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Note H - Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Retirement Benefits [Text Block] | Note H — Employee Benefit Plans Prior to January 1, 1999, we provided a defined benefit pension plan for which most of our employees were eligible to participate (the “Qualified Pension Plan”). In conjunction with significant enhancements to our 401 (k) plan, we elected to freeze benefits under the Qualified Pension Plan as of December 31, 1998. In 1994, we adopted a non-qualified, unfunded, supplemental pension plan (the “Restoration Pension Plan”) covering certain employees, which provides for incremental pension payments so that total pension payments equal those amounts that would have been payable from the principal pension plan were it not for limitations imposed by income tax regulation. The benefits under the Restoration Pension Plan were intended to provide benefits equivalent to our Qualified Pension Plan as if such plan had not been frozen. We elected to freeze benefits under the Restoration Pension Plan as of April 1, 2014. At the end of 2020, the Board of Directors of the Company approved the division of the Qualified Pension Plan into two distinct plans, “Qualified Pension Plan I” and “Qualified Pension Plan II.” The assets and liabilities of the Qualified Pension Plan that were attributable to certain participants in Qualified Pension Plan II were spun off and transferred into Qualified Pension Plan II effective as of the end of December 31, 2020, in accordance with Internal Revenue Code section 414 (I) and ERISA Section 4044. The overfunded or underfunded status of our defined benefit post-retirement plans is recorded as an asset or liability on our balance sheet. The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation. Periodic changes in the funded status are recognized through other comprehensive income (loss). We currently measure the funded status of our defined benefit plans as of December 31, the date of our year-end consolidated balance sheets. The status of the defined benefit pension plans at year-end was as follows:
|  | Year Ended December 31, |
In thousands |  | 2020 |  |  | 2019 |
Change in benefit obligation |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 189,807 |  |  | $ | 171,761 |
Interest cost |  |  | 5,894 |  |  |  | 7,254 |
Actuarial loss |  |  | 13,380 |  |  |  | 21,174 |
Benefits paid |  |  | (10,495 | ) |  |  | (10,382 | )
Benefit obligation at end of year |  | $ | 198,586 |  |  | $ | 189,807 |
Change in plan assets |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 118,092 |  |  | $ | 107,862 |
Actual return on plan assets |  |  | 11,014 |  |  |  | 16,742 |
Contributions |  |  | 10,737 |  |  |  | 3,870 |
Benefits paid |  |  | (10,495 | ) |  |  | (10,382 | )
Fair value of plan assets at end of year |  | $ | 129,348 |  |  | $ | 118,092 |
|  |  |  |  |  |  | \ |
Funded status at end of year |  | $ | (69,238 | ) |  | $ | (71,715 | )
The following amounts have been recognized in the Consolidated Balance Sheets at December 31:
In thousands |  | 2020 |  |  | 2019 |
Other current liabilities |  | $ | 1,748 |  |  | $ | 1,715 |
Pensions |  |  | 67,490 |  |  |  | 70,000 |
Total |  | $ | 69,238 |  |  | $ | 71,715 |
The following amounts have been recognized in accumulated other comprehensive loss, net of tax, at December 31:
In thousands |  | 2020 |  |  | 2019 |
Net loss |  | $ | 68,544 |  |  | $ | 63,887 |
Based on current estimates, we will be required to make $1.8 million and $2.2 million contributions to our Qualified Pension Plan I and Qualified Pension Plan II, respectively, in 2021. We are not required to make and do not intend to make any contributions to our Restoration Pension Plan in 2021 other than to the extent needed to cover benefit payments. We made benefit payments under this supplemental plan of $1.7 million in 2020. The following information is presented for pension plans with an accumulated benefit obligation in excess of plan assets:
In thousands |  | 2020 |  |  | 2019 |
Projected benefit obligation |  | $ | 198,586 |  |  | $ | 189,807 |
Accumulated benefit obligation |  | $ | 198,586 |  |  | $ | 189,807 |
Fair value of plan assets |  | $ | 129,348 |  |  | $ | 118,092 |
The Restoration Pension Plan had an accumulated benefit obligation of $28.7 million and $27.6 million at December 31, 2020 and 2019 , respectively. The following table presents the components of net periodic benefit cost and other amounts recognized in other comprehensive loss for both plans:
|  | Year Ended December 31, |
In thousands |  | 2020 |  |  | 2019 |
Net Periodic Benefit Cost (Pre-Tax) |  |  |  |  |  |  |  |
Interest cost |  | $ | 5,894 |  |  | $ | 7,254 |
Expected return on plan assets |  |  | (5,538 | ) |  |  | (4,446 | )
Recognized actuarial loss |  |  | 3,247 |  |  |  | 2,930 |
Net periodic benefit cost |  |  | 3,603 |  |  |  | 5,738 |
Amounts Recognized in Other Comprehensive Loss (Pre-Tax) |  |  |  |  |  |  |  |
Net loss |  |  | 4,657 |  |  |  | 5,948 |
Net cost recognized in net periodic benefit cost and other comprehensive loss |  | $ | 8,260 |  |  | $ | 11,686 |
The components of net periodic benefit costs other than the service cost component are included in Other, net in our Consolidated Statement of Comprehensive Loss. The estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2021 is $3.5 million. The period over which the net loss from the Qualified Pension Plan is amortized into net periodic benefit cost was the average future lifetime of all participants (approximately 17.3 years for Qualified Pension Plan I and approximately 27.0 years for Qualified Pension Plan II ). The Qualified Pension Plan is frozen and almost all of the plan's participants are not active employees. The weighted-average assumptions used for measurement of the defined pension plans were as follows:
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |
Weighted-average assumptions used to determine net periodic benefit cost |  |  |  |  |  |  |  |
Discount rate |  |  |  |  |  |  |  |
Qualified Plan I |  |  | 3.20 | % |  |  | 4.35 | %
Qualified Plan II |  |  | n/a |  |  |  | n/a |
Restoration Plan |  |  | 3.14 | % |  |  | 4.30 | %
Expected return on plan assets |  |  |  |  |  |  |  |
Qualified Plan I |  |  | 4.75 | % |  |  | 4.25 | %
Qualified Plan II |  |  | n/a |  |  |  | n/a |
Restoration Plan |  |  | n/a |  |  |  | n/a |
|  | December 31, |
|  | 2020 |  |  | 2019 |
Weighted-average assumptions used to determine benefit obligations |  |  |  |  |  |  |  |
Discount rate |  |  |  |  |  |  |  |
Qualified Plan I |  |  | 2.37 | % |  |  | 3.20 | %
Qualified Plan II |  |  | 2.61 | % |  |  | n/a |
Restoration Plan |  |  | 2.34 | % |  |  | 3.14 | %
The discount rate assumptions are based on current yields of investment-grade corporate long-term bonds. The expected long-term return on plan assets is based on the expected future average annual return for each major asset class within the plan's portfolio (which is principally comprised of equity investments) over a long-term horizon. In determining the expected long-term rate of return on plan assets, we evaluated input from our investment consultants, actuaries, and investment management firms, including their review of asset class return expectations, as well as long-term historical asset class returns. Projected returns by such consultants and economists are based on broad equity and bond indices. Additionally, we considered our historical 15 -year compounded returns, which have been in excess of the forward-looking return expectations. The funded pension plan assets as of December 31, 2020 and 2019 , by asset category, are as follows:
In thousands |  | 2020 |  |  | % |  |  | 2019 |  |  | % |
Equity securities |  | $ | 79,906 |  |  |  | 62 | % |  | $ | 68,563 |  |  |  | 58 | %
Debt securities |  |  | 34,307 |  |  |  | 26 | % |  |  | 43,622 |  |  |  | 37 | %
Other |  |  | 15,135 |  |  |  | 12 | % |  |  | 5,907 |  |  |  | 5 | %
Total plan assets |  | $ | 129,348 |  |  |  | 100 | % |  | $ | 118,092 |  |  |  | 100 | %
The fair values presented have been prepared using values and information available as of December 31, 2020 and 2019 . The following tables present the fair value measurements of the assets in our funded pension plan:
|  |  |  |  |  |  |  |  |  | Significant |  |  |  |  |
|  |  |  |  |  | Quoted Prices |  |  | Other |  |  | Significant |
|  |  |  |  |  | in Active Markets for |  |  | Observable |  |  | Unobservable |
|  | December 31, |  |  | Identical Assets |  |  | Inputs |  |  | Inputs |
In thousands |  | 2020 |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Equity securities |  | $ | 79,906 |  |  | $ | 79,906 |  |  | $ | — |  |  | $ | — |
Debt securities |  |  | 34,307 |  |  |  | 26,733 |  |  |  | 7,574 |  |  |  | — |
Total investments, excluding investments valued at NAV |  |  | 114,213 |  |  |  | 106,639 |  |  |  | 7,574 |  |  |  | — |
Investments valued at NAV (1) |  |  | 15,135 |  |  |  | — |  |  |  | — |  |  |  | — |
Total plan assets |  | $ | 129,348 |  |  | $ | 106,639 |  |  | $ | 7,574 |  |  | $ | — |
|  |  |  |  |  |  |  |  |  | Significant |  |  |  |  |
|  |  |  |  |  | Quoted Prices |  |  | Other |  |  | Significant |
|  |  |  |  |  | in Active Markets for |  |  | Observable |  |  | Unobservable |
|  | December 31, |  |  | Identical Assets |  |  | Inputs |  |  | Inputs |
In thousands |  | 2019 |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Equity securities |  | $ | 68,563 |  |  | $ | 68,563 |  |  | $ | — |  |  | $ | — |
Debt securities |  |  | 43,622 |  |  |  | 39,380 |  |  |  | 4,242 |  |  |  | — |
Total investments, excluding investments valued at NAV |  |  | 112,185 |  |  |  | 107,943 |  |  |  | 4,242 |  |  |  | — |
Investments valued at NAV (1) |  |  | 5,907 |  |  |  | — |  |  |  | — |  |  |  | — |
Total plan assets |  | $ | 118,092 |  |  | $ | 107,943 |  |  | $ | 4,242 |  |  | $ | — |
( 1 ) Investment valued at NAV are comprised of cash, cash equivalents, and short-term investments used to provide liquidity for the payment of benefits and other purposes. The commingled funds are valued at NAV based on the market value of the underlying investments, which are primarily government issued securities. The investment policy for the Qualified Pension Plan focuses on the preservation and enhancement of the corpus of the plan's assets through prudent asset allocation, quarterly monitoring and evaluation of investment results, and periodic meetings with investment managers. The investment policy's goals and objectives are to meet or exceed the representative indices over a full market cycle ( 3 - 5 years). The policy establishes the following investment mix, which is intended to subject the principal to an acceptable level of volatility while still meeting the desired return objectives:
|  | Target |  |  | Acceptable Range |  | Benchmark Index
Equities |  |  | 64 | % |  | 54% - 74% |  |
U.S. Large Cap |  |  | 23 | % |  | 18% - 28% |  | Russell 1000 TR
U.S. Mid Cap |  |  | 15 | % |  | 10% - 20% |  | Russell Mid Cap Index TR
U.S. Small Cap |  |  | 8 | % |  | 4% - 12% |  | Russell 2000 TR
International - Developed |  |  | 13 | % |  | 8% - 25% |  | MSCI EAFE Net TR USD Index
Emerging Markets |  |  | 5 | % |  | 0% - 8% |  | MSCI Emerging Net Total Return
Fixed Income |  |  | 34 | % |  | 24% - 44% |  |
Investment Grade |  |  | 34 | % |  | 24% - 44% |  | BBG BARC US Aggregate Bond Index
Cash Equivalent |  |  | 2 | % |  | 0% - 40% |  | ICE BofA US 3-Month Treasury Bill Index TR
The funded pension plan provides for investment in various investment types. Investments, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risk. Due to the level of risk associated with investments, it is reasonably possible that changes in the value of investments will occur in the near term and may impact the funded status of the plan. To address the issue of risk, the investment policy places high priority on the preservation of the value of capital (in real terms) over a market cycle. Investments are made in companies with a minimum five -year operating history and sufficient trading volume to facilitate, under most market conditions, prompt sale without severe market effect. Investments are diversified across numerous market sectors and individual companies. Reasonable concentration in any one issue, issuer, industry, or geographic area is allowed if the potential reward is worth the risk. Investment managers are evaluated by the performance of the representative indices over a full market cycle for each class of assets. The Pension Plan Committee reviews, on a quarterly basis, the investment portfolio of each manager, which includes rates of return, performance comparisons with the most appropriate indices, and comparisons of each manager's performance with a universe of other portfolio managers that employ the same investment style. The expected future benefit payments for both pension plans over the next ten years as of December 31, 2020 are as follows:
In thousands |  |  |  |  |
2021 |  |  | $ | 10,796 |
2022 |  |  |  | 11,033 |
2023 |  |  |  | 11,243 |
2024 |  |  |  | 11,323 |
2025 |  |  |  | 11,365 |
2026 - 2030 |  |  |  | 57,567 |
Total |  |  | $ | 113,327 |
The Company also has two pension plans in its foreign jurisdictions, the associated pension liabilities are not material. We also sponsored a 401 (k) - retirement plan in which we matched a portion of employees' voluntary before-tax contributions prior to 2018. Under this plan, both employee and matching contributions vest immediately. We stopped this 401 (k) match program in 2018.

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