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PENSION AND OTHER POSTRETIREMENT PLANS | 12 Months Ended
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Sep. 30, 2020
Retirement Benefits [Abstract] |
PENSION AND OTHER POSTRETIREMENT PLANS | PENSION AND OTHER POSTRETIREMENT PLANS: The Company provides defined benefit pension and other postretirement plans to certain employees. Effective January 1, 2014, the Company's principal retirement plan was closed to new participants. The following provides a reconciliation of benefit obligations, plan assets and funded status of the plans as of the Company's actuarial valuation as of September 30, 2020 and 2019:
| Pension |  | Other Postretirement
| 2020 |  | 2019 |  | 2020 |  | 2019
Change in benefit obligation: |  |  |  |  |  |  |
Benefit obligation, beginning of year | $ | 289,957 |  |  | $ | 241,553 |  |  | $ | 20,952 |  |  | $ | 18,826 |
Service cost | 8,679 |  |  | 7,998 |  |  | 227 |  |  | 244 |
Interest cost | 7,735 |  |  | 9,202 |  |  | 501 |  |  | 718 |
Actuarial loss (gain) | 23,827 |  |  | 43,198 |  |  | (1,402) |  |  | 2,212 |
Exchange loss (gain) | 799 |  |  | (581) |  |  | — |  |  | — |
Benefit payments | (12,110) |  |  | (11,413) |  |  | (847) |  |  | (1,048) |
Benefit obligation, end of year | 318,887 |  |  | 289,957 |  |  | 19,431 |  |  | 20,952 |
Change in plan assets: |  |  |  |  |  |  |
Fair value, beginning of year (1) | 155,313 |  |  | 158,662 |  |  | — |  |  | — |
Actual return | 8,705 |  |  | 6,852 |  |  | — |  |  | — |
Benefit payments | (12,110) |  |  | (11,413) |  |  | (847) |  |  | (1,048) |
Employer contributions | 16,226 |  |  | 1,212 |  |  | 847 |  |  | 1,048 |
Fair value, end of year (1) | 168,134 |  |  | 155,313 |  |  | — |  |  | — |
Funded status (1) | (150,753) |  |  | (134,644) |  |  | (19,431) |  |  | (20,952) |
Unrecognized actuarial loss (gain) | 110,971 |  |  | 95,741 |  |  | 676 |  |  | (106) |
Unrecognized prior service cost | 343 |  |  | (367) |  |  | (2,048) |  |  | (330) |
Net amount recognized | $ | (39,439) |  |  | $ | (39,270) |  |  | $ | (20,803) |  |  | $ | (21,388) |
Amounts recognized in the consolidated balance sheet: |  |  |  |  |  |  |
Current liability | $ | (905) |  |  | $ | (882) |  |  | $ | (831) |  |  | $ | (989) |
Noncurrent benefit liability | (149,848) |  |  | (133,762) |  |  | (18,600) |  |  | (19,963) |
Accumulated other comprehensive loss (income) | 111,314 |  |  | 95,374 |  |  | (1,372) |  |  | (436) |
Net amount recognized | $ | (39,439) |  |  | $ | (39,270) |  |  | $ | (20,803) |  |  | $ | (21,388) |
Amounts recognized in accumulated |  |  |  |  |  |  |
other comprehensive loss (income): |  |  |  |  |  |  |
Net actuarial loss (income) | $ | 110,971 |  |  | $ | 95,741 |  |  | $ | 676 |  |  | $ | (106) |
Prior service cost | 343 |  |  | (367) |  |  | (2,048) |  |  | (330) |
Net amount recognized | $ | 111,314 |  |  | $ | 95,374 |  |  | $ | (1,372) |  |  | $ | (436) |
(1) The fair value of plan assets and funded status do not include the value of investments held in trust for the Company's non-qualified supplemental retirement plan. These investments totaled $24,610 and $22,986 as of September 30, 2020 and 2019, respectively. Refer to Note 7, "Investments" for further details. Based upon actuarial valuations performed as of September 30, 2020 and 2019, the accumulated benefit obligation for the Company's defined benefit pension plans was $295,674 and $270,140 at September 30, 2020 and 2019, respectively, and the projected benefit obligation for the Company's defined benefit pension plans was $318,887 and $289,957 at September 30, 2020 and 2019, respectively. Net periodic pension and other postretirement benefit cost for the plans included the following:
| Pension |  | Other Postretirement
| 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Service cost | $ | 8,679 |  |  | $ | 7,998 |  |  | $ | 8,159 |  |  | $ | 227 |  |  | $ | 244 |  |  | $ | 335 |
Interest cost * | 7,735 |  |  | 9,202 |  |  | 8,210 |  |  | 501 |  |  | 718 |  |  | 631 |
Expected return on plan assets * | (10,214) |  |  | (10,304) |  |  | (10,136) |  |  | — |  |  | — |  |  | — |
Amortization: |  |  |  |  |  |  |  |  |  |  |
Prior service cost | (186) |  |  | (186) |  |  | (138) |  |  | (464) |  |  | (195) |  |  | (195) |
Net actuarial loss * | 9,767 |  |  | 4,245 |  |  | 7,018 |  |  | — |  |  | (59) |  |  | — |
Net benefit cost | $ | 15,781 |  |  | $ | 10,955 |  |  | $ | 13,113 |  |  | $ | 264 |  |  | $ | 708 |  |  | $ | 771 |
* Non-service components of pension and postretirement expense are included in other income (deductions), net. Matthews has elected to utilize a full yield curve approach in the estimation of the service and interest cost components of net periodic benefit cost by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. Benefit payments under the Company's principal retirement plan are made from plan assets, while benefit payments under the supplemental retirement plan and postretirement benefit plan are funded from the Company's operating cash. In response to COVID-19, the federal government passed a modified relief bill, which provides additional funding measures associated with IRS regulations. In accordance with this bill, the Company was not required to make contributions to its principal retirement plan in fiscal 2020. However, the Company contributed 668,000 shares of its Class A Common Stock to its principal retirement plan during the fourth quarter of fiscal 2020. The shares had a market value of approximately $14,983 at the time of the contribution. The Company is required to make contributions of approximately $4,191 to its principal retirement plan in fiscal 2021. Contributions made in fiscal 2020 are as follows:
Contributions | Pension |  | Other Postretirement
Principal retirement plan * | $ | 14,983 |  |  | $ | — |
Supplemental retirement plan | 821 |  |  | — |
Other retirement plans | 422 |  |  | — |
Other postretirement plan | — |  |  | 847 |
* Amount represents contribution of Matthews Class A Common Stock (see above). Amounts of AOCI expected to be recognized in net periodic benefit costs in fiscal 2021 include:
| Pension Benefits |  | Other Postretirement Benefits
Net actuarial loss | $ | 12,076 |  |  | $ | — |
Prior service cost | (68) |  |  | (364) |
The weighted-average assumptions in the following table represent the rates used to develop the actuarial present value of the projected benefit obligation for the year listed and also the net periodic benefit cost for the following year. The measurement date of annual actuarial valuations for the Company's principal retirement and other postretirement benefit plans was September 30, for fiscal 2020, 2019 and 2018. The weighted-average assumptions for those plans were:
| Pension |  | Other Postretirement
| 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Discount rate | 2.62 | % |  | 3.13 | % |  | 4.21 | % |  | 2.63 | % |  | 3.10 | % |  | 4.19 | %
Return on plan assets | 6.75 | % |  | 6.75 | % |  | 6.75 | % |  | — |  |  | — |  |  | — |
Compensation increase | 3.50 | % |  | 3.50 | % |  | 3.50 | % |  | — |  |  | — |  |  | — |
In October 2014, the Society of Actuaries' Retirement Plans Experience Committee ("RPEC") released new mortality tables known as RP 2014. Each year, RPEC releases an update to the mortality improvement assumption that was released with the RP 2014 tables. The Company considered the RPEC mortality and mortality improvement tables and performed a review of its own mortality history to assess the appropriateness of the RPEC tables for use in generating financial results. In fiscal years 2020, 2019 and 2018, the Company elected to value its principal retirement and other postretirement benefit plan liabilities using the base RP 2014 mortality table and a slightly modified fully generational mortality improvement assumption. The revised assumption uses the most recent RPEC mortality improvement table for all years where the RPEC tables are based on finalized data, and the most recently published Social Security Administration Intermediate mortality improvement for subsequent years. The underlying basis of the investment strategy of the Company's defined benefit plans is to ensure the assets are invested to achieve a positive rate of return over the long term sufficient to meet the plans' actuarial interest rate and provide for the payment of benefit obligations and expenses in perpetuity in a secure and prudent fashion, maintain a prudent risk level that balances growth with the need to preserve capital, diversify plan assets so as to minimize the risk of large losses or excessive fluctuations in market value from year to year, achieve investment results over the long term that compare favorably with other pension plans and appropriate indices. The Company's investment policy, as established by the Company's pension board, specifies the types of investments appropriate for the plans, asset allocation guidelines, criteria for the selection of investment managers, procedures to monitor overall investment performance as well as investment manager performance. It also provides guidelines enabling plan fiduciaries to fulfill their responsibilities. The Company's defined benefit pension plans' weighted-average asset allocation at September 30, 2020 and 2019 and weighted-average target allocation were as follows:
| Plan Assets at |  | Target
Asset Category | 2020 |  | 2019 |  | Allocation*
Equity securities | $ | 118,677 |  |  | $ | 105,297 |  |  | 65 | %
Fixed income, cash and cash equivalents | 34,184 |  |  | 39,156 |  |  | 25 | %
Other investments | 15,273 |  |  | 10,860 |  |  | 10 | %
| $ | 168,134 |  |  | $ | 155,313 |  |  | 100 | %
* Target allocation relates to the Company's primary defined benefit pension plan as of September 30, 2020.
Based on an analysis of the historical and expected future performance of the plan's assets and information provided by its independent investment advisor, the Company set the long-term rate of return assumption for its primary defined benefit pension plans' assets at 6.75% in 2020 for purposes of determining pension cost and funded status under current guidance. The Company's discount rate assumption used in determining the present value of the projected benefit obligation is based upon published indices. The Company categorizes plan assets within a three level fair value hierarchy (see Note 5, "Fair Value Measurements" for a further discussion of the fair value hierarchy). The valuation methodologies used to measure the fair value of pension assets, including the level in the fair value hierarchy in which each type of pension plan asset is classified as follows. Equity securities consist of direct investments in the stocks of publicly traded companies. Such investments are valued based on the closing price reported in an active market on which the individual securities are traded. As such, the direct investments are classified as Level 1. Mutual funds are valued at the closing price of shares held by the Plan at year end. As such, these mutual fund investments are classified as Level 1. Fixed income securities consist of publicly traded fixed interest obligations (primarily U.S. government notes and corporate and agency bonds). Such investments are valued through consultation and evaluation with brokers in the institutional market using quoted prices and other observable market data. As such, U.S. government notes are included in Level 1, and the remainder of the fixed income securities are included in Level 2. Cash and cash equivalents consist of direct cash holdings and short-term money market mutual funds. These values are valued based on cost, which approximates fair value, and as such, are classified as Level 1. Other investments consist primarily of real estate, commodities, private equity holdings and hedge fund investments. These holdings are valued by investment managers based on the most recent information available. The valuation information used by investment managers may not be readily observable. As such, these investments are classified as Level 3. The Company's defined benefit pension plans' asset categories at September 30, 2020 and 2019 were as follows:
| September 30, 2020
Asset Category | Level 1 |  | Level 2 |  | Level 3 |  | Total
Equity securities - stocks (1) | $ | 37,089 |  |  | $ | — |  |  | $ | — |  |  | $ | 37,089 |
Equity securities - mutual funds | 81,588 |  |  | — |  |  | — |  |  | 81,588 |
Fixed income securities | 11,738 |  |  | 20,086 |  |  | — |  |  | 31,824 |
Cash and cash equivalents | 2,360 |  |  | — |  |  | — |  |  | 2,360 |
Other investments | — |  |  | — |  |  | 15,273 |  |  | 15,273 |
Total | $ | 132,775 |  |  | $ | 20,086 |  |  | $ | 15,273 |  |  | $ | 168,134 |
(1) Includes $14,936 of of Matthews Class A Common Stock in Level 1. |  |  |  |  |  |  |
| September 30, 2019
Asset Category | Level 1 |  | Level 2 |  | Level 3 |  | Total
Equity securities - stocks | $ | 54,985 |  |  | $ | — |  |  | $ | — |  |  | $ | 54,985 |
Equity securities - mutual funds | 50,312 |  |  | — |  |  | — |  |  | 50,312 |
Fixed income securities | 15,829 |  |  | 18,968 |  |  | — |  |  | 34,797 |
Cash and cash equivalents | 4,359 |  |  | — |  |  | — |  |  | 4,359 |
Other investments | — |  |  | — |  |  | 10,860 |  |  | 10,860 |
Total | $ | 125,485 |  |  | $ | 18,968 |  |  | $ | 10,860 |  |  | $ | 155,313 |
Changes in the fair value of Level 3 assets at September 30, 2020 and 2019 are summarized as follows:
Asset Category | Fair Value, Beginning of Period |  | Acquisitions |  | Dispositions |  | Realized Gains |  | Unrealized Gains (Losses) |  | Fair Value, End of Period
Other investments: |  |  |  |  |  |  |  |  |  |  |
Fiscal Year Ended: |  |  |  |  |  |  |  |  |  |  |
September 30, 2020 | $ | 10,860 |  |  | $ | 10,835 |  |  | $ | (6,326) |  |  | $ | 220 |  |  | $ | (316) |  |  | $ | 15,273 |
September 30, 2019 | 10,115 |  |  | 4,162 |  |  | (2,786) |  |  | 685 |  |  | (1,316) |  |  | 10,860 |
Benefit payments expected to be paid are as follows:
Years ending September 30: | Pension Benefits |  | Other Postretirement Benefits
2021 | $ | 11,363 |  |  | $ | 831 |
2022 | 12,302 |  |  | 858 |
2023 | 12,630 |  |  | 887 |
2024 | 14,138 |  |  | 910 |
2025 | 14,252 |  |  | 931 |
2026-2030 | 78,163 |  |  | 4,557 |
| $ | 142,848 |  |  | $ | 8,974 |
For measurement purposes, a rate of increase of 7.0% in the per capita cost of health care benefits was assumed for 2021; the rate was assumed to decrease gradually to 4.0% for 2070 and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported. An increase in the assumed health care cost trend rates by one percentage point would have increased the accumulated postretirement benefit obligation as of September 30, 2020 by $50 and the aggregate of the service and interest cost components of net periodic postretirement benefit cost for the year then ended by $3. A decrease in the assumed health care cost trend rates by one percentage point would have decreased the accumulated postretirement benefit obligation as of September 30, 2020 by $46 and the aggregate of the service and interest cost components of net periodic postretirement benefit cost for the year then ended by $3. The Company sponsors defined contribution plans for hourly and salary employees. The expense associated with the contributions made to these plans was $8,692, $8,176, and $8,685 for the fiscal years ended September 30, 2020, 2019 and 2018, respectively.

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