11.     Employee Benefit Plans

Domestic Pension Plan

We maintain a noncontributory defined benefit pension plan for all domestic nonunion employees employed on or prior to December 31, 2013, who meet certain requirements of age, length of service and hours worked per year. We amended the plan to eliminate credit for future service and compensation increases, effective September 2016. Plan benefits are based upon years of service and average compensation, as defined. The measurement dates for the plan were as of June 30, 2026 and 2025.

In July 2023, we entered into an annuity purchase agreement to irrevocably transfer a portion of the pension benefit obligation to a third-party insurance company. The annuity purchase price was $26,381 and was approximately equal to the benefit obligation transferred. The annuity purchase was funded from pension assets. We recognized a partial settlement of the pension plan, resulting from the recognition of net pension losses previously included in Accumulated other comprehensive loss. We recorded $10,674 of expense related to this partial settlement in selling, general and administrative expenses in our consolidated statement of operations during the year ended June 30, 2024.

Changes in the projected benefit obligation were:

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The discount rate used for the projected benefit obligation at June 30, 2026 and 2025, was 5.6% and 5.5%, respectively.

The projected benefit obligation for the year ended June 30, 2026 increased slightly due to an decrease in benefit payments relative to the prior year. The discount rate used each period is determined with reference to current long-term bond market rates. The projected benefit obligation also increases each year by the interest cost due to the passage of time and decreases each year by the benefits paid to plan participants.

Changes in the plan assets and funded status of the plan were:

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The actual return on plan assets for the year ended June 30, 2026 was higher than expected due to an increase in the market value of fixed income securities. Our investment strategy is to hold a significant portion of our plan assets in fixed income securities with maturities and amounts approximately matching projected future benefit payments.

The funded status is included in other liabilities in the consolidated balance sheets at June 30, 2026 and 2025, respectively. We seek to maintain an asset balance that meets the long-term funding requirements identified by actuarial projections while also satisfying ERISA fiduciary responsibilities. We do not expect to contribute to the domestic pension plan during 2027.

Accumulated other comprehensive loss related to the plan was:

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Net periodic pension expense was:

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Significant actuarial assumptions used for the net periodic pension expense for the plan were:

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The plan used the Aon AA Bond Universe as a benchmark for its discount rate as of June 30, 2026, 2025 and 2024. The discount rate is determined by matching the plan’s timing and amount of expected cash outflows to a bond yield curve constructed from a population of AA-rated corporate bond issues that are generally non-callable and have at least $250 million par value outstanding. From this, the discount rate that results in the same present value is calculated.

Estimated future benefit payments, based on the benefit obligation as of June 30, 2026 are:
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The plan’s target asset allocation for 2027 and the weighted-average asset allocation of plan assets as of June 30, 2026 and 2025 are:

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The expected long-term rate of return for the plan’s total assets is generally based on the plan’s asset mix. In determining the rate to use, we consider the expected long-term real returns on asset categories, expectations for inflation, estimates of the effect of active management and actual historical returns.

The investment policy and strategy is to earn a long-term investment return sufficient to meet the obligations of the plan, while assuming a moderate amount of risk in order to maximize investment return. In order to achieve this goal, assets are invested in a diversified portfolio consisting of debt securities, equity securities and other investments in a manner consistent with ERISA’s fiduciary requirements.

The fair values of the plan assets by asset category were:

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The table below provides a summary of the changes in the fair value of Level 3 assets:

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The following outlines the valuation methodologies used to estimate the fair value of plan assets:

Other employee benefit plans

We provide a 401(k) retirement savings plan, under which United States employees may make pre-tax and post-tax contributions. The Company contributes: (i) a matching contribution equal to 100% of the first 6.0% of an employee’s contribution; and (ii) an additional discretionary contribution of up to 4.5% of compensation, depending on the employee’s age and years of service, provided that such contributions comply with ERISA non-discrimination requirements. Employee and Company contributions are subject to certain ERISA limitations. Employees are immediately vested in Company contributions. Our contribution expense was $11,968, $7,846 and $5,395 in 2026, 2025 and 2024, respectively.

Our consolidated balance sheets include other employee-related liabilities of $9,525 and $9,058 as of June 30, 2026 and 2025, respectively, including international retirement plans, supplemental retirement benefits and long-term incentive arrangements. Expense under these plans was $7,125, $4,340 and $4,189 in 2026, 2025 and 2024, respectively.