Pension and Postretirement Benefits | Note 18. Pension and Postretirement Benefits Domestic Plans We have frozen defined benefit pension plans held in trust for certain employees which we funded. We also maintain certain unfunded defined benefit pension plans which provide supplemental benefits to select management employees. These plans use traditional defined benefit formulas based on years of service and final average compensation. Funding policies provide that payments to defined benefit pension trusts shall be at least equal to the minimum funding required by applicable regulations. We also have certain defined benefit postretirement plans that provide medical and life insurance for certain eligible employees, retirees, and dependents. The related postretirement benefit liabilities are recognized over the period that services are provided by employees. In addition, we retained the obligations for these benefits for retirees of certain sold businesses. While the plans have no funding requirements, we may fund the plans. The components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) of our pension plans consist of the following: December 31, (in thousands) 2018 2017 2016 Net periodic benefit cost: Service cost $ 64 $ 64 $ 98 Interest cost 780 803 1,032 Expected return on plan assets (193 ) (176 ) (256 ) Recognized net actuarial loss 494 433 423 Net periodic benefit cost 1,145 1,124 1,297 Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): Net actuarial loss (gain) (76 ) 114 1 Reversal of amortization item: Net actuarial loss (494 ) (433 ) (423 ) Total recognized in other comprehensive income (loss) (570 ) (319 ) (422 ) Total recognized in net periodic benefit cost and other comprehensive income (loss) $ 575 $ 805 $ 875 The components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) of our postretirement benefit plans consist of the following: December 31, (in thousands) 2018 2017 2016 Net periodic benefit cost: Service cost $ 80 $ 92 $ 99 Interest cost 449 413 573 Amortization of prior service credit (205 ) (431 ) (503 ) Recognized net actuarial loss 405 164 295 Net periodic benefit cost 729 238 464 Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): Net actuarial loss (gain) 170 237 (790 ) Prior service credit — 816 73 Reversal of amortization item: Net actuarial loss (405 ) (164 ) (295 ) Prior service credit 205 431 503 Total recognized in other comprehensive income (loss) (30 ) 1,320 (509 ) Total recognized in net periodic benefit cost and other comprehensive income (loss) $ 699 $ 1,558 $ (45 ) The following table indicates the funded status of the plans as of December 31: Postretirement Funded Plans Unfunded Plans Benefit Plans (in thousands) 2018 2017 2018 2017 2018 2017 Change in benefit obligation: Benefit obligation at beginning of year $ 15,440 $ 15,027 $ 9,857 $ 9,825 $ 13,807 $ 13,619 Service cost — — 64 64 80 92 Interest cost 481 492 299 311 449 413 Actuarial adjustments (887 ) 618 (425 ) 175 170 237 Plan amendments — — — — — 816 Benefits paid (799 ) (697 ) (524 ) (518 ) (1,052 ) (1,370 ) Benefit obligation at end of year 14,235 15,440 9,271 9,857 13,454 13,807 Change in plan assets: Fair value of plan assets at beginning of year 11,590 10,416 — — — — Actual return on plan assets (1,043 ) 855 — — — — Company contributions 551 1,016 524 518 1,052 1,370 Benefits paid (799 ) (697 ) (524 ) (518 ) (1,052 ) (1,370 ) Fair value of plan assets at end of year 10,299 11,590 — — — — Funded status at end of year $ (3,936 ) $ (3,850 ) $ (9,271 ) $ (9,857 ) $ (13,454 ) $ (13,807 ) The net amounts recognized in the Consolidated Balance Sheets under the caption “Pension and postretirement benefits” as of December 31 are as follows: Postretirement Funded Plans Unfunded Plans Benefit Plans (in thousands) 2018 2017 2018 2017 2018 2017 Other current liabilities $ — $ — $ 974 $ 809 $ 1,160 $ 1,112 Non-current liabilities 3,936 3,850 8,297 9,048 12,294 12,695 Net amount recognized $ 3,936 $ 3,850 $ 9,271 $ 9,857 $ 13,454 $ 13,807 Amounts recognized in AOCI as of December 31 are as follows: Postretirement Funded Plans Unfunded Plans Benefit Plans Total Total (in thousands) 2018 2017 2018 2017 2018 2017 2018 2017 Net actuarial loss $ 8,643 $ 8,681 $ 2,055 $ 2,587 $ 2,549 $ 2,784 $ 13,247 $ 14,052 Prior service credit — — — — (146 ) (351 ) (146 ) (351 ) Subtotal 8,643 8,681 2,055 2,587 2,403 2,433 13,101 13,701 Less tax effect (2,182 ) (3,292 ) (519 ) (981 ) (607 ) (923 ) (3,308 ) (5,196 ) Total $ 6,461 $ 5,389 $ 1,536 $ 1,606 $ 1,796 $ 1,510 $ 9,793 $ 8,505 The fair value of the domestic plans’ assets by asset class are as follows: Fair Value Measurements at December 31, 2018 Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Total (Level 1) (Level 2) (Level 3) Domestic pension plans: Fixed income securities $ 5,355 $ 5,355 $ — $ — Equity securities 4,611 4,611 — — Cash 140 140 — — Other 193 — 193 — Total $ 10,299 $ 10,106 $ 193 $ — Fair Value Measurements at December 31, 2017 Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Total (Level 1) (Level 2) (Level 3) Domestic pension plans: Fixed income securities $ 5,787 $ 5,787 $ — $ — Equity securities 5,390 5,390 — — Cash 214 214 — — Other 199 — 199 — Total $ 11,590 $ 11,391 $ 199 $ — We employ a total return investment approach whereby a mix of equities and fixed income securities is used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed income securities. Furthermore, equity securities are diversified across U.S. and non-U.S. stocks, as well as growth and value. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews and annual liability measurements. We utilize a building-block approach in determining the long-term expected rate of return on plan assets. Historical markets are studied and long-term historical relationships between equity securities and fixed income securities are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. The long-term portfolio return also considers diversification and rebalancing. Peer data and historical returns are reviewed relative to our assumed rates for reasonableness and appropriateness. The following pension and postretirement benefit payments, which reflect expected future service, as appropriate, are expected to be paid: (in thousands) Funded Plans Unfunded Plans Postretirement Benefit Plans 2019 $ 1,401 $ 994 $ 1,185 2020 $ 994 $ 767 $ 1,196 2021 $ 925 $ 752 $ 1,149 2022 $ 993 $ 735 $ 1,122 2023 $ 988 $ 716 $ 1,096 2024-2028 $ 4,799 $ 3,268 $ 4,779 Foreign Pension Plans Certain of our foreign operations also maintain defined benefit pension plans held in trust for certain employees which are funded by the companies, and unfunded defined benefit pension plans providing supplemental benefits to select management employees. These plans use traditional defined benefit formulas based on years of service and final average compensation. Funding policies provide that payments to defined benefit pension trusts shall be at least equal to the minimum funding required by applicable regulations. The components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) included the following: December 31, (in thousands) 2018 2017 2016 Net periodic benefit cost: Service cost $ 552 $ 530 $ 488 Interest cost 381 492 488 Expected return on plan assets (505 ) (602 ) (558 ) Recognized net actuarial loss 139 155 162 Settlement — 777 — Net periodic benefit cost 567 1,352 580 Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): Net actuarial loss (238 ) (106 ) 158 Reversal of amortization of net actuarial loss (139 ) (155 ) (162 ) Total recognized in other comprehensive income (loss) (377 ) (261 ) (4 ) Total recognized in net periodic benefit cost and other comprehensive income $ 190 $ 1,091 $ 576 The following table represents the funded status of the plans as of December 31: Funded Plans Unfunded Plans (in thousands) 2018 2017 2018 2017 Change in benefit obligation: Benefit obligation at beginning of year $ 9,521 $ 10,488 $ 2,582 $ 2,486 Service cost 552 530 — — Interest cost 308 406 73 87 Actuarial adjustments (809 ) 658 (25 ) (54 ) Benefits paid (732 ) (3,231 ) (184 ) (182 ) Translation adjustment (706 ) 670 (156 ) 245 Benefit obligation at end of year 8,134 9,521 2,290 2,582 Change in plan assets: Fair value of plan assets at beginning of year 9,493 10,576 — — Actual return on plan assets (322 ) 764 — — Company contributions 514 710 184 182 Benefits paid (732 ) (3,231 ) (184 ) (182 ) Translation adjustment (710 ) 674 — — Fair value of plan assets at end of year 8,243 9,493 — — Funded status at end of year $ 109 $ (28 ) $ (2,290 ) $ (2,582 ) The net amounts recognized in the Consolidated Balance Sheets under the caption “Pension and postretirement benefits” as of December 31 were as follows: Funded Plans Unfunded Plans (in thousands) 2018 2017 2018 2017 Non-current assets $ (109 ) $ (15 ) $ — $ — Other current liabilities — — 176 188 Non-current liabilities — 43 2,114 2,394 Net amount recognized $ (109 ) $ 28 $ 2,290 $ 2,582 Net actuarial losses for the foreign funded plans recognized in AOCI were $2.2 million ($1.6 million after-tax) as of December 31, 2018 and $2.5 million ($1.8 million after-tax) as of December 31, 2017. Net actuarial losses for the foreign unfunded plans recognized in AOCI were $0.6 million ($0.4 million after-tax) as of December 31, 2018 and $0.7 million ($0.5 million after-tax) as of December 31, 2017. The fair value information related to the foreign pension plans’ assets is summarized in the following tables: Fair Value Measurements at Reporting Date Using (in thousands) December 31, 2018 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobserved Inputs (Level 3) Assets: Fixed income securities $ 3,967 $ 3,967 $ — $ — Equity securities 4,087 4,087 — — Other 189 189 — — Total $ 8,243 $ 8,243 $ — $ — Fair Value Measurements at Reporting Date Using (in thousands) December 31, 2017 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobserved Inputs (Level 3) Assets: Fixed income securities $ 4,414 $ 4,414 $ — $ — Equity securities 4,889 4,466 423 — Other 190 190 — — Total $ 9,493 $ 9,070 $ 423 $ — The following payments, which reflect expected future service, as appropriate, are expected to be paid: (in thousands) Funded Plans Unfunded Plans 2019 $ 354 $ 183 2020 $ 360 $ 183 2021 $ 365 $ 182 2022 $ 404 $ 182 2023 $ 447 $ 181 2024-2028 $ 2,272 $ 894 Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets The accumulated benefit obligations in excess of plan assets as of December 31 were as follows: Domestic Plans Funded Plans Unfunded Plans (in thousands) 2018 2017 2018 2017 Projected benefit obligation $ 14,235 $ 15,440 $ 9,271 $ 9,857 Accumulated benefit obligation $ 14,235 $ 15,440 $ 9,224 $ 9,826 Fair value of plan assets $ 10,299 $ 11,590 $ — $ — Foreign Plans Funded Plans Unfunded Plans (in thousands) 2018 2017 2018 2017 Projected benefit obligation $ 8,134 $ 9,521 $ 2,290 $ 2,582 Accumulated benefit obligation $ 7,581 $ 8,819 $ 2,290 $ 2,582 Fair value of plan assets $ 8,243 $ 9,493 $ — $ — Contributions In aggregate for both the domestic and foreign plans, we anticipate contributing $1.0 million to the funded pension plans, $1.2 million to the unfunded pension plans, and $1.2 million to the postretirement benefit plans in 2019. Weighted-Average Assumptions Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows: Domestic Plans Funded Plans Unfunded Plans Postretirement Benefit Plans Foreign Plans 2018 2017 2018 2017 2018 2017 2018 2017 Discount rate 4.30 % 3.63 % 4.21 % 3.55 % 4.29 % 3.59 % 3.58 % 3.15 % Rate of compensation increase N/A N/A 3.00 % 3.00 % N/A N/A 2.24 % 2.26 % Weighted-average assumptions used to determine net periodic benefit costs as of December 31 were as follows: Domestic Plans Funded Plans Unfunded Plans Postretirement Benefit Plans Foreign Plans 2018 2017 2018 2017 2018 2017 2018 2017 Discount rate 3.60 % 4.07 % 3.55 % 3.99 % 3.59 % 4.08 % 3.27 % 3.71 % Expected return on plan assets 5.50 % 5.50 % N/A N/A 0.00 % 0.00 % 4.62 % 5.09 % Rate of compensation increase N/A N/A 3.00 % 3.00 % N/A N/A 2.24 % 2.26 % Multi-employer Plans We contribute to various defined benefit pension plans under the terms of collective-bargaining agreements that cover our union-represented employees. The financial risks of participating in these multi-employer pension plans generally include the fact that the unfunded obligations of the plan may be borne by solvent participating employers. In addition, if we were to discontinue participating in some of our multi-employer pension plans, we could be required to pay a withdrawal liability amount based on the underfunded status of the plan. We are currently working with the Chicago Teamsters union leadership to finalize the terms of a new collective-bargaining agreement that includes a partial withdrawal from the Central States pension plan. Assuming the withdrawal takes place, it will trigger a partial withdrawal liability that is currently estimated at a net present value of approximately $14 million, payable over the next 20 years. At this time, we do not anticipate triggering any withdrawal from any other multi-employer pension plan to which we currently contribute. We also contribute to defined contribution plans pursuant to collective-bargaining agreements, which are generally not subject to the funding risks inherent in defined benefit pension plans. The overall level of contributions to our multi-employer plans may significantly vary from year to year based on the demand for union-represented labor to support our operations. We do not have any minimum contribution requirements for future periods pursuant to our collective-bargaining agreements for individually significant multi-employer plans. Our participation in multi-employer pension plans for 2018 is outlined in the following table. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2018 and 2017 relates to the plan’s year end as of December 31, 2017 and 2016, respectively, and is based on information received from the plan. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are less than 80% funded, and plans in the green zone are at least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan or a rehabilitation plan is either pending or has been implemented. Plan Pension Protection Act Zone Status FIP/RP Status Pending/ Implemented Viad Contributions Surcharge Paid Expiration Date of Collective- Bargaining Agreement(s) (in thousands) EIN No. 2018 2017 2018 2017 2016 Pension Fund: Western Conference of Teamsters Pension Plan 91-6145047 1 Green Green No $ 6,471 $ 7,809 $ 6,684 No 3/31/2020 Southern California Local 831—Employer Pension Fund (1) 95-6376874 1 Green Green No 3,087 3,087 2,805 No 8/31/2021 Chicago Regional Council of Carpenters Pension Fund 36-6130207 1 Green Green Yes 2,876 2,390 2,532 No 5/31/2023 Machinery Movers Riggers & Mach Erect Local 136 Supplemental Retirement Plan (1) 36-1416355 11 Yellow Red Yes 1,328 719 1,203 Yes 6/30/2019 Central States, Southeast and Southwest Areas Pension Plan 36-6044243 1 Red Red Yes 1,177 1,060 1,151 No 12/31/2018 IBEW Local Union No 357 Pension Plan A 88-6023284 1 Green Green No 1,025 1,682 1,402 No 6/16/2021 Electrical Contractors Assoc. Chicago Local Union 134, IBEW Joint Pension Trust of Chicago Plan #2 51-6030753 2 Green Green No 927 1,099 845 No 6/6/2021 Southern California IBEW-NECA Pension Fund 95-6392774 1 Yellow Yellow Yes 881 905 701 Yes 8/31/2019 Southwest Carpenters Pension Trust 95-6042875 1 Green Green No 789 883 791 No 7/31/2023 Sign Pictorial & Display Industry Pension Plan (1) 94-6278490 1 Green Green No 778 654 526 No 3/31/2021 New England Teamsters & Trucking Industry Pension 04-6372430 1 Red Red Yes 423 772 552 No 3/31/2022 All other funds (2) 3,734 2,900 3,585 Total contributions to defined benefit plans 23,496 23,960 22,777 Total contributions to other plans 2,900 2,613 2,995 Total contributions to multi-employer plans $ 26,396 $ 26,573 $ 25,772 (1) We contributed more than 5% of total plan contributions for the plan year detailed in the plans’ most recent Form 5500s. (2) Represents participation in 39 pension funds during 2018. Other Employee Benefits We match U.S. employee contributions to the 401(k) plan with shares of our common stock held in treasury up to 100% of the first 3% of a participant’s salary plus 50% of the next 2%. The expense associated with our match was $4.8 million for 2018, $4.2 million for 2017, and $3.9 million for 2016. |