Employee Benefit Plans

12 Months Ended

Dec. 31, 2024

18. Employee Benefit Plans

Defined Benefit Plans

The Company has defined benefit pension and other postretirement plans covering certain union and non-union employees, primarily in the U.S. and Canada. The defined benefit pension plans are closed to new participants. Certain Canadian plans were included with the sale of the Company’s lumber and newsprint assets.

During 2024, the Company recorded a $1 million loss on pension curtailment charges associated with early retirements driven by the indefinite suspension of operations at the Temiscaming High Purity Cellulose plant. The loss on curtailment was recognized in “indefinite suspension charges” in the Company’s consolidated statements of operations. Additionally, the Company decreased its pension liability by $3 million. See Note 3—Indefinite Suspension of Operations for further information. Also during the year, the Company offered lump sum payouts to eligible terminated vested participants, of whom 103 accepted, resulting in $6 million in payments.

During 2022, the Company continued the process of winding up certain Canadian pension plans and as a result recorded a $1 million loss related to the final asset surplus distribution to the plan participants. In addition, in the fourth quarter of 2022, the Company adopted a full freeze on future benefits for salaried participants in the U.S. defined benefit plans. The impact of the curtailment reduced the benefit obligation and the accumulated net loss within other comprehensive income by $8 million.

During 2023, the Company recorded a $2 million loss related to the final asset surplus distribution to the plan participants of certain other wound-up Canadian pension plans.

These settlements were recognized in “components of pension and OPEB, excluding service costs” in the consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022.

Defined benefit pension and other postretirement plan liabilities are calculated using actuarial estimates and management assumptions. These estimates are based on historical information and certain assumptions about future events.

The following tables present the changes in the projected benefit obligation and plan assets and reconciles funded status and the defined benefit pension and postretirement plan amounts recognized in the consolidated balance sheets:


	Pension				Postretirement
	2024		2023		2024		2023
Projected benefit obligation at beginning of year	$	616,118	$	594,455	$	23,864	$	29,944
Service cost	4,641		4,877		551		1,116
Interest cost	27,715		28,724		989		1,351
Actuarial (gain) loss	(24,738)		21,015		(2,717)		(7,198)
Participant contributions	652		700		167		115
Benefits paid	(44,961)		(41,059)		(1,287)		(1,559)

Settlement	—		2,982		—		—
Curtailment	645		—		(22)		—
Effects of foreign currency exchange rates	(16,722)		4,424		55		95
Projected benefit obligation at end of year	$	563,350	$	616,118	$	21,600	$	23,864

Fair value of plan assets at beginning of year	$	532,643	$	507,270	$	—	$	—
Actual return on plan assets	20,540		63,682		—		—
Employer contributions(a)	7,685		1,923		1,012		1,430
Participant contributions	652		700		167		115
Benefits paid	(44,961)		(41,059)		(1,179)		(1,545)
Settlement	—		(2,317)		—		—
Effects of foreign currency exchange rates	(14,619)		2,444		—		—
Fair value of plan assets at end of year	$	501,940	$	532,643	$	—	$	—

Funded Status at end of year	$	(61,410)	$	(83,475)	$	(21,600)	$	(23,864)

(a)The Company received cash of $6 million in 2023 related to surplus assets of unwound pension plans.


	Pension				Postretirement
	2024		2023		2024		2023
Non-current assets	$	—	$	—	$	—	$	—
Current liabilities	(4,390)		(4,474)		(1,381)		(1,372)
Non-current liabilities	(57,020)		(79,001)		(20,219)		(22,492)
Net amount recognized	$	(61,410)	$	(83,475)	$	(21,600)	$	(23,864)

The projected benefit obligation decreased during the year ended December 31, 2024 primarily due to the settlements of certain Canadian pension plans, lump sum payouts to U.S. pension plan participants, actuarial gains resulting from an increase in the discount rate assumed and foreign currency exchange rates.

Net gain (loss) recognized in other comprehensive income for the three years ended December 31 was as follows:


	Pension						Postretirement
	2024		2023		2022		2024		2023		2022
Net gain	$	13,053	$	9,202	$	30,531	$	2,928	$	6,639	$	7,574
Prior service costs	$	—	$	(2,982)	$	—	$	—	$	—	$	—

Net gain (loss) and prior service cost (credit) reclassified from other comprehensive income and recognized as a component of pension and postretirement expense for the three years ended December 31 were as follows:


	Pension						Postretirement
	2024		2023		2022		2024		2023		2022

Amortization of (gain) loss	$	379	$	(490)	$	5,462	$	(737)	$	(215)	$	72
Amortization of prior service cost (credit)	435		294		147		(98)		(98)		(122)

Net gain (loss), prior service cost (credit) and plan amendments that have not yet been included in pension and postretirement expense and have been recognized as a component of AOCI for the three years ended December 31 were as follows:


	Pension						Postretirement
	2024		2023		2022		2024		2023		2022
Prior service cost (credit)	$	(3,600)	$	(3,852)	$	(1,204)	$	561	$	659	$	757
Net gain (loss)	(37,097)		(50,796)		(67,770)		12,341		10,343		3,920
Curtailment	—		—		8,000		—		—		—
Deferred income tax (expense) benefit	9,664		12,630		13,750		(2,929)		(2,521)		(1,147)
Accumulated other comprehensive income (loss)	$	(31,033)	$	(42,018)	$	(47,224)	$	9,973	$	8,481	$	3,530

For defined benefit pension plans, the projected and accumulated benefit obligations and the fair value of plan assets were as follows:


	December 31,
	2024		2023
Projected benefit obligation	$	563,350	$	616,118
Accumulated benefit obligation	553,973		606,072
Fair value of plan assets	501,940		532,643

For pension plans with a projected benefit obligation exceeding plan assets, the projected benefit obligation and fair value of plan assets were $537 million and $490 million, respectively, at December 31, 2024, and $587 million and $502 million, respectively, at December 31, 2023.

For pension plans with an accumulated benefit obligation exceeding plan assets, the accumulated benefit obligation and fair value of plan assets were $537 million and $490 million, respectively, at December 31, 2024 and $577 million and $502 million, respectively, at December 31, 2023.

The following table presents the components of net periodic benefit cost of the plans:


	Pension						Postretirement
	2024		2023		2022		2024		2023		2022
Service cost	$	4,641	$	4,877	$	7,906	$	551	$	1,116	$	1,516
Interest cost	27,715		28,724		21,028		989		1,351		818
Expected return on plan assets	(32,361)		(31,425)		(32,419)		—		—		—
Amortization of prior service cost (credit)	435		294		147		(98)		(98)		(122)
Amortization of (gain) loss	379		(490)		5,553		(737)		(215)		72
Pension settlement loss	—		2,317		964		—		—		—
Curtailment	736		—		—		—		—		—
Other	—		—		—		18		(556)		(173)
Net periodic benefit cost(a)	$	1,545	$	4,297	$	3,179	$	723	$	1,598	$	2,111

(a)Service cost is included in “cost of sales” or “selling, general and administrative expense” in the consolidated statements of operations, as appropriate. Interest cost, expected return on plan assets, amortization of prior service cost (credit) and amortization of (gain) loss are included in “components of pension and OPEB, excluding service costs” on the consolidated statements of operations.

The Company uses the spot rate approach method to determine the service and interest cost components of net periodic benefit cost. Under this method, individual spot rates along the yield curve that correspond with the timing of each benefit payment will be used. The Company believes this provides a more precise measurement of service and interest costs by improving the correlation between projected cash outflows and corresponding spot rates on the yield curve.

The following table presents the weighted average principal assumptions inherent in the determination of benefit obligations and net periodic benefit cost of the pension and postretirement plans:


	Pension						Postretirement
	2024		2023		2022		2024		2023		2022
Assumptions used to determine benefit obligations at December 31:
Discount rate	5.16	%	4.71	%	4.95	%	5.23	%	4.72	%	4.93	%
Rate of compensation increase	2.50	%	2.50	%	2.66	%	4.19	%	3.11	%	3.53	%

Assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate	4.78	%	4.97	%	4.21	%	4.67	%	4.94	%	4.94	%
Expected long-term return on plan assets	5.92	%	5.92	%	5.88	%	N/A		N/A		N/A
Rate of compensation increase	2.50	%	2.50	%	2.66	%	4.19	%	3.11	%	3.53	%

The estimated return on plan assets is based on historical and expected long-term rates of return on broad equity and bond indices and consideration of the actual annualized rate of return. The Company, with the assistance of external consultants, utilizes this information to develop assumptions for returns, risks and correlation of asset classes, which are then used to establish the asset allocation ranges.

Assumed healthcare cost trends significantly affect the amounts reported for the postretirement benefit plans. The following table sets forth the assumed health care cost trend rates as of period end:


	Postretirement
	2024				2023
	U.S.		Canada		U.S.		Canada
Health care cost trend rate assumed for next year	7.50	%	5.87	%	6.80	%	5.93	%
Rate to which cost trend is assumed to decline (ultimate trend rate)	4.00	%	5.00	%	4.00	%	5.00	%
Year that ultimate trend rate is reached	2031		2037		2031		2037

Investment of Plan Assets

The Company’s Pension and Savings Plan Committee and the Audit Committee of the Board of Directors oversee the defined benefit pension plans’ investment program. The investment approach of each defined benefit pension plan is designed to maximize returns and provide sufficient liquidity to meet each plan’s obligations while maintaining acceptable risk levels. For certain defined benefit plans, investment target allocation percentages for equity securities can range up to 65 percent. In other more well-funded plans, 100 percent is allocated to fixed-income securities. All plans were within their respective targeted ranges at December 31, 2024. The Company’s weighted average defined benefit pension plan asset allocations at December 31, by asset category, were as follows:


	Percentage of Plan Assets
	2024		2023
U.S. fixed income securities	33	%	32	%
International fixed income securities	24	%	18	%
U.S. equity securities	21	%	23	%
International equity securities	16	%	22	%
Other(a)	6	%	5	%
Total	100	%	100	%

(a)Includes cash balances related to the timing of portfolio management activities.

Investments within the equity categories may include large capitalization, small capitalization and emerging market securities, while the international fixed income portfolio may include emerging markets debt. Pension assets did not include a direct investment in RYAM common stock at December 31, 2024 or 2023.

Fair Value Measurements

The following tables present, by level within the fair value hierarchy (see Note 13—Fair Value Measurements), the assets of the plans:


	December 31, 2024
	Level 1		Level 2		Level 3		Total
Mutual funds and collective trusts	$	129,584	$	—	$	—	$	129,584
Corporate bonds	—		150,823		—		150,823
U.S. government securities	—		33,308		—		33,308
Non-U.S. government securities	—		4,803		—		4,803
Derivative instruments	—		1,242		—		1,242

Investments at net asset value:
Common collective trust funds							182,180
Total assets at fair value							$	501,940


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Mutual funds and collective trusts	$	141,043	$	—	$	—	$	141,043
Corporate bonds	—		96,069		—		96,069
U.S. government securities	—		78,652		—		78,652
Derivative instruments	—		421		—		421

Investments at net asset value:
Common collective trust funds							216,458
Total assets at fair value							$	532,643

The valuation methodologies used for measuring the fair value of these asset categories were as follows:

Mutual funds and collective trusts — Net asset value in an observable market.

Corporate bonds — Valued using pricing models that maximize the use of observable inputs for similar securities, including basing value on yields currently available on comparable securities of issuers with similar credit ratings.

U.S. government securities — Valued using pricing models that maximize the use of observable inputs for similar securities.

Common collective trust funds — Measured at net asset value per share, as a practical expedient for fair value, as provided by the plan trustee. The net asset value is calculated by determining the fair value of the fund’s underlying assets, deducting its liabilities, and dividing by the units outstanding as of the valuation date. These funds are not publicly traded; however, in most cases, the unit price calculation is based on observable market inputs of the funds’ underlying assets.

There were no changes in the methodology used during the years ended December 31, 2024 and 2023.

Cash Flows

Expected benefit payments for the next ten years were as follows:


	Pension		Postretirement
2025	$	39,387	$	1,522
2026	39,922		1,630
2027	40,262		1,632
2028	40,460		1,685
2029	40,301		1,731
2030 - 2034	199,227		8,013

The Company has mandatory pension contribution requirements of $2 million in 2025 and may make additional discretionary contributions.

Defined Contribution Plans

The Company provides defined contribution plans to all of its hourly and salaried employees. The contributions charged to expense for these plans were $10 million, $6 million and $7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480482/715-20-55-17

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (q)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (l)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/715/tableOfContent

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (o)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (p)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 60
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480266/715-60-50-3

+ Details

RAYONIER ADVANCED MATERIALS INC. 10-K