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Employee Benefit Plans
 12 Months Ended
Dec. 31, 2021
Employee Benefit Plans [Abstract]  
Employee Benefit Plans

Note 14 – Employee Benefit Plans

 

The Company has a qualified, defined benefit pension plan that was established to provide benefits to certain employees. The plan is frozen and participants are no longer accruing benefits. Generally, contributions to the plan are not less than the minimum amounts required under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and not more than the maximum amount that can be deducted for federal income tax purposes. The plan’s assets are held by independent trustees and consist primarily of equity and fixed income securities.

 

The Company has elected to utilize a full yield curve approach in estimating the interest component for pension benefits by applying the specific spot rates along the yield curve used in determining the benefit obligation to the relevant projected cash flows.

 

The changes in benefit obligation, change in plan assets and funded status as of December 31, 2021 and 2020, are as follows:

 

 

 

 

Pension Benefits

 

 

 

 

2021

 

 

 

2020

 

Change in benefit obligation

 

 

 

 

 

 

 

 

Benefit obligation – Beginning of year

 

 

$

55,359

 

 

 

$

53,294

 

Interest cost

 

 

 

944

 

 

 

 

1,430

 

Actuarial (gain) loss

 

 

 

(2,098

)

 

 

 

3,870

 

Benefits paid

 

 

 

(3,267

)

 

 

 

(3,235

)

Benefit obligation – End of year

 

 

 

50,938

 

 

 

 

55,359

 

Change in plan assets

 

 

 

 

 

 

 

 

Plan assets – Beginning of year

 

 

 

48,314

 

 

 

 

46,784

 

Return on plan assets

 

 

 

5,856

 

 

 

 

4,765

 

Benefits paid

 

 

 

(3,267

)

 

 

 

(3,235

)

Plan assets at fair value – End of year

 

 

 

50,903

 

 

 

 

48,314

 

Funded status of plans – End of year

 

 

$

(35

)

 

 

$

(7,045

)

 

 

 

 

 

 

Pension Benefits

 

 

 

 

2021

 

 

 

2020

 

Amounts recognized in the Consolidated Balance Sheets

 

 

 

 

 

 

 

 

Current liabilities

 

 

$

-

 

 

 

$

-

 

Noncurrent liabilities

 

 

 

(35

)

 

 

 

(7,045

)

Net amount recognized at December 31

 

 

$

(35

)

 

 

$

(7,045

)

 

 

 

Amounts recognized in accumulated other comprehensive loss but not yet recognized in earnings at December 31, 2021 and 2020, are as follows:

 

 

 

 

 

 

 

 

Pension Benefits

 

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

 

Net actuarial loss

 

 

$

11,803

 

 

 

$

18,045

 

 

 

 

$

11,803

 

 

 

$

18,045

 

 

Components of net periodic benefit cost for the years ended December 31, 2021 and 2020, are as follows:

 

 

 

 

 

 

 

 

 

Pension Benefits

 

 

 

 

2021

 

 

 

2020

 

Components of net periodic benefit cost

 

 

 

 

 

 

 

 

Interest cost

 

$

 

944

 

 

$

 

1,430

 

Expected return on plan assets

 

 

 

(2,335

)

 

 

 

(2,438

)

Amortization of unrecognized net loss (gain)

 

 

 

621

 

 

 

 

562

 

Total net periodic (income) benefit cost

 

$

 

(770

)

 

$

 

(446

)

 

The increase (decrease) in accumulated other comprehensive loss (pre-tax) for the years ended December 31, 2021 and 2020, are as follows:

 

 

 

 

 

 

 

 

 

Pension Benefits

 

 

 

 

2021

 

 

 

2020

 

Net actuarial (gain) loss

 

 

$

(5,620

)

 

 

$

1,544

 

Amortization of net actuarial (gain) loss

 

 

 

(621

)

 

 

 

(561

)

Total recognized in accumulated other comprehensive loss

 

 

$

(6,241

)

 

 

$

983

 

 

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as of December 31, 2021:

 

 

 

 

 

 

 

 

Pension Benefits

 

 

 

 

 

 

2022

 

 

$

3,206

 

2023

 

 

 

3,234

 

2024

 

 

 

3,195

 

2025

 

 

 

3,175

 

2026

 

 

 

3,139

 

2027 through 2031

 

 

 

14,897

 

 

The Company is not required to make any contributions to its pension plan in 2022 to meet its minimum funding requirements.

 

The assumptions used to determine end of year benefit obligations are shown in the following table:

 

 

 

 

 

 

 

Pension Benefits

 

 

 

2021

 

 

2020

Discount rates

 

 

2.84%

 

 

2.48%

 

 

The discount rate is determined using a yield curve model that uses yields on high quality corporate bonds (AA rated or better) to produce a single equivalent rate. The yield curve model excludes callable bonds except those with make-whole provisions, private placements and bonds with variable rates.

 

In October 2021, the Society of Actuaries issued base mortality table Pri-2012 which is split by retiree and contingent survivor tables and includes mortality improvement assumptions for U.S. plans, scale (MP-2021with COVID adjustment), which reflects additional data that the Social Security Administration has released since prior assumptions (MP-2020) were developed. The Company has historically utilized the Society of Actuaries’ published mortality data in its plan assumptions. Accordingly, the Company adopted Pri-2012 with MP-2021 for purposes of measuring its pension obligations at December 31, 2021.

 

The 2021 actuarial gain of $2,098 was largely the result of the change in the yield curve. The impact of the mortality improvement scale MP-2021also created a slight actuarial gain for 2021. The 2020 actuarial loss of $3,870 was largely the result of the change in the yield curve. The 2020 actuarial loss related to the change in the yield curve was partially offset by the impact of the mortality improvement scale MP-2020.

 

The assumptions used in the measurement of net periodic cost are shown in the following table:

 

 

 

 

 

 

 

Pension Benefits

 

 

 

2021

 

 

2020

Discount rate for benefit obligations

 

 

2.48%

 

 

3.22%

 

Expected return on plan assets

 

 

5.00%

 

 

5.40%

 

Rate for interest on benefit obligations

 

 

1.77%

 

 

2.78%

 

Discount rate for service cost

 

 

N/A

 

 

N/A

 

 

The Company’s pension plan’s weighted average asset allocations at December 31, 2021 and 2020, and target allocations for 2022, by asset category, are as follows:

 

 

 

 

 

Plan Assets at December 31,

 

 

 

 

 

 

 

 

 

 

Target Allocation

 

 

 

 

2021

 

 

2020

 

 

2022

 

Asset Category

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

2

%

 

 

0

%

 

0% - 5%

 

Equity securities

 

 

 

54

%

 

 

56

%

 

45% - 65%

 

Fixed income securities

 

 

 

33

%

 

 

35

%

 

30% - 50%

 

Real estate

 

 

 

11

%

 

 

9

%

 

4%-6%

 

 

 

 

 

100

%

 

 

100

%

 

 

100

%

 

The basic goal underlying the pension plan investment policy is to ensure that the assets of the plans, along with expected plan sponsor contributions, will be invested in a prudent manner to meet the obligations of the plans as those obligations come due under a broad range of potential economic and financial scenarios, maximize the long-term investment return with an acceptable level of risk based on such obligations, and broadly diversify investments across and within the capital markets to protect asset values against adverse movements in any one market. The Company’s investment strategy balances the requirement to maximize returns using potentially higher return

generating assets, such as equity securities, with the need to manage the risk of such investments with less volatile assets, such as fixed-income securities. Investment practices must comply with the requirements of ERISA and any other applicable laws and regulations. The Company, in consultation with its investment advisors, has determined a targeted allocation of invested assets by category and it works with its advisors to reasonably maintain the actual allocation of assets near the target. The long term return on assets was estimated based upon historical market

performance, expectations of future market performance for debt and equity securities and the related risks of various allocations between debt and equity securities. Numerous asset classes with differing expected rates of return, return volatility and correlations are utilized to reduce risk through diversification.

 

The Company’s pension plan assets are invested in one mutual fund for each fund classification. The following table presents the fair value of pension plan assets classified under the appropriate level of the ASC 820 fair value hierarchy (see Note 2, Summary of Significant Accounting Policies for a description of the fair value hierarchy) as of December 31, 2021 and 2020:

 

 

   Pension Plan Assets

 

 

As of December 31, 2021

 

 

 

 

Level 1

 

 

 

Level 2

 

 

 

Level 3

 

 

 

Total

 

Mutual funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed income funds

 

 

$

16,645

 

 

 

$

-

 

 

 

$

-

 

 

 

$

16,645

 

Large cap funds

 

 

 

16,238

 

 

 

 

-

 

 

 

 

-

 

 

 

 

16,238

 

Small cap funds

 

 

 

4,877

 

 

 

 

-

 

 

 

 

-

 

 

 

 

4,877

 

International funds

 

 

 

6,607

 

 

 

 

-

 

 

 

 

-

 

 

 

 

6,607

 

Real estate funds

 

 

 

5,529

 

 

 

 

-

 

 

 

 

-

 

 

 

 

5,529

 

Cash and equivalents

 

 

 

1,007

 

 

 

 

-

 

 

 

 

-

 

 

 

 

1,007

 

Total

 

 

$

50,903

 

 

 

$

-

 

 

 

$

-

 

 

 

$

50,903

 

 

 Pension Plan Assets

 

 

As of December 31, 2020

 

 

 

 

Level 1

 

 

 

Level 2

 

 

 

Level 3

 

 

 

Total

 

Mutual funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed income funds

 

 

$

16,670

 

 

 

$

-

 

 

 

$

-

 

 

 

$

16,670

 

Large cap funds

 

 

 

16,033

 

 

 

 

-

 

 

 

 

-

 

 

 

 

16,033

 

Small cap funds

 

 

 

4,558

 

 

 

 

-

 

 

 

 

-

 

 

 

 

4,558

 

International funds

 

 

 

6,338

 

 

 

 

-

 

 

 

 

-

 

 

 

 

6,338

 

Real estate funds

 

 

 

4,576

 

 

 

 

-

 

 

 

 

-

 

 

 

 

4,576

 

Cash and equivalents

 

 

 

139

 

 

 

 

-

 

 

 

 

-

 

 

 

 

139

 

Total

 

 

$

48,314

 

 

 

$

-

 

 

 

$

-

 

 

 

$

48,314

 

 

 

 

 

 

 

 

The Company also maintains qualified defined contribution plans, which provide benefits to their employees based on employee contributions and employee earnings, with discretionary contributions allowed. Expenses related to these plans were $118 for the year ended December 31, 2021. The Company reinstated the employer contribution to its defined contribution plans effective April 1, 2021 after employer contributions were suspended for fifteen months.