Postretirement Benefits

12 Months Ended

May 31, 2020

NOTE O — POSTRETIREMENT BENEFITS

We sponsor several unfunded-healthcare-benefit plans for certain of our retired employees, as well as postretirement life insurance for certain key former employees. Eligibility for these benefits is based upon various requirements. The following table illustrates the effect on operations of these plans for the three years ended May 31, 2020:

	U.S. Plans									Non-U.S. Plans
(In thousands)	2020			2019			2018			2020		2019		2018
Service cost - benefits earned during the period	$	-		$	-		$	-		$	1,661	$	1,507	$	1,307
Interest cost on the accumulated obligation		149			192			173			1,089		1,122		939
Amortization of:
Prior service (credit)		(219	)		(219	)		(220	)		-		-		-
Net actuarial (gains) losses		(66	)		(26	)		24			611		442		332
Net Postretirement Benefit (Income) Cost	$	(136	)	$	(53	)	$	(23	)	$	3,361	$	3,071	$	2,578

The changes in benefit obligations of the plans at May 31, 2020 and 2019 were as follows:

	U.S. Plans						Non-U.S. Plans
(In thousands)	2020			2019			2020			2019
Accumulated postretirement benefit obligation at beginning of year	$	4,990		$	5,368		$	37,663		$	33,281
Service cost		-			-			1,661			1,507
Interest cost		149			192			1,089			1,122
Benefit payments		(1,659	)		(287	)		(639	)		(664	)
Actuarial (gains) losses		702			(283	)		(683	)		3,801
Currency exchange rate changes		-			-			(702	)		(1,384	)
Accumulated and accrued postretirement benefit obligation at end of year	$	4,182		$	4,990		$	38,389		$	37,663

In determining the postretirement benefit amounts outlined above, measurement dates as of May 31 for each period were applied.

Amounts recognized in the Consolidated Balance Sheets for the years ended May 31, 2020 and 2019 are as follows:

	U.S. Plans						Non-U.S. Plans
(In thousands)	2020			2019			2020			2019
Current liabilities	$	(385	)	$	(423	)	$	(805	)	$	(741	)
Noncurrent liabilities		(3,797	)		(4,567	)		(37,584	)		(36,922	)
Net Amount Recognized	$	(4,182	)	$	(4,990	)	$	(38,389	)	$	(37,663	)

The following table presents the pretax net actuarial gain (loss) and prior service credits recognized in accumulated other comprehensive income (loss) not affecting retained earnings:

	U.S. Plans					Non-U.S. Plans
(In thousands)	2020			2019		2020			2019
Net actuarial gain (loss)	$	(386	)	$	381	$	(11,331	)	$	(12,891	)
Prior service credits		448			667		-			-
Total recognized in accumulated other comprehensive income not affecting retained earnings	$	62		$	1,048	$	(11,331	)	$	(12,891	)

The following table includes the changes recognized in other comprehensive income:

	U.S. Plans					Non-U.S. Plans
(In thousands)	2020		2019			2020			2019
Changes in plan assets and benefit obligations recognized in other comprehensive income:
Prior service cost	$	-	$	-		$	-		$	-
Net loss (gain) arising during the year		702		(283	)		(683	)		3,801
Effect of exchange rates on amounts included in AOCI		-		-			(266	)		(419	)
Amounts recognized as a component of net periodic benefit cost:
Amortization or curtailment recognition of prior service credit		219		219			-			-
Amortization or settlement recognition of net gain (loss)		66		26			(611	)		(442	)
Total recognized in other comprehensive loss (income)	$	987	$	(38	)	$	(1,560	)	$	2,940

The following weighted-average assumptions were used to determine our year-end benefit obligations and net periodic postretirement benefit costs under the plans:

	U.S. Plans						Non-U.S. Plans
Year-End Benefit Obligations	2020			2019			2020			2019
Discount rate		2.44	%		3.44	%		3.32	%		3.22	%
Current healthcare cost trend rate		6.68	%		7.29	%		5.73	%		5.77	%
Ultimate healthcare cost trend rate		4.36	%		4.36	%		3.70	%		3.70	%
Year ultimate healthcare cost trend rate will be realized		2037			2037			2040			2040

	U.S. Plans									Non-U.S. Plans
Net Periodic Postretirement Cost	2020			2019			2018			2020			2019			2018
Discount rate		3.44	%		4.03	%		3.61	%		3.22	%		3.70	%		3.61	%
Healthcare cost trend rate		7.29	%		7.86	%		14.75	%		5.77	%		6.02	%		5.85	%
Ultimate healthcare cost trend rate		4.36	%		4.36	%		4.36	%		3.70	%		4.20	%		4.20	%
Year ultimate healthcare cost trend rate will be realized		2037			2037			2037			2040			2032			2030

We utilize a sensitivity analysis to measure the potential impact of changes in our healthcare cost trend rate on our Consolidated Financial Statements. Increasing or decreasing current healthcare cost trend rates by 1% would affect our accumulated postretirement benefit obligation and net postretirement expense by the following amounts for the years ended May 31, 2020 and 2019:

	U.S. Plans						Non-U.S. Plans
(In thousands)	2020			2019			2020			2019
1% Increase in Healthcare Cost Trend Rate
Accumulated benefit obligation	$	130		$	124		$	7,452		$	8,300
Postretirement cost		4			7			814			731
1% Decrease in Healthcare Cost Trend Rate
Accumulated benefit obligation	$	(117	)	$	(112	)	$	(5,843	)	$	(6,390	)
Postretirement cost		(3	)		(6	)		(595	)		(539	)

We expect to pay approximately $1.2 million to $1.5 million in estimated postretirement benefits in each of the next five years. In the five years thereafter (2026-2030), we expect to pay a cumulative total of $8.9 million.