Employee Benefit Plans

12 Months Ended

Dec. 31, 2019


15.			Employee Benefit Plans

Defined Contribution Plans

The Company maintains a 401(k) Plan for substantially all full time U.S. employees (the “401(k) Plan”). Company contributions are allocated to accounts set aside for each employee’s retirement. Employees generally may contribute up to 50% of their compensation to individual accounts within the 401(k) Plan subject to Internal Revenue Service limitations. Employer contributions are equal to 50% of the first 6% of employee’s eligible annual cash compensation, also subject to Internal Revenue Service limitations. Expense recognized related to the 401(k) Plan totaled approximately $1.0 million, $1.0 million and $0.9 million, for the years ended December 31, 2019, 2018 and 2017, respectively.

Defined Benefit Pension Plans

The Company maintains defined benefit pension plans covering union and certain other employees. These plans are frozen to new participation.

The table that follows contains the accumulated benefit obligation and reconciliations of the changes in projected benefit obligation, the changes in plan assets and funded status:


	U.S. Plans						Non-U.S. Plans
	Year Ended December 31, 2019		Year Ended December 31, 2018		Year Ended December 31, 2019		Year Ended December 31, 2018
Accumulated benefit obligation	$	10,093	$	9,661	$	13,761	$	12,240

Change in projected benefit obligation
Projected benefit obligation at beginning of year	$	9,661	$	10,605	$	12,617	$	14,904
Service cost	—		—		92		92
Interest cost	376		350		291		293
Actuarial (gain) loss	728		(602)		1,635		(386)
Benefits paid	(672)		(692)		(525)		(1,621)
Other	—		—		(51)		17
Currency translation adjustment	—		—		97		(682)
Projected benefit obligation at end of year	$	10,093	$	9,661	$	14,156	$	12,617

Change in plan assets
Fair value of plan assets at beginning of year	$	9,179	$	10,055	$	5,671	$	7,322
Actual return on plan assets	1,370		(452)		831		(207)
Employer and employee contributions	323		307		521		525
Benefits paid	(672)		(692)		(525)		(1,621)
Other	—		(39)		—		—
Currency translation adjustment	—		—		214		(348)
Fair value of plan assets at end of year	$	10,200	$	9,179	$	6,712	$	5,671
Funded status	$	107	$	(482)	$	(7,444)	$	(6,946)

Weighted-average assumptions
Discount rates	3.25%-3.35%		4.02%-4.08%		0.90%-1.95%		2.00%-2.80%
Rate of compensation increase	N/A		N/A		2.00%-3.50%		2.00%-3.70%
Amounts recognized in the statement of financial position consist of:
Non-current assets	$	2,420	$	1,830	$	—	$	—
Other current liabilities	—		—		(77)		(83)
Other long-term liabilities	(2,313)		(2,312)		(7,367)		(6,863)
Net amount recognized	$	107	$	(482)	$	(7,444)	$	(6,946)

The following table contains the components of net periodic benefit cost:


	U.S. Plans										Non-U.S. Plans
	Year Ended December 31, 2019		Year Ended December 31, 2018		Year Ended December 31, 2017		Year Ended December 31, 2019		Year Ended December 31, 2018		Year Ended December 31, 2017

Components of Net Periodic Benefit Cost
Service cost	$	—	$	—	$	—	$	92	$	92	$	98
Interest cost	376		350		393		291		293		286
Expected return on plan assets	(412)		(477)		(467)		(199)		(222)		(226)
Amortization of actuarial loss	29		14		14		178		77		35

Net periodic (benefit) cost	$	(7)	$	(113)	$	(60)	$	362	$	240	$	193

Weighted-average assumptions
Discount rates	4.02%-4.08%		3.33%-3.45%		3.71%-3.90%		2.00%-2.80%		1.80%-2.40%		1.70%-2.60%
Rate of compensation increase	N/A		N/A		N/A		2.00%-3.70%		2.00%-3.70%		2.00%-3.90%
Expected long-term rates or return	5.00%-6.00%		4.75%-6.50%		4.75%-6.50%		3.50%-4.00%		3.30%-4.00%		3.50%-4.00%

The expected return on plan assets is based on the Company’s expectation of the long-term average rate of return of the capital markets in which the plans invest. The expected return reflects the target asset allocations and considers the historical returns earned for each asset category. The Company determines the discount rate assumptions by referencing high-quality long-term bond rates that are matched to the duration of our benefit obligations, with appropriate consideration of local market factors, participant demographics and benefit payment terms.

The net amounts recognized in accumulated other comprehensive loss related to the Company’s defined benefit pension plans consisted of the following:


	Year Ended December 31, 2019		Year Ended December 31, 2018		Year Ended December 31, 2017

Unrecognized loss	$	2,719	$	2,371	$	2,052

In the next fiscal year, $0.4 million of unrecognized loss within accumulated other comprehensive loss is expected to be recognized as a component of net periodic benefit cost.

The Company’s investment policies employ an approach whereby a mix of equities and fixed income investments are used to maximize the long-term return on plan assets for a prudent level of risk. The investment portfolio primarily contains a diversified blend of equity and fixed income investments. Equity investments are diversified across domestic and non-domestic stocks, and investment and market risk are measured and monitored on an ongoing basis. The Company’s actual asset allocations are in line with target allocations and the Company does not have concentration within individual or similar investments that would pose a significant concentration risk to the Company.

The Company’s pension plan asset allocations by asset category at December 31, 2019 and 2018 are as follows:


	U.S. Plans						Non-U.S. Plans
	2019		2018		2019		2018
Equity securities	52.7	%	47.6	%	39.3	%	37.8	%
Debt securities	36.2	%	42.3	%	56.6	%	57.9	%
Other	11.1	%	10.1	%	4.1	%	4.3	%

The fair values of pension plan assets by asset category at December 31, 2019 and 2018 are as follows:


	Total as of December 31, 2019		Level 1		Level 2		Level 3
Cash and cash equivalents	$	1,163	$	1,163	$	—	$	—
Accrued dividends	5		5		—		—
Global equities	8,017		8,017		—		—
Fixed income securities	7,494		—		7,494		—
Group annuity/insurance contracts	233		—		—		233
Total	$	16,912	$	9,185	$	7,494	$	233

	Total as of December 31, 2018		Level 1		Level 2		Level 3
Cash and cash equivalents	$	923	$	923	$	—	$	—
Accrued dividends	4		4		—		—
Global equities	6,515		6,515		—		—
Fixed income securities	7,169		—		7,169		—
Group annuity/insurance contracts	239		—		—		239
Total	$	14,850	$	7,442	$	7,169	$	239

The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2019 due to the following:


Beginning balance, December 31, 2018	$	239
Actual return on assets related to assets still held	9
Purchases, sales and settlements	(15)
Ending balance, December 31, 2019	$	233

No assets were transferred between levels of the fair value hierarchy during the years ended December 31, 2019 and December 31, 2018.

Quoted market prices are used to value investments when available. Investments in securities traded on exchanges are valued at the last reported sale prices on the last business day of the year or, if not available, the last reported bid prices.

The Company’s cash contributions to its defined benefit pension plans in 2020 are estimated to be approximately $0.7 million. Estimated projected benefit payments from the plans as of December 31, 2019 are as follows:


2020	$	1,194
2021	1,219
2022	1,178
2023	1,243
2024	1,216
2025 and thereafter	6,131

Multiemployer Plan

Hourly union employees of the Morton business within the former Metalex business were covered under the National Shopmen Pension Fund (EIN 52-6122274, plan number 001), a union-sponsored and trusteed multiemployer plan which required the Company to contribute a negotiated amount per hour worked by the employees covered by the plan. The Company made the decision to withdraw from this plan in August 2012. The withdrawal amount was finalized during 2013. The Company retained the withdrawal liability related to the mutliemployer plan following the sale of Metalex. As of December 31, 2019, a liability of $1.1 million is recorded within other long-term liabilities and a liability of $0.2 million is recorded within other current liabilities on the consolidated balance sheets. As of December 31, 2018, $1.3 million is recorded within other long-term liabilities and $0.2 million is recorded within other current liabilities on the consolidated balance sheets. The total liability will be paid in equal monthly installments through April 2026, and interest expense will be incurred associated with the discounting of this liability through that date.

Postretirement Health Care and Life Insurance Plans

The Company also provides postretirement health care benefits and life insurance coverage to certain eligible former employees at one of its segments. The costs of retiree health care benefits and life insurance coverage are accrued over the employee benefit period.

The table that follows contains the accumulated benefit obligation and reconciliations of the changes in projected benefit obligation, the changes in plan assets and funded status:


	Year Ended December 31, 2019			Year Ended December 31, 2018
Accumulated benefit obligation	$	1,287		$	1,344

Change in projected benefit obligation
Projected benefit obligation at beginning of year	$	1,344		$	1,423
Interest cost	50			44
Actuarial loss	11			37
Benefits paid	(118)			(160)

Projected benefit obligation at end of year	$	1,287		$	1,344

Change in plan assets
Employer contributions	$	118		$	160
Benefits paid	(118)			(160)
Fair value of plan assets at end of year	$	—		$	—
Funded status	$	(1,287)		$	(1,344)

Weighted-average assumptions
Discount rates	3.20		%	3.96		%
Amounts recognized in the statement of financial position consist of:
Other current liabilities	$	(132)		$	(147)
Other long-term liabilities	(1,155)			(1,197)
Net amount recognized	$	(1,287)		$	(1,344)

The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation was a blended rate of 6.00% and 6.40% at December 31, 2019 and December 31, 2018, respectively. It was assumed that these rates will decline by 1.5% over the next seven years. An increase or decrease in the medical trend rate of 1% would increase or decrease the accumulated postretirement benefit obligation by approximately $0.1 million and $0.1 million, respectively.

The table that follows contains the components of net periodic benefit costs:


	Year Ended December 31, 2019			Year Ended December 31, 2018			Year Ended December 31, 2017

Components of net periodic benefit cost
Interest cost	$	50		$	44		$	68
Amortization of the net gain from earlier periods	(68)			(77)			(18)
Net periodic (benefit) cost	$	(18)		$	(33)		$	50

Weighted-average assumptions
Discount rates	3.96		%	3.26		%	3.64		%

The net amounts recognized in accumulated other comprehensive loss related to the Company’s other postretirement healthcare and life insurance plans consisted of the following:


	Year Ended December 31, 2019		Year Ended December 31, 2018		Year Ended December 31, 2017

Unrecognized gain	$	(490)	$	(548)	$	(582)

In the next fiscal year, $0.1 million of unrecognized gain within accumulated other comprehensive loss is expected to be recognized as a component of net periodic benefit cost.

The Company’s cash contributions to its postretirement benefit plan in 2020 are not yet determined but are expected to equal the projected benefits from the plan. Estimated projected benefit payments from the plan at December 31, 2019 are as follows:


2020	$	133
2021	129
2022	121
2023	113
2024	106
2025-2029	436