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Note 10 - Retirement Plans | 12 Months Ended
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Mar. 31, 2020
Notes to Financial Statements |
Retirement Benefits [Text Block] | 10 . Retirement Plans The Company has a noncontributory defined benefit pension plan (the “Plan”) covering all employees who meet certain age-entry requirements and work a stated minimum number of hours per year. Annual contributions are made to the Plan sufficient to satisfy legal funding requirements. The following tables provide a reconciliation of the changes in the Plan’s benefit obligation and fair value of plan assets over the two -year period ended March 31, 2020 and a statement of the unfunded status as of March 31, 2020 and 2019:
|  | 2020 |  |  | 2019 |
|  | (In thousands) |
Change in Benefit Obligation |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 250,461 |  |  | $ | 236,134 |
Service cost |  |  | 9,244 |  |  |  | 8,954 |
Interest cost |  |  | 9,064 |  |  |  | 9,131 |
Liability gain due to curtailment |  |  | (1,114 | ) |  |  | - |
Actuarial loss |  |  | 20,146 |  |  |  | 4,113 |
Benefit payments and expenses |  |  | (9,574 | ) |  |  | (7,871 | )
Benefit obligation at end of year |  | $ | 278,227 |  |  | $ | 250,461 |
Change in Plan Assets |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 233,112 |  |  | $ | 212,844 |
Actual (loss) gain on plan assets |  |  | (46,325 | ) |  |  | 26,731 |
Employer contributions |  |  | 26,000 |  |  |  | 2,100 |
Benefit payments and expenses |  |  | (10,302 | ) |  |  | (8,563 | )
Fair value of plan assets at end of year |  | $ | 202,485 |  |  | $ | 233,112 |
Unfunded Status |  | $ | (75,742 | ) |  | $ | (17,349 | )
The unfunded status increased by $58.4 million during 2020 reflecting the actual fair value of plan assets and the projected benefit obligation as of March 31, 2020. This unfunded status increase was recognized via the actual loss on plan assets and the increase in accumulated other comprehensive loss of $60.9 million after the income tax expense of $20.3 million. The increase in projected benefit obligation was a function of using an updated mortality table. The discount rate reduced from 4.14% in 2019 to 3.69% in 2020. During 2020, the Company converted to the Pri- 2012 mortality study with the Blue Collar adjustment, with a generational projection of future mortality improvements from 2006 using Scale MP- 2019 for calculating the pension obligation in 2019 and the related pension expense in 2020. The Company utilizes a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in determination of the benefit obligation to their underlying projected cash flows. The Plan was amended to freeze accruals to new hires and rehires effective January 1, 2020. This amendment triggered a curtailment event under ASC 715. The curtailment accelerated statement of earnings recognition of the unrecognized prior service cost resulting in $0.1 million curtailment charge. Plan assets decreased from $233.1 million as of March 31, 2019 to $202.5 million as of March 31, 2020 due primarily to a loss on plan assets of $46.3 million from a COVID- 19 induced deterioration in market conditions, partially offset by a $26.0 million contribution by the Company. The Company made this contribution to partially offset the declines in the portfolio.
|  | 2020 |  |  | 2019 |
|  | (In thousands) |
Amounts Recognized in Accumulated Other Comprehensive Pre-Tax Loss |  |  |  |  |  |  |  |
Prior service cost |  | $ | (349 | ) |  | $ | (587 | )
Net loss |  |  | (105,866 | ) |  |  | (24,305 | )
Accumulated other comprehensive pre-tax loss |  | $ | (106,215 | ) |  | $ | (24,892 | )
|  | Pension and |
|  | post retirement plan |
|  | adjustments, net |
|  | of tax |
|  | (In thousands) |
Accumulated Other Comprehensive Loss |  |  |  |
Balance at March 31, 2019 |  | $ | (18,285 | )
Other comprehensive loss |  |  | (60,935 | )
Balance at March 31, 2020 |  | $ | (79,220 | )
The following table provides the components of net periodic benefit cost for the Plan for fiscal years 2020 and 2019:
|  | 2020 |  |  | 2019 |
|  | (In thousands) |
Service cost including administration |  | $ | 9,935 |  |  | $ | 9,646 |
Interest cost |  |  | 9,064 |  |  |  | 9,131 |
Expected return on plan assets |  |  | (16,746 | ) |  |  | (15,104 | )
Amortization of net loss |  |  | 579 |  |  |  | 1,597 |
Prior service cost |  |  | 120 |  |  |  | 119 |
Net periodic benefit cost |  | $ | 2,952 |  |  | $ | 5,389 |
Settlement/curtailment expense |  |  | 118 |  |  |  | - |
Net periodic benefit cost with curtailment |  | $ | 3,070 |  |  | $ | 5,389 |
The Plan’s accumulated benefit obligation was $256.4 million at March 31, 2020 and $231.2 million at March 31, 2019. Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation and the market-related value of assets are amortized over the average remaining service period of active participants. The assumptions used to measure the Company’s benefit obligation and pension expense are shown in the following table:
|  | 2020 |  |  | 2019 |
Weighted Average Assumptions for Balance Sheet Liability at End of Year: |  |  |  |  |  |  |  |
Discount rate - projected benefit obligation |  |  | 3.69 | % |  |  | 4.14 | %
Expected return on plan assets |  |  | 7.25 | % |  |  | 7.25 | %
Rate of compensation increase |  |  | 3.00 | % |  |  | 3.00 | %
Weighted Average Assumptions for Benefit Cost at Beginning of Year: |  |  |  |  |  |  |  |
Discount rate - benefit obligations |  |  | 4.14 | % |  |  | 4.15 | %
Discount rate - interest cost |  |  | 3.74 | % |  |  | 3.87 | %
Discount rate - service cost |  |  | 4.34 | % |  |  | 4.25 | %
Discount rate - interest on service cost |  |  | 3.69 | % |  |  | 4.14 | %
Expected return on plan assets |  |  | 7.25 | % |  |  | 7.25 | %
Rate of compensation increase |  |  | 3.00 | % |  |  | 3.00 | %
The Company's plan assets consist of the following:
|  | Target |  |  | Percentage of Plan
|  | Allocation |  |  | Assets at March 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Plan Assets |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  |  | 99 | % |  |  | 97 | % |  |  | 99 | %
Debt securities |  |  | - |  |  |  | - |  |  |  | - |
Real estate |  |  | - |  |  |  | - |  |  |  | - |
Cash |  |  | 1 | % |  |  | 3 | % |  |  | 1 | %
Total |  |  | 100 | % |  |  | 100 | % |  |  | 100 | %
|  | 2020 |  |  | 2019 |
|  | Market Value |  |  | Market Value |
|  | (In thousands) |
Assets by Industry Type |  |  |  |  |  |  |  |
Asset Category |  |  |  |  |  |  |  |
Cash and cash equivalents: |  |  |  |  |  |  |  |
Money market funds |  | $ | 7,058 |  |  | $ | 1,387 |
Total cash and cash equivalents |  |  | 7,058 |  |  |  | 1,387 |
Common equity securities: |  |  |  |  |  |  |  |
Materials |  |  | 8,772 |  |  |  | 5,331 |
Industrials |  |  | 15,440 |  |  |  | 16,080 |
Telecommunication services |  |  | 25,093 |  |  |  | 24,370 |
Consumer staples |  |  | 42,522 |  |  |  | 43,486 |
Energy |  |  | 28,538 |  |  |  | 38,230 |
Financials |  |  | 22,275 |  |  |  | 34,521 |
Health care |  |  | - |  |  |  | 4,247 |
Information technology |  |  | 20,657 |  |  |  | 28,750 |
Utilities |  |  | 32,130 |  |  |  | 36,710 |
Total common equity securities |  |  | 195,427 |  |  |  | 231,725 |
Total assets |  | $ | 202,485 |  |  | $ | 233,112 |
Expected Return on Plan Assets The expected long-term rate of return on Plan assets is 7.25%. The Company expects 7.25% to fall within the 40 -to- 50 percentile range of returns on investment portfolios with asset diversification similar to that of the Plan’s target asset allocation. Investment Policy and Strategy The Company maintains an investment policy designed to achieve a long-term rate of return, including investment income through dividends and equity appreciation, sufficient to meet the actuarial requirements of the Plan. The Company seeks to accomplish its return objectives by prudently investing in a diversified portfolio of public company equities with broad industry representation seeking to provide long-term growth consistent with the performance of relevant market indices, as well as maintain an adequate level of liquidity for pension distributions as they fall due. The strategy of being fully invested in equities has historically provided greater rates of return over extended periods of time. The Company’s loss on plan assets during 2020 was 19.9% as compared to the S&P 500 unaudited loss (excluding dividends) of 8.8%. Plan assets include Company common stock with a fair market value of $16.6 million as of March 31, 2020 and $12.8 million as of March 31, 2019. Cash Flows Expected contributions for fiscal year ending March 31, 2021 (in thousands):
Expected Employer Contributions |  | $ | - |
Expected Employee Contributions |  |  | - |
Estimated future benefit payments reflecting expected future service for the fiscal years ending March 31 ( in thousands):
2021 |  |  | $ | 10,102 |
2022 |  |  |  | 10,785 |
2023 |  |  |  | 11,490 |
2024 |  |  |  | 12,259 |
2025 |  |  |  | 13,022 |
2026-2030 |  |  |  | 75,047 |
401 (k) Plans The Company also has employees’ savings 401 (k) plans covering all employees who meet certain age-entry requirements and work a stated minimum number of hours per year. Participants may make contributions up to the legal limit. The Company’s matching contributions are discretionary. Costs charged to operations for the Company’s matching contributions amounted to $0.4 million and $1.4 million in fiscal 2020 and 2019, respectively. In fiscal 2020 and 2019, the matching contribution was entirely treasury stock. This stock portion of the matching contribution is valued at current market value while the treasury stock is valued at cost.

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