Annual report pursuant to Section 13 and 15(d)

Retirement Plans and Related Post Retirement Benefits

v3.10.0.1
Retirement Plans and Related Post Retirement Benefits
 12 Months Ended
Dec. 31, 2018
Retirement Benefits [Abstract]  
Retirement Plans and Related Post Retirement Benefits RETIREMENT PLANS AND RELATED POST RETIREMENT BENEFITS
The Company has two non-qualified supplemental retirement defined benefit plans (“SERP” and “SERP II”) for certain current and retired executive officers. The accumulated benefit obligation of the plans as of December 31, 2018 and 2017 amounts to $21.0 million and $22.7 million, respectively.
The Plans provide for benefits based upon average annual compensation and years of service and in the case of SERP, there are offsets for social security and profit sharing benefits. It is the Company’s intent to fund the plans as plan benefits become payable, since no assets exist at December 31, 2018 or 2017 for either of the plans.
The Company accounts for the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of its pension plans in accordance with the recognition and disclosure provisions of ASC Topic 715, Compensation, Retirement Benefits, which requires the Company to recognize the funded status in its balance sheet, with a corresponding adjustment to AOCI, net of tax. These amounts will be subsequently recognized as net periodic pension cost pursuant to the Company’s historical policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in the same periods will be recognized as a component of AOCI. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in AOCI.
Unrecognized prior service costs of $2.5 million ($3.1 million net of $0.6 million in taxes) and unrecognized actuarial losses of $3.2 million ($4.1 million net of $0.9 million in taxes) are included in AOCI at December 31, 2018 and have not yet been recognized in net periodic pension cost. The prior service cost included in AOCI that is expected to be recognized in net periodic pension cost during the fiscal year-ended December 31, 2019 is $0.3 million ($0.4 million net of $0.1 million in taxes). The actuarial loss included in AOCI expected to be recognized in net periodic pension cost during the fiscal year-ended December 31, 2019 is $0.2 million ($0.3 million net of $0.1 million in taxes).
The reconciliation of the beginning and ending balances of the projected benefit obligation of the plans for the years ended December 31 is as follows:
(In thousands) 2018 2017
Funded Status
Projected Benefit Obligation
Beginning of the Year — January 1 $ 25,141  $ 21,533 
Service Cost 200  186 
Interest Cost 899  897 
Actuarial (Gain) Loss (3,922) 2,873 
Benefits Paid (348) (348)
End of the Year — December 31 $ 21,970  $ 25,141 
The assumptions used to calculate the projected benefit obligation as of December 31 are as follows:
2018 2017
Discount Rate 4.20%    3.60%   
Future Average Compensation Increases 2.00%    2.00% - 3.00%  
The plans are unfunded at December 31, 2018 and are recognized in the accompanying Consolidated Balance Sheets as a current accrued pension liability of $0.4 million and a long-term accrued pension liability of $21.6 million. This also is the expected future contribution to the plan, since the plan is unfunded.
The following table summarizes the components of the net periodic cost for the years ended December 31:
(In thousands) 2018 2017 2016
Net Periodic Cost
Service Cost — Benefits Earned During Period $ 200  $ 186  $ 173 
Interest Cost 899  897  901 
Amortization of Prior Service Cost 386  387  413 
Amortization of Losses 629  369  343 
Net Periodic Cost $ 2,114  $ 1,839  $ 1,830 
The assumptions used to determine the net periodic cost are as follows:
2018 2017 2016
Discount Rate 3.60%    4.20%    4.45%   
Future Average Compensation Increases 2.00% - 3.00%   3.00% - 5.00%   3.00% - 5.00%  
The Company expects the benefits to be paid in each of the next five years to be $0.3 million and $4.1 million in the aggregate for the next five years after that. This also is the expected Company contribution to the plans.
Participants in SERP are entitled to paid medical, dental and long-term care insurance benefits upon retirement under the plan. The measurement date for determining the plan obligation and cost is December 31.
The reconciliation of the beginning and ending balances of the accumulated postretirement benefit obligation for the years ended December 31, is as follows:
(In thousands) 2018 2017
Funded Status
Accumulated Postretirement Benefit Obligation
Beginning of the Year — January 1 $ 1,307  $ 1,021 
Service Cost 16  7 
Interest Cost 46  41 
Actuarial (Gain) Loss (162) 307 
Benefits Paid (71) (69)
End of the Year — December 31 $ 1,136  $ 1,307 
The assumptions used to calculate the accumulated post-retirement benefit obligation as of December 31 are as follows:
2018 2017
Discount Rate 4.20%    3.60%   
The following table summarizes the components of the net periodic cost for the years ended December 31 as follows:
(In thousands) 2018 2017 2016
Net Periodic Cost
Service Cost — Benefits Earned During Period $ 16  $ 7  $ 5 
Interest Cost 46  41  40 
Amortization of Prior Service Cost 16  16  24 
Amortization of Losses 59  31  22 
Net Periodic Cost $ 137  $ 95  $ 91 
The assumptions used to determine the net periodic cost are as follows:
2018 2017 2016
Discount Rate 3.60%    4.20%    4.45%   
Future Average Healthcare Benefit Increases 5.38%    5.50%    5.72%   
Unrecognized prior service of less than $0.1 million and unrecognized actuarial losses of $0.4 million for medical, dental and long-term care insurance benefits (net of taxes of $0.1 million) are included in AOCI at December 31, 2018 and have not been recognized in net periodic cost. The Company estimates that the prior service costs and net losses in AOCI as of December 31, 2018 that will be recognized as components of net periodic benefit cost during the year ended December 31, 2019 for the Plan will be insignificant. For measurement purposes, a 5.2% increase in the cost of health care benefits was assumed for 2019 and 2020, respectively, and a range between 4.3% and 6.1% from 2020 through 2070. A one percentage point increase or decrease in this rate would change the post retirement benefit obligation by less than $0.1 million. The plan is recognized in the accompanying Consolidated Balance Sheets as a current accrued pension liability of less than $0.1 million and a long-term accrued pension liability of $1.1 million. The Company expects the benefits to be paid in each of the next five years to be less than $0.1 million per year and approximately $0.4 million in the aggregate for the next five years after that. This also is the expected Company contribution to the plan, as it is unfunded.
The Company is a participating employer in a trustee-managed multiemployer defined benefit pension plan for employees who participate in collective bargaining agreements. The plan generally provides retirement benefits to employees based on years of service to the Company. Contributions are based on the hours worked and are expensed on a current basis. The Plan is 91.9% funded as of January 1, 2018. The Company’s contributions to the plan were $1.1 million in each of 2018, 2017 and 2016. These contributions represent less than 1% of total contributions to the plan.