EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2018

During 2017, the Company sponsored two 401(k) savings plans for eligible employees. The plans allow participants to make pretax contributions and the Company matches certain percentages of those pretax contributions. The plans have a discretionary profit sharing portion and one of the plans matches 401(k) contributions with shares of the Company’s Common Stock. All amounts contributed to the plans are deposited into a trust fund administered by independent trustees. These plans were merged in January 2018. The merged plan allows participants to make pretax contributions and the Company matches certain percentages of those contributions which is made with shares of the Company’s stock. Additionally, this plan has a discretionary profit sharing portion. The Company provided for profit sharing contributions and matching 401(k) savings plan contributions of $825 and $3,153 in 2018, $395 and $2,594 in 2017, and $712 and $2,248 in 2016, respectively.

On June 1, 2018, the Company established an unfunded, nonqualified deferred compensation plan maintained for the benefit of a select group of management or highly compensated employees. Assets of the plan are held in a rabbi trust, which are subject to additional risk of loss in the event of bankruptcy or insolvency of the Company. The deferred compensation liability as of December 31, 2018 was $265 and is included in Other long-term obligations on the Company's balance sheet.

The Company also provides postretirement benefits in the form of an unfunded retirement medical plan under a collective bargaining agreement covering eligible retired employees of the Verona facility. The Company uses a December 31 measurement date for its postretirement medical plan. In accordance with ASC 715, “Compensation—Retirement Benefits,” the Company is required to recognize the over funded or underfunded status of a defined benefit post retirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position, and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. In addition, during 2016 the Company adopted an unfunded postretirement medical plan for Named Executive Officers.

The actuarial recorded liabilities for such unfunded postretirement benefits are as follows:

Change in benefit obligation:



	2018			2017
Benefit obligation at beginning of year	$	1,573		$	1,411
Initial adoption of new plan	—			—
Service cost with interest to end of year	78			67
Interest cost	44			46
Participant contributions	40			28
Benefits paid	(136		)	(58		)
Actuarial (gain)/loss	(425		)	79
Benefit obligation at end of year	$	1,174		$	1,573

Change in plan assets:



	2018			2017
Fair value of plan assets at beginning of year	$	—		$	—
Employer (reimbursement)/contributions	96			30
Participant contributions	40			28
Benefits paid	(136		)	(58		)
Fair value of plan assets at end of year	$	—		$	—

Amounts recognized in consolidated balance sheet:



	2018			2017
Accumulated postretirement benefit obligation	$	(1,174	)	$	(1,573	)
Fair value of plan assets	—			—
Funded status	(1,174		)	(1,573		)
Unrecognized prior service cost	N/A			N/A
Unrecognized net (gain)/loss	N/A			N/A
Net amount recognized in consolidated balance sheet (after ASC 715) (included in other long-term obligations)	$	1,174		$	1,573
Accrued postretirement benefit cost (included in other long-term obligations)	N/A			N/A

Components of net periodic benefit cost:



	2018			2017			2016
Service cost with interest to end of year	$	78		$	67		$	66
Interest cost	44			46			48
Amortization of prior service credit/(cost)	74			74			57
Amortization of (gain)/loss	(8		)	(15		)	(10		)
Total net periodic benefit cost	$	188		$	172		$	161

Estimated future employer contributions and benefit payments are as follows:



Year
2019	$	127
2020	89
2021	73
2022	90
2023	88
Years 2024-2028	497

Assumed health care cost trend rates have been used in the valuation of postretirement health insurance benefits. The trend rate is 6.26% in 2019 declining to 4.50% in 2038 and thereafter. A one percentage point increase in health care cost trend rates in each year would increase the accumulated postretirement benefit obligation as of December 31, 2018 by $100 and the net periodic postretirement benefit cost for 2018 by $19. A one percentage point decrease in health care cost trend rates in each year would decrease the accumulated postretirement benefit obligation as of December 31, 2018 by $86 and the net periodic postretirement benefit cost for 2018 by $16. The weighted average discount rate used in determining the accumulated postretirement benefit obligation was 3.50% in 2018 and 2.90% in 2017.

The Company contributes to one multiemployer defined benefit plan under the terms of a collective-bargaining agreement covering its union-represented employees of the Verona facility. The risks of participation in this multiemployer plan are different from single-employer plans in the following aspects: (a) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers, (b) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers, and (c) if the Company chooses to stop participating in its multiemployer plan, the Company will be required to pay that plan an amount based on the underfunded status of the plan, referred to as the withdrawal liability.

The Company’s participation in this plan for the annual period ended December 31, 2018 is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employee Identification Number (EIN). The zone status is based on information that the Company received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. The last column lists the expiration date of the collective-bargaining agreement to which the plan is subject. Finally, the period-to-period comparability of the contributions for 2018 and 2017 was affected by a 4.0% increase in the 2018 contribution rate. There have been no other significant changes that affect the comparability of 2018 and 2017 contributions. The Company does not represent more than 5% of the contributions to this pension fund.

Pension
Fund

EIN/Pension
Plan
Number

Pension Plan Protection Act Zone Status

FIP/RP Status

Pending/ Implemented

Contributions of Balchem Corporation

Surcharge
Imposed

Expiration Date of Collective-
Bargaining
Agreement

2018

2017

2018

2017

2016

Central States,

Southeast and

Southwest Areas

Pension Fund

36-6044243

Red as of 1/1/18

Red as of 1/1/17

Implemented

$614

$594

$576

7/11/2020