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RETIREMENT PLANS | 12 Months Ended
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Sep. 30, 2023
Retirement Benefits [Abstract] |
RETIREMENT PLANS | RETIREMENT PLANS Barnwell sponsors a noncontributory defined benefit pension plan (“Pension Plan”) covering substantially all of its U.S. employees, with benefits based on years of service and the employee’s highest consecutive 5 years average earnings. Barnwell’s funding policy is intended to provide for both benefits attributed to service to date and for those expected to be earned in the future. In addition, Barnwell sponsors a Supplemental Executive Retirement Plan (“SERP”), a noncontributory supplemental retirement benefit plan which covers certain current and former employees of Barnwell for amounts exceeding the limits allowed under the Pension Plan. Effective December 31, 2019, the accrual of benefits for all participants in the Pension Plan and SERP was frozen and the plans were closed to new participants from that point forward. The following tables detail the changes in benefit obligations, fair values of plan assets and reconciliations of the funded status of the retirement plans:
| Pension Plan |  | SERP
| September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Change in Projected Benefit Obligation: |  |  |  |  |  |
Benefit obligation at beginning of year | $ | 7,931,000 |  |  | $ | 10,365,000 |  |  | $ | 1,715,000 |  |  | $ | 2,136,000 |
Interest cost | 406,000 |  |  | 290,000 |  |  | 88,000 |  |  | 60,000 |
Actuarial gain | (394,000) |  |  | (2,418,000) |  |  | (66,000) |  |  | (478,000) |
Benefits paid | (432,000) |  |  | (306,000) |  |  | (3,000) |  |  | (3,000) |
Benefit obligation at end of year | 7,511,000 |  |  | 7,931,000 |  |  | 1,734,000 |  |  | 1,715,000 |
Change in Plan Assets: |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | 11,316,000 |  |  | 12,594,000 |  |  | — |  |  | — |
Actual return on plan assets | 1,098,000 |  |  | (972,000) |  |  | — |  |  | — |
Benefits paid | (432,000) |  |  | (306,000) |  |  | — |  |  | — |
Fair value of plan assets at end of year | 11,982,000 |  |  | 11,316,000 |  |  | — |  |  | — |
Funded status | $ | 4,471,000 |  |  | $ | 3,385,000 |  |  | $ | (1,734,000) |  |  | $ | (1,715,000) |
| Pension Plan |  | SERP
| September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Amounts recognized in the Consolidated Balance Sheets:
Noncurrent assets | $ | 4,471,000 |  |  | $ | 3,385,000 |  |  | $ | — |  |  | $ | — |
Current liabilities | — |  |  | — |  |  | (70,000) |  |  | (66,000) |
Noncurrent liabilities | — |  |  | — |  |  | (1,664,000) |  |  | (1,649,000) |
Net amount | $ | 4,471,000 |  |  | $ | 3,385,000 |  |  | $ | (1,734,000) |  |  | $ | (1,715,000) |
Amounts recognized in accumulated other comprehensive income before income taxes:
Net actuarial gain | $ | (1,178,000) |  |  | $ | (353,000) |  |  | $ | (330,000) |  |  | $ | (343,000) |
Accumulated other comprehensive income | $ | (1,178,000) |  |  | $ | (353,000) |  |  | $ | (330,000) |  |  | $ | (343,000) |
The accumulated benefit obligation for the Pension Plan was $7,511,000 and $7,931,000 at September 30, 2023 and 2022, respectively. The accumulated benefit obligation for the SERP was $1,734,000 and $1,715,000 at September 30, 2023 and 2022, respectively. The accumulated benefit obligations are the same as the projected benefit obligations due to the Pension Plan and SERP being frozen as of December 31, 2019. Currently, no contributions are planned to be made to the Pension Plan during fiscal 2024. The SERP plan is unfunded and Barnwell funds benefits when payments are made. Expected payments under the SERP for fiscal 2024 is not material. Fluctuations in actual market returns as well as changes in general interest rates will result in changes in the market value of plan assets and may result in increased or decreased retirement benefits costs and contributions in future periods. The Pension Plan actuarial gains in fiscal 2023 were primarily due to an increase in the discount rate and actual investment returns that were greater than the assumed rate of return. The SERP actuarial gains in fiscal 2023 were primarily due to an increase in the discount rate. The Pension Plan actuarial gains in fiscal 2022 were primarily due to an increase in the discount rate, partially offset by an actuarial loss resulting from actual investment returns that were less than the assumed rate of return. The SERP actuarial gains in fiscal 2022 were primarily due to an increase in the discount rate. The following table presents the weighted-average assumptions used to determine benefit obligations and net benefit (income) costs:
| Pension Plan |  | SERP
| Year ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Assumptions used to determine fiscal year-end benefit obligations:
Discount rate | 5.62% |  | 5.25% |  | 5.62% |  | 5.25%
Rate of compensation increase | N/A |  | N/A |  | N/A |  | N/A
Assumptions used to determine net benefit costs (years ended): |  |
Discount rate | 5.25% |  | 2.84% |  | 5.25% |  | 2.84%
Expected return on plan assets | 6.00% |  | 5.00% |  | N/A |  | N/A
Rate of compensation increase | N/A |  | N/A |  | N/A |  | N/A
We select a discount rate by reference to yields available on the ICE Bank of America Merrill Lynch AA-AAA 15+ Index at our consolidated balance sheet date. The expected return on plan assets is based on an actuarial model which takes into consideration our investment mix and market conditions. The components of net periodic benefit (income) cost are as follows:
| Pension Plan |  | SERP
| Year ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Net periodic benefit (income) cost for the year:
Interest cost | $ | 406,000 |  |  | $ | 290,000 |  |  | $ | 88,000 |  |  | $ | 60,000 |
Expected return on plan assets | (667,000) |  |  | (622,000) |  |  | — |  |  | — |
Amortization of net actuarial gain | — |  |  | — |  |  | (79,000) |  |  | — |
Net periodic benefit (income) cost | $ | (261,000) |  |  | $ | (332,000) |  |  | $ | 9,000 |  |  | $ | 60,000 |
The benefits expected to be paid under the retirement plans as of September 30, 2023 are as follows:
| Pension Plan |  | SERP
Expected Benefit Payments: |  |  |
Fiscal year ending September 30, 2024 | $ | 402,000 |  |  | $ | 70,000 |
Fiscal year ending September 30, 2025 | $ | 552,000 |  |  | $ | 140,000 |
Fiscal year ending September 30, 2026 | $ | 545,000 |  |  | $ | 138,000 |
Fiscal year ending September 30, 2027 | $ | 537,000 |  |  | $ | 137,000 |
Fiscal year ending September 30, 2028 | $ | 574,000 |  |  | $ | 142,000 |
Fiscal years ending September 30, 2029 through 2033 | $ | 2,990,000 |  |  | $ | 712,000 |
Plan Assets Management communicates periodically with its professional investment advisors to establish investment policies, direct investments and select investment options. The overall investment objective of the Pension Plan is to attain a diversified combination of investments that provides long-term growth in the assets of the plan to fund future benefit obligations while managing risk in order to meet current benefit obligations. Generally, interest and dividends received provide cash flows to fund current benefit obligations. Longer-term obligations are generally estimated to be provided for by growth in equity securities. The Company’s investment policy permits investments in a diversified mix of U.S. and international equities, fixed income securities and cash equivalents. Barnwell’s investments in fixed income securities include corporate bonds, U.S. treasury and government securities, preferred securities, and fixed income exchange-traded funds. The Company’s investments in equity securities primarily include domestic and international large-cap companies, as well as, domestic and international equity securities exchange-traded funds. The Company’s year-end target allocation, by asset category, and the actual asset allocations were as follows:
| Target |  | September 30,
Asset Category | Allocation |  | 2023 |  | 2022
Cash and other | 0% - 25% |  | 2% |  | 14%
Fixed income securities | 15% - 40% |  | 32% |  | 34%
Equity securities | 45% - 75% |  | 66% |  | 52%
Actual investment allocations may vary from our target allocations from time to time due to prevailing market conditions. We periodically review our actual investment allocations and rebalance our investments to our target allocations as dictated by current and anticipated market conditions and required cash flows. We categorize plan assets into three levels based upon the assumptions used to price the assets. Level 1 provides the most reliable measure of fair value, whereas Level 3 requires significant management judgment in determining the fair value. Equity securities and exchange-traded funds are valued by obtaining quoted prices on recognized and highly liquid exchanges. Fixed income securities are valued based upon the closing price reported in the active market in which the security is traded. All of our plan assets are categorized as Level 1 assets, and as such, the actual market value is used to determine the fair value of assets. The following tables set forth by level, within the fair value hierarchy, pension plan assets at their fair value:
|  |  |  | Fair Value Measurements Using:
September 30, 2023 |  | Carrying Amount |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Financial Assets: |  |  |  |  |  |  |  |
Cash |  | $ | 263,000 |  |  | $ | 263,000 |  |  | $ | — |  |  | $ | — |
U.S. treasury and government securities |  | 709,000 |  |  | 709,000 |  |  | — |  |  | — |
Fixed income exchange-traded funds |  | 3,102,000 |  |  | 3,102,000 |  |  | — |  |  | — |
Preferred securities |  | 47,000 |  |  | 47,000 |  |  | — |  |  | — |
Equities |  | 7,861,000 |  |  | 7,861,000 |  |  | — |  |  | — |
Total |  | $ | 11,982,000 |  |  | $ | 11,982,000 |  |  | $ | — |  |  | $ | — |
|  |  |  | Fair Value Measurements Using:
September 30, 2022 |  | Carrying Amount |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Financial Assets: |  |  |  |  |  |  |  |
Cash |  | $ | 1,539,000 |  |  | $ | 1,539,000 |  |  | $ | — |  |  | $ | — |
Corporate bonds |  | 1,000 |  |  | 1,000 |  |  | — |  |  | — |
U.S. treasury and government securities |  | 561,000 |  |  | 561,000 |  |  | — |  |  | — |
Fixed income exchange-traded funds |  | 3,223,000 |  |  | 3,223,000 |  |  | — |  |  | — |
Preferred securities |  | 67,000 |  |  | 67,000 |  |  | — |  |  | — |
Equity securities exchange-traded funds |  | 408,000 |  |  | 408,000 |  |  | — |  |  | — |
Equities |  | 5,517,000 |  |  | 5,517,000 |  |  | — |  |  | — |
Total |  | $ | 11,316,000 |  |  | $ | 11,316,000 |  |  | $ | — |  |  | $ | — |

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