XML 27 R15.htm IDEA: XBRL DOCUMENT v3.22.1
Note 8 - Benefit Plans
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Retirement Benefits [Text Block]

NOTE 8 – Benefit Plans: 

 

Defined Benefit Plans

 

The Company had previously sponsored two noncontributory qualified defined benefit pension plans, providing for normal retirement at age 65, covering all eligible employees (as defined). Effective June 30, 2013, the Company no longer accrued additional benefits for future service or for future increases in compensation levels for the Company’s primary defined benefit pension plan. Effective December 31, 2014, the Company no longer accrued additional benefits for future service for the Company’s hourly defined benefit plan. During the year ended December 31, 2021, the Company completed the termination of its two noncontributory qualified defined benefit pension plans, which were fully funded. The Company settled its obligations under the plans by providing lump-sum payments of $14.3 million to eligible participants who elected to receive them and entering into an annuity purchase contract for the remaining liability of $3.1 million. Consequently, the Company recognized a settlement charge of $7.8 million during the year ended December 31, 2021, which represents the acceleration of deferred charges previously included within accumulated other comprehensive loss, the impact of remeasuring the plan assets and obligations at termination and additional benefits from asset surpluses paid and expected to be paid to plan participants. The pension plan terminations did not require a cash outlay by the Company. As of December 31, 2021, an asset surplus of $0.4 million remained undistributed in the pension plans that were terminated.

 

The Company is also the sponsor of an unfunded supplemental executive retirement plan (“SERP”) in which several employees participate. The Company’s projected benefit obligation under the unfunded SERP was $15.5 million. Contributions to the plan are made in accordance with statutory funding requirements and any additional funding that may be deemed appropriate.

 

The following tables present the changes in the benefit obligations and the various plan assets, the funded status of the plans, and the amounts recognized in the Company’s balance sheets at December 31, 2021 and 2020 (in thousands):

 

  

December 31,

 
  

2021

  

2020

 
  

Pension Plans

  

SERP

  

Total

  

Pension Plans

  

SERP

  

Total

 

Changes in benefit obligation:

                        

Benefit obligation at beginning of year

 $18,778  $14,337  $33,115  $18,114  $10,356  $28,470 

Service cost

  -   185   185   -   152   152 

Interest cost

  171   337   508   541   322   863 

Actuarial loss

  11   767   778   1,773   3,610   5,383 

Benefits paid

  (127)  (103)  (230)  (1,650)  (103)  (1,753)

Lump sum benefits paid

  (17,430)  -   (17,430)  -   -   - 

Amendments

  711   -   711   -   -   - 

Effect of settlement/curtailment

  (1,983)  -   (1,983)  -   -   - 

Benefit obligation at end of year

  131   15,523   15,654   18,778   14,337   33,115 
                         

Changes in plan assets:

                        

Fair value of plan assets at beginning of year

  18,754   -   18,754   19,939   -   19,939 

Actual return on assets

  (637)  -   (637)  462   -   462 

Employer contributions

  (14)  103   89   -   103   103 

Benefits paid

  (127)  (103)  (230)  (1,647)  (103)  (1,750)

Lump sum benefits paid

  (17,430)  -   (17,430)  -   -   - 

Fair value of plan assets at end of year

  546   -   546   18,754   -   18,754 
                         

Funded status at end of year

 $415  $(15,523) $(15,108) $(24) $(14,337) $(14,361)
                         

Amounts recognized in balance sheets:

                        

Other assets

 $415  $-  $415  $314  $-  $314 

Other current liabilities

  -   (103)  (103)  -   (101)  (101)

Long-term pension liability

  -   (15,420)  (15,420)  (338)  (14,236)  (14,574)

Net amount recognized

 $415  $(15,523) $(15,108) $(24) $(14,337) $(14,361)
                         

Amounts recognized in accumulated other comprehensive income consist of:

                        

Net actuarial loss

 $-  $6,698  $6,698  $8,227  $7,429  $15,656 

 

Information for benefit plans with projected benefit obligation in excess of plan assets depicted as follows (in thousands):

 

  

December 31,

 
  

2021

  

2020

 
  

Pension Plans

  

SERP

  

Total

  

Pension Plans

  

SERP

  

Total

 

Projected benefit obligation

 $131  $15,523  $15,654  $18,778  $14,337  $33,115 

Fair value of plan assets

  (546)  -   (546)  (18,754)  -   (18,754)

Underfunded (Overfunded)

 $(415) $15,523  $15,108  $24  $14,337  $14,361 

 

Components of net periodic benefit cost related to pension plans were as follows (in thousands):

 

  

Years Ended December 31,

 
  

2021

  

2020

  

2019

 

Interest cost on projected benefit obligation

 $171  $541  $721 

Expected return on plan assets

  (597)  (1,555)  (1,491)

Recognized actuarial loss

  376   539   643 

Settlement loss

  -   413   1,110 

Pension plan termination charge

  7,821   -   - 

Net periodic pension cost after settlements

 $7,771  $(62) $983 

 

The termination of the Company’s two noncontributory qualified defined benefit pension plans in 2021 resulted in a non-cash charge of $7.8 million during the year ended December 31, 2021. The pension settlement losses included in the table above resulted from lump sum pension payments made to various employees upon their retirement or termination during the periods specified. The pension settlement losses did not require a cash outlay by the Company. The pension plan termination charge is presented as a separate line in our statements of comprehensive income and the other components of net periodic pension cost are included in other periodic pension costs in our statements of comprehensive income.

 

Components of net periodic benefit cost related to the SERP were as follows (in thousands):

 

  

Years Ended December 31,

 
  

2021

  

2020

  

2019

 

Service cost - benefits earned during the period

 $185  $152  $117 

Interest cost on projected benefit obligation

  337   322   363 

Recognized actuarial loss

  1,499   695   616 

Net periodic pension cost after settlements

 $2,021  $1,169  $1,096 

 

The service cost component is included in selling and administrative expenses in our statements of comprehensive income and the other components of net periodic pension cost are included in other periodic pension costs in our statements of comprehensive income. The estimated net actuarial loss for the SERP that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $1.7 million.

 

The following table presents the weighted-average assumptions used to determine benefit obligations as of December 31, 2020 and 2021:

 

  

Discount Rate

  

Long Term Rate of Return

  

Salary Scale

 
  Pension Plans      Pension Plans      Pension Plans     
   Corporate   Plants   SERP   Corporate   Plants   SERP   Corporate   Plants   SERP 

2020

  2.36%  2.21%  2.36%  8.00%  8.00%  N/A   N/A   N/A   3.00%

2021

  N/A   N/A   2.59%  N/A   N/A   N/A   N/A   N/A   3.00%

 

The following table presents the weighted-average assumptions used to determine net periodic benefit cost for years ended December 31, 2019, 2020 and 2021:

 

  

Discount Rate

  

Long Term Rate of Return

  

Salary Scale

 
  Pension Plans      Pension Plans      Pension Plans    
   Corporate   Plants   SERP   Corporate   Plants   SERP   Corporate   Plants   SERP 

2019

  4.14%  4.06%  4.14%  8.00%  8.00%  N/A   N/A   N/A   3.00%

2020

  3.12%  3.02%  3.12%  8.00%  8.00%  N/A   N/A   N/A   3.00%

2021

  2.36%  2.21%  2.36%  8.00%  8.00%  N/A   N/A   N/A   3.00%

 

The Company does not plan to contribute any significant amounts to its defined benefit pension plans in 2022.

 

The following table includes projected benefit payments for the years indicated (in thousands):

 

   

Projected Benefit Payments

 

Year

  

Pension Plans

  

SERP

  

Total

 

2022

  $131  $102  $233 

2023

   -   1,214   1,214 

2024

   -   606   606 

2025

   -   598   598 

2026

   -   598   598 
2027-2031   -   4,406   4,406 

 

Rabbi Trust


In connection with the Company’s unfunded SERP, we have life insurance contracts on the lives of designated individuals. The insurance contracts associated with the SERP are held in a Rabbi trust. The trust is the owner and beneficiary of such insurance contracts. The policies are being utilized to help offset the costs and liabilities of the SERP. The cash surrender value of the life insurance contracts was $4.6 million and $4.0 million at December 31, 2021 and 2020, respectively. The cash surrender value of these policies is included in other assets in the balance sheets. During the years ended December 31, 2021, 2020 and 2019, we recognized an investment gain of $0.6 million, $0.5 million and $0.7 million, respectively, on the cash surrender value of these life insurance contracts.

 

In 2013, we initiated a Non-Qualified Deferred Compensation Plan, and we have purchased life insurance contracts on the lives of designated individuals. The insurance contracts associated with the Non-Qualified Deferred Compensation Plan are also held in a Rabbi trust. The trust is the owner and beneficiary of such insurance contracts. The policies are being utilized to help offset the costs and liabilities of the Non-Qualified Deferred Compensation Plan. The cash surrender value of the life insurance contracts was $7.9 million and $5.0 million at December 31, 2021 and 2020, respectively. The cash surrender value of these policies is included in other assets in the balance sheets. The liability for participant deferrals was $7.8 million and $4.8 million as of December 31, 2021 and 2020, respectively, and is included in other long-term liabilities in the balance sheets.

 

Defined Contribution Plan

 

The Company provides a defined contribution plan covering qualified employees. The plan includes a provision that allows employees to make pre-tax contributions under Section 401(k) of the Internal Revenue Code. The plan provides for the Company to make a guaranteed match equal to 25% of each employee’s eligible contributions. The plan also provides the Company with the option of making an additional discretionary contribution to the plan each year. The Company expensed employer matching contributions of $1.6 million during each of the years ended December 31, 2021 and 2019. As a response to the COVID-19 pandemic, the Company elected not to make any discretionary contributions for the fiscal year 2019, and as a result, $1.2 million of accrued discretionary contributions as of December 31, 2019 were reversed during 2020. As a result, the Company recorded a net reversal in expense of $0.3 million relating to employer matching contributions during the year ended December 31, 2020.