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Retirement Plans And Other Postretirement Benefits
 12 Months Ended
Dec. 31, 2022
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 $1.7 million and $2.1 million at December 31, 2022 and December 31, 2021, respectively. Pension expense recognized for this plan was $0.1 million in 2022, 2021 and 2020. 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, 2022, 2021, and 2020.
The following tables reconcile the changes in benefit obligations and plan assets in 2022 and 2021, and reconcile the funded status to prepaid or accrued cost at December 31, 2022 and 2021:
 Pension BenefitsOther Post-
Retirement Benefits
(In thousands)2022202120222021
Change in benefit obligation:
Benefit obligation, beginning of year$316,169 $336,159 $7,370 $8,164 
Service cost— — 18 21 
Interest cost8,945 8,398 207 195 
Effect of actuarial (gains) losses related to the following:
Discount rate change(61,519)(12,512)(1,483)(272)
Retirement rate assumptions and mortality table adjustments— 1,028 — (1)
Other1,513 (101)90 (274)
Plan participant contributions— — 554 613 
Benefits paid(16,994)(16,803)(1,030)(1,076)
Benefit obligation, end of year$248,114 $316,169 $5,726 $7,370 
Change in plan assets:
Plan assets at fair value, beginning of year$244,612 $233,075 $— $— 
Actual return on plan assets(59,683)23,131 — — 
Employer contributions50,184 5,209 476 463 
Plan participant contributions— — 554 613 
Benefits paid(16,994)(16,803)(1,030)(1,076)
Plan assets at fair value, end of year$218,119 $244,612 $— $— 
Funded status of the plans$(29,995)$(71,557)$(5,726)$(7,370)
Amounts recognized in the consolidated balance sheets:
Accrued expenses (current)$180 $181 $489 $478 
Pension and other postretirement benefit obligations, net29,815 71,376 5,237 6,892 
Net amount recognized$29,995 $71,557 $5,726 $7,370 
The following table sets forth the assumptions used in accounting for the pension and other post-retirement benefits, and the components of net periodic benefit cost:
 Pension BenefitsOther Post-
Retirement Benefits
(In thousands, except percentages)202220212020202220212020
Weighted-average assumptions used to determine benefit obligations:
Discount rate5.07 %2.90 %2.57 %5.17 %2.86 %2.54 %
Expected long-term return on plan assets4.99 %3.05 %5.00 %n/an/an/a
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate2.90 %2.57 %3.27 %2.86 %2.54 %3.25 %
Expected long-term return on plan assets3.05 %5.00 %5.00 %n/an/an/a
Components of net periodic benefit cost:
Service cost$— $— $— $18 $21 $29 
Interest cost8,945 8,398 10,156 207 195 243 
Expected return on plan assets(8,174)(11,316)(11,004)— — — 
Amortization of prior service costs and gains or losses13,746 17,003 15,494 (140)(141)(198)
Net periodic benefit cost$14,517 $14,085 $14,646 $85 $75 $74 
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, 2022, 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 2028—2032 are as follows:
(In thousands)Pension
Benefits		Other Post-
Retirement
Benefits
2023$18,701 $489 
202418,971 480 
202519,047 469 
202618,666 458 
202718,600 446 
2028—203288,847 2,051 
The average remaining duration of benefit payments for the pension plan is about 9.6 years.
The pre-tax amounts recorded in 2022, 2021 and 2020 in accumulated other comprehensive income consist of:
 Pension BenefitsOther Post-Retirement Benefits
(In thousands)202220212020202220212020
Net actuarial (gain) loss$103,998 $109,893 $150,267 $(1,574)$(320)$86 
    
Pension expense is expected to be approximately $14 million in 2023. 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 2023 are approximately $12 million of cost for the pension plan and approximately $0.2 million of benefit for other post-retirement plans.
The percentage composition of assets held by pension plans at December 31, 2022, 2021 and 2020 are as follows:
 % Composition of Plan Assets
at December 31,
 202220212020
Pension plans:
Fixed income mutual fund13.9 %— — 
Fixed income securities— 25.3 %7.7 %
Large/mid-capitalization equity securities— 28.1 27.1 
Small-capitalization equity securities— 6.8 8.6 
International and emerging market equity securities— 19.9 20.6 
Total equity securities— 54.8 56.3 
Private equity and hedge funds4.8 10.4 12.1 
Collective investment trust69.9 — — 
Cash and cash equivalents11.4 2.8 17.5 
Other assets— 6.7 6.4 
Total100.0 %100.0 %100.0 %
Following the announcement to terminate and settle the pension plan, the Company contributed $50 million to the pension plan and implemented (through consultation with its investment advisors) a liability-matching bond portfolio investment strategy (including a derivative overlay) that hedged the estimated settlement funding gap, which was approximately $24 million (before plan administration costs) at that time. The overall objective of this hedging program is to minimize the volatility of the estimated settlement funding gap such that, as applicable interest rates move up or down causing a decrease or increase in the estimated value of the settlement liability, the value of the matching bond portfolio and derivative overlay decreases or increases by a similar amount.
A lower expected return on plan assets increases the amount of expense and vice versa. Decreases in the level of actual plan assets will also serve to increase the amount of pension expense. The total return on plan assets (net of fees and plan expenses), which is primarily affected by the change in fair value of plan assets, current year contributions and current year payments to participants, was approximately negative 15.1% in 2022, positive 10.4% in 2021 and positive 10.9% in 2020.
The expected long-term rate return of 5.00% used in both 2021 and 2020 were determined at the end of 2020 and 2019 and therefore did not contemplate the liability-driven investment strategy discussed above, however, the expected long-term rate return of 3.05% used in 2022 and 4.99% for 2023 does contemplate the liability-driven investment strategy discussed above.
Estimates of the fair value of assets held by the Company’s pension plan are provided by unaffiliated third parties. Investments in collective investment trusts, 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, 2022 and 2021, 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, 2022
Cash and cash equivalents(a)
$24,796 $24,796 $— $— 
Fixed income mutual fund30,284 30,284 — — 
Private equity and hedge funds(b)
10,250 — — 10,250 
Total plan assets at fair value$65,330 $55,080 $— $10,250 
Investments measured at net asset value:
Collective investment trust(c)
152,389 
Private equity and hedge funds141 
Total investments measured at net asset value$152,530 
Securities sold and interest receivable259 
Total plan assets, December 31, 2022$218,119 
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(d)
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 
(a) This category represents investments in cash and cash equivalents, which includes: 1.) cash held in the plan used for investments in U.S. Treasury futures which are entered into to minimize the volatility of the estimated settlement funding gap; and 2.) short term money market fund in which the amortized cost approximates fair value. These investments are highly liquid and therefore are classified as level 1 securities.
(b) Represents the estimated fair market value of the Company’s ownership in private equity and hedge funds which are probable of being sold for an amount different from the net asset value per share in connection with the expected termination of the pension plan.
(c) The collective investment trust contains liability hedging fixed income investments and are valued at the net asset value of the collective investment trust. The net asset value is used as a practical expedient to estimate fair value. The net asset value is based on the fair value of the underlying investments held by the fund less its liabilities.
(d) Represents investments in certain commodity funds measured using quoted market prices.