Annual report pursuant to Section 13 and 15(d)

PENSION AND OTHER RETIREMENTS BENEFITS (Tables)

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PENSION AND OTHER RETIREMENTS BENEFITS (Tables)
 12 Months Ended
Dec. 31, 2021
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) From June 26, 2020 to (Predecessor)
Year Ended December 31, 2021 From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020
Accumulated benefit obligations $ 20,314  $ 41,112  $ 39,792 
Changes in projected benefit obligations:
Projected benefit obligations at beginning of year $ 41,112  $ 39,879  $ 37,854 
Service cost 63  94  41 
Interest cost 1,047  545  593 
Actuarial (gain) loss (1,054) 1,568  1,826 
Benefits paid (20,854) (974) (435)
Projected benefit obligations at end of year 20,314  41,112  39,879 
Change in plans’ assets:
Fair value of plans’ assets at beginning of year 33,058  30,674  30,213 
Actual returns on plans’ assets 372  3,195  732 
Employee contributions 326  163  163 
Benefits paid (20,854) (974) (434)
Fair value of plans’ assets at end of year 12,902  33,058  30,674 
Net pension liability $ (7,412) $ (8,054) $ (9,205)
Schedule of Amounts Recognized in Balance Sheet
Amounts recognized in the Company’s consolidated and combined balance sheets consisted of (in thousands):
(Successor) (Predecessor)
Year Ended December 31, 2021 From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020
Other assets $ 2,367  $ 2,238  $ 512 
Accrued expenses and other current liabilities (488) (374) (373)
Other liabilities (9,291) (9,918) (9,344)
Net amount recognized $ (7,412) $ (8,054) $ (9,205)
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)
Year Ended December 31, 2021 From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020
Prior service cost $ —  $ —  $ 169 
Net actuarial (gain) loss (207) (620) 13,997 
$ (207) $ (620) $ 14,166 
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)
Year Ended December 31, 2021 From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020
Net actuarial loss $ 527  $ —  $ 1,912 
Amortization of prior service costs —  —  (33)
Amortization of actuarial loss (36) —  (276)
Total loss recognized in other comprehensive income $ 491  $ —  $ 1,603 
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)
Year Ended December 31, 2021 From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020		 Year Ended December 31, 2019
Service cost $ 63  $ 94  $ 41  $ 692 
Interest cost 1,047  545  593  1,410 
Expected return on plan assets (1,310) (783) (817) (1,462)
Amortization of prior service cost —  —  33  149 
Amortization of net actuarial loss 36  —  276  1,332 
Settlement/curtailment (income) expense (644) (25) —  317 
Net periodic benefit (credit) cost $ (808) $ (169) $ 126  $ 2,438 
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)
Year Ended December 31, 2021 From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020		 Year Ended December 31, 2019
Cost of goods sold $ —  $ —  $ —  $ 614 
Selling, general and administrative expense 63  69  41  1,824 
Other income (expense), net (871) (238) 85  — 
Net periodic benefit (credit) cost $ (808) $ (169) $ 126  $ 2,438 
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)
Year Ended December 31, 2021 From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020
Weighted-average assumptions used to determine benefit obligation at year end:
Discount rate (1) 2.38  % 2.61  % 2.85  %
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate 2.61  % 2.85  % 3.25  %
Expected long-term rate of return on plan assets 4.90  % 5.25  % 5.50  %
(1) The discount rate assumption used to determine the benefit obligation at December 31, 2021 was based on blended 7 year and 15 year duration annuity purchase contracts.
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)
Year Ended December 31, 2021 From June 26, 2020 to December 31, 2020 From January 1, 2020 to
June 25, 2020
Weighted-average assumptions used to determine benefit obligation at year end:
Discount rate 2.78  % 2.42  % 2.64  %
Rate of compensation increase 3.50  % 3.50  % 3.50  %
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate 2.42  % 2.64  % 3.25  %
Rate of compensation increase 3.50  % 3.50  % 3.50  %
Schedule of Target Allocation and Fair Value of Plan Assets
The plan had the following target ranges for the asset classes as shown below. The ranges were intended to allow flexibility for allocating assets and rebalancing as needed depending on changes in market values and the investment environment. The strategy utilized was regularly reviewed by the plan’s investment committee, which could have made adjustments to the allocations when allocations fell 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, 2021 and December 31, 2020, using the fair value hierarchy established under ASC Topic 820 and as described in Note 9. 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, 2021
Level 1 Level 2 Level 3 Total
Pension plan assets measured at fair value:
Cash and cash equivalents $ 325  $ —  $ —  $ 325 
U.S. Government securities —  6,283  —  6,283 
Corporate bonds —  6,283  —  6,283 
Total pension plan assets measured at fair value $ 325  $ 12,566  $ —  $ 12,891 
Pension plan assets measured at NAV as a practical expedient (1) 11 
Total pension plan assets $ 12,902 
(1)    Certain 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, 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.
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
2022 $ 535  $ 488 
2023 515  482 
2024 514  497 
2025 507  503 
2026 501  563 
2027-2031 2,572  2,922