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Note 8 - Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract] |
Pension and Other Postretirement Benefits Disclosure [Text Block] | Note 8: Employee Benefit Plans Pensions and Other Post-retirement Plans We sponsor defined benefit pension plans covering substantially all U.S. 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, 2014, and the funded status as of December 31, 2014 and December 31, 2013 (in thousands):
|  | Pension Benefits |
|  | 2014 |  |  | 2013 |
Change in benefit obligation: |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 101,155 |  |  | $ | 99,367 |
Service cost |  |  | 4,312 |  |  |  | 4,025 |
Interest cost |  |  | 4,859 |  |  |  | 3,889 |
Amendments |  |  | — |  |  |  | (4,208 | )
Actuarial loss |  |  | 12,575 |  |  |  | 2,428 |
Benefits paid |  |  | (4,617 | ) |  |  | (4,346 | )
Benefit obligation at end of year |  |  | 118,284 |  |  |  | 101,155 |
Change in fair value of plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  |  | 69,051 |  |  |  | 68,515 |
Actual return on plan assets |  |  | 3,402 |  |  |  | 3,479 |
Employer contributions |  |  | 6,715 |  |  |  | 1,403 |
Benefits paid |  |  | (4,617 | ) |  |  | (4,346 | )
Fair value of plan assets at end of year |  |  | 74,551 |  |  |  | 69,051 |
Funded status at end of year |  | $ | (43,733 | ) |  | $ | (32,104 | )
The following table provides the amounts recognized in the consolidated balance sheets as of December 31, 2014 and December 31, 2013 (in thousands):
|  | Pension Benefits |
|  | 2014 |  |  | 2013 |
Current liabilities: |  |  |  |  |  |  |  |
Accrued benefit liability |  | $ | (385 | ) |  | $ | (342 | )
Other non- current liabilities: |  |  |  |  |  |  |  |
Accrued benefit liability |  |  | (43,348 | ) |  |  | (31,763 | )
Accumulated other comprehensive loss |  |  | 41,041 |  |  |  | 29,768 |
Net amount recognized |  | $ | (2,692 | ) |  | $ | (2,337 | )
The benefit obligation and prepaid benefit costs were calculated by applying the following weighted average assumptions:
|  | Pension Benefits |
|  | 2014 |  |  | 2013 |
Discount rate: net periodic pension cost |  |  | 4.81 | % |  |  | 4.00 | %
Discount rate: projected benefit obligation |  |  | 4.17 | % |  |  | 4.81 | %
Expected rate of return on plan assets |  |  | 7.20 | % |  |  | 7.20 | %
Rate of compensation increase: net periodic pension cost |  |  | 4.00 | % |  |  | 4.00 | %
Rate of compensation increase: projected benefit obligation |  |  | 2.00 | % |  |  | 4.00 | %
The above assumptions were calculated based on information as of December 31, 2014 and December 31, 2013, the measurement dates for the plans. The discount rate is based on the yield curve for investment-grade corporate bonds as published by the U.S. Treasury Department. 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 7.2% is based on historical returns over the past five years. Net periodic pension cost for the plans consisted of the following in 2014, 2013, and 2012 (in thousands):
|  | Pension Benefits |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Service cost |  | $ | 4,312 |  |  | $ | 4,025 |  |  | $ | 3,974 |
Interest cost |  |  | 4,859 |  |  |  | 3,889 |  |  |  | 4,068 |
Expected return on plan assets |  |  | (4,996 | ) |  |  | (4,741 | ) |  |  | (4,581 | )
Amortization of prior service cost (benefit) |  |  | (337 | ) |  |  | 66 |  |  |  | 401 |
Amortization of net gain from earlier periods |  |  | 3,275 |  |  |  | 3,152 |  |  |  | 2,826 |
Net periodic pension cost |  | $ | 7,113 |  |  | $ | 6,391 |  |  | $ | 6,688 |
The allocations of investments at December 31, 2014 and December 31, 2013, 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 |
|  | 2014 |  |  | 2013 |  |  | 2014 |  |  | 2013 |
Cash |  |  | 3 | % |  |  | 1 | % |  |  | 1 | % |  |  | 1 | %
Large cap U.S. equities |  |  | 11 | % |  |  | 9 | % |  |  | 11 | % |  |  | 9 | %
Small cap U.S. equities |  |  | 6 | % |  |  | 6 | % |  |  | 6 | % |  |  | 6 | %
Non-U.S. equities |  |  | 8 | % |  |  | 9 | % |  |  | 10 | % |  |  | 9 | %
Fixed income |  |  | 34 | % |  |  | 32 | % |  |  | 34 | % |  |  | 32 | %
Real estate |  |  | 15 | % |  |  | 20 | % |  |  | 16 | % |  |  | 20 | %
Absolute return hedge funds |  |  | 14 | % |  |  | 15 | % |  |  | 15 | % |  |  | 15 | %
Real return |  |  | 9 | % |  |  | 8 | % |  |  | 7 | % |  |  | 8 | %
Total |  |  | 100 | % |  |  | 100 | % |  |  | 100 | % |  |  | 100 | %
The "Real return" asset category in the table above includes our common stock in the amounts of $1.4 million and $1.6 million at December 31, 2014 and December 31, 2013. These investments represent approximately 2% of the total combined assets of the plans at December 31, 2014 and December 31, 2013, respectively. Each plan's statement of investment policy delineates the responsibilities of the board, the retirement/pension committee, the investment manager(s), and investment adviser/consultant, and provides guidelines on investment management. Investment objectives are established for each of the asset categories included in the pension plans with comparisons of performance against appropriate benchmarks. Each plan's policy calls for investments to be supervised by qualified investment managers. 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 | %
Each plan's statement of investment policy and objectives aspires 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 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, 2014 (in thousands):
|  | Hecla |  |  | Lucky Friday |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Interest-bearing cash |  | $ | 1,798 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,798 |  |  | $ | 136 |  |  | $ | — |  |  | $ | — |  |  | $ | 136 |
Common stock |  |  | 1,105 |  |  |  | — |  |  |  | — |  |  |  | 1,105 |  |  |  | 281 |  |  |  | — |  |  |  | — |  |  |  | 281 |
Real estate |  |  | — |  |  |  | — |  |  |  | 8,889 |  |  |  | 8,889 |  |  |  | — |  |  |  | — |  |  |  | 2,458 |  |  |  | 2,458 |
Common collective funds |  |  | — |  |  |  | 12,280 |  |  |  | 8,454 |  |  |  | 20,734 |  |  |  | — |  |  |  | 3,040 |  |  |  | 2,306 |  |  |  | 5,346 |
Mutual funds |  |  | 26,392 |  |  |  | — |  |  |  | — |  |  |  | 26,392 |  |  |  | 7,412 |  |  |  | — |  |  |  | — |  |  |  | 7,412 |
Total fair value |  | $ | 29,295 |  |  | $ | 12,280 |  |  | $ | 17,343 |  |  | $ | 58,918 |  |  | $ | 7,829 |  |  | $ | 3,040 |  |  | $ | 4,764 |  |  | $ | 15,633 |
The following is a roll-forward of assets in Level 3 of the fair value hierarchy (in thousands):
|  | Hecla |  |  | Lucky Friday |
Beginning balance at January 1, 2014 |  | $ | 18,767 |  |  | $ | 5,039 |
Net unrealized gains on assets held at the reporting date |  |  | 1,457 |  |  |  | 375 |
Purchases |  |  | 424 |  |  |  | 121 |
Sales |  | $ | (3,305 | ) |  | $ | (771 | )
Ending balance at December 31, 2014 |  | $ | 17,343 |  |  | $ | 4,764 |
Of the $22.1 million in plan assets classified as level 3, $11.3 million was invested in real estate, and the remaining $10.8 million was invested in collective investment funds. The fair values by asset category in each plan, along with their hierarchy levels, were as follows as of December 31, 2013 (in thousands):
|  | Hecla |  |  | Lucky Friday |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Interest-bearing cash |  | $ | 596 |  |  | $ | — |  |  | $ | — |  |  | $ | 596 |  |  | $ | 393 |  |  | $ | — |  |  | $ | — |  |  | $ | 393 |
Common stock |  |  | 1,220 |  |  |  | — |  |  |  | — |  |  |  | 1,220 |  |  |  | 311 |  |  |  | — |  |  |  | — |  |  |  | 311 |
Real estate |  |  | — |  |  |  | — |  |  |  | 10,797 |  |  |  | 10,797 |  |  |  | — |  |  |  | — |  |  |  | 2,865 |  |  |  | 2,865 |
Common collective funds |  |  | — |  |  |  | 9,654 |  |  |  | 7,970 |  |  |  | 17,624 |  |  |  | — |  |  |  | 2,982 |  |  |  | 2,174 |  |  |  | 5,156 |
Mutual funds |  |  | 23,252 |  |  |  | — |  |  |  | — |  |  |  | 23,252 |  |  |  | 6,837 |  |  |  | — |  |  |  | — |  |  |  | 6,837 |
Total fair value |  | $ | 25,068 |  |  | $ | 9,654 |  |  | $ | 18,767 |  |  | $ | 53,489 |  |  | $ | 7,541 |  |  | $ | 2,982 |  |  | $ | 5,039 |  |  | $ | 15,562 |
The following is a roll-forward of assets in Level 3 of the fair value hierarchy (in thousands):
|  | Hecla |  |  | Lucky Friday |
Beginning balance at December 31, 2012 |  | $ | 16,862 |  |  | $ | 4,491 |
Net unrealized gains on assets held at the reporting date |  |  | 1,486 |  |  |  | 399 |
Purchases |  |  | 419 |  |  |  | 149 |
Ending balance at December 31, 2013 |  | $ | 18,767 |  |  | $ | 5,039 |
Of the $23.8 million in plan assets classified as Level 3, $13.7 million was invested in real estate, while $10.1 million was invested in collective investment funds. 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 |
2015 |  | $ | 5,249 |
2016 |  |  | 5,462 |
2017 |  |  | 5,724 |
2018 |  |  | 6,186 |
2019 |  |  | 6,569 |
Years 2020-2024 |  |  | 39,915 |
In January 2015, we contributed approximately $4.9 million in shares of our common stock to our defined benefit plans, with no additional contributions anticipated in 2015. We expect to contribute approximately $0.4 million to our unfunded supplemental executive retirement plan during 2015. 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, 2014 |  |  | December 31, 2013 |
|  | ABO Exceeds Plan Assets |  |  | Plan Assets Exceed ABO |  |  | ABO Exceeds Plan Assets |  |  | Plan Assets Exceed ABO |
Projected benefit obligation |  | $ | 118,284 |  |  | $ | — |  |  | $ | 101,155 |  |  | $ | — |
Accumulated benefit obligation |  |  | 112,727 |  |  |  | — |  |  |  | 97,937 |  |  |  | — |
Fair value of plan assets |  |  | 74,551 |  |  |  | — |  |  |  | 69,051 |  |  |  | — |
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, 2014, that have not yet been recognized as components of net periodic benefit cost (in thousands):
|  | Pension Benefits |
Unamortized net (gain)/loss |  | $ | 42,959 |
Unamortized prior service benefit |  |  | (1,917 | )
The amounts in "Accumulated other comprehensive loss, net" expected to be recognized as components of net periodic benefit cost during 2015 are (in thousands):
|  | Pension Benefits |
Amortization of net loss |  | $ | 3,459 |
Amortization of prior service benefit |  |  | (352 | )
We do not expect to have any of the plans’ assets returned during 2015. Effective July 1, 2013, we amended the Hecla Mining Company Retirement Plan (the "Hecla plan") to change the pension benefit formula and other plan provisions. The amendment resulted in the following changes to the Hecla plan:
| • | The definition of pensionable compensation was changed to exclude one-half of any performance-based or annual incentive bonus, fringe benefits, reimbursements or other expense allowances, moving expenses, health and welfare benefits, stock awards, income realized from stock options or restricted stock, income from certain property arrangements, long term incentive awards, premium pay rates for overtime, contributions to or distributions from a non-qualified deferred compensation plan, and shift or location differentials. Under the terms of the amended Hecla plan, pensionable compensation includes an employee's base salary and other payments of compensation for services performed during the course of employment, elective deferrals not includable in the gross income of the employee under the Internal Revenue Service Code Sections 125, 132(f)(4), 402(e)(3), 402(h), 403(b) and 457, one-half of any performance-based or annual incentive bonus, one-half of any cash safety incentive award, paid time off other than for disability leave, and compensation for overtime at the employee's regular hourly rate of pay for each hour worked.
| • | For new employees hired after June 30, 2013, pension benefits will be calculated based on the highest average of any five consecutive years (60 months) of pensionable compensation during the final ten years of service instead of three consecutive years during the final ten years of service for employees hired before July 1, 2013.
| • | Prior to July 1, 2013, we credited each participant's account annually with an amount equal to 6.0% of pensionable compensation, plus an additional 5.7% of the participant's pensionable compensation in excess of the Social Security taxable wage base ("the cash balance pay credit"). Beginning July 1, 2013, the cash balance pay credit will consist of the 6.0% of pensionable compensation without the 5.7% additional credit.
| • | Access to cash balance accounts following a termination of employment prior to early or normal retirement age has been limited. Prior to the amendment, a cash balance participant could elect to receive a distribution of the vested portion of his or her account at any age following a termination of employment. This change applies only to amounts credited to a cash balance account after June 30, 2013.
| • | For new employees hired after June 30, 2013, the cash balance pay credit will be earned based on years of plan participation: 3% for 1 through 5 years; 4.5% for 6 through 10 years; 6% after 10 years.
Canadian employees participate in Canada's public retirement income system, and are not eligible to participate in the defined benefit pension plans that we maintain for U.S. employees. Canada's public retirement income system includes the following components: (i) the Canada (or Quebec) Pension Plan, which is a contributory, earnings-related social insurance program, and (ii) the Old Age Security program. In addition, the Registered Retirement Savings Plan is a tax-deferred individual savings plan available to Canadian employees. Capital Accumulation Plans Our employees’ Capital Accumulation (401(k)) Plan ("Hecla 401(k) 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 (subject to statutory limits). We make a matching contribution of 100% of an employee’s contribution up to 6% of the employee’s earnings. Our matching contributions were approximately $3.2 million in 2014, $3.0 million in 2013, and $2.5 million in 2012. Effective January 1, 2014, the Hecla 401(k) Plan was restated to allow for payment of matching contributions to be made in Hecla common stock on a quarterly basis. Prior to 2014, contributions were made in cash on a payroll-to-payroll basis. 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 (subject to statutory limits). 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 $292,000 in 2014, $293,000 in 2013, and $407,000 in 2012.

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