Employee benefit plans

12 Months Ended

Dec. 31, 2023

Employee benefit plans

Employee benefit plans

Note 11 - Employee benefit plans:

Defined contribution plans - We maintain various defined contribution pension plans. Company contributions are based on matching or other formulas. Defined contribution plan expense approximated $3.7 million in 2021 and $3.9 million in each of 2022 and 2023.

Defined benefit pension plans - We maintain a defined benefit pension plan in the U.S. The benefits under our defined benefit plan is based upon years of service and employee compensation. The plan is closed to new participants and no additional benefits accrue to existing plan participants. Our funding policy is to contribute annually the minimum amount required under ERISA (or equivalent non-U.S.) regulations plus additional amounts as we deem appropriate.

We previously maintained a defined benefit pension plan in the U.K. related to a former disposed U.K. business unit. In accordance with applicable U.K. pension regulations, we entered into an agreement in March 2021 for the bulk annuity purchase, or “buy-in”, with a specialist insurer of defined benefit pension plans. Following the buy-in, individual policies replaced the bulk annuity policy in a “buy-out” which was completed as of May 1, 2023. The buy-out was completed with existing plan funds. At the completion of the buy-out, the assets and liabilities of the U.K. pension plan were removed from our Consolidated Financial Statements and a non-cash pension plan termination loss of $4.9 million was recognized in the second quarter of 2023.

We expect to contribute approximately $1.0 million to our defined benefit pension plan during 2024. Benefit payments to all plan participants out of plan assets are expected to be the equivalent of:

Years ending December 31,	Amount
	(In thousands)
2024	$	3,012
2025		2,923
2026		2,849
2027		2,766
2028		2,668
Next 5 years		11,725

The funded status of our defined benefit pension plans is presented in the table below.

	December 31,
	2022		2023
	(In thousands)
Change in projected benefit obligations (PBO):
Benefit obligations at beginning of the year	$	50,367	$	36,090
Interest cost		1,138		1,619
Plan settlement		(188)		(5,537)
Actuarial (gains) losses		(10,777)		265
Change in currency exchange rates		(965)		116
Benefits paid		(3,485)		(3,115)
Benefit obligations at end of the year		36,090		29,438
Change in plan assets:
Fair value of plan assets at beginning of the year		47,940		34,126
Actual return on plan assets		(10,263)		2,009
Employer contributions		1,228		196
Plan settlement		(188)		(5,537)
Change in currency exchange rates		(1,106)		131
Benefits paid		(3,485)		(3,115)
Fair value of plan assets at end of year		34,126		27,810
Funded status	$	(1,964)	$	(1,628)
Amounts recognized in the balance sheet:
Noncurrent pension asset	$	1,105	$	—
Accrued pension costs:
Current		(57)		(57)
Noncurrent		(3,012)		(1,571)
Total		(1,964)		(1,628)
Accumulated other comprehensive loss - actuarial losses, net		27,530		21,802
Total	$	25,566	$	20,174
Accumulated benefit obligations (ABO)	$	36,090	$	29,438

The amounts shown in the table above for actuarial (gains) losses at December 31, 2022 and 2023 have not been recognized as components of our periodic defined benefit pension cost as of those dates. These amounts will be recognized as components of our periodic defined benefit cost in future years. These amounts, net of deferred income taxes, are recognized in our accumulated other comprehensive income (loss) at December 31, 2022 and 2023.

The total net underfunded status of our defined benefit pension plans decreased from $2.0 million at December 31, 2022 to $1.6 million at December 31, 2023 due to the change in our plan assets exceeding the change in our PBO during 2023. Plan assets increased relative to our PBO primarily due to improved returns on plan assets during 2023.

The table below details the changes in other comprehensive income (loss) during 2021, 2022 and 2023.

	Years ended December 31,
	2021		2022		2023
	(In thousands)
Changes in plan assets and benefit obligations recognized in   other comprehensive income:
Net actuarial gain (loss) arising during the year	$	1,618	$	(1,034)	$	(574)
Plan settlement		—		104		4,911
Amortization of unrecognized net actuarial gain (loss)		(1,562)		1,664		1,391
Total	$	56	$	734	$	5,728

The components of our net periodic defined benefit pension cost are presented in the table below. The amounts shown below for recognized actuarial losses in 2021, 2022 and 2023, net of deferred income taxes, was recognized as a component of our accumulated other comprehensive income at December 31, 2020, 2021 and 2022, respectively.

	Years ended December 31,
	2021		2022		2023
	(In thousands)
Net periodic pension cost:
Interest cost	$	947	$	1,138	$	1,619
Expected return on plan assets		(1,603)		(1,552)		(1,452)
Plan settlement		—		104		4,911
Recognized actuarial losses		1,562		1,664		1,391
Total	$	906	$	1,354	$	6,469

Certain information concerning our defined benefit pension plans (including information concerning certain plans for which ABO exceeds the fair value of plan assets as of the indicated date) is presented in the table below. As discussed above, our U.K. plan was terminated in the second quarter of 2023.

	December 31,
	2022		2023
	(In thousands)
PBO at end of the year:
U.S. plan	$	30,254	$	29,438
U.K. plan		5,836		—
Total	$	36,090	$	29,438
Fair value of plan assets at end of the year:
U.S. plan	$	27,185	$	27,810
U.K. plan		6,941		—
Total	$	34,126	$	27,810
Plans for which the ABO exceeds plan assets (only our U.S. plan):
PBO	$	30,254	$	29,438
ABO		30,254		29,438
Fair value of plan assets		27,185		27,810

The weighted-average discount rate assumptions used in determining the actuarial present value of our benefit obligations as of December 31, 2022 and 2023 are 5.1% and 5.0%, respectively. Such weighted-average rates were determined using the projected benefit obligations at each date. Since our plans are closed to new participants and no new additional benefits accrue to existing plan participants, assumptions regarding future compensation levels are not

applicable. Consequently, the accumulated benefit obligations for all of our defined benefit pension plans were equal to the projected benefit obligations at December 31, 2022 and 2023.

The weighted-average rate assumptions used in determining the net periodic pension cost for 2021, 2022 and 2023 are presented in the table below. Such weighted-average discount rates were determined using the projected benefit obligations as of the beginning of each year and the weighted-average long-term return on plan assets was determined using the fair value of plan assets as of the beginning of each year.

	Years ended December 31,
Rate	2021		2022		2023
Discount rate	2.1	%	2.3	%	5.1	%
Long-term rate of return on plan assets	3.3	%	3.3	%	4.9	%

Variances from actuarially assumed rates will result in increases or decreases in accumulated pension obligations, pension expense and funding requirements in future periods.

In determining the expected long-term rate of return on our U.S. and our previously maintained non-U.S. plan asset assumptions, we consider the long-term asset mix (e.g. equity vs. fixed income) for the assets for each of our plans and the expected long-term rates of return for such asset components. In addition, we receive third-party advice about appropriate long-term rates of return. In the U.S. we currently have a plan asset target allocation of 33% to equity securities, 59% to fixed income securities, and the remainder is allocated to multi-asset and other strategies. The expected long-term rate of return for such investments is approximately 7% and 5%, respectively (before plan administrative expenses). Approximately 98% of our U.S. plan assets are invested in funds that are valued at net asset value (NAV) and, in accordance with ASC 820-10, not subject to classification in the fair value hierarchy. During 2022 and through plan termination in 2023, the non-U.S. plan assets were invested primarily in insurance contracts and were a Level 3 input.  

We regularly review our actual asset allocation for each plan, and will periodically rebalance the investments in each plan to more accurately reflect the targeted allocation and/or maximize the overall long-term return when considered appropriate.

The composition of our pension plan assets by fair value level at December 31, 2022 and 2023 is shown in the tables below.

	Fair Value Measurements
			Quoted prices		Significant other		Significant
			in active		observable		unobservable		Assets measured
	Total		markets (Level 1)		inputs (Level 2)		inputs (Level 3)		at NAV
	(In thousands)
December 31, 2022:
U.S.:
Equities	$	8,591	$	694	$	—	$	—	$	7,897
Fixed income		15,954		149		—		—		15,805
Cash and other		2,640		1,903		—		44		693
U.K. - Other		6,941		1,104		—		5,837		—
Total	$	34,126	$	3,850	$	—	$	5,881	$	24,395

As noted above, in March 2021 we purchased a bulk annuity for our U.K. pension plan and such annuity is considered a Level 3 asset included with “U.K. – Other” in the table above.

	Fair Value Measurements
			Quoted prices		Significant other		Significant
			in active		observable		unobservable		Assets measured
	Total		markets (Level 1)		inputs (Level 2)		inputs (Level 3)		at NAV
	(In thousands)
December 31, 2023:
U.S.:
Equities	$	7,786	$	—	$	—	$	—	$	7,786
Fixed income		18,733		—		—		—		18,733
Cash and other		1,291		489		—		41		761
Total	$	27,810	$	489	$	—	$	41	$	27,280