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Retirement Benefits
 6 Months Ended
Mar. 31, 2012
Retirement Benefits - General  
Retirement Benefits

Note 17. Retirement benefits

Woodward provides various benefits to eligible members of the Company, including contributions to various defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits and postretirement life insurance benefits. Eligibility requirements and benefit levels vary depending on employee location.

 

Defined contribution plans

Substantially all U.S. employees are eligible to participate in the U.S. defined contribution plan. The U.S. defined contribution plan allows employees to defer part of their annual income for income tax purposes into their personal 401(k) accounts. The Company makes contributions to eligible employee accounts, which are also deferred for employee personal income tax purposes. Certain foreign employees are also eligible to participate in foreign plans.

Most U.S. employees with at least two years of service receive an annual contribution of Woodward stock, equal to 5% of their eligible prior year wages, to their personal Woodward Retirement Savings Plan accounts. In February 2012, Woodward fulfilled the annual Woodward stock contribution using shares held in treasury stock by issuing 209 shares of common stock for a total value of $9,335. In the second quarter of fiscal year 2011, the annual Woodward stock contribution totaling $9,107 was funded by way of a cash contribution to the Woodward Retirement Savings Plan, which then purchased shares of Woodward stock on the open market.

The amount of expense associated with defined contribution plans was as follows:

 

                                 
     Three-Months Ending      Six-Months Ending  
   March 31,      March 31,  
     2012      2011      2012      2011  

Company costs

    $ 4,350       $ 4,058       $ 8,982       $ 8,256   

 

 

 

Woodward operates one multi-employer plan for certain employees in the Netherlands. The amounts of contributions associated with the multi-employer plan were as follows:

 

                                 
     Three-Months Ending      Six-Months Ending  
   March 31,      March 31,  
     2012      2011      2012      2011  

Company contributions

    $ 121       $ 114       $ 242       $ 233   

 

Defined benefit plans

Woodward has defined benefit plans that provide pension benefits for certain retired employees in the U.S., the United Kingdom, Japan and Switzerland. Woodward also provides other postretirement benefits to its employees including postretirement medical benefits and life insurance benefits. Postretirement medical benefits are provided to certain current and retired employees and their covered dependants and beneficiaries in the U.S. and the United Kingdom. Life insurance benefits are provided to certain retirees in the U.S. under frozen plans which are no longer available to current employees. A September 30 measurement date is utilized to value plan assets and obligations for all of Woodward's defined benefit pension and other postretirement benefit plans.

U.S. GAAP requires that, for obligations outstanding as of September 30, 2011, the funded status reported in interim periods shall be the same asset or liability recognized in the previous year end statement of financial position adjusted for (a) subsequent accruals of net periodic benefit cost that exclude the amortization of amounts previously recognized in other comprehensive income (for example, subsequent accruals of service cost, interest cost, and return on plan assets) and (b) contributions to a funded plan or benefit payments.

The components of the net periodic retirement pension costs recognized are as follows:

 

                                                 
     Three-Months Ending March 31,  
     United States     Other Countries     Total  
     2012     2011     2012     2011     2012     2011  

Service cost

    $ 882      $ 859      $ 285      $ 224      $ 1,167      $ 1,083   

Interest cost

      1,454        1,411        569        562        2,023        1,973   

Expected return on plan assets

      (1,752 )      (1,674 )      (645 )      (627 )      (2,397 )      (2,301 ) 

Amortization of:

                                                 

Net actuarial (gain) loss

      131        78        165        224        296        302   

Prior service cost (benefit)

      18        18        (2 )      (2 )      16        16   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net periodic retirement pension (benefit) cost

    $ 733      $ 692      $ 372      $ 381      $ 1,105      $ 1,073   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Contributions paid

    $ 150      $ —        $ 451      $ 488      $ 601      $ 488   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                 
     Six-Months Ending March 31,  
     United States     Other Countries     Total  
     2012     2011     2012     2011     2012     2011  

Service cost

    $ 1,765      $ 1,717      $ 572      $ 446      $ 2,337      $ 2,163   

Interest cost

      2,908        2,823        1,138        1,117        4,046        3,940   

Expected return on plan assets

      (3,504 )      (3,347 )      (1,290 )      (1,246 )      (4,794 )      (4,593 ) 

Amortization of:

                                                 

Net actuarial (gain) loss

      262        156        332        445        594        601   

Prior service cost (benefit)

      37        37         (4 )       (4 )      33       33   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net periodic retirement pension (benefit) cost

    $ 1,468      $ 1,386      $ 748      $ 758      $ 2,216      $ 2,144   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Contributions paid

    $ 300      $ —        $ 2,332      $ 3,190      $ 2,632      $ 3,190   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

 

 

The components of the net periodic other postretirement benefit costs recognized are as follows:

 

                                 
     Three-Months Ending     Six-Months Ending  
   March 31,     March 31,  
     2012     2011     2012     2011  

Service cost

    $ 18      $ 23      $ 35      $ 46   

Interest cost

      450        494        899        987   

Amortization of:

                                 

Net actuarial (gain) loss

      23        32        46        64   

Prior service cost (benefit)

      (138 )      (217 )      (275 )      (435 ) 
    

 

 

    

 

 

    

 

 

    

 

 

  

Net periodic other postretirement (benefit) cost

    $ 353      $ 332      $ 705      $ 662   
    

 

 

    

 

 

    

 

 

    

 

 

  

Contributions paid

    $ 792      $ 817      $ 1,293      $ 1,594   
    

 

 

    

 

 

    

 

 

    

 

 

  

The amount of cash contributions made to these plans in any year is dependent upon a number of factors, including minimum funding requirements in the jurisdictions in which Woodward operates and arrangements made with trustees of certain foreign plans. As a result, the actual funding in fiscal year 2012 may differ from the current estimate. Woodward estimates its remaining cash contributions in fiscal year 2012 will be as follows:

 

         

Retirement pension benefits:

         

United States

    $ 300   

United Kingdom

      864   

Japan

      —     

Switzerland

      191   

Other postretirement benefits

      3,417