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Pension Plans
 12 Months Ended
Dec. 31, 2020
Compensation And Retirement Disclosure [Abstract]  
Pension Plans

Note C - Pension Plans

PLP-USA hourly employees of the Company who meet specific requirements as to age and length and date of service are covered by a defined benefit pension plan (“Plan”).  On December 12, 2012, the Company approved a freeze on further benefit accruals under the Plan and notified the participants of the freeze on December 19, 2012.  Beginning February 1, 2013, participants ceased earning additional benefits under the Plan and no new participants entered the Plan.  The Company uses a December 31 measurement date for its Plan.

Net periodic pension cost for the Plan consists of the following components for the year ended December 31:

 

 

 

 

 

2020

 

 

2019

 

 

2018

 

Service cost

 

 

 

$

0

 

 

$

299

 

 

$

250

 

Interest cost

 

 

 

 

1,301

 

 

 

1,411

 

 

 

1,349

 

Expected return on plan assets

 

 

 

 

(2,251

)

 

 

(1,946

)

 

 

(1,985

)

Recognized net actuarial loss

 

 

 

 

475

 

 

 

520

 

 

 

525

 

Net periodic pension cost

 

 

 

$

(475

)

 

$

284

 

 

$

139

 

 

The following tables set forth benefit obligations, plan assets and the accrued benefit cost of the Plan at December 31:

 

 

 

 

 

2020

 

 

2019

 

Projected benefit obligation at beginning of the year

 

 

 

$

37,936

 

 

$

33,931

 

Service cost

 

 

 

 

0

 

 

 

299

 

Interest cost

 

 

 

 

1,301

 

 

 

1,411

 

Actuarial loss (gain)

 

 

 

 

4,590

 

 

 

3,528

 

Benefits paid

 

 

 

 

(1,245

)

 

 

(1,233

)

Projected benefit obligation at end of year

 

 

 

$

42,582

 

 

$

37,936

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of plan assets at beginning of the year

 

 

 

$

32,658

 

 

$

28,672

 

Actual return on plan assets

 

 

 

 

5,013

 

 

 

5,219

 

Employer contributions

 

 

 

 

330

 

 

 

0

 

Benefits paid

 

 

 

 

(1,245

)

 

 

(1,233

)

Fair value of plan assets at end of the year

 

 

 

$

36,756

 

 

$

32,658

 

 

 

 

 

 

 

 

 

 

 

 

Unfunded pension obligation

 

 

 

$

5,826

 

 

$

5,278

 

 

The actuarial loss in 2020 was primarily the result of a decrease in the Plan discount rate from 3.50% in 2019 to 2.69% in 2020.    

 

In accordance with ASC 715-20, the Company recognizes the underfunded status of the Plan as a liability.  The amount recognized in Accumulated other comprehensive loss related to the Plan at December 31 is comprised of the following:

 

 

 

 

 

2020

 

 

2019

 

Balance at January 1

 

 

 

$

(5,671

)

 

$

(5,873

)

 

 

 

 

 

 

 

 

 

 

 

Reclassification adjustments:

 

 

 

 

 

 

 

 

 

 

Pre-tax amortized net actuarial loss

 

 

 

 

475

 

 

 

520

 

Tax provision

 

 

 

 

(112

)

 

 

(123

)

 

 

 

 

 

363

 

 

 

397

 

 

 

 

 

 

 

 

 

 

 

 

Adjustment to recognize gain (loss) on unfunded

   pension obligations:

 

 

 

 

 

 

 

 

 

 

Pre-tax loss

 

 

 

 

(1,829

)

 

 

(255

)

Tax provision

 

 

 

 

433

 

 

 

60

 

 

 

 

 

 

(1,396

)

 

 

(195

)

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31

 

 

 

$

(6,704

)

 

$

(5,671

)

 

 

The 2020 pre-tax unfunded pension obligation loss of $1.8 million included a loss of $5 million due to an .81% decrease in the discount rate to 2.69%, a gain of $.2 million associated with the industry updates to the mortality table used, a gain of $.2 million due to demographic changes combined and a gain of $2.8 million resulting from asset performance above the 6.50% rate of return assumption.  There is no prior service cost to be amortized in the future.

The Plan had accumulated benefit obligations in excess of Plan assets as follows:

 

 

 

 

 

2020

 

 

2019

 

Accumulated benefit obligation

 

 

 

$

42,582

 

 

$

37,936

 

Fair market value of assets

 

 

 

$

36,756

 

 

$

32,658

 

 

Weighted-average assumptions used to determine benefit obligations at December 31

 

 

 

2020

 

 

2019

 

Discount rate

 

 

 

2.69%

 

 

3.50%

 

Rate of compensation increase

 

 

 

n/a

 

 

n/a

 

 

 

Weighted-average assumptions used to determine net periodic benefit cost at December 31

 

 

 

2020

 

 

2019

 

 

2018

 

Discount rate

 

 

 

3.50%

 

 

3.50%

 

 

4.25%

 

Rate of compensation increase

 

 

 

n/a

 

 

n/a

 

 

n/a

 

Expected long-term return on plan assets

 

 

 

 

7.00

 

 

 

7.00

 

 

 

8.00

 

 

The net periodic pension cost for 2020 was based on a long-term asset rate-of-return of 7.00%.  This rate is based upon management’s estimate of future long-term rates of return on similar assets and is consistent with historical returns on such assets.

During the year ended December 31, 2019, the Company changed its Plan asset base from a combined Level 1 and Level 2 allocation to utilize net asset value (“NAV”) as the practical expedient for its pooled investment funds and the assets are no longer   classified in the fair value hierarchy.  At December 31, 2020 and 2019, the Plan’s pooled investment funds were measured at fair value using the NAV.  The NAV is based on the value of the assets owned by the plan, less liabilities.  These pooled assets are not quoted on an active exchange.  The fair value of the Plan assets as of December 31, 2020 and 2019, by category, are as follows:

 

 

 

 

 

2020

 

 

2019

 

 

 

Assets measured at net asset value

 

 

 

 

 

 

 

 

 

 

 

 

Pooled investment fund

 

 

 

$

36,756

 

 

$

32,658

 

 

 

Total

 

 

 

$

36,756

 

 

$

32,658

 

 

 

 

 

The Plan weighted-average asset allocations at December 31, 2020 and 2019, by asset category, are as follows:

 

 

 

 

 

Plan assets

 

 

 

 

 

 

at December 31

 

 

 

 

 

 

2020

 

 

2019

 

 

Asset category

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

 

 

 

47

 

%

 

48

 

%

Debt securities

 

 

 

 

53

 

 

 

51

 

 

Cash and equivalents

 

 

 

 

0

 

 

 

1

 

 

 

 

 

 

 

100

 

%

 

100

 

%

 

Management seeks to maximize the long-term total return of financial assets consistent with the fiduciary standards of ERISA.  The ability to achieve these returns is dependent upon the need to accept moderate risk to achieve long-term capital appreciation.

In recognition of the expected returns and volatility from financial assets, Plan assets are invested in the following ranges with the target allocation noted:

 

 

 

Range

 

Target

 

Equities

 

40-60%

 

50%

 

Fixed Income

 

40-60%

 

50%

 

Cash Equivalents

 

0-10%

 

0.0%

 

 

 

Investment in these markets is projected to provide performance consistent with expected long-term returns with appropriate diversification.

The Company's policy is to fund amounts deductible for federal income tax purposes.  The Company does not currently expect to contribute to the Plan in 2021.

The benefits expected to be paid out of the Plan assets in each of the next five years and the aggregate benefits expected to be paid for the subsequent five years are as follows:

 

Year

 

Pension Benefits

 

2021

 

$

1,273

 

2022

 

 

1,359

 

2023

 

 

1,449

 

2024

 

 

1,540

 

2025

 

 

1,616

 

2026-2030

 

 

9,344

 

 

The Company also provides retirement benefits through various defined contribution plans including PLP-USA’s Profit Sharing Plan.  Expense for these defined contribution plans was $5.9 million in 2020, $4.9 million in 2019 and $5.6 million in 2018.

Further, the Company also provides retirement benefits through the Supplemental Profit Sharing Plan.  To the extent an employee’s award under PLP-USA’s Profit Sharing Plan exceeds the maximum allowable contribution permitted under existing tax laws, the excess is accrued for (but not funded) under a non-qualified Supplemental Profit Sharing Plan.  The Supplemental Profit Sharing Plan allows participants the ability to hypothetically invest their proportionate award into various investment options, which primarily includes mutual funds. Expense for the Supplemental Profit Sharing Plan was $1.1 million for both 2020 and 2019 and $.2 million for 2018.  The Supplemental Profit Sharing Plan unfunded status for the years ended December 31, 2020 and 2019 was $7.1 million and $6.1 million, respectively, and is included in Other noncurrent liabilities.