RETIREMENT PLANS

12 Months Ended

Dec. 31, 2021

RETIREMENT PLANS

RETIREMENT PLANS

12. RETIREMENT PLANS

The Company has noncontributory defined benefit pension plans as well as noncontributory postretirement benefit plans offering defined medical, dental, vision, and life benefits for certain employees of its International Telecom segment. The Company’s pension and other postretirement benefit plans are closed to new participants and only grandfathered participants continue to accrue additional benefits. Also, in 2020 the Company began the process of winding up one of its benefit plans. The Company reviews the funded status of its pension plans and makes contributions based on that analysis. The benefits are based on the participants’ compensation during their employment and the credited service years earned by participants. The Company funds the other postretirement benefit plans as benefits are paid.

The weighted-average rates assumed in the actuarial calculations for the pension and other postretirement benefit plans are as follows as of December 31, 2021, 2020 and 2019:

	2021		2020		2019
Discount Rate – Pension Benefit Obligation	2.9	%	2.6	%	4.2	%
Discount Rate – Pension Benefit Cost	2.6	%	3.5	%	4.5	%
Discount Rate – Postretirement Benefit Obligation	2.8	%	2.5	%	3.5	%
Discount Rate – Postretirement Benefit Cost	2.5	%	3.5	%	4.5	%
Annual salary increase	n/a		n/a		6.5	%
Expected long-term return on plan assets	5.3	%	5.1	%	6.1	%

The expected long-term rate of return on plan assets was determined based on several factors including input from pension investment consultants, projected long-term returns of equity and bond indices, and historical returns over the life of the related obligations of the fund. The Company, in conjunction with its pension investment consultants, reviews its asset allocation periodically and rebalances its investments when appropriate in an effort to earn the expected long-term returns. The Company will continue to evaluate its long-term rate of return assumptions at least annually and will adjust them as necessary.

The annual salary increase assumption is no longer applicable as the plan participants no longer accrue additional service.

The discount rate was determined based on a review of market data including yields on high quality corporate bonds with maturities approximating the remaining life of the project benefit obligations.

The other postretirement benefit plans healthcare cost trend assumptions is based on health care trend rates. The 2021 assumed medical health care cost trend rate is 6% trending to an ultimate rate of 4% in 2074. The 2021 and ultimate assumed dental care cost trend rate is 4%.

Changes during the year in the projected benefit obligations and in the fair value of plan assets are as follows for 2021 and 2020 (in thousands):

	2021				2020
	Pension Benefits		Postretirement Benefits		Pension Benefits		Postretirement Benefits
Projected benefit obligations:
Balance at beginning of year:	$	88,772	$	5,510	$	81,977	$	4,899
Alaska acquisition		15,399		392		—		—
Service cost		229		143		439		139
Interest cost		2,043		127		2,585		163
Benefits and settlements paid		(4,488)		(390)		(4,791)		(450)
Actuarial (gain) loss		(1,297)		(439)		8,651		759
Settlement		(34)		—		(89)		—
Balance at end of year	$	100,624	$	5,343	$	88,772	$	5,510
Plan net assets:
Balance at beginning of year:	$	89,352	$	—	$	83,350	$	—
Alaska acquisition		12,147		—		—		—
Actual return on plan assets		7,246		—		10,398		—
Company contributions		—		390		958		450
Benefits and settlements paid		(5,027)		(390)		(5,354)		(450)
Balance at end of year	$	103,718	$	—	$	89,352	$	—
Over/ (Under) funded status of plan	$	3,094	$	(5,343)	$	580	$	(5,510)

The Company reports an asset or liability on its balance sheet equal to the funded status of its pension and other postretirement benefit plans. Plans in an overfunded status are aggregated and recorded as a net pension benefit asset in other assets. Plans in an underfunded status are aggregated and recorded as a net postretirement benefit liability in other liabilities. The funded status of the Company’s pension and other retirement benefit plans is below (in thousands):

	2021
	GTT Pension Benefit		Viya Pension Benefit		Alaska Pension Benefit		Viya Postretirement Benefits		Alaska Postretirement Benefits
Projected benefit obligation	$	15,663	$	70,173	$	14,788	$	4,961	$	382
Plan Net Assets		15,663		75,952		12,103		—		—
Over/ (Under) funded status of plan	$	—	$	5,779	$	(2,685)	$	(4,961)	$	(382)

	2020
	GTT Pension Benefit		Viya Pension Benefit		Postretirement Benefits
Projected benefit obligation	$	15,609	$	73,163	$	5,510
Plan Net Assets		15,609		73,743		—
Over/ (Under) funded status of plan	$	—	$	580	$	(5,510)

The Company’s investment policy for its pension assets is to have a reasonably balanced investment approach, with a long-term bias toward debt investments. The Company’s strategy allocates plan assets among equity, debt and other assets to achieve long-term returns without significant risk to principal. The pension fund has limitations from investing in the equity, debt or other securities of the employer, its subsidiaries or associates of the employer or any company of which the employer is a subsidiary or an associate.

The fair values for the pension plan’s net assets, by asset category, at December 31, 2021 are as follows (in thousands):

Asset Category	Total		Level 1		Level 2
Cash, cash equivalents, money markets and other	$	17,908	$	17,908	$	—
Common stock		28,041		28,041		—
Mutual funds - fixed income		9,599		9,599		—
Mutual funds - equities		9,299		9,299		—
Fixed income securities		32,332		—		32,332
Other		6,539		6,539		—
Total	$	103,718	$	71,386	$	32,332

The fair values for the pension plan’s net assets, by asset category, at December 31, 2020 are as follows (in thousands):

Asset Category	Total		Level 1		Level 2
Cash, cash equivalents, money markets and other	$	5,037	$	5,037	$	—
Common stock		27,785		24,781		3,004
Mutual funds - fixed income		9,494		9,494		—
Mutual funds - equities		8,278		8,278		—
Fixed income securities		37,225		—		37,225
Other		1,533		1,533		—
Total	$	89,352	$	49,123	$	40,229

The plan’s weighted-average asset allocations at December 31, 2021 and 2020, by asset category are as follows:

	2021		2020
Cash, cash equivalents, money markets and other	17	%	6	%
Common stock	28		31
Mutual funds - fixed income	9		11
Mutual funds - equities	9		9
Fixed income securities	31		41
Other	6		2
Total	100	%	100	%

Amounts recognized on the Company’s consolidated balance sheets consist of (in thousands):

	As of December 31,
	2021				2020
	Pension benefits		Postretirement benefits		Pension benefits		Postretirement benefits
Accrued and current liabilities	$	—	$	370	$	—	$	381
Other Liabilities		2,687		4,616		—		5,129
Other Assets		5,780		—		580		—
Accumulated other comprehensive income, net of tax		4,419		27		(158)		(411)

Amounts recognized in accumulated other comprehensive income consist of (in thousands):

	As of December 31,
	2021				2020
	Pension benefits		Postretirement benefits		Pension benefits		Postretirement benefits
Unrecognized net actuarial gain (loss)	$	3,547	$	28	$	(1,159)	$	(411)
Accumulated other comprehensive income, pre-tax		3,547		28		(1,159)		(411)
Accumulated other comprehensive income (loss), net of tax		4,419		27		(158)		(411)

Components of the plan’s net periodic pension cost are as follows for the years ended December 31, 2021, 2020 and 2019 (in thousands):

	2021				2020				2019
	Pension benefits		Postretirement benefits		Pension benefits		Postretirement benefits		Pension benefits		Postretirement benefits
Operating expense
Service cost	$	229	$	143	$	439	$	139	$	1,709	$	126
Non-operating expense
Interest cost		2,043		127		2,585		163		3,472		182
Expected return on plan assets		(3,366)		—		(3,060)		—		(4,571)		—
Amortization of actuarial (gain) loss		—		—		—		(11)		29		(58)
Settlement		34		—		89		—		(35)		—
Net periodic pension cost	$	(1,060)	$	270	$	53	$	291	$	604	$	250

The Company is currently evaluating whether it will make any contributions to its pension and postretirement benefit plans during the year ending December 31, 2022.

The following estimated benefits, which reflect expected future service, as appropriate, are expected to be paid over the next 10 years as indicated below (in thousands):

	Pension		Postretirement
Fiscal Year	Benefits		Benefits
2022	$	20,546	$	375
2023		4,840		283
2024		5,224		323
2025		4,808		364
2026		4,860		300
2027-2031		24,155		1,724
Total	$	64,433	$	3,369