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Note 8. Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2011
Pension and Other Postretirement Benefits Disclosure [Text Block] | Note 8: Employee Benefit Plans Pensions and Post-retirement Plans We sponsor defined benefit pension plans covering substantially all U.S. employees and provide certain post-retirement benefits for qualifying retired employees. The following tables provide a reconciliation of the changes in the plans’ benefit obligations and fair value of assets over the two-year period ended December 31, 2011, and the funded status as of December 31, 2011 and 2010 (in thousands):
|  | Pension Benefits |  | Other Benefits
|  | 2011 |  | 2010 |  | 2011 |  | 2010
Change in benefit obligation: |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 76,925 |  |  | $ | 66,813 |  |  | $ | 1,430 |  |  | $ | 1,295 |
Service cost |  |  | 3,877 |  |  |  | 2,203 |  |  |  | 54 |  |  |  | 46 |
Interest cost |  |  | 4,114 |  |  |  | 3,724 |  |  |  | 77 |  |  |  | 73 |
Amendments |  |  | 396 |  |  |  | — |  |  |  | — |  |  |  | — |
Actuarial loss |  |  | 6,476 |  |  |  | 7,907 |  |  |  | 127 |  |  |  | 40 |
Benefits paid |  |  | (3,893 | ) |  |  | (3,722 | ) |  |  | (17 | ) |  |  | (24 | )
Benefit obligation at end of year |  |  | 87,895 |  |  |  | 76,925 |  |  |  | 1,671 |  |  |  | 1,430 |
Change in fair value of plan assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  |  | 70,462 |  |  |  | 64,889 |  |  |  | — |  |  |  | — |
Actual return (loss) on plan assets |  |  | (1,818 | ) |  |  | 8,976 |  |  |  | — |  |  |  | — |
Employer contributions |  |  | 331 |  |  |  | 319 |  |  |  | 17 |  |  |  | 24 |
Benefits paid |  |  | (3,893 | ) |  |  | (3,722 | ) |  |  | (17 | ) |  |  | (24 | )
Fair value of plan assets at end of year |  |  | 65,082 |  |  |  | 70,462 |  |  |  | — |  |  |  | — |
Funded status at end of year |  | $ | (22,813 | ) |  | $ | (6,463 | ) |  | $ | (1,671 | ) |  | $ | (1,430 | )
The following table provides the amounts recognized in the consolidated balance sheets as of December 31, 2011 and 2010 (in thousands):
|  | Pension Benefits |  | Other Benefits
|  | 2011 |  | 2010 |  | 2011 |  | 2010
Other non-current assets: |  |  |  |  |  |  |  |
Prepaid benefit costs |  | $ | — |  |  | $ | 1,438 |  |  | $ | — |  |  | $ | — |
Current liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued benefit liability |  |  | (330 | ) |  |  | (323 | ) |  |  | (52 | ) |  |  | (54 | )
Other non- current liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued benefit liability |  |  | (22,484 | ) |  |  | (7,577 | ) |  |  | (1,620 | ) |  |  | (1,375 | )
Accumulated other comprehensive (income) loss |  |  | 30,747 |  |  |  | 17,859 |  |  |  | (269 | ) |  |  | (395 | )
Net amount recognized |  | $ | 7,933 |  |  | $ | 11,397 |  |  | $ | (1,941 | ) |  | $ | (1,824 | )
The benefit obligation and prepaid benefit costs were calculated by applying the following weighted average assumptions:
|  | Pension Benefits |  |  | Other Benefits |
|  | 2011 |  |  | 2010 |  |  | 2011 |  |  | 2010 |
Discount rate: net periodic pension cost |  |  | 5.50 | % |  |  | 5.75 | % |  |  | — | % |  |  | — | %
Discount rate: projected benefit obligation |  |  | 4.75 | % |  |  | 5.50 | % |  |  | 4.75 | % |  |  | 5.50 | %
Expected rate of return on plan assets |  |  | 8.00 | % |  |  | 8.00 | % |  |  | — | % |  |  | — | %
Rate of compensation increase |  |  | 4.00 | % |  |  | 4.00 | % |  |  | — | % |  |  | — | %
The above assumptions were calculated based on information as of December 31, 2011and 2010, the measurement dates for the plans. The discount rate is generally based on the rates of return available as of the measurement date from high-quality fixed income investments, which in past years we have used Moody’s AA bond index as a guide to setting the discount rate. The expected rate of return on plan assets is based upon consideration of the plan’s current asset mix, historical long-term return rates and the plan’s historical performance. Our current expected rate on plan assets of 8.0% is based on historical returns over the past ten years. Net periodic pension cost for the plans consisted of the following in 2011, 2010 and 2009 (in thousands):
|  | Pension Benefits |  |  | Other Benefits |
|  | 2011 |  |  | 2010 |  |  | 2009 |  |  | 2011 |  |  | 2010 |  |  | 2009 |
Service cost |  | $ | 3,877 |  |  | $ | 2,203 |  |  | $ | 2,269 |  |  | $ | 54 |  |  | $ | 46 |  |  | $ | 15 |
Interest cost |  |  | 4,114 |  |  |  | 3,724 |  |  |  | 3,661 |  |  |  | 77 |  |  |  | 73 |  |  |  | 55 |
Expected return on plan assets |  |  | (5,481 | ) |  |  | (5,041 | ) |  |  | (4,673 | ) |  |  | — |  |  |  | — |  |  |  | — |
Amortization of prior service cost |  |  | 403 |  |  |  | 602 |  |  |  | 602 |  |  |  | 45 |  |  |  | 53 |  |  |  | (3 | )
Amortization of net gain (loss) from earlier periods |  |  | 880 |  |  |  | 867 |  |  |  | 1,232 |  |  |  | (43 | ) |  |  | (46 | ) |  |  | (43 | )
Net periodic pension cost |  | $ | 3,793 |  |  | $ | 2,355 |  |  | $ | 3,091 |  |  | $ | 133 |  |  | $ | 126 |  |  | $ | 24 |
The allocations of investments at December 31, 2011 and 2010, the measurement dates of the plan, by asset category in the Hecla Mining Company Retirement Plan and the Lucky Friday Pension Plan are as follows:
|  | Hecla |  |  | Lucky Friday |
|  | 2011 |  |  | 2010 |  |  | 2011 |  |  | 2010 |
Interest-bearing cash |  |  | 1 | % |  |  | 3 | % |  |  | 1 | % |  |  | 3 | %
Equity securities |  |  | 35 | % |  |  | 34 | % |  |  | 35 | % |  |  | 34 | %
Debt securities |  |  | 43 | % |  |  | 39 | % |  |  | 44 | % |  |  | 39 | %
Real estate |  |  | 13 | % |  |  | 10 | % |  |  | 12 | % |  |  | 10 | %
Precious metals and other |  |  | 8 | % |  |  | 14 | % |  |  | 8 | % |  |  | 14 | %
Total |  |  | 100 | % |  |  | 100 | % |  |  | 100 | % |  |  | 100 | %
The "Precious metals and other" asset category in the table above includes our common stock in the amounts of $2.6 million and $5.2 million at December 31, 2011 and 2010, the measurement dates of the plan, respectively. These investments represent approximately 4% and 7% of the total combined assets of these plans at December 31, 2011 and 2010, respectively. Our statement of investment policy and objectives lays out the responsibilities of the board, the management investment committee, the investment manager(s), and investment adviser/consultant, and provides guidelines on investment and investment management. Investment objectives are established for each of the asset categories included in the pension plans with comparisons of performance against appropriate benchmarks. Our policy calls for each portion of the investments to be supervised by a qualified investment manager. The investment managers are monitored on an ongoing basis by our outside consultant, with formal reporting to us and the consultant performed each quarter. The policy sets forth the following allocation of assets:
|  | Target |  |  | Minimum |  |  | Maximum |
Large cap U.S. equities |  |  | 10 | % |  |  | 7 | % |  |  | 13 | %
Small cap U.S. equities |  |  | 5 | % |  |  | 4 | % |  |  | 6 | %
Non-U.S. equities |  |  | 10 | % |  |  | 8 | % |  |  | 12 | %
Fixed income |  |  | 35 | % |  |  | 29 | % |  |  | 43 | %
Real estate |  |  | 15 | % |  |  | 12 | % |  |  | 18 | %
Absolute return hedge funds |  |  | 15 | % |  |  | 12 | % |  |  | 18 | %
Real return |  |  | 10 | % |  |  | 8 | % |  |  | 12 | %
Our statement of investment policy and objectives specifies over the long term to achieve the assumed long term rate of return on plan assets established by the plan’s actuary plus one percent. Accounting guidance has established a hierarchy of assets that are measured at fair value on a recurring basis. The three levels included in the hierarchy are: Level 1: quoted prices in active markets for identical assets or liabilities Level 2: significant other observable inputs Level 3: significant unobservable inputs The fair values by asset category in each plan, along with their hierarchy levels, are as follows as of December 31, 2011 (in thousands):
|  | Hecla |  |  | Lucky Friday |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Interest-bearing cash |  | $ | 609 |  |  | $ | — |  |  | $ | — |  |  | $ | 609 |  |  | $ | 166 |  |  | $ | — |  |  | $ | — |  |  | $ | 166 |
Common stock |  |  | 2,071 |  |  |  | — |  |  |  | — |  |  |  | 2,071 |  |  |  | 527 |  |  |  | — |  |  |  | — |  |  |  | 527 |
Closely held instruments |  |  | — |  |  |  | 2,777 |  |  |  | 13,300 |  |  |  | 16,077 |  |  |  | — |  |  |  | 738 |  |  |  | 3,566 |  |  |  | 4,304 |
Partnership/joint venture interests |  |  | — |  |  |  | 1,836 |  |  |  | — |  |  |  | 1,836 |  |  |  | — |  |  |  | 523 |  |  |  | — |  |  |  | 523 |
Common collective funds |  |  | — |  |  |  | 8,028 |  |  |  | — |  |  |  | 8,028 |  |  |  | — |  |  |  | 2,049 |  |  |  | — |  |  |  | 2,049 |
Mutual funds |  |  | 22,667 |  |  |  | — |  |  |  | — |  |  |  | 22,667 |  |  |  | 6,225 |  |  |  | — |  |  |  | — |  |  |  | 6,225 |
Total fair value |  | $ | 25,347 |  |  | $ | 12,641 |  |  | $ | 13,300 |  |  | $ | 51,288 |  |  | $ | 6,918 |  |  | $ | 3,310 |  |  | $ | 3,566 |  |  | $ | 13,794 |
The following is a reconciliation of assets in level 3 of the fair value hierarchy (in thousands):
|  | Hecla |  |  | Lucky Friday |
Beginning balance at December 31, 2010 |  | $ | 12,508 |  |  | $ | 3,356 |
Net unrealized gains on assets held at the reporting date |  |  | 391 |  |  |  | 104 |
Purchases |  |  | 401 |  |  |  | 106 |
Ending balance at December 31, 2011 |  | $ | 13,300 |  |  | $ | 3,566 |
The fair values by asset category in each plan, along with their hierarchy levels, are as follows as of December 31, 2010 (in thousands):
|  | Hecla |  |  | Lucky Friday |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Interest-bearing cash |  | $ | 1,495 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,495 |  |  | $ | 466 |  |  | $ | — |  |  | $ | — |  |  | $ | 466 |
Common stock |  |  | 4,460 |  |  |  | — |  |  |  | — |  |  |  | 4,460 |  |  |  | 1,135 |  |  |  | — |  |  |  | — |  |  |  | 1,135 |
Closely held instruments |  |  | — |  |  |  | 3,660 |  |  |  | 12,508 |  |  |  | 16,168 |  |  |  | — |  |  |  | 994 |  |  |  | 3,356 |  |  |  | 4,350 |
Partnership/joint venture interests |  |  | — |  |  |  | 3,360 |  |  |  | — |  |  |  | 3,360 |  |  |  | — |  |  |  | 935 |  |  |  | — |  |  |  | 935 |
Common collective funds |  |  | — |  |  |  | 4,305 |  |  |  | — |  |  |  | 4,305 |  |  |  | — |  |  |  | 1,109 |  |  |  | — |  |  |  | 1,109 |
Mutual funds |  |  | 25,882 |  |  |  | — |  |  |  | — |  |  |  | 25,882 |  |  |  | 6,797 |  |  |  | — |  |  |  | — |  |  |  | 6,797 |
Total fair value |  | $ | 31,837 |  |  | $ | 11,325 |  |  | $ | 12,508 |  |  | $ | 55,670 |  |  | $ | 8,398 |  |  | $ | 3,038 |  |  | $ | 3,356 |  |  | $ | 14,792 |
The following is a reconciliation of assets in level 3 of the fair value hierarchy (in thousands):
|  | Hecla |  |  | Lucky Friday |
Beginning balance at December 31, 2009 |  | $ | 11,027 |  |  | $ | 2,947 |
Net unrealized gains on assets held at the reporting date |  |  | 1,237 |  |  |  | 330 |
Purchases |  |  | 244 |  |  |  | 79 |
Ending balance at December 31, 2010 |  | $ | 12,508 |  |  | $ | 3,356 |
Generally, investments are valued based on information provided by fund managers to our trustee as reviewed by management and its investment advisers. Mutual funds and equities are valued based on available exchange data. Commingled equity funds consist of publicly-traded investments. Fair value for real estate and private equity partnerships is primarily based on valuation methodologies that include third-party appraisals, comparable transactions, and discounted cash flow valuation models. Future benefit payments, which reflect expected future service as appropriate, are estimates of what will be paid in the following years (in thousands):
Year Ending December 31, |  | Pension Plans |  |  | Other Post- Employment Benefit Plans |
2012 |  | $ | 4,474 |  |  | $ | 52 |
2013 |  |  | 4,748 |  |  |  | 57 |
2014 |  |  | 4,905 |  |  |  | 63 |
2015 |  |  | 5,041 |  |  |  | 65 |
2016 |  |  | 5,343 |  |  |  | 71 |
Years 2017-2021 |  |  | 32,141 |  |  |  | 418 |
We expect to contribute approximately $1.1 million to the Hecla pension plan and $0.3 million related to our unfunded supplemental executive retirement plan during 2012. We do not expect to contribute to the Lucky Friday pension plan during 2012. The following table describes plans for which accumulated benefit obligations ("ABO") were in excess of plan assets, and for which plan assets exceeded ABO (in thousands).
|  | December 31, 2011 |  | December 31, 2010
|  | ABO Exceeds Plan Assets |  | Plan Assets Exceed ABO |  | ABO Exceeds Plan Assets |  | Plan Assets Exceed ABO
Projected benefit obligation |  | $ | 87,895 |  |  | $ | — |  |  | $ | 22,655 |  |  | $ | 54,269 |
Accumulated benefit obligation |  |  | 81,018 |  |  |  | — |  |  |  | 20,578 |  |  |  | 48,857 |
Fair value of plan assets |  |  | 65,082 |  |  |  | — |  |  |  | 14,755 |  |  |  | 55,707 |
For the pension plans and other benefit plans, the following amounts are included in "Accumulated other comprehensive loss, net" on our balance sheet as of December 31, 2011, that have not yet been recognized as components of net periodic benefit cost (in thousands):
|  | Pension Benefits |  |  | Other Benefits |
Unamortized net (gain)/loss |  | $ | 28,450 |  |  | $ | (488 | )
Unamortized prior service cost |  |  | 2,297 |  |  |  | 219 |
The amounts in "Accumulated other comprehensive loss, net" expected to be recognized as components of net periodic benefit cost during 2012 are (in thousands):
|  | Pension Benefits |  |  | Other Benefits |
Amortization of net (gain)/loss |  | $ | 2,826 |  |  | $ | (30 | )
Amortization of prior service cost |  |  | 401 |  |  |  | 44 |
During 2012, we do not expect to have any of the plans’ assets returned. Capital Accumulation Plans Our employees’ Capital Accumulation Plan is available to all U.S. salaried and certain hourly employees and applies immediately upon employment. Employees may contribute from 1% to 50% of their annual compensation to the plan. We make a matching contribution of 100% of an employee’s contribution up to, but not exceeding, 6% of the employee’s earnings. Our matching contributions were approximately $2.2 million in 2011, $2.1 million in 2010, and $2.0 million in 2009. We also maintain an employees’ 401(k) plan, which is available to all hourly employees at the Lucky Friday unit after completion of six months of service. Employees may contribute from 2% to 50% of their compensation to the plan. We make a matching contribution of 35% of an employee’s contribution up to, but not exceeding, 5% of the employee’s earnings. In May 2010, union contract negotiations resulted in a change to the matching contribution of 35%. Starting after May 10, 2010 the matching contribution is 55% of an employee’s contribution up to, but not exceeding, 5% of the employee’s earnings. Our contributions were approximately $246,000 in 2011, $229,000 in 2010, and $147,000 in 2009.

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