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Employee Benefit Plans | 12 Months Ended
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Jun. 30, 2019
Retirement Benefits [Abstract] |
Employee Benefit Plans | Employee Benefit Plans The Company provides benefit plans for full-time employees who work 30 hours or more per week, including 401(k), health and other welfare benefit plans and, in certain circumstances, pension benefits. Generally, the plans provide health benefits after 30 days and other retirement benefits based on years of service and/or a combination of years of service and earnings. In addition, the Company contributes to two multiemployer defined benefit pension plans, one multiemployer defined contribution pension plan and nine multiemployer defined contribution plans other than pension plans that provide medical, vision, dental and disability benefits for active, union-represented employees subject to collective bargaining agreements. In addition, the Company sponsors a postretirement defined benefit plan that covers qualified non-union retirees and certain qualified union retirees and provides retiree medical coverage and, depending on the age of the retiree, dental and vision coverage. The Company also provides a postretirement death benefit to certain of its employees and retirees. The Company is required to recognize the funded status of a benefit plan in its consolidated balance sheets. The Company is also required to recognize in other comprehensive income (loss) (“OCI”) certain gains and losses that arise during the period but are deferred under pension accounting rules. Single Employer Pension Plans The Company has a defined benefit pension plan, the Farmer Bros. Co. Pension Plan for Salaried Employees (the “Farmer Bros. Plan”), for Company employees hired prior to January 1, 2010 who are not covered under a collective bargaining agreement. The Company amended the Farmer Bros. Plan, freezing the benefit for all participants effective June 30, 2011. After the plan freeze, participants do not accrue any benefits under the Farmer Bros. Plan, and new hires are not eligible to participate in the Farmer Bros. Plan. As all plan participants became inactive following this pension curtailment, net (gain) loss is now amortized based on the remaining life expectancy of these participants instead of the remaining service period of these participants. As of June 30, 2019, the Company also has two defined benefit pension plans for certain hourly employees covered under collective bargaining agreements (the “Brewmatic Plan” and the “Hourly Employees' Plan”). Effective October 1, 2016, the Company froze benefit accruals and participation in the Hourly Employees' Plan. After the plan freeze, participants do not accrue any benefits under the plan, and new hires are not eligible to participate in the plan. After the freeze the participants in the plan are eligible to receive the Company's matching contributions to their 401(k). Effective December 1, 2018 the Company amended and terminated the Farmer Bros. Co. Pension Plan for Salaried Employees (the “Farmer Bros. Plan”), a defined benefit pension plan for Company employees hired prior to January 1, 2010 who were not covered under a collective bargaining agreement. The Company previously amended the Farmer Bros. Plan, freezing the benefit for all participants effective June 30, 2011. Immediately prior to the termination of the Farmer Bros. Plan, the Company spun off the benefit liability and obligations, and all allocable assets for all retirement plan benefits of certain active employees with accrued benefits in excess of $25,000, retirees and beneficiaries currently receiving benefit payments under the Farmer Bros. Plan, and former employees who have deferred vested benefits under the Farmer Bros. Plan, to the Brewmatic Plan. Upon termination of the Farmer Bros. Plan, all remaining plan participants elected to receive a distribution of his/her entire accrued benefit under the Farmer Bros. Plan in a single cash lump sum or an individual insurance company annuity contract, in either case, funded directly by Farmer Bros. Plan assets. Termination of the Farmer Bros. Plan triggered re-measurement and settlement of the Farmer Bros. Plan and re-measurement of the Brewmatic Plan. As a result of the distributions to the remaining plan participants of the Farmer Bros. Plan, the Company recognized a non-cash pension settlement charge of $10.9 million for the year ended June 30, 2019. Obligations and Funded Status
|  | Farmer Bros. Plan As of June 30, |  | Brewmatic Plan As of June 30, |  | Hourly Employees’ Plan As of June 30, |  | Total
($ in thousands) |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018
Change in projected benefit obligation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligation at the beginning of the year |  | $ | 137,175 |  |  | $ | 146,291 |  |  | $ | 3,724 |  |  | $ | 4,079 |  |  | $ | 4,040 |  |  | $ | 4,329 |  |  | $ | 144,939 |  |  | $ | 154,699 |
Interest cost |  | 2,722 |  |  | 5,417 |  |  | 2,339 |  |  | 149 |  |  | 161 |  |  | 163 |  |  | 5,222 |  |  | 5,729 |
Actuarial (gain) loss |  | (1,571 | ) |  | (5,956 | ) |  | 8,482 |  |  | (227 | ) |  | 349 |  |  | (370 | ) |  | 7,260 |  |  | (6,553 | )
Benefits paid |  | (3,574 | ) |  | (8,577 | ) |  | (3,097 | ) |  | (277 | ) |  | (75 | ) |  | (82 | ) |  | (6,746 | ) |  | (8,936 | )
Pension settlement |  | (3,162 | ) |  | — |  |  | (21,286 | ) |  | — |  |  | — |  |  | — |  |  | (24,448 | ) |  | — |
Other - Plan merger |  | $ | (131,590 | ) |  | — |  |  | 131,590 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Projected benefit obligation at the end of the year |  | $ | — |  |  | $ | 137,175 |  |  | $ | 121,752 |  |  | $ | 3,724 |  |  | $ | 4,475 |  |  | $ | 4,040 |  |  | $ | 126,227 |  |  | $ | 144,939 |
Change in plan assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at the beginning of the year |  | $ | 97,211 |  |  | $ | 97,304 |  |  | $ | 3,719 |  |  | $ | 3,115 |  |  | $ | 3,629 |  |  | $ | 2,999 |  |  | $ | 104,559 |  |  | $ | 103,418 |
Actual return on plan assets |  | (6,236 | ) |  | 5,874 |  |  | 9,325 |  |  | 201 |  |  | 224 |  |  | 198 |  |  | 3,313 |  |  | 6,273 |
Employer contributions |  | 1,525 |  |  | 2,610 |  |  | 1,800 |  |  | 680 |  |  | — |  |  | 514 |  |  | 3,325 |  |  | 3,804 |
Benefits paid |  | (3,574 | ) |  | (8,577 | ) |  | (3,097 | ) |  | (277 | ) |  | (75 | ) |  | (82 | ) |  | (6,746 | ) |  | (8,936 | )
Pension settlement |  | (3,162 | ) |  | — |  |  | (22,100 | ) |  | — |  |  | — |  |  | — |  |  | (25,262 | ) |  | — |
Other - Plan merger |  | (85,764 | ) |  | — |  |  | 85,764 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Fair value of plan assets at the end of the year |  | $ | — |  |  | $ | 97,211 |  |  | $ | 75,411 |  |  | $ | 3,719 |  |  | $ | 3,778 |  |  | $ | 3,629 |  |  | $ | 79,189 |  |  | $ | 104,559 |
Funded status at end of year (underfunded) overfunded |  | $ | — |  |  | $ | (39,964 | ) |  | $ | (46,341 | ) |  | $ | (5 | ) |  | $ | (697 | ) |  | $ | (411 | ) |  | $ | (47,038 | ) |  | $ | (40,380 | )
Amounts recognized in consolidated balance sheets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-current liabilities |  | — |  |  | (39,964 | ) |  | (46,341 | ) |  | (5 | ) |  | (697 | ) |  | (411 | ) |  | (47,038 | ) |  | (40,380 | )
Total |  | $ | — |  |  | $ | (39,964 | ) |  | $ | (46,341 | ) |  | $ | (5 | ) |  | $ | (697 | ) |  | $ | (411 | ) |  | $ | (47,038 | ) |  | $ | (40,380 | )
Amounts recognized in AOCI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  | — |  |  | 51,079 |  |  | 50,080 |  |  | 1,788 |  |  | 565 |  |  | 218 |  |  | 50,645 |  |  | 53,085 |
Total AOCI (not adjusted for applicable tax) |  | $ | — |  |  | $ | 51,079 |  |  | $ | 50,080 |  |  | $ | 1,788 |  |  | $ | 565 |  |  | $ | 218 |  |  | $ | 50,645 |  |  | $ | 53,085 |
Weighted average assumptions used to determine benefit obligations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 4.10 | % |  | 4.05 | % |  | 3.45 | % |  | 4.05 | % |  | 3.45 | % |  | 4.05 | % |  | 4.05 | % |  | 4.05 | %
Rate of compensation increase |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |
Components of Net Periodic Benefit Cost and Other Changes Recognized in Other Comprehensive Income (Loss) (OCI)
|  | Farmer Bros. Plan June 30, |  | Brewmatic Plan June 30, |  | Hourly Employees’ Plan June 30, |  | Total
($ in thousands) |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018
Components of net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest cost |  | 2,722 |  |  | 5,417 |  |  | 2,339 |  |  | 149 |  |  | 161 |  |  | 163 |  |  | 5,222 |  |  | 5,729 |
Expected return on plan assets |  | (2,767 | ) |  | (5,490 | ) |  | (2,257 | ) |  | (161 | ) |  | (222 | ) |  | (173 | ) |  | (5,246 | ) |  | (5,824 | )
Amortization of net loss |  | 710 |  |  | 1,588 |  |  | 796 |  |  | 80 |  |  | — |  |  | 6 |  |  | 1,506 |  |  | 1,674 |
Pension settlement charge |  | 1,356 |  |  | — |  |  | 9,586 |  |  | — |  |  | — |  |  | — |  |  | 10,942 |  |  | — |
Net periodic benefit cost |  | $ | 2,021 |  |  | $ | 1,515 |  |  | $ | 10,464 |  |  | $ | 68 |  |  | $ | (61 | ) |  | $ | (4 | ) |  | $ | 12,424 |  |  | $ | 1,579 |
Other changes recognized in OCI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  | $ | 7,433 |  |  | $ | (6,340 | ) |  | $ | 1,413 |  |  | $ | (267 | ) |  | $ | 347 |  |  | $ | (394 | ) |  | $ | 9,193 |  |  | $ | (7,001 | )
Prior service cost (credit) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Amortization of net loss |  | (710 | ) |  | (1,588 | ) |  | (796 | ) |  | (80 | ) |  | — |  |  | (6 | ) |  | (1,506 | ) |  | (1,674 | )
Pension settlement charge |  | (1,356 | ) |  | — |  |  | (9,586 | ) |  | — |  |  | — |  |  | — |  |  | (10,942 | ) |  | — |
Allocation of net Loss - Plan merger |  | (56,446 | ) |  | — |  |  | 56,446 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Net loss due to annuity purchase |  | — |  |  | — |  |  | 814 |  |  | — |  |  | — |  |  | — |  |  | 814 |  |  | — |
Total recognized in OCI |  | $ | (51,079 | ) |  | $ | (7,928 | ) |  | $ | 48,291 |  |  | $ | (347 | ) |  | $ | 347 |  |  | $ | (400 | ) |  | $ | (2,441 | ) |  | $ | (8,675 | )
Total recognized in net periodic benefit cost and OCI |  | $ | (49,058 | ) |  | $ | (6,413 | ) |  | $ | 58,755 |  |  | $ | (279 | ) |  | $ | 286 |  |  | $ | (404 | ) |  | $ | 9,983 |  |  | $ | (7,096 | )
Weighted-average assumptions used to determine net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 4.05 | % |  | 3.80 | % |  | 4.10 | % |  | 3.80 | % |  | 4.05 | % |  | 3.80 | % |  | 4.05 | % |  | 3.80 | %
Expected long-term return on plan assets |  | — | % |  | 6.75 | % |  | 6.75 | % |  | 6.75 | % |  | 6.75 | % |  | 6.75 | % |  | 6.75 | % |  | 6.75 | %
Rate of compensation increase |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |
Basis Used to Determine Expected Long-term Return on Plan Assets The expected long-term return on plan assets assumption was developed as a weighted average rate based on the target asset allocation of the plan and the Long-Term Capital Market Assumptions (CMA) 2018. The capital market assumptions were developed with a primary focus on forward-looking valuation models and market indicators. The key fundamental economic inputs for these models are future inflation, economic growth, and interest rate environment. Due to the long-term nature of the pension obligations, the investment horizon for the CMA 2018 is 20 to 30 years. In addition to forward-looking models, historical analysis of market data and trends was reflected, as well as the outlook of recognized economists, organizations and consensus CMA from other credible studies. Description of Investment Policy The Company’s investment strategy is to build an efficient, well-diversified portfolio based on a long-term, strategic outlook of the investment markets. The investment markets outlook utilizes both the historical-based and forward-looking return forecasts to establish future return expectations for various asset classes. These return expectations are used to develop a core asset allocation based on the specific needs of each plan. The core asset allocation utilizes investment portfolios of various asset classes and multiple investment managers in order to maximize the plan’s return while providing multiple layers of diversification to help minimize risk. Additional Disclosures
|  | Farmer Bros. Plan June 30, |  | Brewmatic Plan June 30, |  | Hourly Employees’ Plan June 30, |  | Total
($ in thousands) |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018
Comparison of obligations to plan assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Projected benefit obligation |  | $ | — |  |  | $ | 137,175 |  |  | $ | 121,752 |  |  | $ | 3,724 |  |  | $ | 4,475 |  |  | $ | 4,040 |  |  | $ | 126,227 |  |  | $ | 144,939 |
Accumulated benefit obligation |  | $ | — |  |  | $ | 137,175 |  |  | $ | 121,752 |  |  | $ | 3,724 |  |  | $ | 4,475 |  |  | $ | 4,040 |  |  | $ | 126,227 |  |  | $ | 144,939 |
Fair value of plan assets at measurement date |  | $ | — |  |  | $ | 97,211 |  |  | $ | 75,411 |  |  | $ | 3,719 |  |  | $ | 3,778 |  |  | $ | 3,629 |  |  | $ | 79,189 |  |  | $ | 104,559 |
Plan assets by category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  | $ | — |  |  | $ | 63,547 |  |  | $ | 48,464 |  |  | $ | 2,431 |  |  | $ | 2,440 |  |  | $ | 2,341 |  |  | $ | 50,904 |  |  | $ | 68,319 |
Debt securities |  | — |  |  | 27,608 |  |  | 22,461 |  |  | 1,056 |  |  | 1,100 |  |  | 1,065 |  |  | 23,561 |  |  | 29,729 |
Real estate |  | — |  |  | 6,056 |  |  | 4,486 |  |  | 232 |  |  | 238 |  |  | 223 |  |  | 4,724 |  |  | 6,511 |
Total |  | $ | — |  |  | $ | 97,211 |  |  | $ | 75,411 |  |  | $ | 3,719 |  |  | $ | 3,778 |  |  | $ | 3,629 |  |  | $ | 79,189 |  |  | $ | 104,559 |
Plan assets by category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  | — | % |  | 66 | % |  | 64 | % |  | 66 | % |  | 65 | % |  | 65 | % |  | 64 | % |  | 65 | %
Debt securities |  | — | % |  | 28 | % |  | 30 | % |  | 28 | % |  | 29 | % |  | 29 | % |  | 30 | % |  | 29 | %
Real estate |  | — | % |  | 6 | % |  | 6 | % |  | 6 | % |  | 6 | % |  | 6 | % |  | 6 | % |  | 6 | %
Total |  | — | % |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | %
Fair values of plan assets were as follows:
|  | As of June 30, 2019
(In thousands) |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Investments measured at NAV
Brewmatic Plan |  | $ | 75,411 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 75,411 |
Hourly Employees’ Plan |  | $ | 3,778 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3,778 |
|  | As of June 30, 2018
(In thousands) |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Investments measured at NAV
Farmer Bros. Plan |  | $ | 97,211 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 97,211 |
Brewmatic Plan |  | $ | 3,719 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3,719 |
Hourly Employees’ Plan |  | $ | 3,629 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3,629 |
The following is the target asset allocation for the Company's single employer pension plans— Brewmatic Plan and Hourly Employees' Plan—for fiscal 2020:
| Fiscal 2020
U.S. large cap equity securities | 37.0 | %
U.S. small cap equity securities | 4.6 | %
International equity securities | 22.4 | %
Debt securities | 30.0 | %
Real estate | 6.0 | %
Total | 100.0 | %
Estimated Amounts in OCI Expected To Be Recognized In fiscal 2020, the Company expects to recognize net periodic benefit costs of $1.4 million for the Brewmatic Plan and recognize net periodic benefit credit of $75,000 for the Hourly Employees’ Plan. Estimated Future Contributions and Refunds In fiscal 2020, the Company expects to contribute $4.0 million to the Brewmatic Plan and does not expect to contribute to the Hourly Employees’ Plan. The Company is not aware of any refunds expected from single employer pension plans. Estimated Future Benefit Payments The following benefit payments are expected to be paid over the next 10 fiscal years:
(In thousands) |  |  | Brewmatic Plan |  | Hourly Employees’ Plan
Year Ending: |  |
June 30, 2020 |  |  | $ | 6,720 |  |  | $ | 130 |
June 30, 2021 |  |  | $ | 6,550 |  |  | $ | 150 |
June 30, 2022 |  |  | $ | 6,770 |  |  | $ | 160 |
June 30, 2023 |  |  | $ | 6,940 |  |  | $ | 180 |
June 30, 2024 |  |  | $ | 7,060 |  |  | $ | 190 |
June 30, 2025 to June 30, 2029 |  |  | $ | 35,450 |  |  | $ | 1,100 |
These amounts are based on current data and assumptions and reflect expected future service, as appropriate. Multiemployer Pension Plans The Company participates in two multiemployer defined benefit pension plans that are union sponsored and collectively bargained for the benefit of certain employees subject to collective bargaining agreements, of which the Western Conference of Teamsters Pension Plan ("WCTPP") is individually significant. The Company makes contributions to these plans generally based on the number of hours worked by the participants in accordance with the provisions of negotiated labor contracts. The risks of participating in multiemployer pension plans are different from single-employer plans in that: (i) assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers; (ii) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; and (iii) if the Company stops participating in the multiemployer plan, the Company may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The Company received a letter dated July 10, 2018 from the WCT Pension Trust assessing withdrawal liability against the Company for a share of the WCTPP unfunded vested benefits, on the basis claimed by the WCT Pension Trust that employment actions by the Company in 2016 in connection with the Corporate Relocation Plan constituted a partial withdrawal from the WCTPP. The Company agreed with the WCT Pension Trust’s assessment of pension withdrawal liability in the amount of $3.4 million, including interest, which is payable in 17 monthly installments of $190,507 followed by a final monthly installment of $153,822, commencing September 10, 2018. At June 30, 2019 the Company had $1.5 million on its consolidated balance sheet relating to this obligation in “Accrued payroll expenses.” In fiscal 2012, the Company withdrew from the Local 807 Labor-Management Pension Fund (“Pension Fund”) and recorded a charge of $4.3 million associated with withdrawal from this plan, representing the present value of the estimated withdrawal liability expected to be paid in quarterly installments of $0.1 million over 80 quarters. On November 18, 2014, the Pension Fund sent the Company a notice of assessment of withdrawal liability in the amount of $4.4 million, which the Pension Fund adjusted to $4.9 million on January 5, 2015. In December 2018, the parties agreed to settle the Company’s remaining withdrawal liability to the Local 807 Pension Fund for a lump sum cash settlement payment of $3.0 million plus two remaining installment payments of $91,000 due on or before October 1, 2034 and on or before January 1, 2035. At June 30, 2019, the Company has paid the Local 807 Pension Fund $3.0 million and has accrued $0.2 million within “Accrued pension liabilities” on the Company’s condensed consolidated balance sheet. Future collective bargaining negotiations may result in the Company withdrawing from the remaining multiemployer pension plans in which it participates and, if successful, the Company may incur a withdrawal liability, the amount of which could be material to the Company's results of operations and cash flows. Contributions made by the Company to the multiemployer pension plans are as follows:
(In thousands) |  | WCTPP(1)(2)(3) |  | All Other Plans(4)
Year Ended: |  |  |  |
June 30, 2019 |  | $ | 3,634 |  |  | $ | 39 |
June 30, 2018 |  | $ | 1,605 |  |  | $ | 35 |
June 30, 2017 |  | $ | 2,114 |  |  | $ | 39 |
____________
(1) | Individually significant plan.
(2) | Less than 5% of total contribution to WCTPP based on WCTPP's FASB Disclosure Statement for the calendar year ended December 31, 2018.
(3) | The Company guarantees that one hundred seventy-three (173) hours will be contributed upon for all employees who are compensated for all available straight time hours for each calendar month. An additional 6.5% of the basic contribution must be paid for PEER or the Program for Enhanced Early Retirement.
(4) | Includes one plan that is not individually significant.
Multiemployer Plans Other Than Pension Plans The Company participates in nine multiemployer defined contribution plans other than pension plans that provide medical, vision, dental and disability benefits for active, union-represented employees subject to collective bargaining agreements. The plans are subject to the provisions of the Employee Retirement Income Security Act of 1974, and provide that participating employers make monthly contributions to the plans in an amount as specified in the collective bargaining agreements. Also, the plans provide that participants make self-payments to the plans, the amounts of which are negotiated through the collective bargaining process. The Company's participation in these plans is governed by collective bargaining agreements which expires on or before June 30, 2022. The Company's aggregate contributions to multiemployer plans other than pension plans in the fiscal years ended June 30, 2019, 2018 and 2017 were $5.2 million, $4.8 million and $5.3 million, respectively. The Company expects to contribute an aggregate of $5.8 million towards multiemployer plans other than pension plans in fiscal 2020. 401(k) Plan The Company's 401(k) Plan is available to all eligible employees. The Company's 401(k) match portion is available to all eligible employees who have worked more than 1,000 hours during a calendar year and were employed at the end of the calendar year. Participants in the 401(k) Plan may choose to contribute a percentage of their annual pay subject to the maximum contribution allowed by the Internal Revenue Service. The Company's matching contribution is discretionary, based on approval by the Company's Board of Directors. The Company matching contribution for the calendar years 2019, 2018 and 2017, was 50% of an employee's annual contribution to the 401(k) Plan, up to 6% of the employee's eligible income. The Company recorded matching contributions of $2.2 million, $2.0 million and $1.6 million in operating expenses for the fiscal years ended June 30, 2019, 2018 and 2017, respectively. Effective January 1, 2019, the Company amended and restated the 401(k) Plan to, among other things, provide for: (i) an annual safe harbor non-elective contribution of shares of the Company’s common stock equal to 4% of each eligible participant’s annual plan compensation; (ii) an elective matching contribution for non-collectively bargained employees and certain union-represented employees equal to 100% of the first 3% of such eligible participant’s tax-deferred contributions to the 401(k) Plan; and (iii) profit-sharing contributions at the Company’s discretion. Participants are immediately vested in their contributions, the safe harbor non-elective contributions, the employer’s elective matching contributions, and the employer’s discretionary contributions. For the fiscal year ended June 30, 2019, the Company contributed a total of 90,105 shares of the Company’s common stock with a value of $1.6 million to eligible participants’ annual plan compensation. In July 2019, 52,534 shares of the 90,105 shares were issued. Postretirement Benefits The Company sponsors a postretirement defined benefit plan that covers qualified non-union retirees and certain qualified union retirees (“Retiree Medical Plan”). The plan provides medical, dental and vision coverage for retirees under age 65 and medical coverage only for retirees age 65 and above. Under this postretirement plan, the Company’s contributions toward premiums for retiree medical, dental and vision coverage for participants and dependents are scaled based on length of service, with greater Company contributions for retirees with greater length of service, subject to a maximum monthly Company contribution. The Company's retiree medical, dental and vision plan is unfunded, and its liability was calculated using an assumed discount rate of 3.6% at June 30, 2019. The Company projects an initial medical trend rate of 8.1% in fiscal 2020, ultimately reducing to 4.5% in 10 years. The Company also provides a postretirement death benefit (“Death Benefit”) to certain of its employees and retirees, subject, in the case of current employees, to continued employment with the Company until retirement and certain other conditions related to the manner of employment termination and manner of death. The Company records the actuarially determined liability for the present value of the postretirement death benefit. The Company has purchased life insurance policies to fund the postretirement death benefit wherein the Company owns the policy but the postretirement death benefit is paid to the employee's or retiree's beneficiary. The Company records an asset for the fair value of the life insurance policies which equates to the cash surrender value of the policies. Retiree Medical Plan and Death Benefit The following table shows the components of net periodic postretirement benefit cost for the Retiree Medical Plan and Death Benefit for the fiscal years ended June 30, 2019, 2018 and 2017. Net periodic postretirement benefit cost for fiscal 2019 was based on employee census information as of June 30, 2019.
|  | Year Ended June 30,
(In thousands) |  | 2019 |  | 2018 |  | 2017
Components of Net Periodic Postretirement Benefit Cost (Credit): |  |  |  |  |  |
Service cost |  | $ | 530 |  |  | $ | 609 |  |  | $ | 760 |
Interest cost |  | 887 |  |  | 835 |  |  | 829 |
Amortization of net gain |  | (834 | ) |  | (841 | ) |  | (630 | )
Amortization of prior service credit |  | (1,757 | ) |  | (1,757 | ) |  | (1,757 | )
Net periodic postretirement benefit (credit) cost |  | $ | (1,174 | ) |  | $ | (1,154 | ) |  | $ | (798 | )
The difference between the assets and the Accumulated Postretirement Benefit Obligation (APBO) at the adoption of ASC 715-60 was established as a transition (asset) obligation and is amortized over the average expected future service for active employees as measured at the date of adoption. Any plan amendments that retroactively increase benefits create prior service cost. The increase in the APBO due to any plan amendment is established as a base and amortized over the average remaining years of service to the full eligibility date of active participants who are not yet fully eligible for benefits at the plan amendment date. Gains and losses due to experience different than that assumed or from changes in actuarial assumptions are not immediately recognized. The tables below show the remaining bases for the transition (asset) obligation, prior service cost (credit), and the calculation of the amortizable gain or loss.
Amortization Schedule |  |
Transition (Asset) Obligation: The transition (asset) obligations have been fully amortized.
Prior service cost (credit)-Medical only ($ in thousands):
Date Established |  | Balance at July 1, 2019 |  | Annual Amortization |  | Years Remaining |
January 1, 2008 |  | $ | (41 | ) |  | $ | 41 |  |  | 0.2 |
July 1, 2012 |  | (6,895 | ) |  | 1,527 |  |  | 4.5 |
|  | $ | (6,936 | ) |  | $ | 1,568 |  |  |  |
|  | Retiree Medical Plan |  | Death Benefit
|  | Year Ended June 30, |  | Year Ended June 30,
($ in thousands) |  | 2019 |  | 2018 |  | 2019 |  | 2018
Amortization of Net (Gain) Loss: |  |  |  |  |  |  |  |
Net (gain) loss as of July 1 |  | $ | (7,039 | ) |  | $ | (9,206 | ) |  | $ | 1,878 |  |  | $ | 1,201 |
Net (gain) loss subject to amortization |  | (7,039 | ) |  | (9,206 | ) |  | 1,878 |  |  | 1,201 |
Corridor (10% of greater of APBO or assets) |  | 1,490 |  |  | 1,280 |  |  | 919 |  |  | (848 | )
Net (gain) loss in excess of corridor |  | $ | (5,549 | ) |  | $ | (7,926 | ) |  | $ | 2,797 |  |  | $ | 353 |
Amortization years |  | 8.6 |  |  | 8.9 |  |  | 6.5 |  |  | 6.4 |
The following tables provide a reconciliation of the benefit obligation and plan assets:
|  | As of June 30,
(In thousands) |  | 2019 |  | 2018
Change in Benefit Obligation: |  |  |  |
Projected postretirement benefit obligation at beginning of year |  | $ | 21,283 |  |  | $ | 20,680 |
Service cost |  | 530 |  |  | 609 |
Interest cost |  | 887 |  |  | 835 |
Participant contributions |  | 605 |  |  | 699 |
Actuarial gains (losses) |  | 2,010 |  |  | (70 | )
Benefits paid |  | (1,223 | ) |  | (1,470 | )
Projected postretirement benefit obligation at end of year |  | $ | 24,092 |  |  | $ | 21,283 |
|  | Year Ended June 30,
(In thousands) |  | 2019 |  | 2018
Change in Plan Assets: |  |  |  |
Fair value of plan assets at beginning of year |  | $ | — |  |  | $ | — |
Employer contributions |  | 618 |  |  | 771 |
Participant contributions |  | 605 |  |  | 699 |
Benefits paid |  | (1,223 | ) |  | (1,470 | )
Fair value of plan assets at end of year |  | $ | — |  |  | $ | — |
Projected postretirement benefit obligation at end of year |  | 24,092 |  |  | 21,283 |
Funded status of plan |  | $ | (24,092 | ) |  | $ | (21,283 | )
|  | June 30,
(In thousands) |  | 2019 |  | 2018
Amounts Recognized in the Consolidated Balance Sheets Consist of: |  |  |  |
Current liabilities |  | $ | (1,068 | ) |  | $ | (810 | )
Non-current liabilities |  | (23,024 | ) |  | (20,473 | )
Total |  | $ | (24,092 | ) |  | $ | (21,283 | )
|  | Year Ended June 30,
(In thousands) |  | 2019 |  | 2018
Amounts Recognized in AOCI Consist of: |  |  |  |
Net gain |  | $ | (5,160 | ) |  | $ | (8,005 | )
Prior service credit |  | (6,936 | ) |  | (8,693 | )
Total AOCI |  | $ | (12,096 | ) |  | $ | (16,698 | )
|  | Year Ended June 30,
(In thousands) |  | 2019 |  | 2018
Other Changes in Plan Assets and Benefit Obligations Recognized in OCI: |  |  |  |
Unrecognized actuarial gains (loss) |  | $ | 2,010 |  |  | $ | (70 | )
Amortization of net loss |  | 835 |  |  | 840 |
Amortization of prior service cost |  | 1,757 |  |  | 1,757 |
Total recognized in OCI |  | 4,602 |  |  | 2,527 |
Net periodic benefit cost |  | (1,174 | ) |  | (1,154 | )
Total recognized in net periodic benefit credit and OCI |  | $ | 3,428 |  |  | $ | 1,373 |
The estimated net gain and prior service credit that will be amortized from AOCI into net periodic benefit cost in fiscal 2020 are $0.6 million and $1.6 million, respectively.
(In thousands) |
Estimated Future Benefit Payments: |
Year Ending: |
June 30, 2020 | $ | 1,087 |
June 30, 2021 | $ | 1,138 |
June 30, 2022 | $ | 1,173 |
June 30, 2023 | $ | 1,220 |
June 30, 2024 | $ | 1,248 |
June 30, 2025 to June 30, 2029 | $ | 7,116 |
Expected Contributions: |
June 30, 2020 | $ | 1,087 |
Sensitivity in Fiscal 2020 Results Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one percentage point change in assumed health care cost trend rates would have the following effects in fiscal 2020:
|  | 1-Percentage Point
(In thousands) |  | Increase |  | Decrease
Effect on total of service and interest cost components |  | $ | 67 |  |  | $ | (58 | )
Effect on accumulated postretirement benefit obligation |  | $ | 814 |  |  | $ | (745 | )

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