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RETIREMENT PLANS | 12 Months Ended
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Dec. 31, 2020
RETIREMENT PLANS |
RETIREMENT PLANS | 13. RETIREMENT PLANS The Company has noncontributory defined benefit pension plans as well as noncontributory postretirement benefit plans offering defined medical, dental, vision, and life benefits for certain employees of its International Telecom segment. The Company’s pension and other postretirement benefit plans are closed to new participants and only grandfathered participants continue to accrue additional benefits. Also, in 2020 the Company began the process of winding up one of its benefit plans. The Company reviews the funded status of its pension plans and makes contributions based on that analysis. The benefits are based on the participants’ compensation during their employment and the credited service years earned by participants. The Company funds the other postretirement benefit plans as benefits are paid. The weighted-average rates assumed in the actuarial calculations for the pension and other postretirement benefit plans are as follows as of December 31, 2020, 2019 and 2018: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2020 |  | 2019 |  | 2018 | ​
Discount Rate – Pension Benefit Obligation |  | 2.6 | % | 4.2 | % | 4.7 | %
Discount Rate – Pension Benefit Cost | ​ | 3.5 | % | 4.5 | % | 4.3 | %
Discount Rate – Postretirement Benefit Obligation | ​ | 2.5 | % | 3.5 | % | 4.5 | %
Discount Rate – Postretirement Benefit Cost | ​ | 3.5 | % | 4.5 | % | 3.9 | %
Annual salary increase |  | n/a | ​ | 6.5 | % | 6.5 | %
Expected long-term return on plan assets |  | 5.1 | % | 6.1 | % | 6.1 | %
​ The expected long-term rate of return on plan assets was determined based on several factors including input from pension investment consultants, projected long-term returns of equity and bond indices, and historical returns over the life of the related obligations of the fund. The Company, in conjunction with its pension investment consultants, reviews its asset allocation periodically and rebalances its investments when appropriate in an effort to earn the expected long-term returns. The Company will continue to evaluate its long-term rate of return assumptions at least annually and will adjust them as necessary. The annual salary increase assumption is no longer applicable as the plan participants no longer accrue additional service. The discount rate was determined based on a review of market data including yields on high quality corporate bonds with maturities approximating the remaining life of the project benefit obligations. The other postretirement benefit plans healthcare cost trend assumptions is based on health care trend rates. The 2020 assumed medical health care cost trend rate is 6% trending to an ultimate rate of 4% in 2074. The 2020 and ultimate assumed dental care cost trend rate is 4%. Changes during the year in the projected benefit obligations and in the fair value of plan assets are as follows for 2020 and 2019 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2020 |  | 2019 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Pension Benefits | ​ | Postretirement Benefits | ​ | Pension Benefits | ​ | Postretirement Benefits | ​
Projected benefit obligations: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance at beginning of year: | ​ | $ | 81,977 | ​ | $ | 4,899 | ​ | $ | 76,900 | ​ | $ | 4,012 | ​
Service cost | ​ |  | 439 | ​ |  | 139 | ​ |  | 1,709 | ​ |  | 126 | ​
Interest cost | ​ |  | 2,585 | ​ | ​ | 163 | ​ |  | 3,472 | ​ | ​ | 182 | ​
Benefits and settlements paid | ​ |  | (4,791) | ​ |  | (450) | ​ |  | (5,738) | ​ |  | (354) | ​
Actuarial (gain) loss | ​ |  | 8,651 | ​ |  | 759 | ​ |  | 5,739 | ​ |  | 933 | ​
Settlement | ​ |  | (89) | ​ |  | — | ​ |  | (105) | ​ |  | — | ​
Balance at end of year | ​ | $ | 88,772 | ​ | $ | 5,510 | ​ | $ | 81,977 | ​ | $ | 4,899 | ​
Plan net assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance at beginning of year: | ​ | $ | 83,350 | ​ | $ | — | ​ | $ | 77,530 | ​ | $ | — | ​
Actual return on plan assets | ​ | ​ | 10,398 | ​ |  | — | ​ | ​ | 10,678 | ​ |  | — | ​
Company contributions | ​ |  | 958 | ​ |  | 450 | ​ |  | 838 | ​ |  | 354 | ​
Benefits and settlements paid | ​ |  | (5,354) | ​ |  | (450) | ​ |  | (5,696) | ​ |  | (354) | ​
Balance at end of year | ​ | $ | 89,352 | ​ | $ | — | ​ | $ | 83,350 | ​ | $ | — | ​
Over/ (Under) funded status of plan | ​ | $ | 580 | ​ | $ | (5,510) | ​ | $ | 1,373 | ​ | $ | (4,899) | ​
​ The Company reports an asset or liability on its balance sheet equal to the funded status of its pension and other postretirement benefit plans. Plans in an overfunded status are aggregated and recorded as a net pension benefit asset in other assets. Plans in an underfunded status are aggregated and recorded as a net postretirement benefit liability in other liabilities. The funded status of the Company’s pension and other retirement benefit plans is below (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2020 |  | 2019 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | GTT Pension Benefit | ​ | Viya Pension Benefit | ​ | Postretirement Benefits | ​ | GTT Pension Benefit | ​ | Viya Pension Benefit | ​ | Postretirement Benefits | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Projected benefit obligation | ​ | $ | 15,609 | ​ | $ | 73,163 | ​ | $ | 5,510 | ​ | $ | 15,594 | ​ | $ | 66,383 | ​ | $ | 4,899 | ​
Plan Net Assets | ​ | ​ | 15,609 | ​ | ​ | 73,743 | ​ | ​ | — | ​ | ​ | 15,054 | ​ | ​ | 68,296 | ​ | ​ | — | ​
Over/ (Under) funded status of plan | ​ | $ | — | ​ | $ | 580 | ​ | $ | (5,510) | ​ | $ | (540) | ​ | $ | 1,913 | ​ | $ | (4,899) | ​
​ The Company’s investment policy for its pension assets is to have a reasonably balanced investment approach, with a long-term bias toward debt investments. The Company’s strategy allocates plan assets among equity, debt and other assets to achieve long-term returns without significant risk to principal. The pension fund has limitations from investing in the equity, debt or other securities of the employer, its subsidiaries or associates of the employer or any company of which the employer is a subsidiary or an associate. The fair values for the pension plan’s net assets, by asset category, at December 31, 2020 are as follows (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Asset Category |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |
Cash, cash equivalents, money markets and other | ​ | $ | 5,037 | ​ | $ | 5,037 | ​ | $ | — | ​ | $ | — | ​
Common stock | ​ | ​ | 27,785 | ​ | ​ | 24,781 | ​ | ​ | 3,004 | ​ | ​ | — | ​
Mutual funds - fixed income | ​ | ​ | 9,494 | ​ | ​ | 9,494 | ​ | ​ | — | ​ | ​ | — | ​
Mutual funds - equities | ​ | ​ | 8,278 | ​ | ​ | 8,278 | ​ | ​ | — | ​ | ​ | — | ​
Fixed income securities | ​ | ​ | 37,225 | ​ | ​ | — | ​ | ​ | 37,225 | ​ | ​ | — | ​
Other | ​ | ​ | 1,533 | ​ | ​ | 1,533 | ​ | ​ | — | ​ | ​ | — | ​
Total | ​ | $ | 89,352 | ​ | $ | 49,123 | ​ | $ | 40,229 | ​ | $ | — | ​
​ The fair values for the pension plan’s net assets, by asset category, at December 31, 2019 are as follows (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Asset Category |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |
Cash, cash equivalents, money markets and other | ​ | $ | 4,982 | ​ | $ | 4,982 | ​ | $ | — | ​ | $ | — | ​
Common stock | ​ | ​ | 26,702 | ​ | ​ | 22,451 | ​ | ​ | 4,251 | ​ | ​ | — | ​
Mutual funds - fixed income | ​ | ​ | 12,970 | ​ | ​ | 12,970 | ​ | ​ | — | ​ | ​ | — | ​
Mutual funds - equities | ​ | ​ | 10,921 | ​ | ​ | 10,921 | ​ | ​ | — | ​ | ​ | — | ​
Fixed income securities | ​ | ​ | 26,307 | ​ | ​ | 1,178 | ​ | ​ | 25,129 | ​ | ​ | — | ​
Other | ​ | ​ | 1,468 | ​ | ​ | 1,031 | ​ | ​ | — | ​ | ​ | 437 | ​
Total | ​ | $ | 83,350 | ​ | $ | 53,533 | ​ | $ | 29,380 | ​ | $ | 437 | ​
​ The plan’s weighted-average asset allocations at December 31, 2020 and 2019, by asset category are as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ |  | 2020 |  | 2019 | ​
Cash, cash equivalents, money markets and other |  | 6 | % | 6 | %
Common stock | ​ | 31 | ​ | 32 | ​
Mutual funds - fixed income | ​ | 11 | ​ | 16 | ​
Mutual funds - equities | ​ | 9 | ​ | 13 | ​
Fixed income securities | ​ | 41 | ​ | 32 | ​
Other | ​ | 2 | ​ | 1 | ​
Total |  | 100 | % | 100 | %
​ Amounts recognized on the Company’s consolidated balance sheets consist of (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of December 31, | ​
​ |  | 2020 |  | 2019 | ​
​ | ​ | Pension benefits | ​ | Postretirement benefits | ​ | Pension benefits | ​ | Postretirement benefits | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accrued and current liabilities | ​ | $ | — | ​ | $ | 381 | ​ | $ | — | ​ | $ | 340 | ​
Other Liabilities | ​ | ​ | — | ​ | ​ | 5,129 | ​ | ​ | 540 | ​ | ​ | 4,559 | ​
Other Assets | ​ |  | 580 | ​ |  | — | ​ |  | 1,913 | ​ |  | — | ​
Accumulated other comprehensive income, net of tax | ​ | ​ | (158) | ​ | ​ | (411) | ​ | ​ | 1,484 | ​ | ​ | 359 | ​
​ Amounts recognized in accumulated other comprehensive income consist of (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of December 31, | ​
​ |  | 2020 |  | 2019 | ​
​ | ​ | Pension benefits | ​ | Postretirement benefits | ​ | Pension benefits | ​ | Postretirement benefits | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrecognized net actuarial gain (loss) | ​ | $ | (1,159) | ​ | $ | (411) | ​ | $ | 540 | ​ | $ | 359 | ​
Accumulated other comprehensive income, pre-tax | ​ | ​ | (1,159) | ​ | ​ | (411) | ​ | ​ | 540 | ​ | ​ | 359 | ​
Accumulated other comprehensive income (loss), net of tax | ​ |  | (158) | ​ |  | (411) | ​ |  | 1,484 | ​ |  | 359 | ​
​ ​ Components of the plan’s net periodic pension cost are as follows for the years ended December 31, 2020, 2019 and 2018 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2020 |  | 2019 | ​ | 2018 | ​
​ | ​ | Pension benefits | ​ | Postretirement benefits | ​ | Pension benefits | ​ | Postretirement benefits | ​ | Pension benefits | ​ | Postretirement benefits | ​
Operating expense | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Service cost | ​ | $ | 439 | ​ | $ | 139 | ​ | $ | 1,709 | ​ | $ | 126 | ​ | $ | 1,794 | ​ | $ | 147 | ​
Non-operating expense | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest cost | ​ |  | 2,585 | ​ |  | 163 | ​ |  | 3,472 | ​ |  | 182 | ​ |  | 3,279 | ​ |  | 161 | ​
Expected return on plan assets | ​ |  | (3,060) | ​ |  | — | ​ |  | (4,571) | ​ |  | — | ​ |  | (4,835) | ​ |  | — | ​
Amortization of actuarial (gain) loss | ​ |  | — | ​ |  | (11) | ​ |  | 29 | ​ |  | (58) | ​ |  | 121 | ​ |  | (67) | ​
Settlement | ​ |  | 89 | ​ |  | — | ​ |  | (35) | ​ |  | — | ​ |  | — | ​ |  | — | ​
Net periodic pension cost | ​ | $ | 53 | ​ | $ | 291 | ​ | $ | 604 | ​ | $ | 250 | ​ | $ | 359 | ​ | $ | 241 | ​
​ The Company is currently evaluating whether it will make any contributions to its pension and postretirement benefit plans during the year ending December 31, 2021. ​ The following estimated benefits, which reflect expected future service, as appropriate, are expected to be paid over the next 10 years as indicated below (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Pension | ​ | Postretirement
Fiscal Year | ​ | Benefits |  | Benefits
2021 | ​ | $ | 19,691 | ​ | $ | 386
2022 | ​ |  | 3,730 | ​ | ​ | 359
2023 | ​ |  | 3,703 | ​ | ​ | 276
2024 | ​ |  | 4,048 | ​ | ​ | 319
2025 | ​ |  | 3,706 | ​ | ​ | 356
2026-2030 | ​ |  | 19,058 | ​ | ​ | 1,679
Total | ​ | $ | 53,936 | ​ | $ | 3,375
​

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