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Pensions and Other Benefit Plans | 12 Months Ended
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Mar. 31, 2021
Retirement Benefits [Abstract] |
Pensions and Other Benefit Plans | Pensions and Other Benefit Plans The Company provides retirement plans, including defined benefit and defined contribution plans, and other postretirement benefit plans to certain employees. The Company applies ASC Topic 715 “Compensation – Retirement Benefits,” which required the recognition in pension and other postretirement benefits obligations and accumulated other comprehensive income of actuarial gains or losses, prior service costs or credits and transition assets or obligations that had previously been deferred. This statement also requires an entity to measure a defined benefit postretirement plan’s assets and obligations that determine its funded status as of the end of the fiscal year. Pension Plans The Company provides defined benefit pension plans to certain employees. The Company uses March 31 as the measurement date. The following provides a reconciliation of benefit obligation, plan assets, and funded status of the plans:
|  | March 31,
|  | 2021 |  | 2020
Change in benefit obligation: |  |  |  |
Benefit obligation at beginning of year |  | $ | 459,866 |  |  | $ | 446,397 |
Service cost |  | 1,092 |  |  | 1,139 |
Interest cost |  | 11,527 |  |  | 14,759 |
Actuarial (gain) loss |  | 3,729 |  |  | 26,193 |
Benefits paid |  | (24,492) |  |  | (26,852) |
Settlement |  | (53,499) |  |  | — |
Foreign exchange rate changes |  | 6,618 |  |  | (1,770) |
Benefit obligation at end of year |  | $ | 404,841 |  |  | $ | 459,866 |
Change in plan assets: |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 313,366 |  |  | $ | 321,902 |
Actual gain (loss) on plan assets |  | 49,582 |  |  | 7,512 |
Employer contribution |  | 1,316 |  |  | 10,967 |
Benefits paid |  | (24,492) |  |  | (26,852) |
Settlement |  | (53,499) |  |  | — |
Foreign exchange rate changes |  | 405 |  |  | (163) |
Fair value of plan assets at end of year |  | $ | 286,678 |  |  | $ | 313,366 |
Funded status |  | $ | (118,163) |  |  | $ | (146,500) |
Unrecognized actuarial loss |  | 51,540 |  |  | 105,878 |
Net amount recognized |  | $ | (66,623) |  |  | $ | (40,622) |
During fiscal 2021, the Company settled the liabilities for one of its U.S. pension plans through a combination of (i) lump sum payments to eligible participants who elected to receive them and (ii) the purchase of annuity contracts for participants who did not elect lump sums. The lump sum payments were paid during the quarter ended June 30, 2020 and resulted in a settlement charge of $2,722,000 which was recorded in Other (income) expense, net on the Consolidated Statements of Operations. During the quarter ended September 30, 2020, the Company purchased annuity contracts to settle the remaining liabilities of the terminated plan. The total settlement charge of $19,038,000 was recorded in Other (income) expense, net on the Statements of Operations during the twelve months ending March 31, 2021. The remaining surplus of the terminated plan was $3,910,000 as of March 31, 2021 and will be used, as prescribed in the applicable regulations, to fund obligations associated with the Company's U.S. defined contribution plans. Amounts recognized in the consolidated balance sheets are as follows:
|  | March 31,
|  | 2021 |  | 2020
Other assets |  | $ | 427 |  |  | $ | 6,587 |
Accrued liabilities |  | (3,679) |  |  | (3,563) |
Other non-current liabilities |  | (114,911) |  |  | (149,524) |
Accumulated other comprehensive loss, before tax |  | 51,540 |  |  | 105,878 |
Net amount recognized |  | $ | (66,623) |  |  | $ | (40,622) |
Other assets are presented separately from pension liabilities for pension plans that are overfunded. Other assets decreased in the current year due to the pension settlement, described above. Net periodic pension cost included the following components:
|  | 2021 |  | 2020 |  | 2019
Service costs—benefits earned during the period |  | $ | 1,092 |  |  | $ | 1,139 |  |  | $ | 1,078 |
Interest cost on projected benefit obligation |  | 11,527 |  |  | 14,759 |  |  | 15,526 |
Expected return on plan assets |  | (12,787) |  |  | (15,887) |  |  | (18,454) |
Net amortization |  | 3,234 |  |  | 2,279 |  |  | 2,339 |
Settlement |  | 19,038 |  |  | — |  |  | — |
Net periodic pension cost (benefit) |  | $ | 22,104 |  |  | $ | 2,290 |  |  | $ | 489 |
Information for pension plans with a projected benefit obligation in excess of plan assets is as follows:
|  | March 31,
|  | 2021 |  | 2020
Projected benefit obligation |  | $ | 401,870 |  |  | $ | 410,181 |
Fair value of plan assets |  | 283,280 |  |  | 257,093 |
Information for pension plans with an accumulated benefit obligation in excess of plan assets is as follows:
|  | March 31,
|  | 2021 |  | 2020
Accumulated benefit obligation |  | $ | 396,673 |  |  | $ | 401,918 |
Fair value of plan assets |  | 283,280 |  |  | 254,508 |
Unrecognized gains and losses are amortized through March 31, 2021 on a straight-line basis over the average remaining service period of active participants. Starting in fiscal 2016, the Company changed the amortization period of its largest plan to the average remaining lifetime of inactive participants, as a significant portion of the plan population is now inactive. This change increases the amortization period of the unrecognized gains and losses. 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 net periodic pension cost for the following year:
|  | 2021 |  | 2020 |  | 2019
Discount rate |  | 2.62 | % |  | 2.79 | % |  | 3.42 | %
Expected long-term rate of return on plan assets |  | 4.60 | % |  | 5.01 | % |  | 5.77 | %
Rate of compensation increase on active plans |  | 2.76 | % |  | 2.76 | % |  | 2.76 | %
Interest crediting rates used in cash balance pension plans |  | 1.10 | % |  | 2.25 | % |  | 2.25 | %
The expected rates of return on plan asset assumptions are determined considering long-term historical averages and real returns on each asset class. The Company’s retirement plan target and actual asset allocations are as follows:
|  | Target |  | Actual
|  | 2022 |  | 2021 |  | 2020
Equity securities |  | 45%-35% |  | 45% |  | 33%
Fixed income securities |  | 55%-65% |  | 55% |  | 67%
Total plan assets |  | 100% |  | 100% |  | 100%
Investments allocated to fixed income decreased as of March 31, 2021 due to the pension settlement, described above, since the plan was fully funded and invested in fixed income securities. The Company has an investment objective for domestic pension plans to adequately provide for both the growth and liquidity needed to support all current and future benefit payment obligations. The Company's policy is to de-risk the portfolio by increasing liability-hedging investments as the pension liability funded status increases, which is known as the glide path method. Within the table above, cash equivalents are categorized as fixed income as they earn lower returns than equity securities which includes alternative real estate funds (shown in the fair value tables below). The Company’s funding policy with respect to the defined benefit pension plans is to contribute annually at least the minimum amount required by the Employee Retirement Income Security Act of 1974 (ERISA). Additional contributions may be made to minimize PBGC premiums. The Company plans to contribute the minimum amount required (approximately $5,215,000) to its pension plans in fiscal 2022 as a response to COVID-19 but will reassess later in the fiscal year and increase contributions if economic conditions improve. Information about the expected benefit payments for the Company’s defined benefit plans is as follows:
2022 | $ | 23,615 |
2023 | 23,838 |
2024 | 23,729 |
2025 | 23,638 |
2026 | 23,612 |
2027-2031 | 114,262 |
Postretirement Benefit Plans The Company sponsors a defined benefit other postretirement health care plan that provide medical and life insurance coverage to certain U.S. retirees and their dependents of one of its subsidiaries. Prior to the acquisition of this subsidiary, the Company did not sponsor any postretirement benefit plans. The Company pays the majority of the medical costs for certain retirees and their spouses who are under age 65. For retirees and dependents of retirees who retired prior to January 1, 1989, and are age 65 or over, the Company contributes 100% toward the American Association of Retired Persons (“AARP”) premium frozen at the 1992 level. For retirees and dependents of retirees who retired after January 1, 1989, the Company contributes $35 per month toward the AARP premium. The life insurance plan is noncontributory. The Company’s postretirement health benefit plans are not funded. The following sets forth a reconciliation of benefit obligation and the funded status of the plan:
|  | March 31,
|  | 2021 |  | 2020
Change in benefit obligation: |  |  |  |
Benefit obligation at beginning of year |  | $ | 1,887 |  |  | $ | 2,348 |
Interest cost |  | 46 |  |  | 71 |
Actuarial gain |  | (313) |  |  | (340) |
Benefits paid |  | (232) |  |  | (192) |
Benefit obligation at end of year |  | $ | 1,388 |  |  | $ | 1,887 |
Funded status |  | $ | (1,388) |  |  | $ | (1,887) |
Unrecognized actuarial gain |  | (1,467) |  |  | (1,417) |
Net amount recognized |  | $ | (2,855) |  |  | $ | (3,304) |
Amounts recognized in the consolidated balance sheets are as follows:
|  | March 31,
|  | 2021 |  | 2020
Accrued liabilities |  | $ | (193) |  |  | $ | (270) |
Other non-current liabilities |  | (1,195) |  |  | (1,617) |
Accumulated other comprehensive gain, before tax |  | (1,467) |  |  | (1,417) |
Net amount recognized |  | $ | (2,855) |  |  | $ | (3,304) |
In fiscal 2021, net periodic postretirement benefit cost included the following:
|  | Year Ended March 31,
|  | 2021 |  | 2020 |  | 2019
Interest cost |  | $ | 46 |  |  | $ | 71 |  |  | $ | 92 |
Net amortization |  | (263) |  |  | (205) |  |  | (156) |
Net periodic postretirement benefit cost |  | $ | (217) |  |  | $ | (134) |  |  | $ | (64) |
For measurement purposes, healthcare costs are assumed to increase 6.00% in fiscal 2022, grading down over time to 4.5% in 2029. The discount rate used in determining the accumulated postretirement benefit obligation was 2.52% and 3.17% as of March 31, 2021 and 2020, respectively. Information about the expected benefit payments for the Company’s postretirement health benefit plans is as follows:
2022 | $ | 195 |
2023 | 179 |
2024 | 166 |
2025 | 152 |
2026 | 135 |
2027-2031 | 454 |
The Company has collateralized split-dollar life insurance arrangements with two of its former officers. Under these arrangements, the Company pays certain premium costs on life insurance policies for the former officers. Upon the later of the death of the former officer and their spouse, the Company will receive all of the premiums paid to-date. The net periodic pension cost for fiscal 2021 was $141,000 and the liability at March 31, 2021 is $4,682,000 with $4,544,000 included in Other non-current liabilities and $138,000 included in Accrued liabilities in the Consolidated Balance Sheet. The cash surrender value of the policies is $3,496,000 and $3,346,000 at March 31, 2021 and 2020, respectively. The balance is included in Other assets in the consolidated balance sheet. Other Benefit Plans The Company also sponsors defined contribution plans covering substantially all domestic employees and certain international employees. Participants may elect to contribute basic contributions. These plans provide for employer contributions based on employee eligibility and participation. The Company recorded a charge for such contributions of approximately $4,063,000, $5,239,000, and $5,260,000 for the years ended March 31, 2021, 2020, and 2019, respectively which are included in Cost of Products Sold, Selling Expenses, and General and Administrative Expenses within the Consolidated Statements of Operations. The Company expects its contributions for the defined contribution plans in future years to be higher than contributions in fiscal 2021 as the Company temporarily paused contributions to a portion of U.S. employees' defined contributions plans in response to COVID-19. In the first quarter of fiscal 2022 contributions have resumed. Fair Values of Plan Assets The Company classified its investments within the categories of equity securities, fixed income securities, alternative real estate, and cash equivalents, as the Company’s management bases its investment objectives and decisions from these four categories. The Company’s investment policy is to use its glide-path method to de-risk the portfolio by increasing liability-hedging investments as the pension liability funded status increases. The fair values of the Company’s defined benefit plans’ consolidated assets by asset category as of March 31 were as follows:
|  | March 31,
|  | 2021 |  | 2020
Asset categories: |  |  |  |
Equity securities |  | $ | 116,468 |  |  | $ | 94,336 |
Fixed income securities |  | 155,553 |  |  | 199,613 |
Alternative real estate |  | 12,863 |  |  | 9,401 |
Cash equivalents |  | 1,794 |  |  | 10,016 |
Total |  | $ | 286,678 |  |  | $ | 313,366 |
The fair values of our defined benefit plans’ consolidated assets were determined using the fair value hierarchy of inputs described in Note 5. The fair values by category of inputs as of March 31, 2021 and March 31, 2020 were as follows:
|  | Measured at NAV (1) |  | Quoted Prices in Active Markets for Identical Assets |  | Significant other observable Inputs |  | Significant unobservable Inputs |  |
As of March 31, 2021: |  |  |  | (Level 1) |  | (Level 2) |  | (Level 3) |  | Total
Asset categories: |  |  |  |  |  |  |  |  |  |
Equity securities |  | $ | 52,710 |  |  | $ | 63,758 |  |  | $ | — |  |  | $ | — |  |  | $ | 116,468 |
Fixed income securities |  | 25,198 |  |  | 7,115 |  |  | $ | 122,071 |  |  | 1,169 |  |  | 155,553 |
Alternative real estate |  | 12,862 |  |  | 1 |  |  | — |  |  | — |  |  | 12,863 |
Cash equivalents |  | — |  |  | 1,794 |  |  | — |  |  | — |  |  | 1,794 |
Total |  | $ | 90,770 |  |  | $ | 72,668 |  |  | $ | 122,071 |  |  | $ | 1,169 |  |  | $ | 286,678 |
(1) Reflects the net asset value (NAV) practical expedient used to approximate fair value.
|  | Measured at NAV (1) |  | Quoted Prices in Active Markets for Identical Assets |  | Significant other observable Inputs |  | Significant unobservable Inputs |  |
As of March 31, 2020: |  |  |  | (Level 1) |  | (Level 2) |  | (Level 3) |  | Total
Asset categories: |  |  |  |  |  |  |  |  |  |
Equity securities |  | $ | 42,252 |  |  | $ | 52,084 |  |  | $ | — |  |  | $ | — |  |  | $ | 94,336 |
Fixed income securities |  | 30,598 |  |  | 24,014 |  |  | 139,498 |  |  | 5,503 |  |  | 199,613 |
Alternative real estate |  | 4,195 |  |  | 5,206 |  |  | — |  |  | — |  |  | 9,401 |
Cash equivalents |  | — |  |  | 10,016 |  |  | — |  |  | — |  |  | 10,016 |
Total |  | $ | 77,045 |  |  | $ | 91,320 |  |  | $ | 139,498 |  |  | $ | 5,503 |  |  | $ | 313,366 |
(1) Reflects the net asset value (NAV) practical expedient used to approximate fair value. Level 1 securities consist of mutual funds with quoted market prices. The Level 2 fixed income securities are investments in a combination of funds whose underlying investments are in a variety of fixed income securities including foreign and domestic corporate bonds, securities issued by the U.S. government, U.S. and foreign government obligations, and other similar fixed income investments. The fair values of the underlying investments in these funds are generally based on independent broker dealer bids, or by comparison to other debt securities having similar durations, yields, and credit ratings. The fair values of these funds are determined based on their net asset values which are published daily. We are not aware of any significant restrictions on the issuances or redemption of shares of these funds Fair value of Level 3 fixed income securities at the beginning of the year was $5,503,000. During fiscal 2021 fixed income securities earned investment return of $6,000 and had disbursements of $4,340,000, which includes liquidations and termination of one of the Company's pension plans, resulting in an ending balance of $1,169,000. These fixed income securities consist primarily of insurance contracts which are carried at their liquidation value based on actuarial calculations and the terms of the contracts. Significant inputs in determining the fair value for these contracts include company contributions, contract disbursements, and stated interest rates. Gains and losses on these contracts are recognized as part of net periodic pension cost and recorded as part of cost of sales, selling, or general and administrative expense.

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- Definition The entire disclosure for postemployment benefits, which may include supplemental unemployment benefits, obligations recognized for all types of benefits provided to former or inactive employees, their beneficiaries, and covered dependents after employment but before retirement. Disclosure may also include discussion that an obligation for postemployment benefits is not accrued in accordance with regulation only because the amount cannot be reasonably estimated. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6410195&loc=d3e80090-111668 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -URI http://asc.fasb.org/topic&trid=2197446 + Details
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