Quarterly report pursuant to Section 13 or 15(d)

PENSION BENEFITS

v3.22.2.2
PENSION BENEFITS
 9 Months Ended
Sep. 30, 2022
Retirement Benefits [Abstract]  
PENSION BENEFITS
NOTE 10: PENSION BENEFITS
Certain current and former employees of the Company are covered under a funded qualified defined benefit retirement plan. Plan provisions covering certain of the Company’s salaried employees generally provide pension benefits based on years of service and compensation. Plan provisions covering certain of the Company’s union members generally provide stated benefits for each year of credited service. The Company’s funding policy is to contribute annually the statutory required amount as actuarially determined. The Company froze the pension plan on December 31, 2019. In addition, the Company has unfunded non-qualified plans covering certain salaried employees with additional retirement benefits in excess of qualified plan limits imposed by federal tax law. The Company uses December 31 as a measurement date for the plans.
In February 2021, the Compensation Committee approved the termination of the Company’s qualified defined benefit retirement plan at Flavors & Ingredients. During the fourth quarter of 2021, the Company offered the option of receiving a lump sum payment to certain participants with vested benefits in lieu of receiving monthly annuity payments. Approximately 125 participants elected to receive the settlement, and lump sum payments of approximately $16.8 million were paid from plan assets to these participants in December 2021. The benefit obligation settled approximated payments to plan participants and a pre-tax settlement gain of $0.5 million was recorded in the fourth quarter of 2021.
On February 11, 2022, the Company purchased non-participating annuity contracts to settle the remaining liabilities of the plan for approximately $9.5 million which was fully funded by plan assets. The annuity contracts purchased resulted in a settlement gain of approximately $1.0 million that was recorded in the first quarter of 2022. The remaining surplus of the plan will be used, as prescribed in the applicable regulations, to fund future contributions to the defined contribution plan at Flavors & Ingredients. At September 30, 2022, the remaining surplus of the plan was approximately $2.6 million.
The components of net periodic benefit cost (credit) for the Company’s defined benefit pension plans was as follows (in thousands):
Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Service cost $ 10  $ 15  $ 30  $ 47 
Interest cost 66  259  260  778 
Expected return on plan assets 85  (398) 144  (1,197)
Recognized actuarial loss —  9  —  27 
Settlement gain (130) (97) (1,273) (97)
Net periodic benefit cost (credit) $ 31  $ (212) $ (839) $ (442)
Net periodic benefit cost (credit) is reflected in the Company’s condensed consolidated financial statements as follows (in thousands):
Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Selling, general and administrative expense $ 10  $ 15  $ 30  $ 47 
Other income, net 21  (227) (869) (489)
Net periodic benefit cost (credit) $ 31  $ (212) $ (839) $ (442)