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Savings, Pension and Other Postretirement Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2023
Retirement Benefits [Abstract] |
Savings, Pension and Other Postretirement Employee Benefit Plans | Retirement Plans and Postretirement Benefits Certain of our employees are eligible to participate in defined contribution savings and defined benefit postretirement plans. These include 401(k) savings plans, defined benefit pension plans including company-sponsored and multiemployer plans, and other postretirement employee benefit (OPEB) plans. 401(k) Savings Plans Substantially all of our employees are eligible to participate in 401(k) savings plans, which include a company match component. As of December 31, 2023 our contributions may be up to 7.7% for U.S. salaried and non-union hourly employees, consisting of a match of up to 4.2% of allowable contributions and an automatic employer contribution of 3.5%. Contributions associated with our union employees are based upon negotiated agreements. In 2023, 2022 and 2021, we recorded expense of $16.7 million, $15.7 million, and $16.4 million related to employer contributions to the 401(k) plans. Company-Sponsored Defined Benefit Pension and OPEB Plans A portion of our salaried and hourly employees are covered by company-sponsored noncontributory defined benefit pension plans. We provide retiree health care and life insurance plans, which cover certain salaried and hourly employees. Retiree health care benefits for Medicare eligible participants over the age of 65 are provided through Health Reimbursement Accounts, or HRA's. Benefits for retirees under the age of 65 are provided under our company-sponsored health care plans, which require retiree contributions and contain other cost-sharing features. The retiree life insurance plans are primarily noncontributory. We also maintain a Salaried Supplemental Benefit Plan, an unfunded, non-qualified defined benefit plan intended to provide supplemental retirement benefits to certain executives. Benefits in the Salaried Supplemental Benefit Plan are generally provided to restore benefits or company contributions that are reduced under the company sponsored qualified plans due to the limits of Section 401(a)(17) or 415 of the Code. The plan is composed of a defined benefit portion and a defined contribution portion. The defined benefit portion of the plan was frozen on December 31, 2011 (the date on which all benefit accruals under the Salaried Retirement Plan were frozen) and as of December 31, 2023, we had two active employees under this portion. We paid benefits of $0.5 million associated with the defined benefit portion of the plan in 2023. The defined contribution portion of this liability totaled $2.3 million and $1.6 million at December 31, 2023 and 2022. The current and long-term portions of the liability are included in “Accounts payable and accrued liabilities” and “Deferred tax liabilities and other long-term obligations” on our Consolidated Balance Sheets. The defined benefit portion is included in the pension benefit plans tables below. Pension and Other Postretirement Employee Benefit Plans The following table shows the changes in the benefit obligation, plan assets and funded status for 2023 and 2022 for both the pension benefit plans and the other postretirement employee benefit plans.
| Pension Benefit Plans |  | Other Postretirement Employee Benefit Plans
| 2023 | 2022 |  | 2023 | 2022
Change in projected benefit obligation: |  |  |  |  |
Benefit obligation at beginning of year | $ | 234.7 |  | $ | 310.1 |  |  | $ | 52.2 |  | $ | 71.9 |
Service cost | 3.5 |  | 2.2 |  |  | 0.2 |  | 0.3 |
Interest cost | 12.5 |  | 8.9 |  |  | 2.8 |  | 2.1 |
Actuarial (gains) losses | 0.1 |  | (65.5) |  |  | 2.2 |  | (17.3) |
Benefits paid | (22.4) |  | (21.0) |  |  | (4.9) |  | (4.8) |
Benefit obligation at end of year | 228.3 |  | 234.7 |  |  | 52.5 |  | 52.2 |
Changes in plan assets: |  |  |  |  |
Fair value of plan assets at beginning of year | 231.7 |  | 317.5 |  |  | — |  | — |
Actual return on plan assets | 21.2 |  | (65.3) |  |  | — |  | — |
Employer contribution | 0.5 |  | 0.5 |  |  | 4.9 |  | 4.8 |
Benefits paid | (22.4) |  | (21.0) |  |  | (4.9) |  | (4.8) |
Fair value of plan assets at end of year | 231.1 |  | 231.7 |  |  | — |  | — |
Funded status at end of year | $ | 2.8 |  | $ | (3.0) |  |  | $ | (52.5) |  | $ | (52.1) |
Amounts recognized in Consolidated Balance Sheets: |  |  |  |  |
Non-current assets | $ | 11.1 |  | $ | 8.4 |  |  | $ | — |  | $ | — |
Current liabilities | (0.5) |  | (0.4) |  |  | (4.7) |  | (4.9) |
Non-current liabilities | (7.9) |  | (11.0) |  |  | (47.8) |  | (47.2) |
Net amount recognized | $ | 2.8 |  | $ | (3.0) |  |  | $ | (52.5) |  | $ | (52.1) |
Amounts recognized in accumulated other comprehensive loss (pre-tax): |  |  |  |  |
Net actuarial loss (gain) | $ | 56.4 |  | $ | 62.5 |  |  | $ | (8.9) |  | $ | (11.5) |
The benefit obligation for our pension benefits is the projected benefit obligation based upon credited service as of the measurement date. The December 31, 2023 pension funded status was unfavorably affected by a decrease in the discount rate, partially offset by higher than expected asset returns. The OPEB benefit obligation increased as of December 31, 2023 due to a decrease in the discount rate, increase in claim costs assumptions, and the continued payment of benefits, partially offset by demographic changes. Information as of December 31 for certain pension plans included above with accumulated benefit obligations in excess of plan assets were as follows:
| 2023 | 2022
Projected benefit obligation | $ | 129.1 |  | $ | 132.6 |
Accumulated benefit obligation | 129.1 |  | 132.6 |
Fair value of plan assets | 120.7 |  | 121.2 |
Net Periodic Cost Service cost is the actuarial present value of benefits attributed by the plans’ benefit formula to services rendered by employees during the year. Interest cost represents the increase in the projected benefit obligation, which is a discounted amount, due to the passage of time. The expected return on plan assets reflects the computed amount of current-year earnings from the investment of plan assets using an estimated long-term rate of return.
| Pension Benefit Plans |  | Other Postretirement Employee Benefit Plans
| 2023 | 2022 | 2021 |  | 2023 | 2022 | 2021
Service cost | $ | 3.5 |  | $ | 2.2 |  | $ | 1.8 |  |  | $ | 0.2 |  | $ | 0.3 |  | $ | 0.4 |
Interest cost | 12.5 |  | 8.9 |  | 8.4 |  |  | 2.8 |  | 2.1 |  | 2.0 |
Expected return on plan assets | (15.2) |  | (11.3) |  | (10.6) |  |  | — |  | — |  | — |
Amortization of actuarial loss | 0.1 |  | 6.2 |  | 10.2 |  |  | (0.4) |  | — |  | 0.3 |
Net periodic cost | $ | 0.8 |  | $ | 5.9 |  | $ | 9.9 |  |  | $ | 2.6 |  | $ | 2.4 |  | $ | 2.7 |
The components of net periodic pension expense other than the Service cost component are included in "Other non-operating expense" in the Consolidated Statements of Operations. During 2023, 2022, and 2021, $3.1 million, $2.2 million and $2.0 million of net periodic pension and OPEB costs were charged to "Cost of sales" and $0.6 million, $0.4 million and $0.2 million were charged to "Selling, general and administrative expenses," in the accompanying Consolidated Statements of Operations.
Assumptions: | Pension Benefit Plans |  | Other Postretirement Employee Benefit Plans
| 2023 | 2022 | 2021 |  | 2023 | 2022 | 2021
Actuarial assumption used to determine benefit obligation: |  |  |  |  |  |  |
Discount rate | 5.5 | % | 5.6 | % | 3.0 | % |  | 5.3 | % | 5.6 | % | 2.9 | %
Actuarial assumption used to determine net periodic pension cost: |  |  |  |  |  |  |
Discount rate | 5.6 | % | 3.0 | % | 2.6 | % |  | 5.6 | % | 2.9 | % | 2.6 | %
Expected return on plan assets | 5.8 | % | 4.0 | % | 3.8 | % |  | — |  | — |  | — |
The discount rate used in the determination of pension benefit and OPEB obligations and pension expense was determined based on a review of long-term high-grade bonds. The expected return on plan assets assumption is based upon an analysis of historical long-term returns for various investment categories, as measured by appropriate indices and forward-looking expectations of returns. These indices are weighted based upon the extent to which plan assets are invested in the particular categories in arriving at our determination of a composite expected return. The assumed health care cost trend rate used to calculate 2023 OPEB cost was 6.5% in 2023, grading to 3.7% by 2074, for participants whose benefits are not provided through HRAs, and 4.5% in 2023 through 2030, then grading to 3.7% after 2030 for participants whose benefits are provided through HRAs. The health care cost trend rate used to calculate December 31, 2023 OPEB obligations was 6.9% in 2024, grading to 3.7% by 2074, for participants whose benefits are not provided through HRAs, and 4.5% in 2024, grading to 3.7% after 2030, for participants whose benefits are provided through HRAs. Plan Assets There have been no changes in the methodologies used during 2023 and 2022. Investments in common and collective trust funds are generally valued based on their respective net asset value (or its equivalent), as a practical expedient to estimate fair value due to the absence of a readily determinable fair value. The following tables set forth by level, within the fair value hierarchy, the investments at fair value for our company-sponsored pension benefit plans:
| December 31, 2023
| Level 1 |  |  |  |  | Investments measured at net asset value | Total
Cash and cash equivalents | $ | 1.9 |  |  |  |  |  | $ | — |  | $ | 1.9 |
Collective investment funds | — |  |  |  |  |  | 229.2 |  | 229.2 |
Total investments at fair value | $ | 1.9 |  |  |  |  |  | $ | 229.2 |  | $ | 231.1 |
| December 31, 2022
| Level 1 |  |  |  |  | Investments measured at net asset value | Total
Cash and cash equivalents | $ | 1.6 |  |  |  |  |  | $ | — |  | $ | 1.6 |
Collective investment funds | — |  |  |  |  |  | 230.1 |  | 230.1 |
Total investments at fair value | $ | 1.6 |  |  |  |  |  | $ | 230.1 |  | $ | 231.7 |
We have formal investment policy guidelines for our company-sponsored plans. These guidelines were set by our Benefits Committee, which is comprised of members of our management and has been assigned its fiduciary authority over management of the plan assets by our Board of Directors. The Committee’s duties include periodically reviewing and modifying those investment policy guidelines as necessary and ensuring that the policy is adhered to and the investment objectives are met. The investment policy includes guidelines for specific categories of equity and fixed income securities. Assets are managed by professional investment managers who are expected to achieve a reasonable rate of return over a market cycle. Long-term performance is a fundamental tenet of the policy. The general policy states that plan assets would be invested to seek the greatest return consistent with the fiduciary character of the pension funds and to allow the plans to meet the need for timely pension benefit payments. The specific investment guidelines stipulate that management is to maintain adequate liquidity for meeting expected benefit payments by reviewing, on a timely basis, contribution and benefit payment levels and appropriately revising long-term and short-term asset allocations. Management takes reasonable and prudent steps to preserve the value of pension fund assets, avoid the risk of large losses and also attempt to preserve the funded status of the plans. Major steps taken to provide this protection included: ▪Assets are diversified among various asset classes, such as domestic equities, international equities, fixed income and cash. The long-term asset allocation ranges are as follows:
Domestic equities |  |  | 5% | - | 10%
International equities, including emerging markets |  |  | 5% | - | 10%
Corporate/Government bonds |  |  | 80% | - | 90%
Liquid reserves |  |  | —% | - | 5%
Periodically, we review the allocations within these ranges to determine what adjustments should be made based on changing economic and market conditions and specific liquidity requirements. •Assets are managed by professional investment managers and could be invested in separately managed accounts or commingled funds. ▪Assets are not invested in securities rated below BBB- by S&P or Baa3 by Moody’s. The investment guidelines also require that the individual investment managers are expected to achieve a reasonable rate of return over a market cycle. Emphasis is placed on long-term performance versus short-term market aberrations. Factors considered in determining reasonable rates of return include performance achieved by a diverse cross section of other investment managers, performance of commonly used benchmarks (e.g., Russell 3000 Index, MSCI World ex-U.S. Index, Barclays Capital Long Credit Index), actuarial assumptions for return on plan investments and specific performance guidelines given to individual investment managers. As of December 31, 2023, eight investment options held substantially all of the pension funds. Plan assets were diversified among the various asset classes within the allocation ranges approved by the Benefits Committee. In 2023, we did not make any contributions to our qualified pension plans. In 2024, we expect to make contributions of $0.7 million. We do not anticipate funding our OPEB plans in 2024 except to pay benefit costs as incurred during the year by plan participants. Estimated future benefit payments are as follows for the years indicated:
| Pension Benefit Plans | Other Postretirement Employee Benefit Plans |  |
2024 | $ | 19.9 |  | $ | 4.7 |  |  |
2025 | 19.7 |  | 4.5 |  |  |
2026 | 19.4 |  | 4.4 |  |  |
2027 | 19.2 |  | 4.3 |  |  |
2028 | 18.9 |  | 4.2 |  |  |
2029-2033 | 88.1 |  | 19.1 |  |  |
Multiemployer Defined Benefit Pension Plans Hourly employees at one of our manufacturing facilities participate in multiemployer defined benefit pension plans: the PACE Industry Union-Management Pension Fund (PIUMPF) which is managed by United Steelworkers (USW), Benefits; and the International Association of Machinist & Aerospace Workers National Pension Fund (IAM NPF). We make contributions to these plans, as well as make contributions to a trust fund established to provide retiree medical benefits for a portion of these employees, which is also managed by USW Benefits. The risks of participating in these multiemployer plans are different from single-employer plans in the following respects: •Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. •If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. The number of employers participating in PIUMPF fell from 135 during 2012 to 43 during 2022. We believe that we are now the employer making the largest proportion of total contributions. •Under applicable federal law, any employer contributing to a multiemployer pension plan that completely ceases participating in the plan while it is underfunded is subject to an assessment of such employer's allocable share of the aggregate unfunded vested benefits of the plan, except when that plan is in "critical" or "critical and declining" status. In certain circumstances, an employer can also be assessed a statutory withdrawal liability for a partial withdrawal from a multiemployer pension plan. Based on information available to us as of December 31, 2023, as well as information provided by PIUMPF and IAM NPF and reviewed by our actuarial consultant, we estimate the aggregate pre-tax liability that we would have incurred if we had completely withdrawn from PIUMPF and IAM NPF in 2023 would have been in excess of $78 million. However, the exact amount of potential exposure could be higher or lower than the estimate, depending on, among other things, the nature and timing of any triggering events and the funded status of PIUMPF and IAM NPF at that time. A withdrawal liability is recorded for accounting purposes when withdrawal is probable and the amount of the withdrawal obligation is reasonably estimable. Our participation in these plans for the annual period ended December 31, 2023, is outlined in the table below. The “EIN" and "Plan Number” columns provide the Employee Identification Number, or EIN, and the three-digit plan number. The most recent Pension Protection Act, or PPA, zone status available in 2023 and 2022 is for a plan’s year-end as of December 31, 2023 and 2022. The zone status is set under the provisions of the Multiemployer Pension Plan Reform Act of 2014 and is based on information we received from the plans and is certified by each plan's actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent but more than 65 percent funded, and plans in the green zone are at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a Funding Improvement Plan, or FIP, or a Rehabilitation Plan, or RP, is either pending or has been implemented as required by the PPA as a measure to correct its underfunded status. The last column lists the expiration date(s) of the collective-bargaining agreement(s) to which the plans are subject. In 2023, the contribution rate for the IAM NPF plan was $4.00 per hour. In accordance with that plan's Rehabilitation Plan, we began making an additional contribution in June 2019. This additional contribution started at 2.5% and will increase 2.5% each year while the Rehabilitation Plan is in effect. Starting June of 2023 our additional contribution increased to 13.3% of our contractual contribution rate. This additional contribution is scheduled to continue and compound each year while the rehabilitation plan remains in effect. In 2023, the contribution rate for PIUMPF was $2.79 per hour. Contribution rates for IAM NPF and PIUMPF were increased as part of their respective RPs in lieu of the legally required surcharge, paid by the employers, to assist the fund’s financial status. We were listed in PIUMPF’s Form 5500 report as providing more than five percent of the total contributions for the years 2022 and 2021. At the date of issuance of our consolidated financial statements, Form 5500 reports for these plans were not available for the 2023 plan year.
Pension Fund |  | EIN |  | Plan Number |  | PPA Zone Status |  | FIP/RP Status Pending/ Implemented |  | Contributions (in millions) |  | Surcharge Imposed |  | Expiration Date of Collective Bargaining Agreement
2023 |  | 2022 |  | 2023 |  | 2022 |  | 2021 |
IAM NPF |  | 51-6031295 |  | 002 |  | Red |  | Red |  | Implemented |  | $ | 0.2 |  |  | $ | 0.3 |  |  | $ | 0.3 |  |  | No |  | 5/31/2026
PIUMPF |  | 11-6166763 |  | 001 |  | Red |  | Red |  | Implemented |  | 5.6 |  |  | 5.5 |  |  | 5.4 |  |  | No |  | 8/31/2025
|  |  |  |  |  |  |  |  | Total Contributions: |  | $ | 5.8 |  |  | $ | 5.7 |  |  | $ | 5.7 |  |  |  |  |
.Other Benefit Plans We maintain the Clearwater Paper Corporation Management Deferred Compensation Plan. Pursuant to this plan, certain management employees are eligible to defer up to 50% of their regular salary and up to 10% of their annual incentives. Each plan participant is fully vested in these contributions. The liability under this plan totaled $5.7 million and $4.3 million at December 31, 2023 and December 31, 2022. The current and long-term portions of the liability are included in “Accounts payable and accrued liabilities” and “Deferred tax liabilities and other long-term obligations” on our Consolidated Balance Sheets.

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