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Retirement Plans And Other Postretirement Benefits
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Retirement Plans And Other Postretirement Benefits 8. RETIREMENT PLANS AND OTHER POSTRETIREMENT BENEFITS
Tredegar sponsors a noncontributory defined benefit (pension) plan covering certain current and former U.S. employees. The plan for salaried and hourly employees currently in effect is based on a formula using the participant’s years of service and compensation or using the participant’s years of service and a dollar amount. The plan is closed to new participants and pay for active plan participants for benefit calculations was frozen as of December 31, 2007. As of January 31, 2018, the plan no longer accrued benefits associated with crediting employees for service, thereby freezing all future benefits under the plan.
Tredegar also has a non-qualified supplemental pension plan covering certain employees. Effective December 31, 2005, further participation in this plan was terminated and benefit accruals for existing participants were frozen. The plan was designed to restore all or a part of the pension benefits that would have been payable to designated participants from the principal pension plans if it were not for limitations imposed by income tax regulations. The projected benefit obligation relating to this unfunded plan was $2.1 million and $2.2 million at December 31, 2021 and December 31, 2020, respectively. Pension expense recognized for this plan was $0.1 million in 2021, 2020, and 2019. This information has been included in the pension benefit tables below.
In addition to providing pension benefits, the Company provides postretirement life insurance and health care benefits for certain groups of employees. Tredegar and retirees share in the cost of postretirement health care benefits, with employees hired on or before January 1, 1993, receiving a fixed subsidy to cover a portion of their health care premiums. The Company eliminated prescription drug coverage for Medicare-eligible retirees as of January 1, 2006. Consequently, Tredegar is not eligible for any federal subsidies.
Pension and other postretirement benefit liabilities related to Personal Care Films have been retained by the Company. Pension expense recognized for participation by these former employees in the Company’s plans is not material for the years ended December 31, 2021, 2020, and 2019.
The following tables reconcile the changes in benefit obligations and plan assets in 2021 and 2020, and reconcile the funded status to prepaid or accrued cost at December 31, 2021 and 2020:
 Pension BenefitsOther Post-
Retirement Benefits
(In thousands)2021202020212020
Change in benefit obligation:
Benefit obligation, beginning of year$336,159 $318,763 $8,164 $7,650 
Service cost— — 21 29 
Interest cost8,398 10,156 195 243 
Effect of actuarial (gains) losses related to the following:
Discount rate change(12,512)26,887 (272)644 
Retirement rate assumptions and mortality table adjustments1,028 (3,446)(1)13 
Other(101)69 (274)55 
Plan participant contributions— — 613 606 
Benefits paid(16,803)(16,270)(1,076)(1,076)
Benefit obligation, end of year$316,169 $336,159 $7,370 $8,164 
Change in plan assets:
Plan assets at fair value, beginning of year$233,075 $218,329 $— $— 
Actual return on plan assets23,131 18,800 — — 
Employer contributions5,209 12,216 463 470 
Plan participant contributions— — 613 606 
Benefits paid(16,803)(16,270)(1,076)(1,076)
Plan assets at fair value, end of year$244,612 $233,075 $— $— 
Funded status of the plans$(71,557)$(103,084)$(7,370)$(8,164)
Amounts recognized in the consolidated balance sheets:
Accrued expenses (current)$181 $181 $478 $481 
Pension and other postretirement benefit obligations, net71,376 102,903 6,892 7,683 
Net amount recognized$71,557 $103,084 $7,370 $8,164 
The following table sets forth the assumptions used in accounting for the pension and other post-retirement benefits, and the components of net periodic benefit cost:
 Pension BenefitsOther Post-
Retirement Benefits
(In thousands, except percentages)202120202019202120202019
Weighted-average assumptions used to determine benefit obligations:
Discount rate2.90 %2.57 %3.27 %2.86 %2.54 %3.25 %
Expected long-term return on plan assets3.05 %5.00 %5.00 %n/an/an/a
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate2.57 %3.27 %4.40 %2.54 %3.25 %4.37 %
Expected long-term return on plan assets5.00 %5.00 %6.00 %n/an/an/a
Components of net periodic benefit cost:
Service cost$— $— $— $21 $29 $26 
Interest cost8,398 10,156 12,222 195 243 290 
Expected return on plan assets(11,316)(11,004)(13,528)— — — 
Amortization of prior service costs and gains or losses17,003 15,494 10,891 (141)(198)(258)
Net periodic benefit cost$14,085 $14,646 $9,585 $75 $74 $58 
Net periodic benefit cost is determined using assumptions at the beginning of each year. Funded status is determined using assumptions at the end of each year. The amount of the accumulated benefit obligation is the same as the projected benefit obligation. At December 31, 2021, the effect of a 1% change in the health care cost trend rate assumptions would not impact the post-retirement obligation.
Expected benefit payments over the next five years and in the aggregate for 2027—2031 are as follows:
(In thousands)Pension
Benefits		Other Post-
Retirement
Benefits
2022$18,256 $478 
202318,380 472 
202418,591 465 
202518,615 456 
202618,574 447 
2027—203189,722 2,081 
The average remaining duration of benefit payments for the pension plan is about 11.1 years.
The pre-tax amounts recorded in 2021, 2020 and 2019 in accumulated other comprehensive income consist of:
 PensionOther Post-Retirement
(In thousands)202120202019202120202019
Net actuarial (gain) loss$109,893 $150,267 $150,047 $(320)$86 $(824)
Pension expense is expected to be $13.9 million in 2022. The amounts in accumulated other comprehensive income, before related deferred income taxes, that are expected to be recognized as components of net periodic cost during 2022 are $13.2 million of cost for the pension plan and $0.1 million of benefit for other post-retirement plans.
The percentage composition of assets held by pension plans at December 31, 2021, 2020 and 2019 are as follows:
 % Composition of Plan Assets
at December 31,
 202120202019
Pension plans:
Fixed income securities25.3 %7.7 %8.7 %
Large/mid-capitalization equity securities28.1 27.1 21.3 
Small-capitalization equity securities6.8 8.6 7.8 
International and emerging market equity securities19.9 20.6 19.7 
Total equity securities54.8 56.3 48.8 
Private equity and hedge funds10.4 12.1 35.0 
Cash and cash equivalents2.8 17.5 1.4 
Other assets6.7 6.4 6.1 
Total100.0 %100.0 %100.0 %
    
Prior to commencing plans to terminate and settle the frozen defined benefit pension plan, the Company’s primary investment objective was to maximize total return with a strong emphasis on the preservation of capital, which it expected to achieve through a diversified portfolio with both a higher risk profile and anticipated long-term returns via fixed income securities, equity securities, hedge funds and private equity funds. Concurrent with the Company’s decision to commence the termination and settlement of the plan, the Company began transitioning to a liability-driven investment strategy aimed at reducing funded status volatility. The new strategy contemplates an increase of the fixed income securities allocation from 25.3% as of December 31, 2021 to an ultimate target of 100% and decreases to the asset allocations currently invested in equity securities, commodity funds, private equity and hedge funds, from 71.9% to zero over the next 18 months.
The expected long-term rate of return developed through consultation with the Company’s investment advisors as of December 31, 2021 contemplates the impact of this strategy which included consideration of several factors, including prevailing and planned strategic asset allocations, current and expected future market conditions, inflation-adjusted historical returns, volatilities, risk premiums and managed asset premiums.
Estimates of the fair value of assets held by the Company’s pension plan are provided by unaffiliated third parties. Investments in private equity, hedge funds and certain international equity securities are measured at net asset value, which is a practical expedient for measuring fair value. These assets are therefore excluded from the fair value hierarchy for each of the years presented. At December 31, 2021 and 2020, the pension plan assets are categorized by level within the fair value measurement hierarchy as follows:
(In thousands)TotalQuoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Balances at December 31, 2021
Cash and cash equivalents$6,943 $6,943 $— $— 
Large/mid-capitalization equity securities68,739 68,739 — — 
Small-capitalization equity securities16,588 16,588 — — 
International and emerging market equity securities25,174 25,174 — — 
Fixed income securities61,845 9,306 52,539 — 
Contracts with insurance companies9,438 — — 9,438 
Other assets(a)
6,868 6,868 — — 
Total plan assets at fair value$195,595 $133,618 $52,539 $9,438 
Investments measured at net asset value49,017 
Total plan assets, December 31, 2021$244,612 
Balances at December 31, 2020
Cash and cash equivalents$40,890 $40,890 $— $— 
Large/mid-capitalization equity securities63,146 63,146 — — 
Small-capitalization equity securities19,932 19,932 — — 
International and emerging market equity securities24,325 24,325 — — 
Fixed income securities18,008 6,690 11,318 — 
Contracts with insurance companies9,118 — — 9,118 
Other assets(a)
5,629 5,629 — — 
Total plan assets at fair value$181,048 $160,612 $11,318 $9,118 
Investments measured at net asset value52,027 
Total plan assets, December 31, 2020$233,075 
(a) Represents investments in certain commodity funds measured using quoted market prices.