XML 33 R18.htm IDEA: XBRL DOCUMENT v3.22.4
RETIREMENT AND DEFERRED COMPENSATION PLANS
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
RETIREMENT AND DEFERRED COMPENSATION PLANS RETIREMENT AND DEFERRED COMPENSATION PLANS
We have various noncontributory retirement plans covering certain of our domestic and foreign employees. Benefits under our retirement plans are based on participants’ years of service and annual compensation as defined by each plan. Annual cash contributions to fund pension costs accrued under our domestic plans are generally at least equal to the minimum funding amounts required by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Certain pension commitments under our foreign plans are also funded according to local requirements or at our discretion.
Effective January 1, 2021, our domestic noncontributory retirement plans were closed to new employees and employees who were rehired after December 31, 2020. These employees are instead eligible for additional contribution to their defined contribution 401(k) employee savings plan. All domestic employees with hire/rehire dates prior to January 1, 2021 are still eligible for the domestic pension plans and continue to accrue plan benefits after this date.
The following table presents the changes in the benefit obligations and plan assets for the most recent two years for our domestic and foreign plans.
Domestic PlansForeign Plans
2022202120222021
Change in benefit obligation:
Benefit obligation at beginning of year$255,457 $272,471 $123,386 $134,426 
Service cost15,784 16,356 7,547 8,159 
Interest cost6,970 6,366 1,388 843 
Curtailment/Settlement— — 68 5 
Prior service cost— — 813 — 
Actuarial gain(92,724)(18,526)(26,826)(6,489)
Benefits paid(21,615)(21,210)(4,615)(4,555)
Foreign currency translation adjustment— — (7,762)(9,003)
Benefit obligation at end of year$163,872 $255,457 $93,999 $123,386 
Domestic PlansForeign Plans
2022202120222021
Change in plan assets:
Fair value of plan assets at beginning of year$193,770 $192,034 $85,421 $85,087 
Actual return on plan assets(25,517)22,480 (4,897)2,811 
Employer contribution15,513 466 1,871 7,966 
Benefits paid(21,615)(21,210)(4,615)(4,555)
Transfer— — — 124 
Foreign currency translation adjustment— — (5,257)(6,012)
Fair value of plan assets at end of year$162,151 $193,770 $72,523 $85,421 
Funded status at end of year$(1,721)$(61,687)$(21,476)$(37,965)
The following table presents the funded status amounts recognized in our Consolidated Balance Sheets as of December 31, 2022 and 2021.
Domestic PlansForeign Plans
2022202120222021
Non-current assets$9,304 $— $— $1,832 
Current liabilities(515)(500)(31)(33)
Non-current liabilities(10,510)(61,187)(21,445)(39,764)
$(1,721)$(61,687)$(21,476)$(37,965)
The following table presents the amounts not recognized as components of periodic benefit cost that are recognized in accumulated other comprehensive (gain) loss as of December 31, 2022 and 2021.
Domestic PlansForeign Plans
2022202120222021
Net actuarial (gain) loss$(3,338)$57,627 $11,383 $32,269 
Net prior service cost— — 1,150 509 
Tax effects2,271 (12,873)(5,518)(11,049)
$(1,067)$44,754 $7,015 $21,729 
Changes in benefit obligations and plan assets recognized in other comprehensive income in 2022, 2021 and 2020 are as follows:
Domestic Plans
202220212020
Current year actuarial gain (loss)$54,295 $28,714 $(33,335)
Amortization of net loss6,670 10,099 5,684 
$60,965 $38,813 $(27,651)
Foreign Plans
202220212020
Current year actuarial gain (loss)$19,181 $6,257 $(2,530)
Current year prior service cost(818)— 2,701 
Transfer actuarial loss17 — — 
Amortization of net loss1,688 2,325 2,121 
Amortization of prior service cost177 166 398 
$20,245 $8,748 $2,690 
Components of net periodic benefit cost:
Domestic Plans
202220212020
Service cost$15,784 $16,356 $14,278 
Interest cost6,970 6,366 7,046 
Expected return on plan assets(12,912)(12,293)(12,248)
Amortization of net loss6,670 10,099 5,684 
Net periodic benefit cost$16,512 $20,528 $14,760 
Foreign Plans
202220212020
Service cost$7,547 $8,159 $7,311 
Interest cost1,388 843 1,410 
Expected return on plan assets(2,728)(2,838)(2,620)
Amortization of net loss1,688 2,325 2,121 
Amortization of prior service cost177 166 398 
Net periodic benefit cost$8,072 $8,655 $8,620 
Curtailment(24)5 (8)
Total Net periodic benefit cost$8,048 $8,660 $8,612 
The accumulated benefit obligation (“ABO”) for our domestic defined benefit pension plans was $152.4 million and $236.3 million at 2022 and 2021, respectively. The ABO for our foreign defined benefit pension plans was $73.8 million and $96.0 million at December 31, 2022 and 2021, respectively.
The following table provides the projected benefit obligation (“PBO”), ABO, and fair value of plan assets for all pension plans with an ABO in excess of plan assets as of December 31, 2022 and 2021.
Domestic PlansForeign Plans
2022202120222021
Projected benefit obligation$11,025 $255,457 $54,455 $89,595 
Accumulated benefit obligation10,087 236,295 40,481 63,614 
Fair value of plan assets— 193,770 34,446 49,916 
The following table provides the PBO, ABO and fair value of plan assets for all pension plans with a PBO in excess of plan assets as of December 31, 2022 and 2021.
Domestic PlansForeign Plans
2022202120222021
Projected benefit obligation$11,025 $255,457 $71,730 $97,221 
Accumulated benefit obligation10,087 236,295 52,173 69,630 
Fair value of plan assets— 193,770 47,236 56,228 
Assumptions:
Domestic PlansForeign Plans
202220212020202220212020
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate5.15 %2.75 %2.40 %3.69 %1.09 %0.54 %
Rate of compensation increase3.20 %3.17 %3.19 %3.21 %3.05 %3.05 %
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate2.75 %2.40 %3.20 %1.20 %0.66 %1.12 %
Expected long-term return on plan assets7.00 %7.00 %7.00 %3.53 %3.56 %3.59 %
Rate of compensation increase3.20 %3.17 %4.00 %3.20 %3.05 %3.05 %
We develop the expected long-term rate of return assumptions based on historical experience and by evaluating input from the plans’ asset managers, including the managers’ review of asset class return expectations and benchmarks, economic indicators and long-term inflation assumptions.
In order to determine the 2023 net periodic benefit cost, we expect to use the December 31, 2022 discount rates, December 31, 2022 rates of compensation increase assumptions and the same assumed long-term returns on domestic and foreign plan assets used for the 2022 net periodic benefit cost.
Our domestic and foreign pension plan weighted-average asset allocations at December 31, 2022 and 2021 by asset category are as follows:
Plan Assets:
Domestic Plans Assets at December 31,Foreign Plans Assets at December 31,
2022202120222021
Equity securities47 %48 %5 %6 %
Fixed income securities27 %27 %1 %1 %
Corporate debt securities— — 1 %2 %
Infrastructure8 %8 %— — 
Hedge funds10 %11 %— — 
Money market1 %1 %1 %1 %
Investment Funds— — 92 %90 %
Real estate7 %5 %— — 
Total100 %100 %100 %100 %
Our investment strategy for our domestic and foreign pension plans is to maximize the long-term rate of return on plan assets within an acceptable level of risk. The investment policy strives to have assets sufficiently diversified so that adverse or unexpected results from one security type will not have an unduly detrimental impact on the entire portfolio and accordingly, establishes a target allocation for each asset category within the portfolio. The domestic plan asset allocation is reviewed on a quarterly basis and the foreign plan asset allocation is reviewed annually. Rebalancing occurs as needed to comply with the investment strategy. The domestic plan target allocation for 2023 is 58% equity securities and 42% fixed income securities and infrastructure. The foreign plan target allocation for 2023 is 100% investment funds.
Authoritative guidelines require the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:
•Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.
•Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
•Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.
Domestic Fair Value Measurement at December 31, 2022Foreign Fair Value Measurement at December 31, 2022
(In Thousands $)Total(Level 1)(Level 2)(Level 3)Total(Level 1)(Level 2)(Level 3)
Cash and Short-term Securities (a)$1,260 $1,260 $— $— $516 $516 $— $— 
USD— 1,260 — — — — — — 
EUR— — — — — 505 — — 
Others— — — — — 11 — — 
Equity Securities (a)$66,338 $66,338 $— $— $3,769 $3,769 $— $— 
U.S. Large Cap Equities— 37,537 — — — — — — 
U.S. Small Cap Equities— 7,918 — — — — — — 
International Equities— 20,883 — — — 3,769 — — 
Fixed Income (a)(b)$28,443 $28,443 $— $— $723 $723 $— $— 
Corporate debts securities$— $— $— $— $1,135 $1,135 $— $— 
Euro Corporate Bonds (a)— — — — — 1,135 — — 
Investment Funds$— $— $— $— $66,380 $21,952 $44,428 $— 
Mutual Funds in Equities (a)— — — — — 5,221 — — 
Mutual Funds in Bonds (a)— — — — — 15,901 — — 
Mutual Funds Diversified (a)(b)— — — — — 830 44,428 — 
Total Investments in Fair Value Hierarchy$96,041 $96,041 $— $— $72,523 $28,095 $44,428 $— 
Investments at Net Asset Value per Share66,110 — — — — — — — 
Total Investments$162,151 $96,041 $— $— $72,523 $28,095 $44,428 $— 
Domestic Fair Value Measurement at December 31, 2021Foreign Fair Value Measurement at December 31, 2021
(In Thousands $)Total(Level 1)(Level 2)(Level 3)Total(Level 1)(Level 2)(Level 3)
Cash and Short-term Securities (a)$1,864 $1,864 $— $— $547 $547 $— $— 
USD— 1,864 — — — — — — 
EUR— — — — — 539 — — 
Others— — — — — 8 — — 
Equity Securities (a)$82,927 $82,927 $— $— $4,881 $4,881 $— $— 
U.S. Large Cap Equities— 49,637 — — — — — — 
U.S. Small Cap Equities— 9,112 — — — — — — 
International Equities— 24,178 — — — 4,881 — — 
Fixed Income (a)(b)$34,584 $34,584 $— $— $772 $772 $— $— 
Corporate debts securities$— $— $— $— $1,413 $1,413 $— $— 
Euro Corporate Bonds (a)— — — — — 1,413 — — 
Investment Funds$— $— $— $— $77,808 $26,381 $51,427 $— 
Mutual Funds in Equities (a)— — — — — 4,576 — — 
Mutual Funds in Bonds (a)— — — — — 20,810 — — 
Mutual Funds Diversified (a)(b)— — — — — 995 51,427 — 
Total Investments in Fair Value Hierarchy$119,375 $119,375 $— $— $85,421 $33,994 $51,427 $— 
Investments at Net Asset Value per Share74,395 — — — — — — — 
Total Investments$193,770 $119,375 $— $— $85,421 $33,994 $51,427 $— 
(a)Based on third party quotation from financial institution.
(b)Based on observable market transactions.
Contributions
Annual cash contributions to fund pension costs accrued under our domestic plans are generally at least equal to the minimum funding amounts required by ERISA. We contributed $15.5 million to our domestic defined benefit plans in 2022 and although we have no minimum funding requirement, we plan to contribute approximately $0.5 million to pay our ongoing SERP annuity contracts in 2023. Contributions to fund pension costs accrued under our foreign plans are made in accordance with local laws or at our discretion. We contributed approximately $1.9 million to our foreign defined benefit plan in 2022 and expect to contribute approximately $0.5 million in 2023.
Estimated Future Benefit Payments
As of December 31, 2022, we expect the plans to make the following estimated benefit payments relating to our defined benefit plans over the next ten years:
Domestic PlansForeign Plans
2023$10,184 $2,652 
202410,948 4,781 
202511,241 6,658 
202612,743 5,136 
202711,828 7,700 
2028 - 203270,372 38,262 
Other Plans
We have a non-qualified supplemental pension plan for domestic employees which provides for pension amounts that would have been payable from our principal domestic pension plan if it were not for limitations imposed by income tax regulations. The liability for this plan, which is not funded, was $11.0 million and $14.9 million at December 31, 2022 and 2021, respectively. This amount is included in the liability for domestic plans shown above.
We have a defined contribution 401(k) employee savings plan ("401(k) plan") available to substantially all domestic employees. Company matching contributions are made in cash up to a maximum of 3% of the participating employee’s salary subject to income tax regulations. For each of the years ended December 31, 2022, 2021 and 2020, total contributions made to these plans were approximately $5.0 million, $4.5 million and $4.3 million, respectively. As discussed above, domestic employees hired after December 31, 2020 will no longer be eligible for the pension plans and will instead receive an annual Aptar Retirement Savings Account contribution of 5% of their eligible earnings in the 401(k) plan. For the years ended December 31, 2022 and 2021, total contributions for these eligible employees was approximately $2.0 million and $0.7 million, respectively.
We have several foreign defined contribution plans, which require us to contribute a percentage of the participating employee’s salary according to local regulations. For each of the years ended December 31, 2022, 2021 and 2020, total contributions made to these plans were approximately $2.9 million, $2.9 million and $2.4 million, respectively.
We have no additional postretirement or postemployment benefit plans.