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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2019
Compensation And Retirement Disclosure [Abstract] |
Employee benefit plans | Note 11 - Employee benefit plans: Defined contribution plans - We maintain various defined contribution pension plans. Company contributions are based on matching or other formulas. Defined contribution plan expense approximated $2.5 million in 2017, $3.1 million in 2018 and $3.2 million in 2019. Defined benefit pension plans - We maintain a defined benefit pension plan in the U.S. We also maintain a plan in the United Kingdom (U.K.) related to a former disposed business unit in the U.K. The benefits under our defined benefit plans are based upon years of service and employee compensation. The plans are closed to new participants and no additional benefits accrue to existing plan participants. Our funding policy is to contribute annually the minimum amount required under ERISA (or equivalent non-U.S.) regulations plus additional amounts as we deem appropriate. We expect to contribute approximately $2.0 million to our defined benefit pension plans during 2020. Benefit payments to all plan participants out of plan assets are expected to be the equivalent of:
Years ending December 31, |  | Amount |
|  | (In thousands) |
2020 |  | $ | 3,551 |
2021 |  |  | 3,576 |
2022 |  |  | 3,583 |
2023 |  |  | 3,545 |
2024 |  |  | 3,465 |
Next 5 years |  |  | 16,150 |
The funded status of our defined benefit pension plans is presented in the table below.
|  | December 31, |
|  | 2018 |  |  | 2019 |
|  | (In thousands) |
Change in projected benefit obligations (PBO): |  |  |  |  |  |  |  |
Benefit obligations at beginning of the year |  | $ | 53,978 |  |  | $ | 49,249 |
Interest cost |  |  | 1,808 |  |  |  | 1,884 |
Participant contributions |  |  | 5 |  |  |  | 1 |
Actuarial losses (gains) |  |  | (2,511 | ) |  |  | 2,582 |
Change in currency exchange rates |  |  | (545 | ) |  |  | 260 |
Benefits paid |  |  | (3,486 | ) |  |  | (3,626 | )
Benefit obligations at end of the year |  |  | 49,249 |  |  |  | 50,350 |
Change in plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of the year |  |  | 44,222 |  |  |  | 40,626 |
Actual return on plan assets |  |  | (2,237 | ) |  |  | 5,752 |
Employer contributions |  |  | 2,792 |  |  |  | 3,173 |
Participant contributions |  |  | 5 |  |  |  | 1 |
Change in currency exchange rates |  |  | (670 | ) |  |  | 387 |
Benefits paid |  |  | (3,486 | ) |  |  | (3,626 | )
Fair value of plan assets at end of year |  |  | 40,626 |  |  |  | 46,313 |
Funded status |  | $ | (8,623 | ) |  | $ | (4,037 | )
Amounts recognized in the balance sheet: |  |  |  |  |  |  |  |
Noncurrent pension asset |  | $ | 1,898 |  |  | $ | 4,294 |
Accrued pension costs: |  |  |  |  |  |  |  |
Current |  |  | (132 | ) |  |  | (101 | )
Noncurrent |  |  | (10,389 | ) |  |  | (8,230 | )
Total |  |  | (8,623 | ) |  |  | (4,037 | )
Accumulated other comprehensive loss - actuarial losses, net |  |  | 31,601 |  |  |  | 28,687 |
Total |  | $ | 22,978 |  |  | $ | 24,650 |
Accumulated benefit obligations (ABO) |  | $ | 49,249 |  |  | $ | 50,350 |
The amounts shown in the table above for actuarial losses (gains) at December 31, 2018 and 2019 have not been recognized as components of our periodic defined benefit pension cost as of those dates. These amounts will be recognized as components of our periodic defined benefit cost in future years. These amounts, net of deferred income taxes, are recognized in our accumulated other comprehensive income (loss) at December 31, 2018 and 2019. We expect that $1.5 million of the unrecognized actuarial losses will be recognized as a component of our periodic defined benefit pension cost in 2020. The table below details the changes in other comprehensive income during 2017, 2018 and 2019.
|  | Years ended December 31, |
|  | 2017 |  |  | 2018 |  |  | 2019 |
|  | (In thousands) |
Changes in plan assets and benefit obligations recognized in other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |
Net actuarial gain (loss) arising during the year |  | $ | 498 |  |  | $ | (2,709 | ) |  | $ | 1,330 |
Amortization of unrecognized net actuarial loss |  |  | 1,704 |  |  |  | 1,937 |  |  |  | 1,584 |
Total |  | $ | 2,202 |  |  | $ | (772 | ) |  | $ | 2,914 |
The components of our net periodic defined benefit pension cost are presented in the table below. The amount shown below for the amortization of unrecognized actuarial losses in 2017, 2018 and 2019, net of deferred income taxes, was recognized as a component of our accumulated other comprehensive income (loss) at December 31, 2016, 2017 and 2018, respectively.
|  | Years ended December 31, |
|  | 2017 |  |  | 2018 |  |  | 2019 |
|  | (In thousands) |
Net periodic pension cost: |  |  |  |  |  |  |  |  |  |  |  |
Interest cost on PBO |  | $ | 2,072 |  |  | $ | 1,808 |  |  | $ | 1,884 |
Expected return on plan assets |  |  | (2,770 | ) |  |  | (3,043 | ) |  |  | (1,899 | )
Recognized actuarial losses |  |  | 1,704 |  |  |  | 1,937 |  |  |  | 1,584 |
Settlement cost |  |  | 87 |  |  |  | - |  |  |  | - |
Total |  | $ | 1,093 |  |  | $ | 702 |  |  | $ | 1,569 |
Certain information concerning our defined benefit pension plans (including information concerning certain plans for which ABO exceeds the fair value of plan assets as of the indicated date) is presented in the table below.
|  | December 31, |
|  | 2018 |  |  | 2019 |
|  | (In thousands) |
PBO at end of the year |  |  |  |  |  |  |  |
U.S. plan |  | $ | 40,643 |  |  | $ | 42,198 |
U.K. plan |  |  | 8,606 |  |  |  | 8,152 |
Total |  | $ | 49,249 |  |  | $ | 50,350 |
Fair value of plan assets at end of the year |  |  |  |  |  |  |  |
U.S. plan |  | $ | 30,122 |  |  | $ | 33,867 |
U.K. plan |  |  | 10,504 |  |  |  | 12,446 |
Total |  | $ | 40,626 |  |  | $ | 46,313 |
Plans for which the ABO exceeds plan assets (only our U.S. plan): |  |  |  |  |  |  |  |
PBO |  | $ | 40,643 |  |  | $ | 42,198 |
ABO |  |  | 40,643 |  |  |  | 42,198 |
Fair value of plan assets |  |  | 30,122 |  |  |  | 33,867 |
The weighted-average discount rate assumptions used in determining the actuarial present value of our benefit obligations as of December 31, 2018 and 2019 are 3.9% and 2.9%, respectively. Such weighted-average rates were determined using the projected benefit obligations at each date. Since our plans are closed to new participants and no new additional benefits accrue to existing plan participants, assumptions regarding future compensation levels are not applicable. Consequently, the accumulated benefit obligations for all of our defined benefit pension plans were equal to the projected benefit obligations at December 31, 2018 and 2019. The weighted-average rate assumptions used in determining the net periodic pension cost for 2017, 2018 and 2019 are presented in the table below. Such weighted-average discount rates were determined using the projected benefit obligations as of the beginning of each year and the weighted-average long-term return on plan assets was determined using the fair value of plan assets as of the beginning of each year.
|  | Years ended December 31, |
Rate |  | 2017 |  |  | 2018 |  |  | 2019 |
Discount rate |  |  | 3.7 | % |  |  | 3.4 | % |  |  | 3.9 | %
Long-term rate of return on plan assets |  |  | 6.9 | % |  |  | 7.2 | % |  |  | 4.7 | %
Variances from actuarially assumed rates will result in increases or decreases in accumulated pension obligations, pension expense and funding requirements in future periods. At December 31, 2017, substantially all of the assets attributable to our U.S. plan were invested in the Combined Master Retirement Trust (CMRT), a collective investment trust sponsored by Contran to permit the collective investment by certain master trusts that fund certain employee benefit plans sponsored by Contran and certain of its affiliates, including us. For 2017 and 2018, the long-term rate of return assumption for our U.S. plan assets was 7.5%, based on the long-term asset mix of the assets of the CMRT and the expected long-term rates of return for such asset components as well as advice from Contran’s actuaries. During 2018, Contran and the other employer-sponsors (including us) implemented a restructuring of the CMRT, in which a substantial part of each plan’s units in the CMRT were redeemed in exchange for a pro-rata portion of a substantial part of the CMRT’s investments. Following such restructuring, the plans held directly in the aggregate the investments previously held directly by the CMRT which had been exchanged for CMRT units as part of the restructuring. Certain investments held directly by the CMRT were not part of such restructuring and remained investments of the CMRT at December 31, 2018. During 2019, the remaining investments of the CMRT allocable to our U.S. plan were transferred and are held as direct investments of our U.S. plan at December 31, 2019. Such restructuring was implemented in part so each plan could more easily align the composition of its plan asset portfolio with the plan’s benefit obligations. In determining the expected long-term rate of return on our U.S. and non-U.S. plan asset assumptions, we consider the long-term asset mix (e.g. equity vs. fixed income) for the assets for each of our plans and the expected long-term rates of return for such asset components. In addition, we receive third-party advice about appropriate long-term rates of return. In the U.S. we currently have a plan asset target allocation of 36% to equity securities, 49% to fixed income securities, and the remainder is allocated to multi-asset strategies. The expected long-term rate of return for such investments is approximately 9%, 4% and 3%, respectively (before plan administrative expenses). The majority of U.S. plan assets are Level 1 inputs because they are traded in active markets and approximately 30% of our U.S. plan assets are invested in funds that are valued at net asset value (NAV) and, in accordance with ASC 820-10, not subject to classification in the fair value hierarchy. The non-U.S. plan assets consist of marketable securities which are Level 1 inputs because they trade in active markets. We regularly review our actual asset allocation for each plan, and will periodically rebalance the investments in each plan to more accurately reflect the targeted allocation and/or maximize the overall long-term return when considered appropriate. The composition of our pension plan assets by fair value level at December 31, 2018 and 2019 is shown in the table below.
|  | Fair Value Measurements |
|  | Total |  |  | Quoted prices in active markets (Level 1) |  |  | Significant other observable inputs (Level 2) |  |  | Significant unobservable inputs (Level 3) |  |  | Assets measured at NAV |
|  | (In thousands) |  |  |  |  |
December 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equities |  | $ | 11,353 |  |  | $ | 3,423 |  |  | $ | - |  |  | $ | - |  |  | $ | 7,930 |
Fixed income |  |  | 13,856 |  |  |  | 13,856 |  |  |  | - |  |  |  | - |  |  |  | - |
Cash and other |  |  | 3,250 |  |  |  | 2,347 |  |  |  | - |  |  |  | - |  |  |  | 903 |
CMRT |  |  | 1,663 |  |  |  | - |  |  |  | - |  |  |  | 1,663 |  |  |  | - |
Other |  |  | 10,504 |  |  |  | 10,504 |  |  |  | - |  |  |  | - |  |  |  | - |
Total |  | $ | 40,626 |  |  | $ | 30,130 |  |  | $ | - |  |  | $ | 1,663 |  |  | $ | 8,833 |
|  | Fair Value Measurements |
|  | Total |  |  | Quoted prices in active markets (Level 1) |  |  | Significant other observable inputs (Level 2) |  |  | Significant unobservable inputs (Level 3) |  |  | Assets measured at NAV |
|  | (In thousands) |  |  |  |  |
December 31, 2019: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equities |  | $ | 13,439 |  |  | $ | 3,789 |  |  | $ | - |  |  | $ | 439 |  |  | $ | 9,211 |
Fixed income |  |  | 16,290 |  |  |  | 16,290 |  |  |  | - |  |  |  | - |  |  |  | - |
Cash and other |  |  | 4,138 |  |  |  | 3,197 |  |  |  | - |  |  |  | - |  |  |  | 941 |
Other |  |  | 12,446 |  |  |  | 12,446 |  |  |  | - |  |  |  | - |  |  |  | - |
Total |  | $ | 46,313 |  |  | $ | 35,722 |  |  | $ | - |  |  | $ | 439 |  |  | $ | 10,152 |

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