | 63 |  |  | $ | 27 |

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