Whole Earth Brands, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

PENSION BENEFITS

PENSION BENEFITS

9 Months Ended

Sep. 30, 2020

NOTE 10: PENSION BENEFITS

Certain current and former employees of the Company are covered under a funded 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 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 uses December 31 as a measurement date for the plan. The Company froze the pension plan on December 31, 2019.

The components of net periodic benefit (credit) cost for the Company’s defined benefit pension plan for the Successor and Predecessor were as follows (in thousands):


	(Successor)				(Predecessor)
	Three Months Ended September 30, 2020		From June 26, 2020 to September 30, 2020		From January 1, 2020 to June 25, 2020		Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Service cost	$	—	$	—	$	—	$	152	$	456
Interest cost	210		210		452		275		841
Expected return on plan assets	(392)		(392)		(818)		(365)		(1,096)
Recognized actuarial loss	—		—		108		276		828
Amortization of prior service cost	—		—		—		21		63
Net periodic benefit (credit) cost	$	(182)	$	(182)	$	(258)	$	359	$	1,092

Net periodic benefit (credit) cost is reflected in the Company’s consolidated financial statements as follows for the Successor and Predecessor periods presented (in thousands):


	(Successor)				(Predecessor)
	Three Months Ended September 30, 2020		From June 26, 2020 to September 30, 2020		From January 1, 2020 to June 25, 2020		Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Cost of Goods Sold	$	—	$	—	$	—	$	125	$	387
Selling, general and administrative expense	—		—		—		234		705
Other income, net	(182)		(182)		(258)		—		—
Net periodic benefit (credit) cost	$	(182)	$	(182)	$	(258)	$	359	$	1,092

The Company currently does not expect to make contributions to its funded defined benefit pension plan in 2020 due to the funded status.

In addition to the expense shown above, the Company has an unfunded supplemental benefit plan to provide certain salaried employees with additional retirement benefits due to limitations established by U.S. income tax regulation. The net periodic benefit cost for the three months ended September 30, 2020 and 2019 was $0.1 million and $0.2 million, respectively. The net periodic benefit cost for January 1, 2020 to June 25, 2020 and the nine months ended September 30, 2019 was $0.4 million and $0.5 million, respectively. The net periodic benefit cost for the period June 26, 2020 to June 30, 2020 was insignificant.