Employee Benefit Plans

9 Months Ended

Sep. 30, 2019

16. Employee Benefit Plans

Retirement Plans

The Company sponsors qualified defined benefit pension plans covering certain employees of the Company and its subsidiaries, although the U.S. qualified and non-qualified defined benefit plans are closed to new entrants. The plans’ benefits are generally based on years of service and employee compensation. The Company also provides to certain management employees, through non-qualified plans, supplemental retirement benefits in excess of qualified plan limits imposed by federal tax law.

The tables below set forth the components of the Company’s net periodic (income) expense relating to retirement benefit plans. The service cost component is recognized within selling, general and administrative expenses and cost of goods and services, depending on the functional area of the underlying employees included in the plans, and the non-operating components of pension costs are included within other income, net in the Condensed Consolidated Statements of Earnings. The amounts recorded to discontinued operations represent the net periodic benefit expense for several non-U.S. qualified and U.S. non-qualified plans that were transferred to Apergy at the spin-off date of May 9, 2018.

Qualified Defined Benefits


	Three Months Ended September 30,														Nine Months Ended September 30,
	U.S. Plan						Non-U.S. Plans						U.S. Plan				Non-U.S. Plans
	2019		2018		2019		2018		2019		2018		2019		2018
Service cost	$	1,754	$	1,861	$	1,429	$	1,054	$	5,262	$	7,148	$	4,265	$	4,165
Interest cost	4,756		5,236		1,193		1,098		14,269		15,491		3,641		3,819
Expected return on plan assets	(8,534)		(9,518)		(1,538)		(1,710)		(25,602)		(29,474)		(4,664)		(5,838)
Amortization:
Prior service cost (credit)	76		69		(102)		(112)		227		495		(298)		(338)
Recognized actuarial loss	—		150		763		673		—		2,951		2,288		2,258
Transition obligation	—		—		—		—		—		—		—		2


Net periodic (income) expense	$	(1,948)	$	(2,202)	$	1,745	$	1,003	$	(5,844)	$	(3,389)	$	5,232	$	4,068
Less: Discontinued operations	—		—		—		—		—		950		—		247
Net periodic (income) expense - Continuing operations	$	(1,948)	$	(2,202)	$	1,745	$	1,003	$	(5,844)	$	(4,339)	$	5,232	$	3,821

Non-Qualified Supplemental Benefits


	Three Months Ended September 30,						Nine Months Ended September 30,
	2019		2018		2019		2018
Service cost	$	486	$	635	$	1,457	$	1,990
Interest cost	668		751		2,003		2,452
Amortization:
Prior service cost	703		931		2,109		3,245
Recognized actuarial gain	(570)		(298)		(1,710)		(834)

Net periodic expense	$	1,287	$	2,019	$	3,859	$	6,853
Less: Discontinued operations	—		—		—		351
Net periodic expense - Continuing operations	$	1,287	$	2,019	$	3,859	$	6,502

Post-Retirement Benefit Plans

The Company also maintains post-retirement benefit plans, although these plans are closed to new entrants. The supplemental and post-retirement benefit plans are supported by the general assets of the Company. The following table sets forth the components of the Company’s net periodic expense relating to its post-retirement benefit plans:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2019		2018		2019		2018
Service cost	$	5	$	8	$	15	$	23
Interest cost	78		73		234		218
Amortization:
Prior service cost	3		3		10		10
Recognized actuarial gain	(17)		(8)		(52)		(23)

Net periodic expense	$	69	$	76	$	207	$	228

The total amount amortized out of accumulated other comprehensive earnings into net periodic pension and post-retirement expense totaled $856 and $1,407 for the three months ended September 30, 2019 and 2018, respectively, and $2,574 and $7,765 for the nine months ended September 30, 2019 and 2018, respectively.

Defined Contribution Retirement Plans

The Company also offers defined contribution retirement plans which cover the majority of its U.S. employees, as well as employees in certain other countries. The Company’s expense relating to defined contribution plans were $12,188, and $11,230 for the three months ended September 30, 2019 and 2018, respectively, and $38,340 and $35,243 for the nine months ended September 30, 2019 and 2018.