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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS
The Company has one qualified non-contributory defined benefit pension plan covering a portion of its employees and an unfunded plan that provides benefits in excess of amounts allowable under current tax law in the qualified plans. The Company closed enrollment in its pension plans to salaried employees hired after December 31, 2005. Effective December 31, 2016, the Company froze benefits for all employees participating in the pension plan. In lieu of the pension plan, the Company provides those employees with an enhanced 401(k) plan match similar to what is currently provided to employees hired after December 31, 2005. Employee benefit plan liabilities are calculated using actuarial estimates and management assumptions. These estimates are based on historical information, along with certain assumptions about future events. Changes in assumptions, as well as changes in actual experience, could cause the estimates to change.
The following tables set forth the change in the projected benefit obligation and plan assets and reconcile the funded status and the amounts recognized in the Consolidated Balance Sheets for the pension and postretirement benefit plans for the two years ended December 31:
 
Pension
 
Postretirement
 
2019
 
2018
 
2019
 
2018
Change in Projected Benefit Obligation
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year

$79,559

 

$87,986

 

$1,303

 

$1,420

Service cost
—

 
—

 
6

 
7

Interest cost
3,197

 
3,021

 
54

 
38

Actuarial loss (gain)
10,828

 
(8,160
)
 
285

 
(149
)
Benefits paid
(3,323
)
 
(3,288
)
 
(14
)
 
(13
)
Projected benefit obligation at end of year

$90,261

 

$79,559

 

$1,634

 

$1,303


Change in Plan Assets
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year

$50,949

 

$57,377

 
—

 
—

Actual return on plan assets
12,975

 
(4,638
)
 
—

 
—

Employer contributions
6,413

 
2,829

 
14

 
13

Benefits paid
(3,284
)
 
(4,002
)
 
(14
)
 
(13
)
Other expense
(593
)
 
(617
)
 
—

 
—

Fair value of plan assets at end of year

$66,460

 

$50,949

 
—

 
—


Funded Status at End of Year:
 
 
 
 
 
 
 
Net accrued benefit cost

($23,801
)
 

($28,610
)
 

($1,634
)
 

($1,303
)

Amounts Recognized in the Consolidated
 
 
 
 
 
 
 
Balance Sheets Consist of:
 
 
 
 
 
 
 
Current liabilities

($86
)
 

($86
)
 

($38
)
 

($27
)
Noncurrent liabilities
(23,715
)
 
(28,524
)
 
(1,596
)
 
(1,276
)
Net amount recognized

($23,801
)
 

($28,610
)
 

($1,634
)
 

($1,303
)

Net gains or losses recognized in other comprehensive (loss) income for the three years ended December 31 are as follows:
 
Pension
 
Postretirement
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Net (losses) gains

($1,514
)
 

($1,743
)
 

($583
)
 

($285
)
 

$149

 

($89
)
Net gains or losses reclassified from other comprehensive income and recognized as a component of pension and postretirement expense for the three years ended December 31 are as follows:
 
Pension
 
Postretirement
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Amortization of losses (gains)

$449

 

$673

 

$466

 
—

 

$2

 

($1
)

Net losses that have not yet been included in pension and postretirement expense for the two years ended December 31, but have been recognized as a component of AOCI are as follows:
 
Pension
 
Postretirement
 
2019
 
2018
 
2019
 
2018
Net losses

($24,317
)
 

($23,252
)
 

($292
)
 

($7
)
Deferred income tax benefit
1,216

 
1,216

 
6

 
6

AOCI

($23,101
)
 

($22,036
)
 

($286
)
 

($1
)

For pension and postretirement plans with accumulated benefit obligations in excess of plan assets, the following table sets forth the projected and accumulated benefit obligations and the fair value of plan assets for the two years ended December 31:
 
2019
 
2018
Projected benefit obligation

$90,261

 

$79,559

Accumulated benefit obligation
90,261

 
79,559

Fair value of plan assets
66,460

 
50,949


The following tables set forth the components of net pension and postretirement benefit cost (credit) that have been recognized during the three years ended December 31:
 
Pension
 
Postretirement
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Components of Net Periodic Benefit Cost (Credit)
 
 
 
 
 
 
 
 
 
 
 
Service cost
—

 
—

 
—

 

$6

 

$7

 

$6

Interest cost
3,197

 
3,021

 
3,259

 
54

 
38

 
53

Expected return on plan assets
(3,107
)
 
(3,934
)
 
(3,781
)
 
—

 
—

 
—

Amortization of losses (gains)
449

 
673

 
466

 
—

 
2

 
(1
)
Net periodic benefit cost (credit)

$539

 

($240
)
 

($56
)
 

$60

 

$47

 

$58


The estimated pre-tax amounts that will be amortized from AOCI into net periodic benefit cost in 2020 are as follows:
 
Pension
 
Postretirement
Amortization of loss

$861

 

$8


The following table sets forth the principal assumptions inherent in the determination of benefit obligations and net periodic benefit cost of the pension and postretirement benefit plans as of December 31:
 
Pension
 
Postretirement
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Assumptions used to determine benefit obligations at December 31:
 
 
 
 
 
 
 
 
 
 
 
Discount rate
3.06
%
 
4.11
%
 
3.48
%
 
3.16
%
 
4.18
%
 
3.56
%
Rate of compensation increase
—

 
—

 
—

 
4.50
%
 
4.50
%
 
4.50
%
Assumptions used to determine net periodic benefit cost for years ended December 31:
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.11
%
 
3.48
%
 
4.01
%
 
4.18
%
 
3.56
%
 
4.12
%
Expected long-term return on plan assets
5.72
%
 
7.17
%
 
7.17
%
 
—

 
—

 
—

Rate of compensation increase
—

 
—

 
—

 
4.50
%
 
4.50
%
 
4.50
%

At December 31, 2019, the pension plan’s discount rate was 3.1%, which closely approximates interest rates on high quality, long-term obligations. In 2019, the expected return on plan assets decreased to 5.7%, which is based on historical and expected long-term rates of return on broad equity and bond indices and consideration of the actual annualized rate of return. The Company utilizes this information in developing assumptions for returns, risks and correlations of asset classes, which are then used to establish the asset allocation ranges.
INVESTMENT OF PLAN ASSETS
The Company’s pension plans’ asset allocation (excluding short-term investments) at December 31, 2019 and 2018, and target allocation ranges by asset category are as follows:
 
Percentage of 
Plan Assets
 
Target
Allocation
Range
Asset Category
2019
 
2018
 
Domestic equity securities
41
%
 
39
%
 
35-45%
International equity securities
28
%
 
28
%
 
20-30%
Domestic fixed income securities
25
%
 
26
%
 
25-29%
International fixed income securities
4
%
 
5
%
 
3-7%
Real estate fund
2
%
 
2
%
 
2-4%
Total
100
%
 
100
%
 
 

The Company’s Pension and Savings Plan Committee and the Audit Committee of the Board of Directors oversee the pension plans’ investment program, which is designed to maximize returns and provide sufficient liquidity to meet plan obligations while maintaining acceptable risk levels. The investment approach emphasizes diversification by allocating the plans’ assets among asset categories and selecting investment managers whose various investment methodologies will be minimally correlative with each other. Investments within the equity categories may include large capitalization, small capitalization and emerging market securities, while the international fixed income portfolio may include emerging markets debt. Pension assets did not include a direct investment in Rayonier common shares during the years ended December 31, 2019 and 2018.
NET ASSET VALUE MEASUREMENTS
Separate investment accounts are measured using the unit value calculated based on the Net Asset Value (“NAV”) of the underlying assets. The NAV is based on the fair value of the underlying investments held by each fund less liabilities divided by the units outstanding as of the valuation date. These funds are not publicly traded; however, the unit price calculation is based on observable market inputs of the funds’ underlying assets.




The following table sets forth the net asset value of the plan assets as of December 31, 2019 or 2018.
 
December 31, 2019
 
December 31, 2018
Asset Category
 
 
 
Investments at Net Asset Value:


 


     Separate Investment Accounts
66,460

 
50,949

Total Investments at Net Asset Value

$66,460

 

$50,949


CASH FLOWS
Expected benefit payments to be made by the Company for the next 10 years are as follows:
 
Pension
Benefits
 
Postretirement
Benefits
2020

$3,671

 

$38

2021
3,829

 
42

2022
4,050

 
45

2023
4,146

 
48

2024
4,318

 
51

2025-2029
22,752

 
308


The Company has approximately $3.6 million of pension contribution requirements in 2020.
DEFINED CONTRIBUTION PLANS
The Company provides a defined contribution plan to all of its employees. Company match contributions charged to expense for these plans were $1.0 million, $0.9 million and $0.8 million for the years ended December 31, 2019, 2018 and 2017, respectively. The defined contribution plan includes Rayonier common shares with a fair market value of $10.6 million and $9.7 million at December 31, 2019 and 2018, respectively. As of June 1, 2016, the Rayonier Inc. Common Stock Fund was closed to new contributions. Transfers out of the fund will continue to be permitted, but no new investments or transfers into the fund are allowed.
As discussed above, the defined benefit pension plan is currently frozen. In lieu of the pension plan, employees are eligible to receive an enhanced match contribution. Company enhanced match contributions charged to expense for the years ended December 31, 2019, 2018 and 2017 were $0.9 million, $0.8 million and $0.8 million, respectively.