Pension And Postretirement Benefits

9 Months Ended

Sep. 30, 2019

Pension And Postretirement Benefits

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE 6. PENSION AND POSTRETIREMENT BENEFITS

Many of our employees are covered by one of our noncontributory pension plans. We also provide certain medical, dental, life insurance and death benefits to certain retired employees under various plans and accrue actuarially determined postretirement benefit costs. Our objective in funding these plans, in combination with the standards of the Employee Retirement Income Security Act of 1974, as amended (ERISA), is to accumulate assets sufficient to provide benefits described in the plans to employees upon their retirement.

In first quarter of 2019, for certain management participants in our pension plan who terminated employment before April 1, 2019, we offered the option of more favorable 2018 interest rates and mortality basis for determining lump-sum distributions. During the first nine months of 2019, we have recorded special termination benefits of $81 in “Other income (expense) – net.” During 2019, we also offered certain terminated vested pension plan participants the opportunity to receive their benefit in a lump-sum amount.

We recognize actuarial gains and losses on pension and postretirement plan assets in our consolidated results as a component of “Other income (expense) – net” at our annual measurement date of December 31, unless earlier remeasurements are required. We anticipated total distributions from the pension plan would exceed the threshold of service and interest costs for 2019, requiring us to follow settlement accounting and remeasure our pension benefit obligation at each quarter-end, resulting in the recognition of actuarial losses of $432, $1,699, and $1,888 in the first, second and third quarters of 2019, respectively.

As part of our quarterly 2019 remeasurements, we decreased the weighted-average discount rate used to measure our pension benefit obligation from 4.50% at December 31, 2018 by 40 basis points each quarter to 3.30% at September 30, 2019. Our remeasurements also reflect actual returns on plan assets of 13.40% (nine-month rate). Our expected long-term rate of return on pension plan assets is an annualized 7.00% for 2019.

The following table details pension and postretirement benefit costs included in the accompanying consolidated statements of income. The service cost component of net periodic pension cost (benefit) is recorded in operating expenses in the consolidated statements of income while the remaining components are recorded in “Other income (expense) – net.”

	Three months ended				Nine months ended
	September 30,				September 30,
	2019		2018		2019		2018
Pension cost:
Service cost – benefits earned during the period	$	260	$	270	$	743	$	845
Interest cost on projected benefit obligation		463		551		1,520		1,542
Expected return on assets		(905)		(761)		(2,636)		(2,276)
Amortization of prior service credit		(28)		(28)		(85)		(87)
Actuarial (gain) loss		1,888		-		4,019		(1,796)
Net pension (credit) cost	$	1,678	$	32	$	3,561	$	(1,772)
Postretirement cost:
Service cost – benefits earned during the period	$	19	$	27	$	55	$	82
Interest cost on accumulated postretirement benefit obligation		185		196		557		582
Expected return on assets		(57)		(76)		(169)		(228)
Amortization of prior service credit		(425)		(412)		(1,277)		(1,222)
Actuarial (gain) loss		-		-		-		(930)
Net postretirement (credit) cost	$	(278)	$	(265)	$	(834)	$	(1,716)
Combined net pension and postretirement (credit) cost	$	1,400	$	(233)	$	2,727	$	(3,488)

We also provide senior- and middle-management employees with nonqualified, unfunded supplemental retirement and savings plans. Net supplemental pension benefits costs not included in the table above were $24 and $24 in the third quarter and $74 and $65 for the first nine months of 2019 and 2018, respectively. During the third quarter of 2019, we recorded an actuarial loss of $29.