Retirement And Other Benefit Plans

12 Months Ended

Dec. 31, 2020

RETIREMENT AND OTHER BENEFIT PLANS

Defined Contribution Plan

The Company maintains a discretionary defined contribution 401(k) profit sharing plan covering all eligible employees. The Company contributed $9.0 million, $7.7 million, and $6.8 million to this plan during the years ended December 31, 2020, 2019, and 2018, respectively.

Deferred Compensation Plan

The Company has an Executive Non-Qualified Deferred Compensation Plan (the “Plan”). Pursuant to the Plan, certain management employees are eligible to defer all or a portion of their regular salary and incentive compensation. Participants deferred $2.9 million, $0.9 million, and $6.9 million during the years ended December 31, 2020, 2019, and 2018, respectively. The amounts deferred under this Plan are credited with earnings or losses based upon changes in values of the notional investments elected by the Plan participants. Each Plan participant is fully vested in their deferred compensation and earnings credited to his or her account as all contributions to the Plan are made by the participant. The Company is responsible for certain costs of Plan administration, which are not significant, and will not make any contributions to the Plan. Pursuant to the Plan, payments to the Plan participants are made from the general unrestricted assets of the Company, and the Company’s obligations pursuant to the Plan are unfunded and unsecured. Participants withdrew $0.2 million, $1.7 million, and $0.2 million from the Plan during the years ended December 31, 2020, 2019, and 2018, respectively. At December 31, 2020 and 2019, deferred compensation of $38.5 million and $30.3 million, respectively, was recorded in other long-term liabilities, and deferred compensation of $0.2 million and $0.2 million, respectively, was recorded in accrued expenses and other current liabilities. The Company invests approximately 99 percent of the amounts deferred by the Plan participants in life insurance contracts, matching the investments elected by the Plan participants. Deferred compensation assets and liabilities are recorded at contract value. At December 31, 2020 and 2019, life insurance contract assets of $35.3 million and $30.1 million, respectively, were recorded in other assets.

Dutch Pension Plans

The acquisition of Polyplastic in January 2020 included the assumption of two partially-funded defined benefit pension plans (the "Dutch pension plans") based in the Netherlands. The Dutch pension plans, which are qualified defined benefit pension plans, provide benefits based on years of service and average pay. The benefits earned by the employees are immediately vested. The Company funds the future obligations of the Dutch pension plans by purchasing an insurance contract from a large multi-national insurance company. Each year the Company will make premium payments to the insurance company (1) to provide for the benefit obligation of the current year of service based on each employee's age, gender, and current salary, and (2) for indexations for both active and post-active participants. The Company determines the fair value of the plan assets with the assistance of an actuary using unobservable inputs (Level 3), which is determined as the present value of the accrued benefits guaranteed by the insurer.

The following table summarizes the change in the projected benefit obligation and the fair value of plan assets for the Dutch pension plans for the year ended December 31, 2020 (in thousands):


Projected Benefit Obligation
Projected benefit obligation at Polyplastic acquisition date	$	78,579
Interest cost	1,007
Net service cost	3,357
Employee contributions	571
Benefits paid	(925)
Actuarial loss, net	5,453
Unrealized loss on foreign exchange	8,670
Projected benefit obligation at end of year	96,712

Fair Value of Plan Assets
Fair value of plan assets at Polyplastic acquisition date	$	49,914
Increase in plan asset value	5,887
Employer contributions	1,222
Employee contributions	571
Benefits and administrative expenses paid	(1,201)
Unrealized gain on foreign exchange	5,543
Fair value of plan assets at end of year	61,936

Underfunded status of the plans at end of the year	$	34,776

Accumulated benefit obligation	$	96,712

The following actuarial assumptions were used to determine the actuarial present value of the projected benefit obligation and the net periodic pension costs for the Dutch pension plans at December 31, 2020:


Discount rate	0.70	%
Expected return on plan assets	0.70	%
Wage inflation	2.00	%

Additionally, the Company assumed expected indexation that conforms to the growth path established by Dutch pension law, which ranged from 0.0 percent at acquisition to 2.0 percent in 2034 and thereafter.

Amounts recognized for the Dutch pension plans in the Consolidated Balance Sheet at December 31, 2020 consist of the following (in thousands):


Deferred taxes	$	8,694
Other long-term liabilities	34,776
Accumulated other comprehensive income (loss)	(207)

The components of net periodic pension cost for the Dutch pension plans for the year ended December 31, 2020 included the following (in thousands):


Net service cost	$	(3,357)
Interest cost	(1,007)
Expected return on plan assets	626
Administrative charges	(276)
Net periodic pension cost	$	(4,014)

Plan assets at December 31, 2020 consisted of insurance contracts. Under Dutch pension law, the pension insurer is legally required to pay the funded benefits to the participants. The insurer cannot unilaterally return the obligation to the employer and the employer has no risks related to the assets. As the surrender value of the contract is less than the guarantee value, the guarantee value is used as the value of the plan assets. This value is the net present value of the accrued benefits against the same assumptions as applied in the valuation of the liability. As such, the expected return is equal to the discount rate.

The Company's 2021 minimum funding requirements are expected to be $1.3 million. The estimate of future annual contributions is based on current funding and the unconditional indexation requirements, and the Company believes these contributions will be sufficient to fund the Dutch pension plans.

Expected benefit payments to eligible participants under the Dutch pension plans for the next ten years are as follows (in thousands):


2021	$	1,139
2022	1,245
2023	1,301
2024	1,390
2025	1,515
2026 - 2030	9,501