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Pension Plans
 12 Months Ended
Dec. 31, 2024
Pension Plans [Abstract]  
PENSION PLANS

10. PENSION PLANS.

 

Retirement Plan - The Company sponsors a defined benefit pension plan (the “Retirement Plan”) that is noncontributory, and covers only “grandfathered” unionized employees at its Alto Pekin production facilities. Benefits are based on a prescribed formula based upon the employee’s years of service. Employees hired after November 1, 2010, are not eligible to participate in the Retirement Plan. The Company uses a December 31st measurement date for its Retirement Plan. The Company’s funding policy is to make the minimum annual contribution required by applicable regulations.

 

Information related to the Retirement Plan as of and for the years ended December 31, 2024 and 2023 is presented below (dollars in thousands):

 

   2024   2023 
Changes in plan assets:        
Fair value of plan assets, beginning  $18,485   $16,688 
Actual gains   1,711    2,376 
Benefits paid   (829)   (834)
Company contributions   800    255 
Participant contributions   
—
    
—
 
Fair value of plan assets, ending  $20,167   $18,485 
Less: projected accumulated benefit obligation  $17,530   $18,590 
Funded status, overfunded (underfunded)  $2,637   $(105)
           
Amounts recognized in the consolidated balance sheets:          
Other assets  $2,637   $
—
 
Other liabilities  $
—
   $(105)
Accumulated other comprehensive income  $(4,167)  $(2,231)
           
Assumptions used in computation of benefit obligations:          
Discount rate   5.50%   4.90%
Expected long-term return on plan assets   6.50%   6.50%
Rate of compensation increase   
—
    
—
 

 

   Years Ended December 31, 
   2024   2023   2022 
Components of net periodic benefit costs are as follows:            
Service cost  $267   $249   $404 
Interest cost   887    900    655 
Expected return on plan assets   (1,103)   (993)   (1,090)
Net periodic cost (benefit)  $51   $156   $(31)

The Company does not expect to make any contributions in the year ending December 31, 2025. Net periodic benefit for 2025 is estimated to be approximately $0.5 million.

 

The following table summarizes the expected benefit payments for the Company’s Retirement Plan for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter (in thousands):

 

December 31:      
2025   $ 1,000  
2026     1,040  
2027     1,080  
2028     1,130  
2029     1,160  
2030-34     6,480  
    $ 11,890  

 

See Note 15 for discussion of the Retirement Plan’s fair value disclosures.

 

Historical and future expected returns of multiple asset classes were analyzed to develop a risk-free real rate of return and risk premiums for each asset class. The overall rate for each asset class was developed by combining a long-term inflation component, the risk-free real rate of return, and the associated risk premium. A weighted-average rate was developed based on those overall rates and the target asset allocation of the Retirement Plan.

 

The Company’s pension committee is responsible for overseeing the investment of pension plan assets. The pension committee is responsible for determining and monitoring the appropriate asset allocations and for selecting or replacing investment managers, trustees, and custodians. The Retirement Plan’s current investment target allocations are 50% equities and 50% debt. The pension committee periodically reviews the actual asset allocation in light of these targets and rebalances investments as necessary. The pension committee also evaluates the performance of investment managers as compared to the performance of specified benchmarks and peers and monitors the investment managers to ensure adherence to their stated investment style and to the Retirement Plan’s investment guidelines.

 

Postretirement Plan - The Company also sponsors a health care plan and life insurance plan (the “Postretirement Plan”) that provides postretirement medical benefits and life insurance to certain “grandfathered” unionized employees at its Alto Pekin production facilities. Employees hired after December 31, 2000, are not eligible to participate in the Postretirement Plan. The plan is contributory, with contributions required at the same rate as active employees. Benefit eligibility under the plan reduces at age 65 from a defined benefit to a defined dollar cap based upon years of service.

 

Information related to the Postretirement Plan as of December 31, 2024 and 2023 is presented below (dollars in thousands):

 

   2024   2023 
Amounts at the end of the year:        
Accumulated/projected benefit obligation  $3,783   $4,294 
Fair value of plan assets   
—
    
—
 
Funded status, underfunded  $(3,783)  $(4,294)
           
Amounts recognized in the consolidated balance sheets:          
Accrued liabilities  $(280)  $(320)
Other liabilities  $(3,503)  $(3,974)
Accumulated other comprehensive income  $(808)  $(250)
           
Discount rate used in computation of benefit obligations   5.30%   4.75%
   Years Ended December 31, 
   2024   2023   2022 
Components of net periodic benefit costs are as follows:            
Service cost  $19   $14   $26 
Interest cost   196    186    105 
Amortization of prior service cost   
—
    (53)   
—
 
Net periodic benefit cost  $215   $147   $131 
Amounts recognized in the plan for the year:               
Participant contributions  $35   $36   $43 
Benefits paid  $204   $201   $215 

 

The Company does not expect to recognize any amortization of net actuarial loss during the year ended December 31, 2025.

 

The following table summarizes the expected benefit payments for the Company’s Postretirement Plan for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter (in thousands):

 

December 31:      
2025   $ 280  
2026     360  
2027     390  
2028     420  
2029     400  
2030-2034     1,780  
    $ 3,630  

 

For purposes of determining the cost and obligation for pre-Medicare postretirement medical benefits, a 8.50% annual rate of increase in the per capita cost of covered benefits (i.e., health care trend rate) was assumed for the Postretirement Plan in 2026, adjusted to a rate of 4.50% in 2035. Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans.