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Pension and other postretirement benefits (Tables)
 12 Months Ended
Dec. 31, 2012
Net Benefit Cost of Pension and Postretirement Benefit Plans

Net benefit cost of pension and postretirement benefit plans for continuing operations consisted of the following:

 

     Pension (1)     Other Benefits (1)  
     2012     2011     2010     2012      2011     2010  
     (Dollars in thousands)  

Service cost

    $ 2,331      $ 2,297      $ 2,229      $ 704       $ 479      $ 690   

Interest cost

      16,561        17,284        17,141        2,122         2,054        2,310   

Expected return on plan assets

      (20,245 )      (19,998 )      (16,753 )      —         —        —   

Net amortization and deferral

      6,474        4,018        4,013        761         (45 )      105   

Curtailment gain

      (197 )      (37 )      (52 )      —         —        —   

Settlement gain

      106        (5 )      (40 )      —         —        —   
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net benefit cost

    $ 5,030      $ 3,559      $ 6,538      $ 3,587       $ 2,488      $ 3,105   
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

 

(1) All periods have been adjusted to remove amounts related to discontinued operations.
Weighted Average Assumptions used in Determining Net Periodic Benefit Cost

The weighted average assumptions for U.S. and foreign plans used in determining net benefit cost were as follows:

 

     Pension     Other Benefits  
      2012     2011     2010     2012     2011     2010  

Discount rate

      4.28 %      5.50 %      5.78 %      3.95 %      5.10 %      5.60 % 

Rate of return

      8.27 %      8.31 %      8.27 %      —        —        —   

Initial healthcare trend rate

      —        —        —        8.5 %      8.0 %      9.0 % 

Ultimate healthcare trend rate

      —        —        —        5.0 %      5.0 %      5.0 % 
Pension and Postretirement Benefit Plans

Summarized information on the Company’s pension and postretirement benefit plans, measured as of year end, and the amounts recognized in the consolidated balance sheet and in accumulated other comprehensive income with respect to the plans were as follows:

 

     Pension     Other Benefits  
     2012     2011     2012     2011  
     Under Funded     Under Funded  
     (Dollars in thousands)  

Benefit obligation, beginning of year

    $ 393,794      $ 354,125      $ 49,508      $ 55,522   

Service cost

      2,331        2,297        704        479   

Interest cost

      16,561        17,284        2,122        2,054   

Actuarial loss

      2,345        65,636        6,161        5,047   

Divestiture of businesses

      —        (28,568 )      —        (10,361 ) 

Currency translation

      678        200        —        —   

Benefits paid

      (16,227 )      (15,507 )      (3,106 )      (3,466 ) 

Medicare Part D reimbursement

      —        —        220        233   

Settlements

      (767 )      (173 )      —        —   

Administrative costs

      (1,452 )      (1,463 )      —        —   

Curtailments

      (79 )      (37 )      —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Projected benefit obligation, end of year

      397,184        393,794        55,609        49,508   
  

 

 

    

 

 

    

 

 

    

 

 

  

Fair value of plan assets, beginning of year

      243,324        261,934        —        —   

Actual return on plan assets

      33,946        11,419        —        —   

Contributions

      17,567        6,451        —        —   

Divestiture of businesses

      —        (19,619 )      —        —   

Benefits paid

      (16,227 )      (15,507 )      —        —   

Settlements paid

      (767 )      (173 )      —        —   

Administrative costs

      (1,452 )      (1,463 )      —        —   

Currency translation

      472        282        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Fair value of plan assets, end of year

      276,863        243,324        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Funded status, end of year

    $ (120,321 )    $ (150,470 )    $ (55,609 )    $ (49,508 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  
Amounts Recognized in the Consolidated Balance Sheet

The following table sets forth information as to amounts recognized in the consolidated balance sheet with respect to the plans:

 

     Pension     Other Benefits  
     2012     2011     2012     2011  
     (Dollars in thousands)  

Payroll and benefit-related liabilities

    $ (1,784 )    $ (1,813 )    $ (3,200 )    $ (3,181 ) 

Pension and postretirement benefit liabilities

      (118,537 )      (148,657 )      (52,409 )      (46,327 ) 

Accumulated other comprehensive loss

      186,916        204,508        12,254        6,854   
  

 

 

    

 

 

    

 

 

    

 

 

  
   $ 66,595      $ 54,038      $ (43,355 )    $ (42,654 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  
Amounts Recognized in Accumulated Other Comprehensive (Income) Loss

Amounts recognized in accumulated other comprehensive (income) loss with respect to the plans are set forth below:

 

     Pension  
     Prior Service
Cost (Credit)		     Net (Gain)
or Loss		     Deferred
Taxes		     Accumulated
Other
Comprehensive
(Income) Loss,
Net of Tax		  
     (Dollars in thousands)  

Balance at December 31, 2010

    $ 431      $ 143,206      $ (52,313 )    $ 91,324   

Reclassification adjustments related to components of Net Periodic Benefit Cost recognized during the period:

         

Net amortization and deferral

      (32 )      (3,986 )      1,449        (2,569 ) 

Settlement

      —        5        (2 )      3   

Amounts arising during the period:

         

Tax rate adjustments

      —        —        (58 )      (58 ) 

Actuarial changes in benefit obligation

      —        74,215        (26,959 )      47,256   

Divestiture of businesses

      (148 )      (9,260 )      3,415        (5,993 ) 

Impact of currency translation

      —        77        (20 )      57   
  

 

 

    

 

 

    

 

 

    

 

 

  

Balance at December 31, 2011

      251        204,257        (74,488 )      130,020   

Reclassification adjustments related to components of Net Periodic Benefit Cost recognized during the period:

         

Net amortization and deferral

      (35 )      (6,439 )      2,287        (4,187 ) 

Curtailment

      —        118        (44 )      74   

Settlement

      —        (106 )      40        (66 ) 

Amounts arising during the period:

         

Tax rate adjustments

      —        —        115        115   

Actuarial changes in benefit obligation

      —        (11,356 )      4,581        (6,775 ) 

Impact of currency translation

      —        226        (58 )      168   
  

 

 

    

 

 

    

 

 

    

 

 

  

Balance at December 31, 2012

    $ 216      $ 186,700      $ (67,567 )    $ 119,349   
  

 

 

    

 

 

    

 

 

    

 

 

  

 

     Other Benefits  
     Prior Service
Cost (Credit)		     Initial
Obligation		     Net
(Gain) or
Loss		     Deferred
Taxes		     Accumulated
Other
Comprehensive
(Income) Loss,
Net of Tax		  
     (Dollars in thousands)  

Balance at December 31, 2010

    $ 509      $ 364      $ 5,422      $ (1,873 )    $ 4,422   

Reclassification adjustments related to components of Net Periodic Benefit Cost recognized during the period:

           

Net Amortization and deferral

      56        (110 )      99        (17 )      28   

Amounts Arising During the period:

           

Tax rate adjustments

      —        —        —        (4 )      (4 ) 

Divestiture of businesses

      (658 )      (152 )      (3,723 )      1,450        (3,083 ) 

Actuarial changes in benefit obligation

      —        —        5,047        (1,882 )      3,165   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at December 31, 2011

      (93 )      102        6,845        (2,326 )      4,528   

Reclassification adjustments related to components of Net Periodic Benefit Cost recognized during the period:

           

Net Amortization and deferral

      55        (97 )      (719 )      277        (484 ) 

Amounts Arising During the period:

           

Tax rate adjustments

      —        —        —        (1 )      (1 ) 

Actuarial changes in benefit obligation

      —        —        6,161        (2,296 )      3,865   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at December 31, 2012

    $ (38 )    $ 5      $ 12,287      $ (4,346 )    $ 7,908   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Weighted Average Assumptions used in Determining Benefit Obligations

The weighted average assumptions for U.S. and foreign plans used in determining benefit obligations were as follows:

 

     Pension     Other Benefits  
     2012     2011     2012     2011  

Discount rate

      4.27 %      4.28 %      3.83 %      3.95 % 

Rate of compensation increase

      3.0 %      3.0 %      —        —   

Initial healthcare trend rate

      —        —        8.15 %      8.5 % 

Ultimate healthcare trend rate

      —        —        5.0 %      5.0 % 
Fair Values of Pension Plan Assets

The fair values of the Company’s pension plan assets at December 31, 2012 by asset category are as follows:

 

     Fair Value Measurements at 12/31/12  

Asset Category (a)

    Total      Quoted Prices in
Active Markets for
Identical Assets
(Level 1)		      Significant
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		  
     (Dollars in thousands)  

Cash

    $ 408       $ 408       $ —       $ —   

Money market funds

      361         361         —         —   

Equity securities:

            

Managed volatility (b)

      66,413         66,413         —         —   

U.S. small/mid-cap equity (d)

      16,543         16,543         —         —   

World Equity (excluding United States) (e)

      27,257         27,257         —         —   

Common Equity Securities — Teleflex Incorporated

      8,336         8,336         —         —   

Diversified United Kingdom Equity

      6,681         6,681         —         —   

Diversified Global (excluding United Kingdom)

      3,267         3,267         —         —   

Fixed income securities:

            

Long duration bond fund (f)

      73,370         73,370         —         —   

High yield bond fund (g)

      10,896         10,896         —         —   

Emerging markets debt fund (h)

      8,453         8,453         —         —   

Corporate, government and foreign bonds

      5,675         —         5,675         —   

Asset backed — home loans

      1,005         —         1,005         —   

Other types of investments:

            

Structured credit (i)

      26,828         —         —         26,828   

Hedge fund of funds (j)

      21,365         —         —         21,365   

Other

      5         —         —         5   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 276,863       $ 221,985       $ 6,680       $ 48,198   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

The fair values of the Company’s pension plan assets at December 31, 2011 by asset category are as follows:

 

     Fair Value Measurements at 12/31/11  

Asset Category (a)

    Total      Quoted Prices in
Active Markets for
Identical Assets
(Level 1)		      Significant
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		  
     (Dollars in thousands)  

Cash

    $ 432       $ 432       $ —       $ —   

Money market funds

      2,987         2,987         —         —   

Equity securities:

            

U.S. large-cap disciplined equity (c)

      67,089         67,089         —         —   

U.S. small/mid-cap equity (d)

      18,290         18,290         —         —   

World Equity (excluding United States) (e)

      42,260         42,260         —         —   

Common Equity Securities — Teleflex Incorporated

      7,165         7,165         —         —   

Diversified United Kingdom Equity

      5,681         5,681         —         —   

Diversified Global (excluding United Kingdom)

      2,860         2,860         —         —   

Fixed income securities:

            

Long duration bond fund (f)

      71,057         71,057         —         —   

Corporate, government and foreign bonds

      2,573         —         2,573         —   

Asset backed — home loans

      1,008         —         1,008         —   

Other types of investments:

            

Hedge fund of funds (j)

      20,624         —         —         20,624   

General Fund — Japan

      767         —         767         —   

Other

      531         —         —         531   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 243,324       $ 217,821       $ 4,348       $ 21,155   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

 

(a) Information on asset categories described in notes (b)-(j) is derived from prospectuses and other material provided by the respective funds comprising the respective asset categories.

 

(b) This category comprises mutual funds that invest in securities of U.S. and non-U.S. companies of all capitalization ranges that exhibit relatively low volatility.

 

(c) This category comprises a mutual fund that invests at least 80% of its net assets in equity securities of large companies. These securities include common stocks, preferred stocks, warrants, exchange traded funds based on a large cap equity index and derivative instruments whose value is based on an underlying equity security or a basket of equity securities. The fund invests primarily in common stocks of U.S. companies with market capitalizations in the range of companies in the S&P 500 Composite Stock Price Index (S&P 500 Index).

 

(d) This category comprises a mutual fund that invests at least 80% of its net assets in equity securities of small and mid-sized companies. The fund invests in common stocks or exchange traded funds holding common stock of U.S. companies with market capitalizations in the range of companies in the Russell 2500 Index.

 

(e)

This category comprises a mutual fund that invests at least 80% of its net assets in equity securities of foreign companies. These securities may include common stocks, preferred stocks, warrants, exchange traded funds based on an international equity index and derivative instruments whose value is based on an international equity index and derivative instruments whose value is based on an underlying equity security or a basket of equity securities. The fund invests in securities of foreign issuers located in developed and emerging market countries. However, the fund will not invest more than 30% of its assets in the common stocks or other equity securities of issuers located in emerging market countries.

 

(f) This category comprises a mutual fund that invests in instruments or derivatives having economic characteristics similar to fixed income securities. The fund invests in investment grade fixed income instruments, including securities issued or guaranteed by the U.S. Government and its agencies and instrumentalities, corporate bonds, asset-backed securities, exchange traded funds, mortgage-backed securities and collateralized mortgage-backed securities. The fund invests primarily in long duration government and corporate fixed income securities, and uses derivative instruments, including interest rate swap agreements and Treasury futures contracts, for the purpose of managing the overall duration and yield curve exposure of the Fund’s portfolio of fixed income securities.

 

(g) This category comprises a mutual fund that invests at least 80% of its net assets in higher-yielding fixed income securities, including corporate bonds and debentures, convertible and preferred securities and zero coupon obligations.

 

(h) This category comprises a mutual fund that invests at least 80% of its net assets in fixed income securities of emerging market issuers, primarily in U.S. dollar-denominated debt of foreign governments, government-related and corporate issuers in emerging market countries and entities organized to restructure the debt of those issuers.

 

(i) This category comprises of a fund that invests primarily in collateralized debt obligations (“CDOs”) and other structured credit vehicles. The fund investments may include fixed income securities, loan participants, credit-linked notes, medium-term notes, pooled investment vehicles and derivative instruments.

 

(j) This category comprises a hedge fund that invests in various other hedge funds. As of December 31, 2012 and December 31, 2011:

 

  •  

approximately 22% and 20%, respectively, of the assets of the hedge fund were invested in equity hedge based funds, including equity long/short and equity market neutral strategies;
  •  

approximately 30% and 27%, respectively, of the assets were held in tactical/directional based funds, including global macro, long/short equity, commodity and systematic quantitative strategies;
  •  

approximately 25% and 29%, respectively, of the assets were held in relative value based funds, including convertible and fixed income arbitrage, credit long/short and volatility arbitrage strategies;
  •  

approximately 17% and 17%, respectively, of the assets were held in funds with an event driven strategy; and
  •  

approximately 6% and 7%, respectively, of the assets were held in cash.
Reconciliation of Changes in Level 3 Pension Assets Measured at Fair Value on Recurring Basis

The following table provides a reconciliation of changes in Level 3 pension assets measured at fair value on a recurring basis from December 31, 2010 through December 31, 2012:

 

     Hedge Fund
of Funds		     Structured
Credit		      Other
Investments		  
     (Dollars in thousands)  

Balance at December 31, 2010

    $ 20,689      $ —       $ 498   

Actual return on assets

      (65 )      —         25   

Foreign currency adjustment

      —        —         8   
  

 

 

    

 

 

     

 

 

  

Balance at December 31, 2011

      20,624        —         531   

Purchases

      —        26,000         —   

Sales/redemptions

      —        —         (509 ) 

Actual return on assets

      741        828         (35 )

Foreign currency adjustment

      —        —         18   
  

 

 

    

 

 

     

 

 

  

Balance at December 31, 2012

    $ 21,365      $ 26,828       $ 5   
  

 

 

    

 

 

     

 

 

  
Expected Benefit Payments

The Company’s expected benefit payments for U.S. and foreign plans for each of the five succeeding years and the aggregate of the five years thereafter, net of the annual average Medicare Part D subsidy of approximately $0.3 million, is as follows:

 

     Pension      Other Benefits  
     (Dollars in thousands)  

2013

    $ 16,316       $ 3,199   

2014

      16,625         3,314   

2015

      17,249         3,369   

2016

      17,949         3,511   

2017

      18,540         3,539   

Years 2018 — 2022

      103,552         17,865