Annual report pursuant to Section 13 and 15(d)

PENSION AND OTHER POSTRETIREMENT PLANS

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PENSION AND OTHER POSTRETIREMENT PLANS
 12 Months Ended
Sep. 30, 2024
Retirement Benefits [Abstract]  
PENSION AND OTHER POSTRETIREMENT PLANS PENSION AND OTHER POSTRETIREMENT PLANS:
The Company provides defined benefit pension and other postretirement plans to certain employees. Effective January 1, 2014, the Company's principal defined benefit retirement plan ("DB Plan") was closed to new participants. During fiscal 2021, future benefit accruals were frozen for all participants in the Company's DB Plan, non-qualified Supplemental Retirement Plan ("SERP") and the defined benefit portion of the Officers Retirement Restoration Plan ("ORRP"). Additionally, the Company notified plan participants of its intention to terminate and fully settle the obligations of these plans.

In the first quarter of fiscal 2022, the Company terminated its DB Plan and made plan contributions totaling $35,706 to fully fund the planned settlement of the DB Plan obligations. Also during the first quarter of fiscal 2022, lump sum distributions of $185,958 were made from the DB Plan to plan participants, and non-participating annuity contracts totaling $56,274 were purchased by the DB Plan for plan participants, resulting in the full settlement of the DB Plan obligations. The settlement of the DB Plan obligations resulted in the recognition of a non-cash charge of $30,856, which has been presented as a component of other income (deductions), net for the year ended September 30, 2022. This amount represents the immediate recognition of the remaining portion of the deferred AOCI balances related to the DB Plan.

In the first quarter of fiscal 2023, the Company made lump sum payments totaling $24,242 to fully settle the SERP and defined benefit portion of the ORRP obligations. The settlement of these plan obligations resulted in the recognition of a non-cash charge of $1,271, which has been presented as a component of other income (deductions), net for the year ended September 30, 2023. This amount represents the immediate recognition of the deferred AOCI balances related to the SERP and ORRP.

As of September 30, 2024 and 2023, all of the Company's remaining defined benefit plans are unfunded.
The following provides a reconciliation of benefit obligations, plan assets and funded status of the plans as of the Company's actuarial valuation as of September 30, 2024 and 2023:
  Pension Other Postretirement
  2024 2023 2024 2023
Change in benefit obligation:
Benefit obligation, beginning of year $ 12,896  $ 36,609  $ 12,375  $ 12,813 
Service cost 125  163  55  76 
Interest cost 530  497  684  644 
Actuarial loss (gain) 1,100  (512) 777  (641)
Settlement —  (24,242) —  — 
Exchange loss 645  979  —  — 
Benefit payments (584) (598) (513) (517)
Benefit obligation, end of year (1)
14,712  12,896  13,378  12,375 
Change in plan assets:        
Fair value, beginning of year —  —  —  — 
Benefit payments (584) (598) (513) (517)
Employer contributions 584  24,840  513  517 
Settlement —  (24,242) —  — 
Fair value, end of year —  —  —  — 
Funded status (14,712) (12,896) (13,378) (12,375)
Unrecognized actuarial gain (1,453) (1,518) (4,407) (5,906)
Unrecognized prior service credit —  —  (591) (956)
Net amount recognized $ (16,165) $ (14,414) $ (18,376) $ (19,237)
Amounts recognized in the consolidated balance sheet:        
Current liability $ —  $ (68) $ (872) $ (876)
Noncurrent benefit liability (14,712) (12,828) (12,506) (11,499)
Accumulated other comprehensive income (1,453) (1,518) (4,998) (6,862)
Net amount recognized $ (16,165) $ (14,414) $ (18,376) $ (19,237)
Amounts recognized in accumulated        
       other comprehensive income:
       
Net actuarial gain $ (1,453) $ (1,518) $ (4,407) $ (5,906)
Prior service credit —  —  (591) (956)
Net amount recognized $ (1,453) $ (1,518) $ (4,998) $ (6,862)
(1) Gains and losses related to changes in assumptions (e.g., discount rate, mortality, etc.), salary and other experience impacted benefit obligations.
Based upon actuarial valuations performed as of September 30, 2024 and 2023, both the accumulated benefit obligation and the projected benefit obligation for the Company's defined benefit pension plans was $14,712 and $12,896 at September 30, 2024 and 2023, respectively.

Net periodic pension and other postretirement benefit cost for the plans included the following:
  Pension Other Postretirement
  2024 2023 2022 2024 2023 2022
Service cost $ 125  $ 163  $ 392  $ 55  $ 76  $ 165 
Interest cost * 530  497  1,127  684  644  411 
Expected return on plan assets * —  —  (1,040) —  —  — 
Amortization:            
Prior service cost (credit) —  —  (152) (364) (364) (364)
Net actuarial (gain) loss * (53) (64) 469  (722) (708) — 
Settlement* —  1,271  30,856  —  —  — 
Net benefit cost $ 602  $ 1,867  $ 31,652  $ (347) $ (352) $ 212 
* Non-service components of pension and postretirement expense are included in other income (deductions), net.

Matthews has elected to utilize a full yield curve approach in the estimation of the service and interest cost components of net periodic benefit cost by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.

Benefit payments under the Company's DB Plan were made from plan assets, while benefit payments under the SERP were made from the Company's operating funds. Benefit payments under the Company's postretirement benefit plan are made from the Company's operating funds.

The weighted-average assumptions in the following table represent the rates used to develop the actuarial present value of the projected benefit obligation for the year listed and also the net periodic benefit cost for the following year. The measurement date of annual actuarial valuations for the Company's pension and other postretirement benefit plans was September 30, for fiscal 2024, 2023 and 2022.  The weighted-average assumptions for those plans were:
  Pension
  
Other Postretirement   
  2024 2023 2022 2024 2023 2022
Discount rate 3.51  % 4.13  % 4.01  % 4.99  % 5.86  % 5.37  %

In October 2014, the Society of Actuaries' Retirement Plans Experience Committee ("RPEC") released new mortality tables known as RP-2014. Each year, RPEC releases an update to the mortality improvement assumption that was released with the RP 2014 tables. The Company considered the RPEC mortality and mortality improvement tables and performed a review of its own mortality history to assess the appropriateness of the RPEC tables for use in generating financial results. In October 2019, the Society of Actuaries released updated base mortality tables denoted PRI-2012, replacing the RP-2014 base tables. In fiscal years 2024, 2023 and 2022, the Company elected to value its pension and other postretirement benefit plan liabilities using the base PRI-2012 mortality table and a slightly modified fully generational mortality improvement assumption. The revised assumption uses the most recent RPEC Scale MP mortality improvement table for all years where the RPEC tables are based on finalized data, and the most recently published Social Security Administration Intermediate mortality improvement for subsequent years.
Benefit payments expected to be paid are as follows:
Years ending September 30: Pension Benefits Other Postretirement Benefits
2025 $ 646  $ 872 
2026 650  886 
2027 659  887 
2028 671  894 
2029 692  894 
2030-2034 3,699  4,303 
  $ 7,017  $ 8,736 

For measurement purposes, a rate of increase of 7.0% in the per capita cost of health care benefits was assumed for 2025; the rate was assumed to decrease gradually to 4.0% for 2073 and remain at that level thereafter.  Assumed health care cost trend rates have a significant effect on the amounts reported.

The Company sponsors defined contribution plans for hourly and salary employees. The expense associated with the contributions made to these plans was $13,032, $13,297, and $12,442 for the fiscal years ended September 30, 2024, 2023 and 2022, respectively. The Company also provides a non-qualified deferred compensation plan for certain executives that permits participants to defer an amount of income into the plan during each calendar year. The expense associated with the contributions made to this plan was $700 and $1,385 for the fiscal years ended September 30, 2024 and 2023, respectively.