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Retirement Plans | 12 Months Ended
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Dec. 31, 2024
Retirement Benefits [Abstract] |
Retirement Plans | Retirement Plans The Company provides retirement plans that cover its hourly and salaried employees. In the US, as of December 31, 2024 the Company has two defined contribution plans. Employees are eligible to participate in the appropriate plan based on employment classification. The Company's contributions to the defined contribution plans are governed by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the Company’s policy and investment guidelines of the applicable plan. The Company’s policy is to contribute at least the required minimum in accordance with the funding standards of ERISA. The Company maintains one defined contribution plans for its employees in Canada. In the United Kingdom, the Company maintains two defined contribution plans and a defined benefit plan, which is frozen. These plans are discussed in further detail below. On May 23, 2024, the Company's Board of Directors approved the termination of the frozen L.B. Foster Company Merged Retirement Plan (the “US DB Plan”) and the Portec Rail Products (UK) Limited Pension Scheme (the “UK DB Plan”). At such time, the Company notified all plan participants of the Company's intentions to terminate and fully settle the obligations. United States Defined Benefit Plan During the fourth quarter of 2024, the Company completed the termination of the US DB Plan by distributing all the assets of its US DB Plan and by making additional cash contributions of $1,806 to effectuate the termination of this plan. The settlement of these obligations resulted in the recognition of a charge of $1,722 which has been presented as a component of “Other expense - net” for the year ended December 31, 2024. The following tables present a reconciliation of the changes in the benefit obligation, the fair market value of the assets, and the funded status of the plan, as of December 31, 2024 and 2023:
|  | December 31,
|  | 2024 |  | 2023
Changes in benefit obligation: |  |  |  |
Benefit obligation at beginning of year |  | $ | 5,909 |  |  | $ | 6,101 |
Service cost |  | — |  |  | — |
Interest cost |  | 265 |  |  | 286 |
Actuarial gain |  | (150) |  |  | (23) |
Benefits paid |  | (432) |  |  | (455) |
Settlements |  | (5,592) |  |  | — |
Benefit obligation at end of year |  | $ | — |  |  | $ | 5,909 |
Change to plan assets: |  |  |  |
Fair value of assets at beginning of year |  | $ | 3,923 |  |  | $ | 3,792 |
Actual gain (loss) on plan assets |  | (61) |  |  | 310 |
Employer contribution |  | 2,274 |  |  | 276 |
Benefits paid |  | (432) |  |  | (455) |
Reversion |  | (112) |  |  |
Settlements |  | (5,592) |  |  | — |
Fair value of assets at end of year |  | — |  |  | 3,923 |
Funded status at end of year |  | $ | — |  |  | $ | (1,986) |
Amounts recognized in the consolidated balance sheets consist of: |  |  |  |
Other long-term liabilities |  | $ | — |  |  | $ | (1,986) |
Amounts recognized in accumulated other comprehensive loss consist of: |  |  |  |
Net loss |  | $ | — |  |  | $ | 1,598 |
Net periodic pension costs for the years ended December 31, 2024 and 2023 were as follows:
|  | Year Ended December 31,
|  | 2024 |  | 2023 |  |
Components of net periodic benefit cost: |  |  |  |  |  |
Interest cost |  | $ | 265 |  |  | $ | 286 |  |  |
Expected return on plan assets |  | (271) |  |  | (256) |  |  |
Recognized net actuarial loss |  | 58 |  |  | 62 |  |  |
Net periodic pension cost |  | $ | 52 |  |  | $ | 92 |  |  |
Settlement charge |  | 1,722 |  |  | — |  |  |
Total pension expense |  | $ | 1,774 |  |  | $ | 92 |  |  |
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 the net periodic benefit cost for the following year.
|  | Year Ended December 31,
|  | 2024 |  | 2023 |  |
Discount rate |  | 4.7 | % |  | 4.9 | % |  |
Expected rate of return on plan assets |  | 7.0 | % |  | 7.0 | % |  |
The expected long-term rate of return is based on numerous factors, including the target asset allocation for plan assets, historical rate of return, long-term inflation assumptions, and current and projected market conditions. Amounts applicable to the Company’s pension plan with accumulated benefit obligations in excess of plan assets were as follows as of December 31, 2023:
|  |  | December 31,
|  |  |  | 2023
Projected benefit obligation |  |  |  | $ | 5,909 |
Accumulated benefit obligation |  |  |  | 5,909 |
Fair value of plan assets |  |  |  | 3,923 |
Plan assets consist primarily of various fixed income and equity investments. The Company’s primary investment objective is to provide long-term growth of capital while accepting a moderate level of risk. The investments are limited to cash and cash equivalents, bonds, preferred stocks, and common stocks. The investment target ranges and actual allocation of pension plan assets by major category as of December 31, 2023 were as follows:
|  |  |  |  | December 31,
|  | Target |  |  |  | 2023
Asset Category |  |  |  |  |  |
Cash and cash equivalents |  | 0 - 20% |  |  |  | 4 | %
Total fixed income funds |  | 25 - 50% |  |  |  | 33 |
Total mutual funds and equities |  | 35 - 70% |  |  |  | 63 |
Total |  |  |  |  |  | 100 | %
In accordance with the fair value disclosure requirements of ASC 820, the following assets were measured at fair value on a recurring basis as of December 31, 2023. Additional information regarding ASC 820 and the fair value hierarchy can be found in Note 15.
|  |  | December 31,
|  |  |  | 2023
Asset Category |  |  |  |
Cash and cash equivalents |  |  |  | $ | 160 |
Fixed income funds |  |  |  |
Corporate bonds |  |  |  | 845 |
Total fixed income funds |  |  |  | 845 |
Equity funds and equities |  |  |  |
Mutual funds |  |  |  | — |
Exchange-traded funds |  |  |  | 2,918 |
Total mutual funds and equities |  |  |  | 2,918 |
Total |  |  |  | $ | 3,923 |
Cash equivalents: The Company uses quoted market prices to determine the fair value of these investments in interest-bearing cash accounts and they are classified as Level 1 of the fair value hierarchy. The carrying amounts approximate fair value because of the short maturity of the instruments. Fixed income funds: Investments within the fixed income funds category consist of fixed income corporate debt. The Company uses quoted market prices to determine the fair values of these fixed income funds. These instruments consist of exchange-traded government and corporate bonds and are classified as Level 1 of the fair value hierarchy. Equity funds and equities: The valuation of investments in registered investment companies is based on the underlying investments in securities. Securities traded on security exchanges are valued at the latest quoted sales price. Securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the average of the last reported bid and ask quotations. These investments are classified as Level 1 of the fair value hierarchy. United Kingdom Defined Benefit Plan The Company’s UK defined benefit plan covers certain current employees, former employees, and retirees. The plan has been frozen to new entrants since April 1, 1997 and also covers the former employees of a merged plan after January 2002. Benefits under the plan were based on years of service and eligible compensation during defined periods of service. The Company’s funding policy for the plan is to make minimum annual contributions required by applicable regulations. The UK DB Plan is fully funded as of December 31, 2024. The funded status of the United Kingdom defined benefit plan as of December 31, 2024 and 2023 was as follows:
|  | December 31,
|  | 2024 |  | 2023
Changes in benefit obligation: |  |  |  |
Benefit obligation at beginning of year |  | $ | 5,011 |  |  | $ | 4,671 |
Interest cost |  | 215 |  |  | 229 |
Actuarial gain |  | (134) |  |  | 154 |
Benefits paid |  | (322) |  |  | (292) |
Foreign currency exchange rate changes |  | (66) |  |  | 249 |
Benefit obligation at end of year |  | $ | 4,704 |  |  | $ | 5,011 |
Change to plan assets: |  |  |  |
Fair value of assets at beginning of year |  | $ | 6,399 |  |  | $ | 5,745 |
Actual gain (loss) on plan assets |  | 137 |  |  | 323 |
Employer contribution |  | 214 |  |  | 318 |
Benefits paid |  | (322) |  |  | (292) |
Foreign currency exchange rate changes |  | (83) |  |  | 305 |
Fair value of assets at end of year |  | 6,345 |  |  | 6,399 |
Funded status at end of year |  | $ | 1,641 |  |  | $ | 1,388 |
Amounts recognized in the consolidated balance sheets consist of: |  |  |  |
Other assets |  | $ | 1,641 |  |  | $ | 1,388 |
Amounts recognized in accumulated other comprehensive loss consist of: |  |  |  |
Net gain |  | $ | (703) |  |  | $ | (567) |
Prior service cost |  | 46 |  |  | 71 |
Total |  | $ | (657) |  |  | $ | (496) |
The Company's UK DB Plan is fully funded as of December 31, 2024. In January 2025, the Company entered into an insurance buy-in contract with a third party insurer which resulted in an exchange of plan assets for an annuity that covers our future projected benefit obligations. The Company expects the buy out of the plan and transfer of future benefit obligations of plan participants to be completed in early 2026. The Company does not expect to make any further contributions to the UK DB Plan. Net periodic pension costs for the years ended December 31, 2024 and 2023 were as follows:
|  | Year Ended December 31,
|  | 2024 |  | 2023 |  |
Components of net periodic benefit gain: |  |  |  |  |  |
Interest cost |  | $ | 215 |  |  | $ | 229 |  |  |
Expected return on plan assets |  | (380) |  |  | (346) |  |  |
Amortization of prior service cost |  | 24 |  |  | 24 |  |  |
Recognized net actuarial loss |  | 33 |  |  | 18 |  |  |
Net periodic pension gain |  | $ | (108) |  |  | $ | (75) |  |  |
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 the net periodic benefit cost for the following year.
|  | Year Ended December 31,
|  | 2024 |  | 2023 |  |
Discount rate |  | 5.4 | % |  | 4.5 | % |  |
Expected rate of return on plan assets |  | 5.3 | % |  | 6.0 | % |  |
Amounts applicable to the Company’s pension plans with accumulated benefit obligations in excess of plan assets were as follows as of December 31, 2024 and 2023:
|  | December 31,
|  | 2024 |  | 2023
Projected benefit obligation |  | $ | 4,704 |  |  | $ | 5,011 |
Accumulated benefit obligation |  | 4,704 |  |  | 5,011 |
Fair value of plan assets |  | 6,345 |  |  | 6,399 |
The Company has estimated the long-term rate of return on plan assets based primarily on historical returns on plan assets, adjusted for changes in target portfolio allocations, and recent changes in long-term interest rates based on publicly available information. Plan assets are invested by the trustees in accordance with a written statement of investment principles. This statement permits investment in equities, corporate bonds, United Kingdom government securities, commercial property, and cash, based on certain target allocation percentages. Asset allocation is primarily based on a strategy to provide steady growth without undue fluctuations. The target asset allocation percentages for 2024 were as follows:
Equity securities |  | Up to 100%
Commercial property |  | Not to exceed 50%
UK Government securities |  | Not to exceed 50%
Cash |  | Up to 100%
Plan assets held within the United Kingdom defined benefit plan consist of cash and equity securities that have been classified as Level 1 of the fair value hierarchy. All other plan assets have been classified as Level 2 of the fair value hierarchy. The plan assets by category for the years ended December 31, 2024 and 2023 were as follows:
|  | December 31,
|  | 2024 |  | 2023
Asset Category |  |  |  |
Cash and cash equivalents |  | $ | 139 |  |  | $ | 127 |
Equity securities |  | — |  |  | 3,676 |
Bonds |  | 6,206 |  |  | 1,693 |
Other |  | — |  |  | 903 |
Total |  | $ | 6,345 |  |  | $ | 6,399 |
United Kingdom regulations require trustees to adopt a prudent approach to funding required contributions to defined benefit pension plans. The UK DB Plan expects to make $336 of benefit payments in 2025 prior to the termination of the plan in early 2026. Defined Contribution Plans The Company sponsors five defined contribution plans for hourly and salaried employees across its domestic and international facilities. The following table summarizes the expense associated with the contributions made to these plans.
|  | Year Ended December 31,
|  | 2024 |  | 2023 |  |
United States |  | $ | 2,757 |  |  | $ | 2,841 |  |  |
Canada |  | 124 |  |  | 114 |  |  |
United Kingdom |  | 1,165 |  |  | 1,178 |  |  |
|  | $ | 4,046 |  |  | $ | 4,133 |  |  |

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