Benefit Plans

v3.19.3.a.u2

Benefit Plans	12 Months Ended
	Dec. 31, 2019
Retirement Benefits [Abstract]
Benefit Plans	21. Benefit Plans: The Company sponsors defined benefit pension plans covering employees in the United States and certain employees at its foreign subsidiaries. Benefits for a majority of the plans are based on average final pay and years of service. The Company’s funding policy is to fund the minimum required contribution under local statutory requirements. The Company sponsors unfunded plans to provide certain health care benefits to retired employees in the United States and Canada. The plans pay a stated percentage of medical expenses reduced by deductibles and other coverage. The plans are unfunded and obligations are paid out of the Company’s operations. The Company also has defined benefit supplementary retirement plans which provide benefits for certain U.S. employees in excess of qualified plan limitations. The obligations are paid out of the Company’s general assets, including assets held in a Rabbi trust, or restoration plan assets. The Company uses a December 31 measurement date for all of its defined benefit pension, postretirement medical and supplementary retirement plans. The following discussion includes information for the Eco Services benefit plans for all periods presented, and the acquired PQ Holdings benefit plans beginning on the date of a former business combination. The Eco Services benefit plans include two defined benefit pension plans and one retiree health plan, all based in the U.S. The PQ Holdings benefit plans include a U.S. defined benefit pension plan as well as the defined benefit pension plans for all of the Company’s foreign subsidiaries, two retiree health plans (one each in the U.S and Canada), and the Company’s defined benefit supplementary retirement plans. Of the Company’s three defined benefit pension plans covering employees in the U.S., only the Eco Services Hourly Pension Plan continues to accrue benefits for certain participants; however, this plan will be frozen to future accruals as of December 31, 2020. All future accruals were frozen for the PQ Corporation Retirement Plan as of December 31, 2006 and for the Eco Services Pension Equity Plan as of December 31, 2016. With respect to the Company’s three retiree health plans, the PQ Holdings plans in the U.S. and Canada were closed to new retirees as of December 31, 2006. The Eco Services Postretirement Life and Dental Plan was closed to new retirees effective July 1, 2017. The Company’s defined benefit supplementary retirement plans were frozen to future accruals as of December 31, 2006. Defined Benefit Pension Plans The following tables summarize changes in the benefit obligation, plan assets and funded status of the Company’s significant defined benefit pension plans as well as the components of net periodic benefit cost, including key assumptions:     U.S.   Foreign     December 31,   December 31,     2019   2018   2019   2018 Change in benefit obligation:                 Benefit obligation at beginning of period   $ 246,311   $ 261,102   $ 112,103   $ 119,710 Service cost   978   1,019   3,382   3,566 Interest cost   10,281   9,599   3,290   3,340 Participant contributions   —   —   555   570 Plan amendments   —   —   —   179 Plan curtailments   (2,795 )   (952 )   —   (340 ) Plan settlements   (1,669 )   —   (642 )   (1,071 ) Benefits paid   (10,862 )   (11,453 )   (2,478 )   (2,569 ) Expenses paid   —   —   (328 )   (363 ) Net transfer in   —   —   —   1,535 Actuarial (gains) losses   25,148   (13,004 )   16,186   (5,432 ) Translation adjustment   —   —   (589 )   (7,022 ) Benefit obligation at end of the period   $ 267,392   $ 246,311   $ 131,479   $ 112,103                   Change in plan assets:                 Fair value of plan assets at beginning of period   $ 195,755   $ 218,374   $ 91,787   $ 96,518 Actual return on plan assets   43,116   (12,854 )   13,421   (540 ) Employer contributions   5,073   1,688   3,941   4,249 Employee contributions   —   —   555   570 Plan settlements   (1,669 )   —   (642 )   (1,071 ) Benefits paid   (10,862 )   (11,453 )   (2,478 )   (2,569 ) Expenses paid   —   —   (328 )   (363 ) Acquisitions   —   —   —   1,013 Translation adjustment   —   —   (70 )   (6,020 ) Fair value of plan assets at end of the period   $ 231,413   $ 195,755   $ 106,186   $ 91,787                   Funded status of the plans (underfunded)   $ (35,979 )   $ (50,556 )   $ (25,293 )   $ (20,316 )                   The total actuarial losses for the year ended December 31, 2019 across the Company’s U.S. plans was $25,148, which was driven by declines in the discount rates of $26,604 and declines in general demographic experience of $2,953, which was offset by favorable changes in mortality assumptions of $4,409. The total actuarial losses for the year ended December 31, 2019 across the Company’s foreign plans was $16,186, which was driven by declines in the discount rates of $17,998, which was offset by favorable changes in general demographic experience of $1,263 and favorable changes in mortality assumptions of $549. Total actuarial gains for the year ended December 31, 2018 across the Company’s U.S. and foreign plans was $18,436, which was primarily driven by movements in the discount rates of $17,085. Amounts recognized in the consolidated balance sheets consist of:     U.S.   Foreign     December 31,   December 31,     2019   2018   2019   2018 Noncurrent asset   $ —   $ —   $ 4,877   $ 4,670 Current liability   —   —   (397 )   (748 ) Noncurrent liability   (35,979 )   (50,556 )   (29,773 )   (24,238 ) Accumulated other comprehensive income (loss)   8,687   1,218   (5,895 )   (1,829 ) Net amount recognized   $ (27,292 )   $ (49,338 )   $ (31,188 )   $ (22,145 )                   Amounts recognized in accumulated other comprehensive income (loss) consist of:     U.S.   Foreign     December 31,   December 31,     2019   2018   2019   2018 Prior service cost   $ —   $ —   $ (151 )   $ (170 ) Net gain (loss)   10,922   1,618   (7,981 )   (2,133 ) Gross amount recognized   10,922   1,618   (8,132 )   (2,303 ) Deferred income taxes   (2,235 )   (400 )   2,237   474 Net amount recognized   $ 8,687   $ 1,218   $ (5,895 )   $ (1,829 )                   Components of net periodic benefit cost consist of:     U.S.   Foreign     Years ended December 31,   Years ended December 31,     2019   2018   2017   2019   2018   2017 Service cost   $ 978   $ 1,019   $ 1,219   $ 3,382   $ 3,566   $ 3,686 Interest cost   10,281   9,599   10,115   3,290   3,340   3,271 Expected return on plan assets   (11,508 )   (12,851 )   (12,277 )   (3,153 )   (3,311 )   (3,208 ) Amortization of prior service cost   —   —   —   24   —   — Amortization of net (gain) loss   —   —   —   (5 )   49   (9 ) Curtailment gain recognized   —   (576 )   —   —   (340 )   — Settlement (gain) loss recognized   49   —   (48 )   20   (11 )   — Net periodic expense (benefit)   $ (200 )   $ (2,809 )   $ (991 )   $ 3,558   $ 3,293   $ 3,740                           All components of net periodic benefit cost other than service cost are presented within other expense (income), net in the Company’s consolidated statements of income. The net amount of projected benefit obligation and plan assets for all underfunded and unfunded plans was $77,801 and $87,410 as of December 31, 2019 and 2018, respectively, and was classified as noncurrent liabilities. The total accumulated benefit obligation as of December 31, 2019 and 2018 for the Company’s U.S. pension plans was $266,992 and $244,580, respectively. The total accumulated benefit obligation as of December 31, 2019 and 2018 for the Company’s foreign pension plans was $126,518 and $107,910, respectively. The following table presents selected information about the Company’s pension plans with accumulated benefit obligations in excess of plan assets:     U.S.   Foreign     December 31,   December 31,     2019   2018   2019   2018 Projected benefit obligation   $ 267,392   $ 246,311   $ 97,635   82,656 Accumulated benefit obligation   266,992   244,580   94,334   78,862 Fair value of plan assets   231,413   195,755   68,790   57,670                   The following table presents selected information about the Company’s pension plans with projected benefit obligations in excess of plan assets:     U.S.   Foreign     December 31,   December 31,     2019   2018   2019   2018 Projected benefit obligation   $ 267,392   $ 246,311   $ 116,165   82,656 Fair value of plan assets   231,413   195,755   85,994   57,670                   Significant weighted average assumptions used in determining the pension obligations include the following:     U.S.   Foreign     December 31,   December 31,     2019   2018   2019   2018 Discount rate   3.32 %   4.32 %   2.18 %   3.01 % Rate of compensation increase(1)   3.00 %   3.00 %   2.35 %   2.44 %                   Significant weighted average assumptions used in determining net periodic benefit cost include the following:     U.S.   Foreign     Years ended December 31,   Years ended December 31,     2019   2018   2017   2019   2018   2017 Discount rate   4.32 %   3.74 %   4.24 %   3.01 %   2.91 %   2.99 % Rate of compensation increase(1)   3.00 %   3.00 %   3.00 %   2.44 %   2.57 %   2.97 % Expected return on assets   6.00 %   6.00 %   6.37 %   3.44 %   3.52 %   3.58 %                           (1)  Includes only plans not frozen to benefit accruals for the respective periods. The discount rate for each of the U.S. plans was determined by utilizing a yield curve model. The model develops a spot rate curve based on the yields available from a broad-based universe of high quality corporate bonds. The discount rate is then set as the weighted average spot rate, using the respective plan’s expected benefit cash flows as the weights. The investment objective for the U.S. plans is to generate returns sufficient to meet future obligations. The strategy to meet the objective includes generating attractive returns using higher returning assets such as equity securities and balancing risk using less volatile assets such as fixed income securities. The U.S. plans invest in an allocation of assets across the two broadly-defined financial asset categories of equity and fixed income securities. The target allocations for the plan assets across the three U.S. plans are as follows: 45% equity securities and 55% fixed income investments for the PQ Corporation Retirement Plan; 40% equity securities and 60% fixed income investments for the Eco Services Pension Equity Plan; and 60% equity securities and 40% fixed income investments for the Eco Services Hourly Pension Plan. Similar considerations are applied to the investment objectives of the non-U.S. plans as well as the asset classes available in each location and any legal restrictions on plan investments. The Company classifies plan assets based upon a fair value hierarchy (see Note 5 to these consolidated financial statements for further information). The classification of each asset within the hierarchy is based on the lowest level input that is significant to its measurement. The fair value hierarchy consists of three levels as follows: • Level 1—Values are unadjusted quoted prices for identical assets and liabilities in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets. Level 1 assets primarily include investments in publicly traded equity securities and mutual funds. These securities (or the underlying investments of the funds) are actively traded and valued using quoted prices for identical securities from the market exchanges. • Level 2—Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument. Such inputs include market interest rates and volatilities, spreads and yield curves. Level 2 assets primarily consist of fixed-income securities and commingled funds that are not actively traded or whose underlying investments are valued using observable marketplace inputs. The fair value of plan assets invested in fixed-income securities is generally determined using valuation models that use observable inputs such as interest rates, bond yields, low-volume market quotes and quoted prices for similar assets. Plan assets that are invested in commingled funds are valued using a unit price or net asset value (“NAV”) that is based on the underlying investments of the fund. • Level 3—Certain inputs are unobservable (supported by little or no market activity) and significant to the fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. Level 3 assets include investments covered by insurance contracts and real estate funds valued using significant unobservable inputs. The following tables set forth by level, within the fair value hierarchy, plan assets at fair value:     December 31, 2019     Total   Level 1   Level 2   Level 3 Cash and cash equivalents   $ 991   $ 991   $ —   $ — Equity securities:                 U.S. investment funds   67,374   67,374   —   — International investment funds   65,136   44,905   20,231   — Fixed income securities:         Government securities   31,040   23,500   7,540   — Corporate bonds   14,900   14,782   118   — Investment fund bonds   116,121   1,170   114,951   — Other:         Insurance contracts   42,037   —   36,637   5,400 Total   $ 337,599   $ 152,722   $ 179,477   $ 5,400                       December 31, 2018     Total   Level 1   Level 2   Level 3 Cash and cash equivalents(1)   $ 57,000   $ 56,925   $ 75   $ — Equity securities:                 U.S. investment funds   35,103   35,103   —   — International investment funds   44,508   24,040   20,468   — Fixed income securities:                 Government securities   10,121   —   10,121   — Corporate bonds   77,229   72,216   5,013   — Investment fund bonds   25,152   7,665   17,487   — Other:                 Insurance contracts   38,429   —   33,408   5,021 Total   $ 287,542   $ 195,949   $ 86,572   $ 5,021                   (1)  Level 1 balance includes $55,905 of cash and cash equivalents held by the Eco Services Pension Equity and Hourly Pension Plans. The investments in equity securities and fixed income securities previously held by these plans were liquidated into cash and cash equivalents in December 2018 in preparation for a transfer of plan assets to a new custodian. This transfer was completed in January 2019. The changes in the Level 3 pension plan assets are as follows for the years ended December 31:     Insurance Contracts     2019   2018 Beginning balance   $ 5,021   $ 4,150 Actual return on plan assets   185   10 Benefits paid   (76 )   (385 ) Contributions   479   461 Exchange rate changes and other   (209 )   785 Ending balance   $ 5,400   $ 5,021           The Company expects to contribute $7,280 to the U.S. pension plans and $3,837 to the foreign pension plans in 2020. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Year   U.S.   Foreign 2020   $ 16,372   $ 2,759 2021   17,327   2,908 2022   16,048   3,289 2023   15,963   3,544 2024   15,943   4,023 Years 2025-2029   77,891   24,028           Certain of the Company’s foreign subsidiaries maintain other defined benefit plans that are consistent with statutory practices. These plans are not included in the disclosures above as they are not significant to the Company’s consolidated financial statements. Supplemental Retirement Plans The following tables summarize changes in the benefit obligation, plan assets and funded status of the Company’s defined benefit supplementary retirement plans, as well as the components of net periodic benefit cost, including key assumptions:     December 31,     2019   2018 Change in benefit obligation:         Benefit obligation at beginning of period   $ 11,868   $ 12,781 Interest cost   465   450 Benefits paid   (1,045 )   (1,070 ) Actuarial (gains) losses   364   (293 ) Benefit obligation at end of period   $ 11,652   $ 11,868           Change in plan assets:         Fair value of plan assets at beginning of period   $ —   $ — Employer contributions   1,045   1,070 Benefits paid   (1,045 )   (1,070 ) Fair value of plan assets at end of period   $ —   $ —           Funded status of the plans (underfunded)   $ (11,652 )   $ (11,868 )           The total actuarial losses for the year ended December 31, 2019 across the Company’s supplemental retirement plans was $364, which was driven by declines in the discount rates of $971, which was offset by favorable changes in general demographic experience of $281 and favorable changes in mortality assumptions of $326. Amounts recognized in the consolidated balance sheets consist of:     December 31,     2019   2018 Current liability   $ (1,019 )   $ (1,105 ) Noncurrent liability   (10,633 )   (10,763 ) Accumulated other comprehensive income   253   795 Net amount recognized   $ (11,399 )   $ (11,073 )           Amounts recognized in accumulated other comprehensive income consist of:     December 31,     2019   2018 Net gain   $ 681   $ 1,055 Gross amount recognized   681   1,055 Deferred income taxes   (428 )   (260 ) Net amount recognized   $ 253   $ 795           Components of net periodic benefit cost consist of:     Years ended December 31,     2019   2018   2017 Interest cost   $ 465   $ 450   $ 489 Amortization of net (gain) loss   (10 )   —   — Net periodic expense   $ 455   $ 450   $ 489               Interest cost is presented within other expense (income), net in the Company’s consolidated statements of income. The accumulated benefit obligation of the Company’s defined benefit supplemental retirement plans as of December 31, 2019 and 2018 was $11,652 and $11,868, respectively. The discount rate used in determining the defined benefit supplemental retirement plan obligation was 3.10% and 4.20% as of December 31, 2019 and 2018, respectively. The discount rate used in determining net periodic benefit cost was 4.20%, 3.60% and 3.90% for the years ended December 31, 2019, 2018 and 2017, respectively. There was no rate of compensation increase for any of the periods presented, as all future accruals were frozen for the defined benefit supplementary retirement plans as of December 31, 2006. There was no rate of interest crediting rate, as there are no cash balance accounts associated with these plans. The Company expects to contribute $1,019 to the defined benefit supplementary retirement plans in 2020. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Year   Amount 2020   $ 1,019 2021   996 2022   966 2023   933 2024   898 Years 2025-2029   3,966       Other Postretirement Benefit Plans The following tables summarize changes in the benefit obligation, plan assets and funded status of the Company’s other postretirement benefit plans as well as the components of net periodic benefit cost, including key assumptions:     December 31,     2019   2018 Change in benefit obligation:         Benefit obligation at beginning of period   $ 3,814   $ 4,612 Service cost   10   16 Interest cost   152   150 Employee contributions   253   251 Plan amendments   (460 )   (271 ) Benefits paid   (751 )   (1,061 ) Medical subsidies received   —   74 Premiums paid   (7 )   (66 ) Actuarial (gains) losses   412   172 Translation adjustment   29   (63 ) Benefit obligation at end of period   $ 3,452   $ 3,814           Change in plan assets:         Fair value of plan assets at beginning of period   —   — Employer contributions   505   802 Employee contributions   253   251 Benefits paid   (751 )   (1,061 ) Medical subsidies received   —   74 Premiums paid   (7 )   (66 ) Fair value of plan assets at end of period   $ —   $ —           Funded status of the plans (underfunded)   $ (3,452 )   $ (3,814 )           The total actuarial losses for the year ended December 31, 2019 across the Company’s U.S. plans was $412, which was driven by declines in the discount rates of $334 and declines in general demographic experience of $172, which was offset by favorable changes in mortality assumptions of $94. Amounts recognized in the consolidated balance sheets consist of:     December 31,     2019   2018 Current liability   $ (537 )   $ (581 ) Noncurrent liability   (2,915 )   (3,233 ) Accumulated other comprehensive income   524   830 Net amount recognized   $ (2,928 )   $ (2,984 )           Amounts recognized in accumulated other comprehensive income consist of:     December 31,     2019   2018 Prior service credit   $ 828   $ 525 Net gain   67   500 Gross amount recognized   895   1,025 Deferred income taxes   (371 )   (195 ) Net amount recognized   $ 524   $ 830           Components of net periodic benefit cost consist of:     Years ended December 31,     2019   2018   2017 Service cost   $ 10   $ 16   $ 21 Interest cost   152   150   174 Amortization of prior service credit   (157 )   (112 )   (78 ) Amortization of net gain   (33 )   (26 )   (45 ) Net periodic expense (benefit)   $ (28 )   $ 28   $ 72               All components of net periodic benefit cost other than service cost are presented within other expense (income), net in the Company’s consolidated statements of income. The discount rate used in determining the other postretirement benefit plan obligation was 3.06% and 4.09% as of December 31, 2019 and 2018, respectively. The discount rate used in determining net periodic benefit cost was 4.09%, 3.53% and 3.74% for the years ended December 31, 2019, 2018 and 2017, respectively. There was no rate of interest crediting rate, as there are no cash balance accounts associated with these plans. Assumed health care cost trend rates were as follows:     December 31,     2019   2018 Immediate trend rate   5.91%   6.59% Ultimate trend rate   4.39%   4.50% Year that the rate reaches ultimate trend rate   2038   2035           The Company expects to contribute $537 to the retiree health plans in 2020. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Year   Amount 2020   $ 537 2021   473 2022   343 2023   318 2024   185 Years 2025-2029   820       There are no expected Medicare subsidy receipts expected in future periods. Certain of the Company’s foreign subsidiaries maintain other postretirement benefit plans that are consistent with statutory practices. These plans are not included in the disclosures above as they are not significant to the Company’s consolidated financial statements. Defined Contribution Plans The Company also has defined contribution plans covering domestic employees of the Company and certain subsidiaries. The Company recorded expenses of $12,702, $12,585 and $13,103 related to these plans for the years ended December 31, 2019, 2018 and 2017, respectively.