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Retirement Benefit Plans | 12 Months Ended
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Sep. 30, 2023
Retirement Benefits [Abstract] |
Retirement Benefit Plans | Retirement Benefit Plans Defined Benefit Plans The Company and certain of its subsidiaries sponsor four defined benefit pension plans covering some of its employees. The Company’s funding policy for its defined benefit pension plans is based on an actuarially determined cost method allowable under Internal Revenue Service regulations. One of the defined benefit pension plans covers non-union employees of the Company’s U.S. operations who were hired prior to March 1, 2003. Benefit accruals ceased in March 2003. A second defined benefit plan covered employees at a business location that closed in December 2013, at which time benefits accruals ceased. The third defined pension plan covers one of the Company's union groups at the Cleveland location. Benefits accruals under this plan ceased in March 2020, when the then-current union disclaimed all interest in the bargaining unit. Curtailment occurred; however, there was no impact to consolidated financial statements. A new union was certified and the collective bargaining agreement was finalized in December 2021, at which time it was agreed that the defined benefit plan would be frozen and retirement benefits are to be provided through a defined contribution plan. The Company sponsors a fourth defined benefit plan for certain employees at its Maniago location. The plan is a severance entitlement payable to the Italian employees who qualified prior to December 27, 2006. The plan is considered an unfunded defined benefit plan and its liability is measured as the actuarial present value of the vested benefits to which the employees would be entitled if they separated at the consolidated balance sheet date. The Company uses a September 30 measurement date for its U.S. defined benefit pension plans. Net pension expense, benefit obligations and plan assets for the Company-sponsored defined benefit pension plans consist of the following:
| Years Ended September 30, |  |
| 2023 |  | 2022 |  |
Service cost | $ | 24 |  |  | $ | 42 |  |  |
Interest cost | 1,090 |  |  | 714 |  |  |
Expected return on plan assets | (1,101) |  |  | (1,362) |  |  |
Amortization of net loss | 319 |  |  | 476 |  |  |
Settlement cost | 108 |  |  | 208 |  |  |
Net pension expense for defined benefit plans (non-operating expense) | $ | 440 |  |  | $ | 78 |  |  |
The status of all defined benefit pension plans at September 30 is as follows:
| 2023 |  | 2022
Benefit obligations: |  |  |
Benefit obligations at beginning of year | $ | 22,795 |  |  | $ | 29,330 |
Service cost | 24 |  |  | 42 |
Interest cost | 1,090 |  |  | 714 |
Actuarial (gain) | (1,463) |  |  | (5,265) |
Benefits paid | (1,814) |  |  | (1,970) |
Currency translation | 25 |  |  | (56) |
Benefit obligations at end of year | $ | 20,657 |  |  | $ | 22,795 |
Plan assets: |  |  |
Plan assets at beginning of year | $ | 17,937 |  |  | $ | 23,211 |
Actual return on plan assets | 979 |  |  | (3,376) |
Employer contributions | 92 |  |  | 72 |
Benefits paid | (1,814) |  |  | (1,970) |
Plan assets at end of year | $ | 17,194 |  |  | $ | 17,937 |
Underfunded status at end of year | $ | (3,463) |  |  | $ | (4,858) |
As shown within the above table, there was a decrease in the benefit obligation of $2,138 to $20,657 at September 30, 2023 compared with $22,795 at September 30, 2022. The primary drivers that attributed to the change pertained to increase in the discount rate used partially offset by asset returns.
|  | Plans in which Benefit Obligations Exceed Assets at September 30,
|  |  |  | 2023 |  | 2022
Reconciliation of funded status: |  |  |  |  |  |
Plan assets less than projected benefit obligations |  |  |  | $ | (3,463) |  |  | $ | (4,858) |
Amounts recognized in accumulated other comprehensive loss: |  |  |  |  |  |
Net loss |  |  |  | 4,504 |  |  | 6,271 |
Net amount recognized in the consolidated balance sheets |  |  |  | $ | 1,041 |  |  | $ | 1,413 |
Amounts recognized in the consolidated balance sheets are: |  |  |  |  |  |
Accrued liabilities |  |  |  | (46) |  |  | (46) |
Pension liability |  |  |  | (3,417) |  |  | (4,812) |
Accumulated other comprehensive loss – pretax |  |  |  | 4,504 |  |  | 6,271 |
Net amount recognized in the consolidated balance sheets |  |  |  | $ | 1,041 |  |  | $ | 1,413 |
Where applicable, the following weighted-average assumptions were used in developing the benefit obligation and the net pension expense for defined benefit pension plans:
| Years Ended September 30,
| 2023 |  | 2022
Discount rate for liabilities | 5.6 | % |  | 5.2 | %
Discount rate for expenses | 5.1 | % |  | 2.9 | %
Expected return on assets | 6.2 | % |  | 6.4 | %
The Company held investments in pooled separate accounts and common/collective trusts prior to February 2023, in which the fair value of assets of the underlying funds are determined in the following ways: •U.S. equity securities are comprised of domestic equities that are priced using the closing price of the applicable nationally recognized stock exchange, as provided by industry standard vendors such as Interactive Data Corporation. •Non-U.S. equity securities are comprised of international equities. These securities are priced using the closing price from the applicable foreign stock exchange. •U.S. bond funds are comprised of domestic fixed income securities. Securities are priced by industry standards vendors, such as Interactive Data Corporation, using inputs such as benchmark yields, reported trades, broker/dealer quotes, or issuer spreads. ◦Included as part of the U.S. bond funds, was a private placement funds, for which fair market value is not always commercially available, the fair value of these investments is primarily determined using a discounted cash flow model, which utilizes a discount rate based upon the average of spread surveys collected from private-market intermediaries who are active in both primary and secondary transactions, and takes into account, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. •Non-U.S. bond funds are comprised of international fixed income securities. Securities are priced by Interactive Data Corporation, using inputs such as benchmark yields, reported trades, broker/dealer quotes, or issuer spreads. •Stable value fund is comprised of short-term securities and cash equivalent securities, which seek to provide high current income consistent with the preservation of principal and liquidity. As permitted under relevant securities laws, securities in this type of fund are valued initially at cost and thereafter adjusted for amortization of any discount or premium. During fiscal 2023, the Company transferred its investments to a new custodian. The Company held investments in mutual funds and money market funds, in which the fair value of assets of the underlying funds are determined in the following ways: •Mutual funds are valued at the daily closing price as reported by the fund. Mutual funds held are open-ended mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value (“NAV”) and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded. •Money market funds are valued at NAV, which approximates fair value. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. However, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement result. The following tables set forth the asset allocation of the Company’s defined benefit pension plan assets and summarize the fair values and levels within the fair value hierarchy for such plan assets as of September 30, 2023 and 2022:
September 30, 2023 | Asset Amount |  | Level 1 |  |  |  |
U.S. equity securities: |  |  |  |  |  |  |
Large value | $ | 879 |  |  | $ | 879 |  |  |  |  |
Large blend | 3,124 |  |  | 3,124 |  |  |  |  |
Large growth | 1,060 |  |  | 1,060 |  |  |  |  |
Mid blend | 599 |  |  | 599 |  |  |  |  |
Small blend | 499 |  |  | 499 |  |  |  |  |
Non-U.S. equity securities: |  |  |  |  |  |  |
Foreign large blend | 615 |  |  | 615 |  |  |  |  |
Diversified emerging markets | 272 |  |  | 272 |  |  |  |  |
Global equity securities | 577 |  |  | 577 |  |  |  |  |
U.S. debt securities: |  |  |  |  |  |  |
Inflation protected bond | — |  |  |  |  |  |  |
Intermediate term bond | 5,676 |  |  | 5,676 |  |  |  |  |
Multi-sector bond | 2,044 |  |  | 2,044 |  |  |  |  |
Stable value: |  |  |  |  |  |  |
Cash or money market | 1,849 |  |  | 1,849 |  |  |  |  |
Total plan assets at fair value | $ | 17,194 |  |  | $ | 17,194 |  |  |  |  |
September 30, 2022 | Asset Amount |  |  |  | Level 2 |  | Level 3
U.S. equity securities: |  |  |  |  |  |  |
Large value | $ | 393 |  |  |  |  | $ | 393 |  |  | $ | — |
Large blend | 7,637 |  |  |  |  | 7,637 |  |  | — |
Large growth | 302 |  |  |  |  | 302 |  |  | — |
Mid blend | 167 |  |  |  |  | 167 |  |  | — |
Small blend | 359 |  |  |  |  | 359 |  |  | — |
Non-U.S. equity securities: |  |  |  |  |  |  |
Foreign large blend | 1,276 |  |  |  |  | 1,276 |  |  | — |
Diversified emerging markets | 63 |  |  |  |  | 63 |  |  | — |
U.S. debt securities: |  |  |  |  |  |  |
Inflation protected bond | 971 |  |  |  |  | 971 |  |  | — |
Intermediate term bond | 6,332 |  |  |  |  | 4,503 |  |  | 1,829 |
High inflation bond | 78 |  |  |  |  | 78 |  |  | — |
Non-U.S. debt securities: |  |  |  |  |  |  |
Emerging markets bonds | — |  |  |  |  | — |  |  | — |
Stable value: |  |  |  |  |  |  |
Short-term bonds | 359 |  |  |  |  | 359 |  |  | — |
Total plan assets at fair value | $ | 17,937 |  |  |  |  | $ | 16,108 |  |  | $ | 1,829 |
Changes in the fair value of the Company’s Level 3 investments during the years ending September 30, 2023 and 2022 were as follows:
| 2023 |  | 2022
Balance at beginning of year | $ | 1,829 |  |  | $ | 2,108 |
Actual return on plan assets | 94 |  |  | (279) |
Purchases and sales of plan assets, net | (1,923) |  |  | — |
Balance at end of year | $ | — |  |  | $ | 1,829 |
Investment objectives relative to the assets of the Company’s defined benefit pension plans are to (i) optimize the long-term return on the plans’ assets while assuming an acceptable level of investment risk; (ii) maintain an appropriate diversification across asset categories and among investment managers; and (iii) maintain a careful monitoring of the risk level within each asset category. Asset allocation objectives are established to promote optimal expected returns and volatility characteristics given the long-term time horizon for fulfilling the obligations of the Company’s defined benefit pension plans. Selection of the appropriate asset allocation for the plans’ assets was based upon a review of the expected return and risk characteristics of each asset category in relation to the anticipated timing of future plan benefit payment obligations. The Company has a long-term objective for the allocation of plan assets. However, the Company realizes that actual allocations at any point in time will likely vary from this objective due principally to (i) the impact of market conditions on plan asset values and (ii) required cash contributions to and distribution from the plans. The “Asset Allocation Range” listed below anticipates these potential scenarios and provides flexibility for the plans' investments to vary around the objective without triggering a reallocation of the assets, as noted by the following:
| Percent of Plan Assets at September 30, |  | Asset Allocation Range
| 2023 |  | 2022 |
U.S. equities | 36 | % |  | 49 | % |  | 30% to 70%
Non-U.S. equities | 8 | % |  | 8 | % |  | 0% to 20%
U.S. debt securities | 45 | % |  | 41 | % |  | 20% to 70%
Non-U.S. debt securities | — | % |  | — | % |  | 0% to10%
Other securities | 11 | % |  | 2 | % |  | 0% to 60%
Total | 100 | % |  | 100 | % |  |
External consultants assist the Company with monitoring the appropriateness of the above investment strategy and the related asset mix and performance. To develop the expected long-term rate of return assumptions on plan assets, generally the Company uses long-term historical information for the target asset mix selected. Adjustments are made to the expected long-term rate of return assumptions when deemed necessary based upon revised expectations of future investment performance of the overall investments markets. The Company anticipates making approximately $93 in contributions to its defined benefit pension plans during fiscal 2024. The Company has carryover balances from previous periods that may be available for use as a credit to reduce the amount of contributions that the Company is required to make to certain of its defined benefit pension plans in fiscal 2024. The Company’s ability to elect to use such carryover balances will be determined based on the actual funded status of each defined benefit pension plan relative to the plan’s minimum regulatory funding requirements. The following defined benefit payment amounts are expected to be made in the future:
Years Ending September 30, | Projected Benefit Payments
2024 | $ | 2,295 |
2025 | 1,893 |
2026 | 1,724 |
2027 | 1,669 |
2028 | 1,643 |
2029-2032 | 7,497 |
Multi-Employer Plan As noted within Note 12, Business Information, one of the bargaining units previously participated in a multi-employer plan; however, as part of the ratification of a new collective bargaining agreement in December 2019, there was a provision to withdraw from the existing multi-employer plan effective December 31, 2019. The withdrawal resulted in a liability of $739, which was recorded within the costs of goods sold line in fiscal 2020 of the consolidated statements of operations and is included in other long-term liabilities. The liability is payable in quarterly installments over the next 20 years. The next four quarterly installments are recorded in accrued liabilities of the consolidated balance sheet. Defined Contribution Plans Substantially all non-union U.S. employees of the Company and its U.S. subsidiaries are eligible to participate in the Company’s U.S. defined contribution plan. The Company makes non-discretionary, regular matching contributions to this plan equal to an amount that represents one hundred percent (100%) of a participant’s deferral contribution up to one percent (1%) of eligible compensation plus eighty percent (80%) of a participant’s deferral contribution between one percent (1%) and six percent (6%) of eligible compensation. The Company’s regular matching contribution expense for its U.S. defined contribution plan in fiscal 2023 and 2022 was $516 and $528, respectively. This defined contribution plan provides that the Company may also make an additional discretionary matching contribution during those periods in which the Company achieves certain performance levels. The Company did not provide additional discretionary matching contributions in either fiscal 2023 and 2022. The Company sponsors two defined contribution plans for the Cleveland bargaining units that either withdrew from the multi-employer plan (union) pension plan or bargained to freeze the company-sponsored pension plan. Impacted employees were enrolled into one of two newly formed defined contribution plans. The Company makes a non-elective contribution equal to $1.50 or $1.25 per work, vacation, or holiday hour, up to a maximum of 40 hours per week. The Company's non-elective contribution expense was $222 in fiscal 2023 and $204 in fiscal 2022. The Company sponsors a defined contribution plan for certain of its Maniago union employees. The plan is a severance entitlement plan payable to Italian employees based on local government laws, which qualifies as a defined contribution plan.

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