14. Retirement Plans

Defined Benefit Plans

The Company provides retirement benefits to substantially all eligible salaried and hourly employees. The Company uses a measurement date of March 31 for its pension plans.

Net periodic pension cost for fiscal 2013, 2012 and 2011, includes the following components:


	United States Plans									International Plans
	Fiscal year ended March 31,									Fiscal year ended March 31,
	2013			2012			2011			2013			2012			2011
Service cost	$	349		$	285		$	250		$	679		$	645		$	603
Interest cost		649			668			646			2,377			2,504			2,503
Expected return on plan assets		(756	)		(706	)		(624	)		(1,851	)		(1,787	)		(1,615	)
Amortization and deferral		393			238			248			209			32			53

Net periodic benefit cost	$	635		$	485		$	520		$	1,414		$	1,394		$	1,544

The following table sets forth a reconciliation of the related benefit obligation, plan assets, and accrued benefit costs related to the pension benefits provided by the Company for those employees covered by defined benefit plans:


	United States Plans						International Plans
	March 31,						March 31,
	2013			2012			2013			2012
Change in projected benefit obligation
Benefit obligation at the beginning of the period	$	14,040		$	11,903		$	53,895		$	48,881
Service cost		349			285			679			645
Interest cost		649			668			2,377			2,504
Benefits paid, inclusive of plan expenses		(664	)		(615	)		(1,667	)		(1,709	)
Plan settlements		—			—			—			(40	)
Experience loss		1,537			1,799			7,099			5,442
Foreign currency translation adjustment		—			—			(2,507	)		(1,828	)

Benefit obligation at the end of the period	$	15,911		$	14,040		$	59,876		$	53,895


	United States Plans						International Plans
	March 31,						March 31,
	2013			2012			2013			2012
Change in plan assets
Fair value of plan assets at the beginning of the period	$	9,192		$	8,746		$	26,942		$	25,779
Actual return on plan assets		843			420			4,024			1,555
Employer contributions		963			641			1,639			1,505
Benefits paid, inclusive of plan expenses		(664	)		(615	)		(1,667	)		(1,709	)
Plan settlements		—			—			—			(40	)
Foreign currency translation adjustment		—			—			(1,470	)		(148	)

Fair value of plan assets at the end of the period	$	10,334		$	9,192		$	29,468		$	26,942

Funded status deficit	$	(5,577	)	$	(4,848	)	$	(30,408	)	$	(26,953	)


	March 31,
	2013			2012
Amounts recognized in the consolidated balance sheets consist of:
Other assets	$	—		$	260
Accrued expenses		(1,431	)		(1,309	)
Other liabilities		(34,554	)		(30,752	)

	$	(35,985	)	$	(31,801	)

The following table represents pension components (before tax) and related changes (before tax) recognized in AOCI for the Company’s pension plans for the years ended March 31, 2013, 2012 and 2011:


	Fiscal year ended March 31,
	2013			2012			2011
Amounts recorded in AOCI before taxes:
Prior service cost	$	(816	)	$	(922	)	$	(1,054	)
Net loss		(16,645	)		(11,176	)		(3,712	)

Net amount recognized	$	(17,461	)	$	(12,098	)	$	(4,766	)


	Fiscal year ended March 31,
	2013			2012			2011
Changes in plan assets and benefit obligations:
New prior service cost	$	—		$	—		$	905
Net loss (gain) arising during the year		6,376			7,757			(3,505	)
Effect of exchange rates on amounts included in AOCI		(392	)		(176	)		151
Amounts recognized as a component of net periodic benefit costs:
Amortization of prior service cost		(79	)		(83	)		(62	)
Amortization or settlement recognition of net loss		(523	)		(187	)		(250	)

Total recognized in other comprehensive income	$	5,382		$	7,311		$	(2,761	)

The amounts included in AOCI as of March 31, 2013 that are expected to be recognized as components of net periodic pension cost during the fiscal year ended March 31, 2014 are as follows:


Net loss	$	(866	)
Prior service cost		(78	)

Net amount expected to be recognized	$	(944	)

The accumulated benefit obligation related to all defined benefit pension plans and information related to unfunded and underfunded defined benefit pension plans at the end of each year are as follows:


	United States Plans				International Plans
	March 31,				March 31,
	2013		2012		2013		2012
All defined benefit plans:
Accumulated benefit obligation	$	15,911	$	14,040	$	56,135	$	50,416
Unfunded defined benefit plans:
Projected benefit obligation		—		—		28,444		26,892
Accumulated benefit obligation		—		—		27,032		25,508
Defined benefit plans with a projected benefit obligation in excess of the fair value of plan assets:
Projected benefit obligation	$	15,911	$	14,040	$	59,876	$	28,003
Accumulated benefit obligation		15,911		14,040		56,135		26,445
Fair value of plan assets		10,334		9,192		29,468		789
Defined benefit plans with an accumulated benefit obligation in excess of the fair value of plan assets:
Projected benefit obligation	$	15,911	$	14,040	$	29,571	$	28,003
Accumulated benefit obligation		15,911		14,040		27,985		26,445
Fair value of plan assets		10,334		9,192		777		789

Assumptions

Significant assumptions used to determine the net periodic benefit cost for the US and International plans were as follows:


	United States Plans									International Plans
	Fiscal year ended March 31,									Fiscal year ended March 31,
	2013			2012			2011			2013			2012			2011
Discount rate		4.8	%		5.7	%		6.0	%		2.5-5.5	%		4.0-5.5	%		4.3-6.0	%
Expected return on plan assets		8.0			8.0			8.0			5.5-7.0			5.5-7.0			5.5-7.0
Rate of compensation increase		N/A			N/A			N/A			2.0-4.0			2.0-4.0			2.0-3.5

Significant assumptions used to determine the projected benefit obligations for the US and International plans were as follows:


	United States Plans						International Plans
	March 31,						March 31,
	2013			2012			2013			2012
Discount rate		4.0	%		4.8	%		2.5-4.4	%		2.5-5.5	%
Expected return on plan assets		8.0			8.0			4.0-7.0			5.5-7.0
Rate of compensation increase		N/A			N/A			2.0-4.0			2.0-4.0

N/A = not applicable

The United States plans do not include compensation in the formula for determining the pension benefit as it is based solely on years of service.

The expected long-term rate of return for the Company’s pension plan assets is based upon the target asset allocation and is determined using forward looking assumptions in the context of historical returns and volatilities for each asset class, as well as correlations among asset classes. The Company evaluates the rate of return assumptions for each of its plans on an annual basis.

Pension Plan Investment Strategy

The Company’s investment policy emphasizes a balanced approach to investing in securities of high quality and ready marketability. Investment flexibility is encouraged so as not to exclude opportunities available through a diversified investment strategy.

Equity investments are maintained within a target range of 50%-70% of the total portfolio market value. Investments in debt securities include issues of various maturities, and the average quality rating of bonds should be investment grade with a minimum quality rating of “B” at the time of purchase.

The Company periodically reviews the asset allocation of its portfolio. The proportion committed to equities, debt securities and cash and cash equivalents is a function of the values available in each category and risk considerations. The plan’s overall return will be compared to and expected to meet or exceed established benchmark funds and returns over a three to five year period.

The objectives of the Company’s investment strategies are: (a) the achievement of a reasonable long-term rate of total return consistent with an emphasis on preservation of capital and purchasing power, (b) stability of annual returns through a portfolio risk level, which is appropriate to conservative accounts, and (c) reflective of the Company’s willingness to forgo significantly above-average rewards in order to minimize above-average risks. These objectives may not be met each year but should be attained over a reasonable period of time.

The following table represents our pension plan investments measured at fair value as of March 31, 2013 and 2012 and the basis for that measurement:


	March 31, 2013
	United States Plans								International Plans
	Total Fair Value Measurement		Quoted Price In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurement		Quoted Price In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset category:
Cash and cash equivalents	$	1,454	$	1,454	$	—	$	—	$	—	$	—	$	—	$	—
Equity securities
US^(a)		5,346		5,346		—		—		2,856		2,856		—		—
International^(b)		905		905		—		—		15,617		15,617		—		—
Fixed income^(c)		2,629		2,629		—		—		10,995		10,995		—		—

Total	$	10,334	$	10,334	$	—	$	—	$	29,468	$	29,468	$	—	$	—


	March 31, 2012
	United States Plans								International Plans
	Total Fair Value Measurement		Quoted Price In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurement		Quoted Price In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset category:
Cash and cash equivalents	$	868	$	868	$	—	$	—	$	—	$	—	$	—	$	—
Equity securities
US^(a)		5,067		5,067		—		—		2,742		2,742		—		—
International^(b)		837		837		—		—		14,728		14,728		—		—
Fixed income^(c)		2,420		2,420		—		—		9,472		9,472		—		—

Total	$	9,192	$	9,192	$	—	$	—	$	26,942	$	26,942	$	—	$	—

The fair values presented above were determined based on valuation techniques categorized as follows:

Level 1

Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2

Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

Level 3

Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

(a)

US equities include companies that are well diversified by industry sector and equity style (i.e., growth and value strategies). Active and passive management strategies are employed. Investments are primarily in large capitalization stocks and, to a lesser extent, mid- and small-cap stocks.

(b)

International equities are invested in companies that are traded on exchanges outside the U.S. and are well diversified by industry sector, country and equity style. Active and passive strategies are employed. The vast majority of the investments are made in companies in developed markets with a small percentage in emerging markets.

(c)

Fixed income consists primarily of investment grade bonds from diversified industries.

The Company expects to make cash contributions of approximately $2,226 to its pension plans in fiscal year 2014.

Estimated future benefit payments under the Company’s pension plans are as follows:


	Pension Benefits
2014	$	2,486
2015		2,253
2016		2,464
2017		2,888
2018		2,872
Years 2019-2023		17,519

Defined Contribution Plan

The Company maintains defined contribution plans primarily in the U.S. and U.K. Eligible employees can contribute a portion of their pre-tax and /or after-tax income in accordance with plan guidelines and the Company will make contributions based on the employees’ eligible pay and /or will match a percentage of the employee contributions up to certain limits. Matching contributions charged to expense for the fiscal years ended March 31, 2013, 2012 and 2011 were $5,191, $5,146 and $5,025, respectively.