Employee Benefit Plans

9 Months Ended

Sep. 30, 2020

The Company provides several types of benefits for its employees, including defined benefit and defined contribution pension plans, workers’ compensation and black lung benefits, and postemployment life insurance. The Company does not participate in any multiemployer plans. The components of net periodic (benefit) expense other than the service cost component for pension, black lung, and life insurance benefits are included in the line item miscellaneous loss, net in the Condensed Consolidated Statements of Operations.

Pension

Effective as of the September 30, 2019 adjusted funding target attainment percentage certification date under Section 436 of the Internal Revenue Code, certain lump sum benefit restrictions were lifted for one of the qualified non-contributory defined benefit pension plans, allowing certain eligible participants the option to elect to receive lump sum benefits which resulted in a partial plan settlement and the accelerated recognition of a portion of the accumulated other comprehensive loss during the nine months ended September 30, 2020. Refer to the table below for further information on the partial plan settlement.

The following table details the components of the net periodic benefit for pension obligations:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Interest cost	$	4,670	$	6,636	$	14,061	$	19,929
Expected return on plan assets	(6,752)		(7,011)		(20,312)		(21,032)
Amortization of net actuarial loss	511		199		1,501		597
Settlement	—		—		1,230		—
Net periodic benefit	$	(1,571)	$	(176)	$	(3,520)	$	(506)

Assets of the three qualified non-contributory defined pension plans (“Pension Plans”) are held in trusts and are invested in accordance with investment guidelines that have been established by the Company’s Benefits Committee in consultation with outside investment advisors. In September 2020, the target allocation was adjusted by the Company’s Benefits Committee to transition to 60.0% equity securities and 40.0% fixed income funds in approximate 2.0% increments over a 10 month period. The asset allocation targets have been set with the expectation that the Pension Plans’ assets will fund the expected liabilities within an appropriate level of risk. In determining the appropriate target asset allocations, the Benefits Committee considers the demographics of the Pension Plans’ participants, the funding status of each plan, the Company’s contribution philosophy, the Company’s business and financial profile, and other associated risk factors.

Black Lung

The following table details the components of the net periodic expense for black lung obligations:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Service cost	$	598	$	751	$	1,762	$	1,558
Interest cost	747		1,567		2,493		3,386
Expected return on plan assets	(14)		(17)		(40)		(49)
Amortization of net actuarial loss	596		72		1,346		162
Net periodic expense	$	1,927	$	2,373	$	5,561	$	5,057

As a result of the strategic actions impacting certain mines during the three months ended June 30, 2020 (refer to Note 8), black lung obligations were revalued for curtailment and remeasured with an updated discount rate as of May 31, 2020, which resulted in an increase in the liability for black lung obligations of approximately $7,400 with the offset to accumulated other comprehensive loss and a slight increase in net periodic expense to be recognized subsequent to the remeasurement date.

Life Insurance Benefits

The following table details the components of the net periodic expense for life insurance benefit obligations:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Interest cost	$	84	$	106	$	253	$	318
Amortization of net actuarial gain	(12)		(26)		(36)		(78)
Net periodic expense	$	72	$	80	$	217	$	240

Defined Contribution and Profit Sharing Plans

The Company sponsors defined contribution plans to assist its eligible employees in providing for retirement. Generally, under the terms of these plans, employees make voluntary contributions through payroll deductions and the Company makes matching and/or discretionary contributions, as defined by each plan. The Company’s total contributions to these plans for the three months ended September 30, 2020 and 2019 was $628 and $4,158, respectively. The Company’s total contributions to these plans for the nine months ended September 30, 2020 and 2019 was $6,520 and $23,461, respectively.

During the second quarter of 2020, the Company’s matching contributions under the Contura Energy 401(k) Retirement Savings Plan were suspended due to current market conditions.

Self-Insured Medical Plan

The Company is self-insured for health insurance coverage for all of its active employees. Estimated liabilities for health and medical claims are recorded based on the Company’s historical experience and include a component for incurred but not paid claims. During the three months ended September 30, 2020 and 2019, the Company incurred total expenses of $17,327 and $20,976, respectively, which primarily includes claims processed and an estimate for claims incurred but not paid. During the nine months ended September 30, 2020 and 2019, the Company incurred total expenses of $48,430 and $58,873, respectively, which primarily includes claims processed and an estimate for claims incurred but not paid.