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EMPLOYEE RETIREMENT PLANS
 12 Months Ended
Dec. 31, 2020
EMPLOYEE RETIREMENT PLANS  
EMPLOYEE RETIREMENT PLANS

11. EMPLOYEE RETIREMENT PLANS

The Company has a defined benefit pension plan covering substantially all employees, as well as an unfunded supplemental pension plan for key executives. Retirement benefits are provided based on employees’ years of credited service and average earnings or stated amounts for years of service. Normal retirement age is 65 with provisions for earlier retirement. The plan also has provisions for disability and death benefits. The plan closed to new participants as of August 1, 2011 and benefit accruals under the plan were frozen effective December 31, 2016.

The Company’s funding policy for the defined benefit pension plan is to make contributions to the plan such that all employees’ benefits will be fully provided by the time they retire. Plan assets are stated at fair value and consist primarily of equity securities and fixed income securities, mainly U.S. government and corporate obligations.

The Company follows ASC 715, Compensation – Retirement Benefits,  which requires employers to recognize the funded status of defined benefit pension and other postretirement benefit plans as an asset or liability in their statements of financial position and to recognize changes in the funded status in the year in which the changes occur as a component of comprehensive income (loss). In addition, ASC 715 requires employers to measure the funded status of their plans as of the date of their year-end statements of financial position. ASC 715 also requires additional disclosures regarding amounts included in accumulated other comprehensive loss.

The Company’s pension plan’s weighted average asset allocation at December 31, 2020 and 2019, by asset category, was as follows:

​

​

​

​

​

​

​

​

Plan Assets at December 31, 

 

​

    

2020

    

2019

 

Asset Category:

 

  

 

  

​

Equity Securities

 

59

%  

55

%

Fixed Income Securities

 

32

%  

36

%

Other

 

9

%  

9

%

Total

 

100

%  

100

%

​

The Company has a Retirement Plan Committee, consisting of the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, to manage the operations and administration of all benefit plans and related trusts. The committee has an investment policy for the pension plan assets that establishes target asset allocation ranges for the above listed asset classes as follows: equity securities: 20% - 80%; fixed income securities: 20% - 80%; and other, principally cash: 0% - 20%. On a semi-annual basis, the committee reviews progress towards achieving the pension plan’s performance objectives.

To develop the expected long-term rate of return on assets assumption, the Company considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This resulted in the selection of the 7.00%long-term rate of return on assets assumption for both 2020 and 2019.

The following discount rates were used to determine the funded status of the pension plans as of December 31, 2020 and 2019:

​

​

​

​

​

​

​

​

​

​

​

​

Defined Benefit Pension Plan

​

Supplemental Pension Plan

 

​

    

2020

    

2019

    

2020

    

2019

​

Discount rate for determining funded status

 

2.47

%  

3.35

%  

2.51

%  

3.38

%

​

The following is a reconciliation of the change in benefit obligation and plan assets of both the defined benefit pension plan and the unfunded supplemental pension plan for the years ended December 31, 2020 and 2019:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Defined Benefit Pension Plan

​

Supplemental Pension Plan

​

    

2020

    

2019

    

2020

    

2019

​

​

(Dollars in thousands)

Change in projected benefit obligation

 

​

  

 

​

  

 

​

  

 

​

  

Projected benefit obligation, beginning of year

​

$

50,552

​

$

45,010

​

$

18,460

​

$

15,891

Service cost

​

 

383

​

 

463

​

 

—

​

 

—

Interest cost

​

 

1,450

​

 

1,801

​

 

562

​

 

659

Actuarial loss

​

 

6,067

​

 

5,660

​

 

2,485

​

 

2,355

Benefits paid

​

 

(2,426)

​

 

(2,382)

​

 

(382)

​

 

(445)

Projected benefit obligation, end of year

​

$

56,026

​

$

50,552

​

$

21,125

​

$

18,460

​

​

​

​

​

​

​

​

​

​

​

​

​

Change in plan assets

​

 

​

​

 

  

​

 

  

​

 

  

Fair value of plan assets, beginning of year

​

$

41,036

​

$

37,353

​

$

—

​

$

—

Actual return on plan assets

​

 

4,917

​

 

6,528

​

 

—

​

 

—

Administrative expenses

​

 

(383)

​

 

(463)

​

 

—

​

 

—

Contributions

​

 

—

​

 

—

​

 

382

​

 

445

Benefits paid

​

 

(2,426)

​

 

(2,382)

​

 

(382)

​

 

(445)

Fair value of plan assets, end of year

​

$

43,144

​

$

41,036

​

$

—

​

$

—

Funded status of plan

​

$

(12,882)

​

$

(9,516)

​

$

(21,125)

​

$

(18,460)

​

​

​

​

​

​

​

​

​

​

​

​

​

Amounts recognized in the consolidated balance sheets consist of:

​

 

  

​

 

  

​

 

  

​

 

  

Accrued liabilities - other

​

$

—

​

$

—

​

$

(473)

​

$

(453)

Long-term pension liability

​

 

(12,882)

​

 

(9,516)

​

 

(20,652)

​

 

(18,007)

Net amount recognized

​

$

(12,882)

​

$

(9,516)

​

$

(21,125)

​

$

(18,460)

​

​

​

​

​

​

​

​

​

​

​

​

​

Amounts recognized in accumulated other comprehensive loss consist of:

​

 

  

​

 

  

​

 

  

​

 

  

Accumulated loss, net of income tax benefit of $5,435, $4,478, $2,275 and $1,684, respectively

​

$

15,468

​

$

12,745

​

$

6,475

​

$

4,792

Prior service cost (credit) net of income tax liability of $0, $0, $4 and ($12), respectively

​

 

—

​

 

—

​

 

12

​

 

(34)

Net amount recognized

​

$

15,468

​

$

12,745

​

$

6,487

​

$

4,758

​

As noted above, benefit accruals under the pension plan were frozen, effective December 31, 2016. Therefore, the accumulated benefit obligation of the defined benefit pension plan and supplemental pension plan were equal to the respective plans’ projected benefit obligations, as shown in the above table, at December 31, 2020 and 2019. The increase in the projected benefit obligations in 2020 was primarily due to a decrease in the discount rates.

Assumptions used in determining pension expense for the years ended December 31, 2020 and 2019 were:

​

​

​

​

​

​

​

​

​

​

​

​

Defined Benefit Pension Plan

    

Supplemental Pension Plan

 

​

    

2020

    

2019

    

2020

    

2019

 

Discount rate for projected benefit obligation

 

3.35

%  

4.38

%  

3.38

%  

4.42

%

Discount rate for determining interest cost

 

2.92

%  

4.05

%  

3.07

%  

4.19

%

Long-term rate of return on plan assets

 

7.00

%  

7.00

%  

—

 

—

​

​

The components of pension expense for the years ended December 31, 2020 and 2019, were:

​

​

​

​

​

​

​

​

​

2020

    

2019

​

​

(Dollars in thousands)

Service cost

​

$

383

​

$

463

Interest cost

​

 

2,012

​

 

2,460

Expected return on plan assets

​

 

(2,761)

​

 

(2,502)

Net amortization and deferral

​

 

763

​

 

626

Pension expense

​

$

397

​

$

1,047

​

The components of pension expense other than the service cost component were included in “other income (expense), net” in the Consolidated Statements of Earnings.

It is the Company’s intention to satisfy the minimum funding requirements and maintain at least an 80% funding percentage in its defined benefit retirement plan in future years. At this time, the Company expects that any cash contributions necessary to satisfy these requirements in 2021 would not be material.

Projected benefit payments for the plans at December 31, 2020, were estimated as follows:

​

​

​

​

​

​

​

​

    

Defined Benefit 

    

Supplemental

​

​

Pension Plan

​

Pension Plan

​

​

(Dollars in thousands)

2021

​

$

2,835

​

$

473

2022

​

$

2,826

​

$

525

2023

​

$

2,878

​

$

695

2024

​

$

2,892

​

$

766

2025

​

$

2,885

​

$

899

2026 - 2030

​

$

14,376

​

$

5,580

​

The following table summarizes the fair value of the Company’s pension plan assets at December 31, 2020, by asset category within the fair value hierarchy (for further level information, see Note 3):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

​

Quoted Prices

​

Significant

​

Significant

​

​

​

​

​

in Active Markets

​

Observable Inputs

​

Unobservable Inputs

​

​

​

​

    

Level 1

    

Level 2

    

Level 3

    

Total

​

​

(Dollars in thousands)

Common stocks

​

$

17,194

​

$

2,196

​

$

—

​

$

19,390

Preferred stocks

​

 

245

​

 

27

​

 

—

​

 

272

Exchange traded funds

​

 

6,033

​

 

—

​

 

—

​

 

6,033

Corporate obligations

​

 

—

​

 

4,349

​

 

—

​

 

4,349

State and municipal obligations

​

 

—

​

 

821

​

 

—

​

 

821

Pooled fixed income funds

​

 

7,117

​

 

—

​

 

—

​

 

7,117

U.S. government securities

​

 

—

​

 

763

​

 

—

​

 

763

Marketable CD’s

​

 

—

​

 

513

​

 

—

​

 

513

Cash and cash equivalents

​

 

3,817

​

 

—

​

 

—

​

 

3,817

Subtotal

​

$

34,406

​

$

8,669

​

$

—

​

$

43,075

Other assets (1)

​

​

​

​

 

  

​

 

  

​

 

69

Total

​

​

​

​

 

  

​

 

  

​

$

43,144

​

(1)This category represents trust receivables that are not leveled.

The following table summarizes the fair value of the Company’s pension plan assets at December 31, 2019, by asset category within the fair value hierarchy (for further level information, see Note 3):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2019

​

​

Quoted Prices

​

Significant

​

Significant

​

​

​

​

​

in Active Markets

​

Observable Inputs

​

Unobservable Inputs

​

​

​

​

    

Level 1

    

Level 2

    

Level 3

    

Total

​

​

(Dollars in thousands)

Common stocks

​

$

15,464

​

$

2,026

​

$

—

​

$

17,490

Preferred stocks

​

 

287

​

 

29

​

 

—

​

 

316

Exchange traded funds

​

 

5,213

​

 

—

​

 

—

​

 

5,213

Corporate obligations

​

 

—

​

 

4,626

​

 

—

​

 

4,626

State and municipal obligations

​

 

—

​

 

1,062

​

 

—

​

 

1,062

Pooled fixed income funds

​

 

7,598

​

 

—

​

 

—

​

 

7,598

U.S. government securities

​

 

—

​

 

364

​

 

—

​

 

364

Marketable CD’s

​

 

—

​

 

806

​

 

—

​

 

806

Cash and cash equivalents

​

 

3,470

​

 

—

​

 

—

​

 

3,470

Subtotal

​

$

32,032

​

$

8,913

​

$

—

​

$

40,945

Other assets (1)

​

​

​

​

 

  

​

 

  

​

 

91

Total

​

​

​

​

 

  

​

 

  

​

$

41,036

​

(1)This category represents trust receivables that are not leveled.

The Company also has a defined contribution plan covering substantially all employees. The Company contributed $875,000 and $941,000 to the plan in 2020 and 2019, respectively.