Annual report pursuant to Section 13 and 15(d)

Benefit Plans

v3.22.0.1
Benefit Plans
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Benefit Plans
22. Benefit Plans:
The Company sponsors defined benefit pension plans covering certain of its employees. Benefits under the plans are generally 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 an unfunded plan to provide health care benefits to certain retired employees in the United States. The plan pays a stated percentage of medical expenses reduced by deductibles and other coverage. The plan is unfunded and obligations are paid out of the Company’s operations.
The Company uses a December 31 measurement date for all of its defined benefit pension and postretirement medical plans. Of the Company’s two defined benefit pension plans covering employees in the U.S., the Eco Services Hourly Pension Plan was frozen to future accruals as of December 31, 2020, and the Eco Services Pension Equity Plan was frozen to future accruals as of December 31, 2016. The retiree healthcare plan was closed to new retirees effective July 1, 2017. The Company no longer has a defined benefit pension plan covering its employees at a foreign subsidiary since during the year ended December 31, 2021, that plan was converted to a defined contribution plan.
Defined Benefit Pension Plans
The following tables summarize changes in the benefit obligation, plan assets and funded status of the Company’s defined benefit pension plans as well as the components of net periodic benefit cost, including key assumptions:
U.S. Foreign
December 31, December 31,
2021 2020 2021 2020
Change in benefit obligation:
Benefit obligation at beginning of period $ 91,937  $ 82,726  $ 22,210  $ 19,673 
Service cost —  769  —  1,080 
Interest cost 2,210  2,665  255  299 
Participant contributions —  —  —  112 
Plan curtailments —  —  —  (1,603)
Plan settlements (1,795) (1,455) (21,622) — 
Benefits paid (2,069) (1,511) —  (213)
Expenses paid —  —  —  (60)
Actuarial (gains) losses (3,818) 8,743  —  949 
Translation adjustment —  —  (843) 1,973 
Benefit obligation at end of the period $ 86,465  $ 91,937  $ —  $ 22,210 
Change in plan assets:
Fair value of plan assets at beginning of period $ 80,395  $ 69,450  $ 22,210  $ 18,365 
Actual return on plan assets 6,383  11,539  255  1,238 
Employer contributions —  2,372  —  820 
Employee contributions —  —  —  112 
Plan settlements (1,795) (1,455) (21,622) — 
Benefits paid (2,069) (1,511) —  (213)
Expenses paid —  —  —  (60)
Translation adjustment —  —  (843) 1,948 
Fair value of plan assets at end of the period $ 82,914  $ 80,395  $ —  $ 22,210 
Funded status of the plans (underfunded) $ (3,551) $ (11,542) $ —  $ — 
The total actuarial gains for the year ended December 31, 2021 was $3,818, which was driven by declines in the discount rates of $3,989 and changes in the lump sum conversion of $545 offset by changes in mortality assumptions of $204 and declines in general experience of $512. The total actuarial losses for the year ended December 31, 2020 was $8,743, which was driven by declines in the discount rates of $8,938 and declines in general demographic experience of $343, which was offset by favorable changes in mortality assumptions of $538.
Amounts recognized in the consolidated balance sheets consist of:
U.S. Foreign
December 31, December 31,
2021 2020 2021 2020
Noncurrent liability (3,551) (11,542) —  — 
Accumulated other comprehensive income (loss) (672) 371  —  (1,198)
Net amount recognized $ (4,223) $ (11,171) $ —  $ (1,198)
Amounts recognized in accumulated other comprehensive income (loss) consist of:
U.S. Foreign
December 31, December 31,
2021 2020 2021 2020
Net gain (loss) 2,486  (3,328) —  (2,166)
Gross amount recognized 2,486  (3,328) —  (2,166)
Deferred income taxes (3,158) 3,699  —  968 
Net amount recognized $ (672) $ 371  $ —  $ (1,198)
Components of net periodic benefit cost consist of:
U.S. Foreign
Years ended
December 31,		 Years ended
December 31,
2021 2020 2019 2021 2020 2019
Service cost $ —  $ 769  $ 978  $ —  $ 1,080  $ 977 
Interest cost 2,210  2,665  3,099  255  299  355 
Expected return on plan assets (4,360) (3,898) (3,444) (255) (287) (275)
Amortization of net (gain) loss —  —  —  —  95  — 
Settlement (gain) loss recognized (26) 78  49  2,084  —  — 
Net periodic expense (benefit) $ (2,176) $ (386) $ 682  $ 2,084  $ 1,187  $ 1,057 
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 $3,551 and $11,542 as of December 31, 2021 and 2020, respectively, and was classified as noncurrent liabilities. The total accumulated benefit obligation as of December 31, 2021 and 2020 for the Company’s U.S. pension plans was $86,465 and $91,937, 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,
2021 2020 2021 2020
Projected benefit obligation $ 86,465  $ 91,937  $ —  — 
Accumulated benefit obligation 86,465  91,937  —  — 
Fair value of plan assets 82,914  80,395  —  — 
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,
2021 2020 2021 2020
Projected benefit obligation $ 86,465  $ 91,937  $ —  — 
Fair value of plan assets 82,914  80,395  —  — 
Significant weighted average assumptions used in determining the pension obligations include the following:
U.S. Foreign
December 31, December 31,
2021 2020 2021 2020
Discount rate 2.90  % 2.50  % N/A 1.20  %
Rate of compensation increase(1)
N/A N/A N/A 1.75  %

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,
2021 2020 2019 2021 2020 2019
Discount rate 2.50  % 3.4  % 4.37  % 1.20  % 1.50  % 2.30  %
Rate of compensation increase(1)
N/A 3.00  % 3.00  % 1.75  % 1.75  % 1.75  %
Expected return on assets 5.60  % 5.70  % 6.00  % 1.20  % 1.50  % 1.60  %
(1)    Includes only plans not frozen to benefit accruals for the respective periods.
The discount rate 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 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 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 two U.S. plans are as follows: 10% equity securities and 90% fixed income investments for the Eco Services Pension Equity Plan; and 30% equity securities and 70% fixed income investments for the Eco Services Hourly Pension Plan.
The Company classifies plan assets based upon a fair value hierarchy (see Note 8 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, 2021
Total Level 1 Level 2 Level 3
Cash and cash equivalents $ 202  $ 202  $ —  $ — 
Equity securities:
U.S. investment funds 12,150  12,150  —  — 
International investment funds 7,816  7,816  —  — 
Fixed income securities:
Government securities 28,869  28,869  —  — 
Corporate bonds 33,877  33,877  —  — 
Total $ 82,914  $ 82,914  $ —  $ — 
December 31, 2020
Total Level 1 Level 2 Level 3
Cash and cash equivalents $ 151  $ 151  $ —  $ — 
Equity securities:
U.S. investment funds 28,040  28,040  —  — 
International investment funds 18,770  18,770  —  — 
Fixed income securities:
Government securities 16,766  16,766  —  — 
Corporate bonds 16,668  16,668  —  — 
Other:
Insurance contracts 22,210  —  22,210  — 
Total $ 102,605  $ 80,395  $ 22,210  $ — 

The Company does not expect to contribute to the U.S. pension plans or to the foreign pension plan in 2022.
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
Year Amount
2022 $ 4,619 
2023 4,544 
2024 4,393 
2025 4,266 
2026 4,339 
Years 2027-2031 22,707 
Other Postretirement Benefit Plan
The following tables summarize changes in the benefit obligation, plan assets and funded status of the Company’s other postretirement benefit plan as well as the components of net periodic benefit cost, including key assumptions:
December 31,
2021 2020
Change in benefit obligation:
Benefit obligation at beginning of period $ 650  $ 554 
Interest cost 17  19 
Benefits paid (1) (2)
Premiums paid (2) (3)
Actuarial (gains) losses (40) 82 
Benefit obligation at end of period $ 624  $ 650 
Change in plan assets:
Employer contributions 3  5 
Benefits paid (1) (2)
Premiums paid (2) (3)
Fair value of plan assets at end of period $ —  $ — 
Funded status of the plan (underfunded) $ (624) $ (650)
The total actuarial gains for the year ended December 31, 2021 was $40, which was driven by increases in the discount rates of $27, changes in mortality assumptions of $1, and general experience of $12.
The total actuarial losses for the year ended December 31, 2020 was $82, which was driven by declines in the discount rates of $83, declines in general demographic experience of $4, and declines in mortality assumptions of $3.
Amounts recognized in the consolidated balance sheets consist of:
December 31,
2021 2020
Current liability $ (17) $ (16)
Noncurrent liability (607) (634)
Accumulated other comprehensive income (59) 238 
Net amount recognized $ (683) $ (412)
Amounts recognized in accumulated other comprehensive income consist of:
December 31,
2021 2020
Prior service credit $ 364  $ 596 
Net gain (114) (159)
Gross amount recognized 250  437 
Deferred income taxes (309) (199)
Net amount recognized $ (59) $ 238 
Components of net periodic benefit cost consist of:
Years ended
December 31,
2021 2020 2019
Service cost $ —  $ —  $ 10 
Interest cost 17  19  29 
Amortization of prior service credit (232) (232) (157)
Amortization of net loss (gain) 5  1  (11)
Net periodic benefit $ (210) $ (212) $ (129)
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 2.90% and 2.60% as of December 31, 2021 and 2020, respectively. The discount rate used in determining net periodic benefit cost was 2.60%, 3.50% and 4.50% for the years ended December 31, 2021, 2020 and 2019, respectively. There was no rate of interest crediting rate, as there are no cash balance accounts associated with this plan.
Assumed health care cost trend rates were as follows:
December 31,
2021 2020
Immediate trend rate NA NA
Ultimate trend rate NA NA
Year that the rate reaches ultimate trend rate NA NA
The Company expects to contribute $17 to the retiree health plan in 2022.
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
Year Amount
2022 $ 17 
2023 18 
2024 19 
2025 20 
2026 21 
Years 2025-2029 128 
There are no expected Medicare subsidy receipts expected in future periods.
Defined Contribution Plans
The Company also has defined contribution plans covering domestic employees of the Company and a foreign subsidiary. The Company recorded expenses of $2,054, $1,357 and $1,305 related to these plans for the years ended December 31, 2021, 2020 and 2019, respectively.