PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS

12 Months Ended

Dec. 31, 2021

PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS

PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS

13.PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS

Defined Benefit Plans

We sponsor three qualified defined benefit pension plans that are non-contributory covering substantially all of our hourly employees under collective bargaining agreements who fulfill minimum age and service requirements and certain salaried employees. The defined benefit pension plans are closed to all new entrants. All of our defined benefit pension plans are now frozen to all current employees and no additional monthly pension benefits will accrue under those plans.

We also have two non-qualified supplemental retirement plans (the “Supplemental Plans” and, together with the defined benefit pension plans, the “Pension Plans”). The Supplemental Plans provide supplemental retirement benefits to certain former employees by providing for incremental pension payments to partially offset the reduction of the amount that would have been payable under the qualified defined benefit pension plans if it were not for limitations imposed by federal income tax regulations. The Supplemental Plans are frozen so that no person is eligible to become a new participant.  These plans are unfunded and have no assets.  The benefits paid under the Supplemental Plans are paid from the general operating funds of the Company.

The following tables summarize the change in benefit obligation, plan assets and funded status of the Pension Plans as of December 31, 2021 and 2020:

(In thousands)	2021		2020
Change in benefit obligation
Benefit obligation at the beginning of the year	$	826,120	$	759,821
Interest cost		22,758		25,971
Actuarial loss (gain)		(19,218)		75,131
Benefits paid		(36,381)		(34,803)
Plan settlement		(48,816)		—
Benefit obligation at the end of the year	$	744,463	$	826,120
(In thousands)	2021		2020
Change in plan assets
Fair value of plan assets at the beginning of the year	$	623,826	$	556,967
Employer contributions		20,755		24,039
Actual return on plan assets		58,156		77,623
Benefits paid		(36,381)		(34,803)
Plan settlement		(48,816)		—
Fair value of plan assets at the end of the year	$	617,540	$	623,826
Funded status at year end	$	(126,923)	$	(202,294)

In the year ended December 31, 2021, the actuarial gain on the benefit obligation was primarily due to an increase in the discount rate. In the year ended December 31, 2020, the actuarial loss on the benefit obligation was primarily due to a decrease in the discount rate.

Amounts recognized in the consolidated balance sheets at December 31, 2021 and 2020 consisted of:

(In thousands)	2021		2020
Current liabilities	$	(242)	$	(244)
Long-term liabilities	$	(126,681)	$	(202,050)

Amounts recognized in accumulated other comprehensive loss for the years ended December 31, 2021 and 2020 consisted of:

(In thousands)	2021		2020
Unamortized prior service cost	$	808	$	930
Unamortized net actuarial loss		90,318		138,868
	$	91,126	$	139,798

The following table summarizes the components of net periodic pension cost recognized in the consolidated statements of operations for the plans for the years ended December 31, 2021, 2020 and 2019:

(In thousands)	2021		2020		2019
Service cost	$	—	$	—	$	50
Interest cost		22,758		25,971		30,327
Expected return on plan assets		(36,997)		(34,544)		(34,627)
Amortization of:
Net actuarial loss		2,309		1,165		2,890
Prior service cost		122		123		123
Plan settlement		5,864		—		6,726
Net periodic pension cost (benefit)	$	(5,944)	$	(7,285)	$	5,489

The components of net periodic pension cost other than the service cost component are included in other, net within other income (expense) in the consolidated statements of operations.

In 2021 and 2019, we purchased a group annuity contract to transfer the pension benefit obligations and annuity administration for a select group of retirees or their beneficiaries to an annuity provider.  Upon issuance of the group annuity contract, in 2021 the pension benefit obligation of $47.1 million for approximately 400 participants was irrevocably transferred to the annuity provider and in 2019 the pension benefit obligation of $24.4 million for approximately 500 participants was irrevocably transferred to the annuity provider.  The purchase of the group annuity contracts was funded directly by the assets of the Pension Plans.  During the years ended December 31, 2021 and 2019, we recognized a pension settlement charge of $5.9 million and $6.7 million, respectively, as a result of the transfer of the pension liability to the annuity provider and other lump sum payments made during the years.

The following table summarizes other changes in plan assets and benefit obligations recognized in other comprehensive loss, before tax effects, during 2021 and 2020:

(In thousands)	2021		2020
Actuarial loss (gain), net	$	(40,377)	$	32,052
Recognized actuarial loss		(2,309)		(1,165)
Recognized prior service cost		(122)		(123)
Plan settlement		(5,864)		—
Total amount recognized in other comprehensive loss, before tax effects	$	(48,672)	$	30,764

The weighted-average assumptions used to determine the projected benefit obligations and net periodic benefit cost for the years ended December 31, 2021, 2020 and 2019 were as follows:

	2021		2020		2019
Discount rate - net periodic benefit cost	2.81	%	3.51	%	4.36	%
Discount rate - benefit obligation	3.05	%	2.81	%	3.51	%
Expected long-term rate of return on plan assets	6.00	%	6.25	%	6.97	%
Rate of compensation/salary increase	N/A		2.50	%	2.50	%
Interest crediting rate for cash balance plans	2.00	%	2.00	%	3.00	%

Other Non-qualified Deferred Compensation Agreements

We also are liable for deferred compensation agreements with former members of the board of directors and certain other former employees of acquired companies.  Depending on the plan, benefits are payable in monthly or annual installments for a period of time based on the terms of the agreement which range from five years up to the life of the participant or to the beneficiary upon death of the participant and may begin as early as age 55.  Participants accrue no new benefits as these plans had previously been frozen.  Payments related to the deferred compensation agreements totaled approximately $0.2 million for each of the years ended December 31, 2021 and 2020, respectively.  The net present value of the remaining obligations was approximately $0.6 million and $0.8 million at December 31, 2021 and 2020, respectively, and is included in pension and post-retirement benefit obligations in the accompanying balance sheets.

We also maintain 22 life insurance policies on certain of the participating former directors and employees. We recognized $0.1 million and $1.4 million in life insurance proceeds as other non-operating income in 2021 and 2020, respectively. The excess of the cash surrender value of the remaining life insurance policies over the notes payable balances related to these policies is determined by an independent consultant, and totaled $2.7 million and $2.5 million at December 31, 2021 and 2020, respectively. These amounts are included in investments in the accompanying consolidated balance sheets.  Cash principal payments for the policies and any proceeds from the policies are classified as operating activities in the consolidated statements of cash flows.  The aggregate death benefit payment payable under these policies totaled $6.2 million and $6.3 million as of December 31, 2021 and 2020, respectively.

Post-retirement Benefit Obligations

We sponsor various healthcare and life insurance plans (“Post-retirement Plans”) that provide post-retirement medical and life insurance benefits to certain groups of retired employees.  Certain plans are frozen so that no person is eligible to become a new participant. Retirees share in the cost of healthcare benefits, making contributions that are adjusted periodically—either based upon collective bargaining agreements or because total costs of the program have changed. Covered expenses for retiree health benefits are paid as they are incurred. Post-retirement life insurance benefits are fully insured. A majority of the healthcare plans are unfunded and have no assets, and benefits are paid from the general

operating funds of the Company.  However, a certain healthcare plan is funded by assets that are separately designated within the Pension Plans for the sole purpose of providing payments of retiree medical benefits for this specific plan.  

The following tables summarize the change in benefit obligation, plan assets and funded status of the post-retirement benefit obligations as of December 31, 2021 and 2020:

(In thousands)	2021		2020
Change in benefit obligation
Benefit obligation at the beginning of the year	$	106,704	$	107,132
Service cost		649		825
Interest cost		2,579		3,265
Plan participant contributions		868		218
Actuarial loss (gain)		(4,860)		6,387
Benefits paid		(9,506)		(9,376)
Plan amendments		—		(1,747)
Benefit obligation at the end of the year	$	96,434	$	106,704

(In thousands)	2021		2020
Change in plan assets
Fair value of plan assets at the beginning of the year	$	3,337	$	3,164
Employer contributions		8,638		9,159
Plan participant’s contributions		868		218
Actual return on plan assets		209		172
Benefits paid		(9,506)		(9,376)
Fair value of plan assets at the end of the year	$	3,546	$	3,337
Funded status at year end	$	(92,888)	$	(103,367)

In the year ended December 31, 2021, the actuarial gain on the benefit obligation was primarily due to the underwriting gain and an increase in the discount rate. In the year ended December 31, 2020, the actuarial loss on the benefit obligation was primarily due to a decrease in the discount rate which was partially offset by the underwriting gain.

Amounts recognized in the consolidated balance sheets at December 31, 2021 and 2020 consist of:

(In thousands)	2021		2020
Current liabilities	$	(5,446)	$	(5,709)
Long-term liabilities	$	(87,442)	$	(97,658)

Amounts recognized in accumulated other comprehensive loss for the years ended December 31, 2021 and 2020 consist of:

(In thousands)	2021		2020
Unamortized prior service credit	$	(2,865)	$	(3,766)
Unamortized net actuarial loss (gain)		(4,585)		284
	$	(7,450)	$	(3,482)

The following table summarizes the components of the net periodic costs for post-retirement benefits for the years ended December 31, 2021, 2020 and 2019:

(In thousands)	2021		2020		2019
Service cost	$	649	$	825	$	957
Interest cost		2,579		3,265		4,231
Expected return on plan assets		(200)		(197)		(180)
Amortization of:
Net actuarial gain		—		(1,859)		(2,033)
Prior service cost (credit)		(901)		1,147		3,072
Net periodic postretirement benefit cost	$	2,127	$	3,181	$	6,047

The components of net periodic post-retirement benefit cost other than the service cost component are included in other, net within other income (expense) in the consolidated statements of operations.

The following table summarizes other changes in plan assets and benefit obligations recognized in other comprehensive loss, before tax effects, during 2021 and 2020:

(In thousands)	2021		2020
Actuarial loss (gain), net	$	(4,869)	$	6,412
Recognized actuarial gain		—		1,859
Prior service credit		—		(1,747)
Recognized prior service (cost) credit		901		(1,147)
Total amount recognized in other comprehensive loss, before tax effects	$	(3,968)	$	5,377

The weighted-average assumptions used to determine the projected benefit obligations and net periodic benefit cost for the years ended December 31, 2021, 2020 and 2019 were as follows:

	2021		2020		2019
Discount rate - net periodic benefit cost	2.57	%	3.35	%	4.35	%
Discount rate - benefit obligation	2.93	%	2.56	%	3.34	%
Rate of compensation/salary increase	2.50	%	2.50	%	2.50	%

For purposes of determining the cost and obligation for post-retirement medical benefits, a 6.25% healthcare cost trend rate was assumed for the plan in 2021, declining to the ultimate trend rate of 5.00% in 2027.  

Plan Assets

Our investment strategy is designed to provide a stable environment to earn a rate of return over time to satisfy the benefit obligations and minimize the reliance on contributions as a source of benefit security.  The objectives are based on a long-term (5 to 15 year) investment horizon, so that interim fluctuations should be viewed with appropriate perspective.  The assets of the fund are to be invested to achieve the greatest return for the pension plans consistent with a prudent level of risk.

The asset return objective is to achieve, as a minimum over time, the passively managed return earned by managed index funds, weighted in the proportions outlined by the asset class exposures identified in the pension plan’s strategic allocation. We update our long-term, strategic asset allocations every few years to ensure they are in line with our fund objectives.  At December 31, 2021, the target allocation of the Pension Plan assets is approximately 70 - 90% in return seeking assets consisting primarily of equity and fixed income funds with the remainder in hedge funds.  Our investment policy allows the use of derivative instruments when appropriate to reduce anticipated asset volatility or to gain desired exposure to various markets and return drivers.  Currently, we believe that there are no significant concentrations of risk associated with the Pension Plan assets.

The following is a description of the valuation methodologies for assets measured at fair value utilizing the fair value hierarchy discussed in Note 1, which prioritizes the inputs used in the valuation methodologies in measuring fair value. The fair value measurements used to value our plan assets as of December 31, 2021 were generated by using market transactions involving identical or comparable assets.  There were no changes in the valuation techniques used during 2021.

Common Stocks:  Includes domestic and international common stocks and are valued at the closing price as of the measurement date as reported on the active market on which the individual securities are traded.

Common Collective Trusts and Commingled Funds:  Units in the fund are valued based on the net asset value (“NAV”) of the funds, which is based on the fair value of the underlying investments held by the fund less its liabilities as reported by the issuer of the fund. The NAV per share is used as a practical expedient to estimate fair value. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported net asset value. These investments have no unfunded commitments, are redeemable daily, weekly, monthly, quarterly or semi-annually and have redemption notice periods of up to 180 days.

The fair values of our assets for our defined benefit pension plans at December 31, 2021 and 2020, by asset category were as follows:

			As of December 31, 2021
			Quoted Prices		Significant
			In Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	459	$	459	$	—	$	—
Equities:
Stocks:
U.S. common stocks		24		24		—		—
International stocks		1		1		—		—
Total plan assets in the fair value hierarchy		484	$	484	$	—	$	—
Common Collective Trusts measured at NAV: (1)
Short-term investments (2)		6,477
Equities:
Global		223,101
Real estate		126,980
Fixed Income		194,189
Hedge Funds		66,309
Total plan assets	$	617,540

			As of December 31, 2020
			Quoted Prices		Significant
			In Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Equities:
Stocks:
U.S. common stocks	$	15	$	15	$	—	$	—
International stocks		1		1		—		—
Total plan assets in the fair value hierarchy		16	$	16	$	—	$	—
Common Collective Trusts measured at NAV: (1)
Short-term investments (2)		7,479
Equities:
Global		232,933
Real estate		89,508
Fixed Income		247,479
Hedge Funds		46,402
Other assets/(liabilities) (3)		9
Total plan assets	$	623,826

(1) Certain investments that are measured at fair value using NAV per share as a practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the total plan assets.

(2) Short-term investments include an investment in a common collective trust which is principally comprised of certificates of deposit, commercial paper, U.S. government obligations and variable rate securities with maturities less than one year.

(3) Other assets/(liabilities) include accrued receivables, net payables and pending settlements.

The fair values of our assets for our post-retirement benefit plans at December 31, 2021 and 2020 were as follows:

			As of December 31, 2021
			Quoted Prices		Significant
			In Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	3	$	3	$	—	$	—
Common Collective Trusts measured at NAV: (1)
Short-term investments (2)		39
Equities:
Global		1,330
Real estate		757
Fixed Income		1,158
Hedge Funds		395
Total plan assets		3,682
Benefit payments payable		(136)
Net plan assets	$	3,546

	As of
	December 31,
(In thousands)	2020
Common Collective Trusts measured at NAV: (1)
Short-term investments (2)	$	41
Equities:
Global		1,288
Real estate		496
Fixed Income		1,369
Hedge Funds		257
Total plan assets		3,451
Benefit payments payable		(114)
Net plan assets	$	3,337

(1) Certain investments that are measured at fair value using NAV per share as a practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the total plan assets.

(2) Short-term investments include investment in a common collective trust which is principally comprised of certificates of deposit, commercial paper and U.S. government obligations with maturities less than one year.

Cash Flows

Contributions

Our funding policy is to contribute annually an actuarially determined amount necessary to meet the minimum funding requirements as set forth in employee benefit and tax laws. We have elected not to reduce our required pension contributions to the minimum funding requirements under ARPA and our expected contributions for 2022 are based on historical minimum funding requirements in order to increase the Pension Plan’s funded status. We expect to contribute approximately $20.5 million to our Pension Plans and $8.2 million to our other post-retirement plans in 2022.

Estimated Future Benefit Payments

As of December 31, 2021, benefit payments expected to be paid over the next ten years are outlined in the following table:

			Other
	Pension		Post-retirement
(In thousands)	Plans		Plans
2022	$	31,143	$	8,155
2023		32,136		7,710
2024		33,515		7,206
2025		34,550		6,691
2026		35,610		6,284
2027 - 2031		189,363		27,262

Defined Contribution Plans

We offer defined contribution 401(k) plans to substantially all of our employees.  Contributions made under the defined contribution plans include a match, at the Company’s discretion, of employee contributions to the plans.  We recognized expense with respect to these plans of $15.6 million, $15.6 million and $15.8 million in 2021, 2020 and 2019, respectively.