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Pension Benefits
 12 Months Ended
Dec. 31, 2024
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Pension Benefits
Note 12 – Pension Benefits
The Company has a non-contributory defined benefit pension plan covering employees who met age and service requirements and began employment with the Company prior to January 1, 2016 (“Qualified Pension Plan”). The Company also has a supplemental non-contributory pension plan covering certain management employees (“Nonqualified Pension Plan” and together with the Qualified Pension Plan, “Pension Plans”). The Company froze the Pension Plans to new participants, effective January 1, 2016. Employees participating in the Pension Plans prior to the plans being frozen continue to earn benefits.
Obligations and Funded Status for the Pension Plans
The Company recognizes the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligation) of the Company’s Pension Plans in the accompanying balance sheets as either an asset or a liability and recognizes a corresponding adjustment within the other comprehensive income, net of tax, line item in the accompanying consolidated statements of comprehensive income. The projected benefit obligation is the actuarial present value of the benefits earned to date by plan participants based on employee service and compensation including the effect of assumed future salary increases. The accumulated
benefit obligation uses the same factors as the projected benefit obligation, but excludes the effects of assumed future salary increases. The Company’s measurement date for plan assets and obligations is December 31.
For the Years Ended December 31,
20242023
(in thousands)
Change in benefit obligation:
Projected benefit obligation at beginning of year$67,268 $65,161 
Service cost3,652 3,706 
Interest cost3,209 3,200 
Actuarial (gain) loss(1,281)84 
Benefits paid(2,204)(4,883)
Settlements
(482)— 
Projected benefit obligation at end of year70,162 67,268 
Change in plan assets:
Fair value of plan assets at beginning of year45,692 36,414 
Actual return on plan assets3,547 4,161 
Employer contribution10,482 10,000 
Benefits paid(2,204)(4,883)
Settlements
(482)— 
Fair value of plan assets at end of year57,035 45,692 
Funded status at end of year$(13,127)$(21,576)
The Company’s underfunded status for the Pension Plans as of December 31, 2024, and 2023, was $13.1 million and $21.6 million, respectively, and is recognized in the accompanying balance sheets within the other noncurrent liabilities line item. There are no plan assets in the Nonqualified Pension Plan.
Accumulated Benefit Obligation in Excess of Plan Assets for the Pension Plans
As of December 31,
20242023
(in thousands)
Projected benefit obligation$70,162 $67,268 
Accumulated benefit obligation$58,807 $55,557 
Less: fair value of plan assets(57,035)(45,692)
Underfunded accumulated benefit obligation$1,772 $9,865 
Pension expense is determined based upon the annual service cost of benefits (the actuarial cost of benefits earned during a period) and the interest cost on those liabilities, less the expected return on plan assets. The expected long-term rate of return on plan assets is applied to a calculated value of plan assets that recognizes changes in fair value over a five-year period. This practice is intended to reduce year-to-year volatility in pension expense, but it can have the effect of delaying recognition of differences between actual returns on assets and expected returns based on long-term rate of return assumptions. Amortization of the unrecognized net gain or loss resulting from actual experience different from that assumed and from changes in assumptions (excluding asset gains and losses not yet reflected in market-related value) is included as a component of net periodic benefit cost for the year. If, as of the beginning of the year, the unrecognized net gain or loss exceeds 10 percent of the greater of the projected benefit obligation and the market-related value of plan assets, then the amortization is the excess divided by the average remaining service period of participating employees expected to receive benefits under the plan.
The pre-tax amounts not yet recognized in net periodic pension costs, but rather recognized in the accumulated other comprehensive loss line item within the accompanying balance sheets as of December 31, 2024, and 2023, totaled $1.5 million and $3.3 million, respectively, and related to unrecognized actuarial losses.
The pension liability adjustments recognized in other comprehensive income during 2024, 2023, and 2022, were as follows:
For the Years Ended December 31,
202420232022
(in thousands)
Net actuarial gain$1,681 $1,737 $10,327 
Amortization of net actuarial loss46 68 931 
Settlements124 — — 
Total pension liability adjustment, pre-tax1,851 1,805 11,258 
Tax expense(405)(390)(2,431)
Total pension liability adjustment, net$1,446 $1,415 $8,827 
Components of Net Periodic Benefit Cost for the Pension Plans
For the Years Ended December 31,
202420232022
(in thousands)
Components of net periodic benefit cost:
Service cost$3,652 $3,706 $4,652 
Interest cost3,209 3,2002,314 
Expected return on plan assets that reduces periodic pension benefit cost(3,147)(2,340)(1,711)
Amortization of net actuarial loss46 68 931 
Net periodic benefit cost3,760 4,634 6,186 
Settlements124 — — 
Total net benefit cost$3,884 $4,634 $6,186 
Pension Plan Assumptions
The weighted-average assumptions used to measure the Company’s projected benefit obligation are as follows:
As of December 31,
20242023
Projected benefit obligation:
Discount rate5.6%5.0%
Rate of compensation increase3.5%3.5%
The weighted-average assumptions used to measure the Company’s net periodic benefit cost are as follows:
For the Years Ended December 31,
202420232022
Net periodic benefit cost:
Discount rate5.1%5.2%3.1%
Expected return on plan assets (1)
6.5%6.3%3.6%
Rate of compensation increase3.5%3.5%4.8%
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(1)There is no assumed expected return on plan assets for the Nonqualified Pension Plan because there are no plan assets in the Nonqualified Pension Plan.
The Company’s pension investment policy includes various guidelines and procedures designed to ensure that assets are prudently invested in a manner necessary to meet the future benefit obligation of the Pension Plans. The policy prohibits the direct investment of plan assets in the Company’s securities. The Qualified Pension Plan’s investment horizon is long-term and accordingly
the target asset allocations encompass a strategic, long-term perspective of capital markets, expected risk and return behavior and perceived future economic conditions. The key investment principles of diversification, assessment of risk, and targeting of expected returns for given levels of risk are applied.
The Qualified Pension Plan’s investment portfolio contains a diversified blend of investments, which may reflect varying rates of return. The investments are further diversified within each asset classification. This portfolio diversification provides protection against a single security or class of securities having a disproportionate impact on aggregate investment performance. The actual asset allocations are reviewed and rebalanced on a periodic basis to maintain the target allocations.
The weighted-average asset allocation of the Qualified Pension Plan is as follows:
TargetAs of December 31,
Asset Category202520242023
Equity securities30.0 %41.0 %43.0 %
Fixed income securities50.0 %40.3 %25.5 %
Other securities20.0 %18.7 %31.5 %
Total100.0 %100.0 %100.0 %
There is no asset allocation of the Nonqualified Pension Plan since there are no plan assets in the plan. The assumption of the expected long-term rate of return on plan assets of the Qualified Pension Plan is based upon the target asset allocation and is determined using forward-looking assumptions in the context of historical returns and volatilities for each asset class, as well as correlations among asset classes. The Company evaluates the expected rate of return on plan assets assumption on an annual basis.
Pension Plan Assets
The fair values of the Company’s Qualified Pension Plan assets utilizing the fair value hierarchy discussed in Note 8 – Fair Value Measurements are as follows:
Fair Value Measurements Using:
Actual Asset Allocation (1)
TotalLevel 1 InputsLevel 2 InputsLevel 3 Inputs
(in thousands)
As of December 31, 2024
Equity securities:
Domestic (2)
19.5 %$11,128 $7,149 $3,979 $— 
International (3)
21.5 %12,236 12,236 — — 
Total equity securities41.0 %23,364 19,385 3,979 — 
Fixed income securities:
Core fixed income (4)
40.3 %22,973 22,973 — — 
Total fixed income securities40.3 %22,973 22,973 — — 
Other securities:
Real estate (5)
3.3 %1,878 — — 1,878 
Collective investment trusts (6)
6.1 %3,507 — 3,507 — 
Hedge fund (7)
9.3 %5,313 1,707 — 3,606 
Total other securities18.7 %10,698 1,707 3,507 5,484 
Total investments100.0 %$57,035 $44,065 $7,486 $5,484 
As of December 31, 2023
Equity securities:
Domestic (2)
20.3 %$9,280 $6,097 $3,183 $— 
International (3)
22.7 %10,349 10,349 — — 
Total equity securities43.0 %19,629 16,446 3,183 — 
Fixed income securities:
Core fixed income (4)
25.5 %11,646 11,646 — — 
Total fixed income securities25.5 %11,646 11,646 — — 
Other securities:
Real estate (5)
4.6 %2,116 — — 2,116 
Collective investment trusts (6)
13.6 %6,206 — 6,206 — 
Hedge fund (7)
13.3 %6,095 1,498 — 4,597 
Total other securities31.5 %14,417 1,498 6,206 6,713 
Total investments100.0 %$45,692 $29,590 $9,389 $6,713 
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(1)Percentages may not calculate due to rounding.
(2)Level 1 equity securities consist of United States large and small capitalization companies, which are actively traded securities that can be sold on demand. Level 2 equity securities are investments in collective investment funds that are valued at net asset value based on the value of the underlying investments and total units outstanding on a daily basis. The objective of these funds is to approximate the S&P 500 by investing in one or more collective investment funds.
(3)International equity securities consist of a well-diversified portfolio of holdings of mostly large issuers organized in developed countries with liquid markets, commingled with investments in equity securities of issuers located in emerging markets that are believed to have strong sustainable financial productivity at attractive valuations.
(4)The objective of core fixed income funds is to achieve value added from sector or issue selection by constructing a portfolio to approximate the investment results of the Barclay’s Capital Aggregate Bond Index with a modest amount of variability in duration around the index.
(5)The investment objective of direct real estate is to provide current income with the potential for long-term capital appreciation. Ownership in real estate entails a long-term time horizon, periodic valuations, and potentially low liquidity.
(6)Collective investment trusts invest in short-term investments and are valued at the net asset value of the collective investment trust. The net asset value, as provided by the trustee, is used as a practical expedient to estimate fair value. The net asset value is based on the fair value of the underlying investments held by the fund less its liabilities.
(7)The hedge fund portfolio includes investments in actively traded global mutual funds that focus on alternative investments and a hedge fund of funds that invests both long and short using a variety of investment strategies.
The following is a summary of the changes in Level 3 plan assets (in thousands):
Balance at January 1, 2023$6,797 
Purchases— 
Realized gain on assets364 
Unrealized loss on assets(448)
Disposition— 
Balance at December 31, 2023$6,713 
Purchases— 
Realized gain on assets282 
Unrealized loss on assets(110)
Disposition(1,401)
Balance at December 31, 2024$5,484 
Contributions
The Company contributed $10.5 million, $10.0 million, and $6.0 million to the Pension Plans during the years ended December 31, 2024, 2023, and 2022, respectively. The Company expects to make an $8.2 million contribution to the Pension Plans in 2025.
Benefit Payments
The Pension Plans made actual benefit payments of $2.7 million, $4.9 million, and $2.0 million during the years ended December 31, 2024, 2023, and 2022, respectively. Expected benefit payments over the next 10 years are as follows:
For the Years Ending December 31,Amount
(in thousands)
2025$9,726 
2026$7,606 
2027$5,233 
2028$4,880 
2029$4,637 
2030 through 2034$26,858