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Pension and Other Post Retirement Benefit Plans
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Pension and Other Post Retirement Benefit Plans

Note 10 — Pension and Other Post Retirement Benefit Plans

The Company maintains a U.S. defined benefit pension plan covering a former Company executive (“U.S. Plan”) and a German defined benefit pension plan covering certain retired executive employees of the Company’s wholly owned subsidiary, Gentherm GmbH (“German Plan”).

The components of net periodic benefit cost for the Company’s defined benefit plans for the years ended December 31, 2024, 2023 and 2022 were as follows:

 

 

U.S. Plan

 

 

German Plan

 

 

 

Year Ended December 31,

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

 

2024

 

 

2023

 

 

2022

 

Net periodic benefit cost:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Interest cost

 

 

101

 

 

 

115

 

 

 

56

 

 

 

234

 

 

 

217

 

 

 

92

 

Expected return on plan assets

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(130

)

 

 

(115

)

 

 

(109

)

Amortization of prior service cost and actuarial loss

 

 

—

 

 

 

—

 

 

 

22

 

 

 

19

 

 

 

23

 

 

 

114

 

Net periodic benefit cost

 

$

101

 

 

$

115

 

 

$

78

 

 

$

123

 

 

$

125

 

 

$

97

 

Assumptions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 

4.45

%

 

 

4.65

%

 

 

1.80

%

 

 

4.56

%

 

 

4.10

%

 

 

1.08

%

Long-term return on assets

 

N/A

 

 

N/A

 

 

N/A

 

 

 

3.20

%

 

 

3.20

%

 

 

2.90

%

A reconciliation of the change in benefit obligation and the change in plan assets for the years ended December 31, 2024 and 2023 is as follows:

 

 

U.S. Plan

 

 

German Plan

 

 

 

As of December 31,

 

 

As of December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Change in projected benefit obligation:

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of year

 

$

2,602

 

 

$

2,811

 

 

$

5,406

 

 

$

5,398

 

Interest cost

 

 

101

 

 

 

115

 

 

 

234

 

 

 

217

 

Paid pension distributions

 

 

(342

)

 

 

(342

)

 

 

(256

)

 

 

(290

)

Actuarial (gain) loss

 

 

(30

)

 

 

18

 

 

 

1,259

 

 

 

(89

)

Exchange rate impact

 

 

—

 

 

 

—

 

 

 

(362

)

 

 

170

 

Balance at end of year

 

$

2,331

 

 

$

2,602

 

 

$

6,281

 

 

$

5,406

 

Change in plan assets:

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of year

 

$

—

 

 

$

—

 

 

$

4,145

 

 

$

3,918

 

Actual return on plan assets

 

 

—

 

 

 

—

 

 

 

104

 

 

 

98

 

Contributions

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Paid pension distributions

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Exchange rate impact

 

 

—

 

 

 

—

 

 

 

(244

)

 

 

129

 

Balance at end of year

 

$

—

 

 

$

—

 

 

$

4,005

 

 

$

4,145

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Underfunded Status

 

$

(2,331

)

 

$

(2,602

)

 

$

(2,276

)

 

$

(1,261

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance sheet classification:

 

 

 

 

 

 

 

 

 

 

 

 

Other current liabilities

 

$

(342

)

 

$

(357

)

 

$

(248

)

 

$

(297

)

Pension benefit obligation

 

 

(1,989

)

 

 

(2,245

)

 

 

(2,028

)

 

 

(964

)

Accumulated other comprehensive loss (pre-tax):

 

 

 

 

 

 

 

 

 

 

 

 

Actuarial losses

 

 

194

 

 

 

223

 

 

 

2,063

 

 

 

899

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assumptions:

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 

4.85

%

 

 

4.45

%

 

 

3.38

%

 

 

4.56

%

Pre-tax amounts included in AOCI that are expected to be recognized in net periodic benefit cost during the year ended December 31, 2025 are as follows:

 

 

U.S Plan

 

 

German Plan

 

Actuarial losses

 

$

—

 

 

$

71

 

 

The accumulated benefit obligations were as follows:

 

 

U.S. Plan

 

 

German Plan

 

 

 

As of December 31,

 

 

As of December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Accumulated benefit obligation

 

$

2,331

 

 

$

2,602

 

 

$

6,281

 

 

$

5,406

 

Interest costs are recognized in selling, general and administrative expenses in the consolidated statements of income and actuarial gains and losses are included the consolidated balance sheets as part of accumulated other comprehensive loss within shareholders’ equity. Actuarial gains or losses are amortized to selling, general and administrative expense in the consolidated statements of income based on the average future life of the U.S Plan or German Plan using the corridor method. Prior service cost is included in selling, general and administrative expenses in the consolidated statements of income.

Plan assets – German Plan

Plan assets are comprised of Gentherm GmbH’s pension insurance policies and are pledged to the beneficiaries of the German Plan. A market valuation technique, based on observable underlying insurance charges, is used to determine the fair value of the pension plan assets (Level 2).

The expected return on plan assets assumption used to calculate Gentherm GmbH’s pension benefit obligation was determined using actual returns realized on plan assets in the prior year.

Contributions

We do not expect contributions to be paid to the U.S. Plan or the German Plan during the next fiscal year.

The schedule of future expected pension payments is as follows:

 

 

Projected Pension
Benefit Payments

 

Year

 

U.S Plan

 

 

German Plan

 

2025

 

$

342

 

 

$

248

 

2026

 

 

342

 

 

 

249

 

2027

 

 

342

 

 

 

249

 

2028

 

 

342

 

 

 

247

 

2029

 

 

342

 

 

 

1,628

 

2030-2033

 

 

1,026

 

 

 

1,565

 

Total

 

$

2,736

 

 

$

4,186

 

Defined Contribution Plans

The Company also sponsors defined contribution plans for eligible employees. On a discretionary basis, the Company matches a portion of the employee contributions and or makes additional discretionary contributions. Gentherm recognized costs of $2,264, $2,344 and $1,984 related to contributions to its defined contribution plans during the years ended December 31, 2024, 2023 and 2022, respectively.