Annual report pursuant to Section 13 and 15(d)

PENSION AND OTHER RETIREMENTS BENEFITS (Tables)

v3.20.4
PENSION AND OTHER RETIREMENTS BENEFITS (Tables)
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Funded Status of Company's Defined Benefit Pension Plans
The following table reconciles the funded status of the Company’s defined benefit pension plans (in thousands):
(Successor) (Predecessor)
From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020		 Year Ended December 31, 2019
Accumulated benefit obligations $ 41,112  $ 39,792  $ 37,847 
Changes in projected benefit obligations:
Projected benefit obligations at beginning of year $ 39,879  $ 37,854  $ 34,000 
Service cost 94  41  692 
Interest cost 545  593  1,410 
Actuarial loss 1,568  1,826  5,236 
Benefits paid (974) (435) (1,019)
Liability gain due to curtailment —  —  (2,465)
Projected benefit obligations at end of year 41,112  39,879  37,854 
Change in plans’ assets:
Fair value of plans’ assets at beginning of year 30,674  30,213  25,800 
Actual returns on plans’ assets 3,195  732  5,112 
Employee contributions 163  163  320 
Benefits paid (974) (434) (1,019)
Fair value of plans’ assets at end of year 33,058  30,674  30,213 
Net pension liability $ (8,054) $ (9,205) $ (7,641)
Schedule of Amounts Recognized in Balance Sheet
Amounts recognized in the Company’s consolidated and combined balance sheets consisted of (in thousands):
(Successor) (Predecessor)
From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020		 Year Ended December 31, 2019
Other assets $ 2,238  $ 512  $ 1,375 
Accrued expenses and other current liabilities (374) (373) (370)
Other liabilities (9,918) (9,344) (8,646)
Net amount recognized $ (8,054) $ (9,205) $ (7,641)
Schedule of Net Periodic Benefit Cost Not yet Recognized
Amounts recognized in accumulated other comprehensive income (loss), net of tax, which have not yet been recognized as a component of net periodic pension expense for the Company’s funded defined benefit pension plans, are as follows (in thousands):
(Successor) (Predecessor)
From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020		 Year Ended December 31, 2019
Prior service cost $ —  $ 169  $ 201 
Net actuarial (gain) loss (620) 13,997  12,362 
$ (620) $ 14,166  $ 12,563 
Schedule of Amounts Recognized in Other Comprehensive Income (Loss)
The components of the changes in unrecognized amounts included in pension obligation, net in other comprehensive income (loss) for the Company’s defined benefit pension plans were as follows (in thousands):
(Successor) (Predecessor)
From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020		 Year Ended December 31, 2019
Net actuarial (gain) loss $ —  $ 1,912  $ (879)
Prior service credit —  —  (316)
Amortization of prior service costs —  (33) (149)
Amortization of actuarial loss —  (276) (1,332)
Total (gain) loss recognized in other comprehensive income $ —  $ 1,603  $ (2,676)
Components of Net Periodic Benefit (Credit) Expense
The components of net periodic benefit (credit) cost for the Company’s defined benefit pension plans for the Successor and Predecessor were as follows (in thousands):
(Successor) (Predecessor)
From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020		 Year Ended December 31, 2019 Year Ended December 31, 2018
Service cost $ 94  $ 41  $ 692  $ 864 
Interest cost 545  593  1,410  1,320 
Expected return on plan assets (783) (817) (1,462) (1,507)
Amortization of prior service cost —  33  149  149 
Amortization of net actuarial loss —  276  1,332  1,344 
Settlement/curtailment expense (25) —  317  — 
Net periodic benefit (credit) cost $ (169) $ 126  $ 2,438  $ 2,170 
Net periodic benefit (credit) cost is reflected in the Company’s consolidated and combined financial statements as follows for the Successor and Predecessor periods presented (in thousands):
(Successor) (Predecessor)
From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020		 Year Ended December 31, 2019 Year Ended December 31, 2018
Cost of Goods Sold $ —  $ —  $ 614  $ 500 
Selling, general and administrative expense 69  41  1,824  1,670 
Other (expense) income, net (238) 85  —  — 
Net periodic benefit (credit) cost $ (169) $ 126  $ 2,438  $ 2,170 
Schedule of Assumptions for Benefit Obligations The following assumptions were used to determine the benefit obligation at year end and net periodic benefit (credit) cost during the year for the Company’s funded defined benefit pension plan:
(Successor) (Predecessor)
From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020		 Year Ended December 31, 2019
Weighted-average assumptions used to determine benefit obligation at year end:
Discount rate 2.61  % 2.85  % 3.25  %
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate 2.85  % 3.25  % 4.25  %
Expected long-term rate of return on plan assets 5.25  % 5.50  % 5.75  %
Rate of compensation increase —  % —  % 3.50  %
The following assumptions were used to determine the benefit obligation at year end and net periodic benefit (credit) cost during the year for the Company’s unfunded supplemental defined benefit pension plan:
(Successor) (Predecessor)
From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020		 Year Ended December 31, 2019
Weighted-average assumptions used to determine benefit obligation at year end:
Discount rate 2.42  % 2.64  % 3.25  %
Rate of compensation increase 3.50  % 3.50  % 3.50  %
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate 2.64  % 3.25  % 4.25  %
Rate of compensation increase 3.50  % 3.50  % 3.50  %
Schedule of Target Allocation and Fair Value of Plan Assets
The plan currently has the following target ranges for these asset classes as shown below. The ranges are intended to allow flexibility for allocating assets and rebalancing as needed depending on changes in market values and the investment environment. The strategy utilized is regularly reviewed by the plan’s investment committee, which may decide to make adjustments to the allocations when allocations fall outside the asset class range.
Target Ranges
Asset classes:
Cash equivalents and other
0% - 17%
Fixed income securities
45% - 100%
Equity securities
0% - 28%
The following tables set forth, by category, the Company’s pension plan assets as of December 31, 2020 and December 31, 2019, using the fair value hierarchy established under ASC Topic 820 and as described in Note 8. The fair value hierarchy in the tables excludes certain investments which are valued using Net Asset Value (“NAV”) as a practical expedient (in thousands):
Pension Plan Assets as of December 31, 2020
Level 1 Level 2 Level 3 Total
Pension plan assets measured at fair value:
Cash and cash equivalents $ 419  $ —  $ —  $ 419 
Mutual funds 5,374  442  —  5,816 
U.S. Government securities —  3,087  —  3,087 
Municipal/provincial bonds —  296  —  296 
Corporate bonds —  13,408  —  13,408 
Total pension plan assets measured at fair value $ 5,793  $ 17,233  $ —  $ 23,026 
Pension plan assets measured at NAV as a practical expedient (1) 10,032 
Total pension plan assets $ 33,058 
(1)    Certain common/collective trusts, investments in private equity funds and investments in real estate funds that are measured at fair value using the NAV per share practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the table above are intended to permit reconciliation of the fair value hierarchy to the total value of plan assets.
Pension Plan Assets as of December 31, 2019
Level 1 Level 2 Level 3 Total
Pension plan assets measured at fair value:
Cash and cash equivalents $ 398  $ —  $ —  $ 398 
Mutual funds 4,996  457  —  5,453 
U.S. Government securities —  2,697  —  2,697 
Municipal/provincial bonds —  322  —  322 
Corporate bonds —  12,578  —  12,578 
Total pension plan assets measured at fair value $ 5,394  $ 16,054  $ —  21,448 
Pension plan assets measured at NAV as a practical expedient (1) 8,765 
Total pension plan assets $ 30,213 
(1)    Certain common/collective trusts, investments in private equity funds and investments in real estate funds that are measured at fair value using the NAV per share practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the table above are intended to permit reconciliation of the fair value hierarchy to the total value of plan assets.
Schedule of Projected Benefit Payments The projected benefit payments for the funded qualified and unfunded non-qualified defined benefit pension plans are as follows (in thousands):
Qualified Pension Plan Non-qualified Pension Plans
2021 $ 968  $ 374 
2022 1,090  387 
2023 1,235  502 
2024 1,495  511 
2025 1,233  517 
2026-2030 7,233  2,920