Glatfelter Corp

13. RETIREMENT PLANS AND OTHER POST-RETIREMENT BENEFITS

Prior to May 2019, we provided non-contributory retirement benefits under both funded and unfunded plans to all U.S. employees and to certain non-U.S. employees in Germany. As discussed in more detail below, we terminated our U.S. qualified pension plan effective June 30, 2019 and replaced the benefits with an enhanced 401(k) defined contribution plan. Participation and benefits under the plans were based upon the employees’ date of hire. U.S. benefits accrued under the terminated pension plan was based on a final average pay formula or cash balance formula for salaried employees.

In December 2019, our Board of Directors approved the freezing of benefit accruals in the non-qualified pension plan for active participants effective December 31, 2019. As of January 1, 2020, each active participant’s frozen non-qualified pension benefit was transferred to a newly approved Deferred Compensation Plan non-qualified benefit plan and will earn interest credits going forward.

The Deferred Compensation Plan also provides for employer contributions and the Plan may provide for elective employee deferrals. Beginning in 2022, the plan allows active in-service withdrawals for elective employee deferrals. Under the Deferred Compensation Plan, participants are eligible to receive annual Company contributions that such participants would have received under our 401(k) Savings Plan, but for certain limitations imposed by the Internal Revenue Code on 401(k) plan contributions (“Company Contributions”). Unless otherwise determined by the Compensation Committee, Company Contributions under the Deferred Compensation Plan will not exceed 7% of a participant’s annual eligible compensation that is in excess of the Internal Revenue Code compensation limit for 401(k) plans.

As of December 31, 2023 and 2022, the remaining non-contributory pension plans are unfunded non-qualified plans. Non-U.S. benefits were based on average salary and years of service. We use a December 31-measurement date for all of our defined benefit plans.

We also provide certain health care benefits to eligible U.S.-based retired employees. Participation in the plan is closed to any salaried employees hired after December 31, 2006. For retirees prior to age 65, these benefits consists of either a Company provided fixed contribution, as determined on an annual basis, to the participant’s health reimbursement account or providing group medical insurance coverage with a subsidy cap of $10,000 per year, as determined by date of retirement. In December 2023, the Plan was amended to transition all retiree medical benefits to the health reimbursement construct, eliminating the group medical insurance offering. For certain retirees over age 65, these benefits consists of a fixed payment to defray the costs of Medicare.

All information presented in the following tables represents amounts attributable to continuing operations.

As of December 31, 2023, the non-qualified plans have an unfunded projected benefit obligation of $28.3 million.

During 2023, we made a $5.8 million one-time settlement payment to our former CEO under the terms of his non-qualified pension plan in connection with his separation from the Company. In accordance with pension settlement accounting, we recorded a $0.6 million settlement charge reflecting the recognition of amounts previously included in accumulated other comprehensive income.

Amounts recognized in the consolidated balance sheets consist of the following as of December 31:

The components of amounts recognized as “Accumulated other comprehensive income” consist of the following on a pre-tax basis:

The weighted-average assumptions used in computing the benefit obligations above were as follows:

The discount rates set forth above were estimated based on the modeling of expected cash flows for each of our benefit plans and selecting a portfolio of high-quality debt instruments with maturities matching the respective cash flows of each plan. The resulting discount rates as of December 31, 2023 ranged from 3.71% to 5.41% for pension plans and was 5.42% for the other benefit plans.

Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows:

Net periodic benefit (income) expense includes the following components:

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) were as follows:

The weighted-average assumptions used in computing the net periodic benefit expense information above were as follows:

Cash Flow Benefit payments expected to be made under our non-qualified pension plans and other benefit plans are summarized below:

Defined Contribution Plans We maintain 401(k) plans for substantially all U.S.-based employees. Employees may contribute up to 50% of their earnings, subject to certain restrictions. We currently provide a minimum company contribution equal to 7% of eligible compensation. In addition, we have provided discretionary contributions resulting in total contributions equal to 7.0%,7.5% and 10% of compensation in 2023, 2022 and 2021, respectively. The expense associated with our 401(k) plan was $4.3 million, $2.7 million and $2.4 million in 2023, 2022 and 2021, respectively.