Retirement Benefits

12 Months Ended

Dec. 31, 2019

Retirement Benefits [Abstract]

Retirement Benefits

13. Retirement Benefits

Defined Benefit Pension Plans

	U.S. Pension Plans									Non-U.S. Plans
	2019			2018			2017			2019			2018			2017
	(Dollars in thousands)
Service cost	$	10		$	11		$	11		$	1,410		$	1,392		$	1,410
Interest cost		11,787			11,308			14,594			2,264			2,166			2,089
Expected return on plan assets		(12,622)			(15,982)			(20,111)			(758)			(755)			(773)
Amortization of prior service cost		—			—			7			7			6			8
Mark-to-market actuarial net losses (gains)		1,228			16,633			(5,432)			11,033			2,444			(1,792)
Curtailment and settlement effects losses		—			—			2,581			292			156			28
Special termination benefits		—			—			—			—			106			27
Net periodic benefit cost (credit)	$	403		$	11,970		$	(8,350)		$	14,248		$	5,515		$	997
Weighted-average assumptions:
Discount rate		4.40	%		3.80	%		4.40	%		2.61	%		2.35	%		2.24	%
Rate of compensation increase		N/A			N/A			N/A			3.19	%		3.18	%		3.14	%
Expected return on plan assets		7.70	%		7.70	%		8.20	%		2.74	%		2.55	%		2.54	%

For the majority of our U.S. defined benefit pension plans, the participants stopped accruing benefit service costs after March 31, 2006, except for one plan with a single employee.

In 2019, the mark-to-market actuarial net loss on the U.S. pension plans of $1.2 million consisted of a charge of $28.3 million to remeasure the liability based on a lower discount rate compared with the prior year, partially offset by a gain of $23.3 million from actual returns on plan assets exceeding expected returns and a $3.8 million gain on demographic experience and actuarial assumptions. The mark-to-market actuarial net loss of $11.0 million for non-U.S. plans was primarily driven by remeasurement of the respective liabilities at lower discount rates.

In 2018, the mark-to-market actuarial net loss on the U.S. pension plans of $16.6 million was driven by a loss of $31.0 million from expected returns on plan assets being lower than actual returns, partially offset by a gain of $17.9 million from the change in the discount rate compared with the prior year. The mark-to-market actuarial net loss of $2.4 million for non-U.S. plans was primarily driven by expected returns on plan assets being lower than actual returns.

In 2017, the mark-to-market actuarial net gain on the U.S. pension plans of $5.4 million was based on $20.8 million of gain from actual returns on plan assets exceeding expected returns on plan assets, partially offset by a loss on remeasurement of the liability from a lower discount rate compared with the prior year. The mark-to-market actuarial net gain of $1.8 million for non-U.S. plans was primarily driven by remeasurement of the respective liabilities at a higher discount rate.

	U.S. Pension Plans				Non-U.S. Pension Plans
	2019		2018		2019		2018
	(Dollars in thousands)
Change in benefit obligation
Benefit obligation at beginning of year	$	279,885	$	303,170	$	106,098	$	109,450
Service cost		10		11		1,410		1,392
Interest cost		11,787		11,308		2,264		2,166
Curtailments		—		—		(45)		—
Amendments		—		—		23		—
Settlements		—		(25)		(734)		(517)
Special termination benefits		—		—		—		106
Plan participants' contributions		—		—		14		21
Benefits paid		(19,978)		(20,165)		(5,367)		(2,658)
Net transfer in		—		—		—		140
Actuarial loss (gain)		24,477		(14,414)		14,949		816
Exchange rate effect		—		—		(1,914)		(4,818)
Benefit obligation at end of year	$	296,181	$	279,885	$	116,698	$	106,098
Accumulated benefit obligation at end of year	$	296,181	$	279,885	$	107,332	$	97,406
Change in plan assets:
Fair value of plan assets at beginning of year	$	204,425	$	239,260	$	32,979	$	36,314
Actual return on plan assets		35,871		(15,065)		4,336		(1,029)
Employer contributions		2,909		420		3,277		2,523
Plan participants' contributions		—		—		14		21
Benefits paid		(19,978)		(20,165)		(5,367)		(2,658)
Effect of settlements		—		(25)		(734)		(517)
Exchange rate effect		—		—		(607)		(1,675)
Fair value of plan assets at end of year	$	223,227	$	204,425	$	33,898	$	32,979
Amounts recognized in the balance sheet:
Other non-current assets	$	—	$	—	$	44	$	—
Accrued expenses and other current liabilities		(410)		(404)		(2,589)		(2,912)
Postretirement and pension liabilities		(72,544)		(75,056)		(80,255)		(70,205)
Funded status	$	(72,954)	$	(75,460)	$	(82,800)		(73,117)

	U.S. Pension Plans						Non-U.S. Pension Plans
	2019			2018			2019			2018
	(Dollars in thousands)
Weighted-average assumptions as of December 31:
Discount rate		3.35	%		4.40	%		1.76	%		2.61	%
Rate of compensation increase		N/A			N/A			3.11	%		3.19	%
Pension plans with benefit obligations in excess of plan assets:
Benefit obligations	$	296,181		$	279,885		$	84,791		$	78,791
Plan assets		223,227			204,425			1,946			5,674
Pension plans with accumulated benefit obligations in excess of plan assets:
Projected benefit obligations	$	296,181		$	279,885		$	84,338		$	76,097
Accumulated benefit obligations		296,181			279,885			75,073			67,619
Plan assets		223,227			204,425			1,553			3,100

Activity and balances in Accumulated other comprehensive loss related to defined benefit pension plans are summarized below:

	U.S. Pension Plans				Non-U.S. Pension Plans
	2019		2018		2019		2018
	(Dollars in thousands)
Prior service (cost):
Balance at beginning of year	$	—	$	—	$	(22)	$	2
Amounts recognized as net periodic benefit costs		—		—		(7)		(6)
Plan amendments		—		—		(14)		—
Exchange rate effects		—		—		(1)		(18)
Balance at end of year	$	—	$	—	$	(44)	$	(22)
Estimated amounts to be amortized in 2020	$	—			$	(8)

The overall investment objective for our defined benefit pension plan assets is to achieve the highest level of investment return that is compatible with prudent investment practices, asset class risk and current and future benefit obligations of the plans. Based on the potential risks and expected returns of various asset classes, the Company establishes asset allocation ranges for major asset classes. For U.S. plans, the target allocations are 35% fixed income, 60% equity, and 5% other investments. For non-U.S. plans, the target allocations are 75% fixed income, 24% equity, and 1% other investments. The Company invests in funds and with asset managers that track broad investment indices. The equity funds generally capture the returns of the equity markets in the U.S., Europe, and Asia Pacific and also reflect various investment styles, such as growth, value, and large or small capitalization. The fixed income funds generally capture the returns of government and investment-grade corporate fixed income securities in the U.S. and Europe and also reflect various durations of these securities.

We derive our assumption for expected return on plan assets at the beginning of the year based on the weighted-average expected return for the target asset allocations of the major asset classes held by each plan. In determining the expected return, the Company considers both historical performance and an estimate of future long-term rates of return. The Company consults with, and considers the opinion of, its actuaries in developing appropriate return assumptions.

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

	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
U.S. plans:
Fixed income:
Guaranteed deposits	$	—		1,863		—		1,863
Mutual funds		73,563		—		—		73,563
Commingled funds		—		434		244		678
Equities:
U.S. common stocks		4,198		—		—		4,198
Mutual funds		128,546		—		—		128,546
Commingled funds		—		706		—		706
Total assets in the fair value hierarchy	$	206,307	$	3,003	$	244	$	209,554
Investments measured at net asset value		—		—		—		13,673
Investments at fair value	$	206,307	$	3,003	$	244	$	223,227
Non-U.S. plans
Fixed income:
Cash and cash equivalents	$	10	$	—	$	—	$	10
Guaranteed deposits		—		748		30,155		30,903
Mutual funds		2,352		—		—		2,352
Other		89		—		—		89
Equities:
Mutual funds		544		—		—		544
Other assets		—		—		—		—
Total	$	2,995	$	748	$	30,155	$	33,898

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

	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
U.S. plans:
Fixed income:
Guaranteed deposits	$	—		1,723		—		1,723
Mutual funds		74,310		—		—		74,310
Commingled funds		—		502		226		728
Equities:
U.S. common stocks		4,439		—		—		4,439
Mutual funds		109,756		—		—		109,756
Commingled funds		—		695		—		695
Total assets in the fair value hierarchy	$	188,505	$	2,920	$	226	$	191,651
Investments measured at net asset value		—		—		—		12,774
Investments at fair value	$	188,505	$	2,920	$	226	$	204,425
Non-U.S. plans
Fixed income:
Cash and cash equivalents	$	—	$	89	$	—	$	89
Guaranteed deposits		32		744		27,318		28,094
Mutual funds		1,070		—		—		1,070
Other		1,068		2,126		—		3,194
Equities:
Mutual funds		451		—		—		451
Other assets		81		—		—		81
Total	$	2,702	$	2,959	$	27,318	$	32,979

The Company’s U.S. pension plans held 0.3 million shares of the Company’s common stock with a market value of $4.2 million at December 31, 2019 and 0.3 million shares with a market value of $4.4 million at December 31, 2018.

Level 3 assets consist primarily of guaranteed deposits. The guaranteed deposits in Level 3 are in the form of contracts with insurance companies that secure the payment of benefits and are valued based on discounted cash flow models using the same discount rate used to value the related plan liabilities. The investments measured at net investment value, which is a practical expedient to estimating fair value, seek both current income and long term capital appreciation through investing in underlying funds that acquire, manage, and dispose of commercial real estate properties.

A rollforward of Level 3 assets is presented below. Unrealized gains included in earnings were $3.9 million in 2019 and unrealized loss included in earnings were $1.0 million in 2018.

	Guaranteed		Commingled
	deposits		funds		Total
	(Dollars in thousands)
Balance at December 31, 2017	$	30,127	$	269	$	30,396
Sales		(487)		—		(487)
Gains (losses) included in earnings		(960)		(43)		(1,003)
Exchange rate effect		(1,362)		—		(1,362)
Balance at December 31, 2018	$	27,318	$	226	$	27,544
Sales		(473)		—		(473)
Gains (losses) included in earnings		3,885		18		3,903
Exchange rate effect		(575)		—		(575)
Balance at December 31, 2019		30,155		244	$	30,399

We expect to contribute approximately $9.7 million to our U.S. pension plans and $3.5 million to our non-U.S. pension plans in 2020.

We estimate that future pension benefit payments, will be as follows:

	U.S. Plans		Non-U.S. Plans
	(Dollars in thousands)
2020	$	20,340	$	3,487
2021		20,580		3,275
2022		20,952		3,655
2023		20,450		4,017
2024		20,336		3,371
2025-2029		96,857		22,516

Postretirement Health Care and Life Insurance Benefit Plans

	2019			2018			2017
	(Dollars in thousands)
Net periodic benefit cost:
Interest expense	$	702		$	732		$	843
Service cost		2			—			—
Mark-to-market actuarial net loss (gain)		1,080			(2,580)			458
Total net periodic benefit cost (credit)	$	1,784		$	(1,848)		$	1,301
Weighted-average assumptions:
Discount rate		4.30	%		3.70	%		4.20	%
Current trend rate for health care costs		6.30	%		6.40	%		6.50	%
Ultimate trend rate for health care costs		4.50	%		4.50	%		4.50	%
Year that ultimate trend rate is reached		2036			2036			2036

A one-percentage-point change in the assumed health care cost trend rates would have the following effect:

	1-Percentage-			1-Percentage-
	Point			Point
	Increase			Decrease
	(Dollars in thousands)
Effect on total of service and interest costs components	$	38	$	(34)
Effect on postretirement benefit obligation		877		(773)

	2019			2018
	(Dollars in thousands)
Change in benefit obligation:
Benefit obligation at beginning of year	$	17,198		$	20,725
Service cost		2			—
Interest cost		702			732
Benefits paid		(1,833)			(1,679)
Actuarial loss (gain)		1,080			(2,580)
Benefit obligation at end of year	$	17,149		$	17,198
Change in plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Employer contributions		1,836			1,679
Benefits paid		(1,836)			(1,679)
Fair value of plan assets at end of year	$	—		$	—
Amounts recognized in the balance sheet:
Accrued expenses and other current liabilities	$	(1,945)		$	(1,966)
Postretirement and pension liabilities		(15,204)			(15,232)
Funded status	$	(17,149)		$	(17,198)
Weighted-average assumptions as of December 31:
Discount rate		3.25	%		4.30	%
Current trend rate for health care costs		6.10	%		6.30	%
Ultimate trend rate for health care costs		4.50	%		4.50	%
Year that ultimate trend rate is reached		2036			2036

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 provides subsidies for certain drug costs to companies that provide coverage that is actuarially equivalent to the drug coverage under Medicare Part D. We estimate that future postretirement health care and life insurance benefit payments will be as follows:

	Before Medicare		After Medicare
	Subsidy			Subsidy
	(Dollars in thousands)
2020	$	1,945	$	1,737
2021		1,846		1,651
2022		1,741		1,559
2023		1,635		1,466
2024		1,537		1,382
2025-2029		6,181		5,589

Other Retirement Plans

We also have defined contribution retirement plans covering certain employees. Our contributions are determined by the terms of the plans and are limited to amounts that are deductible for income taxes. Generally, benefits under these plans vest over a period of five years from date of employment. The largest plan covers salaried and most hourly employees in the U.S. In this plan, the Company contributes a percentage of eligible employee basic compensation and also a percentage of employee contributions. The expense applicable to these plans was $3.7 million, $2.9 million, and $5.7 million in 2019, 2018, and 2017, respectively.