6. Deferred Compensation and Retirement Plans

The Company has several deferred compensation and retirement plans for eligible consultants and vice-presidents that provide defined benefits to participants based on the deferral of current compensation or contributions made by the Company subject to vesting and retirement or termination provisions.

The total benefit obligations for these plans were as follows:


	Year Ended April 30,
	2014			2013
	(in thousands)
Deferred compensation plans	$	82,153		$	85,562
Pension plan		4,424			4,536
International retirement plans		3,727			3,646
Executive Capital Accumulation Plan		89,308			75,913

Total benefit obligations		179,612			169,657
Less: current portion of benefit obligation		(10,377	)		(9,951	)

Non-current benefit obligation	$	169,235		$	159,706

Deferred Compensation Plans

The Enhanced Wealth Accumulation Plan (“EWAP”) was established in fiscal 1994, which replaced the Wealth Accumulation Plan (“WAP”). Certain vice presidents elected to participate in a “deferral unit” that required the participant to contribute a portion of their compensation for an eight year period, or in some cases, make an after tax contribution, in return for defined benefit payments from the Company over a fifteen year period generally at retirement age of 65 or later. Participants were able to acquire additional “deferral units” every five years. Vice presidents who did not choose to roll over their WAP units into the EWAP continue to be covered under the earlier version in which participants generally vest and commence receipt of benefit payments at retirement age of 65. In June 2003, the Company amended the EWAP and WAP plans, so as not to allow new participants or the purchase of additional deferral units by existing participants.

The Company also maintains a Senior Executive Incentive Plan (“SEIP”) for participants approved by the Board. Generally, to be eligible, the vice president must be participating in the EWAP. Participation in the SEIP required the participant to contribute a portion of their compensation during a four-year period, or in some cases make an after tax contribution, in return for a defined benefit paid by the Company generally over a fifteen year period after ten years of participation in the plan or such later date as elected by the participant. In June 2003, the Company amended the SEIP plan, so as not to allow new participants or the purchase of additional deferral units by existing participants.

Pension Plan

The Company has a defined benefit pension plan, referred to as the Worldwide Executive Benefit (“WEB”), covering certain executives in the U.S. and foreign countries. The WEB is designed to integrate with government sponsored and local benefits and provide a monthly benefit to vice presidents upon retirement from the Company. Each year a plan participant accrued and was fully vested in one-twentieth of the targeted benefits expressed as a percentage set by the Company for that year. Upon retirement, a participant receives a monthly benefit payment equal to the sum of the percentages accrued over such participant’s term of employment, up to a maximum of 20 years, multiplied by the participant’s highest average monthly salary during the 36 consecutive months in the final 72 months of active full-time employment through June 2003. In June 2003, the Company froze the WEB, so as to not allow new participants, future accruals and future salary increases.

Deferred Compensation Plan

The following tables reconcile the benefit obligation for the deferred compensation plans:


	Year Ended April 30,
	2014			2013			2012
	(in thousands)
Change in benefit obligation:
Benefit obligation, beginning of year	$	85,562		$	78,479		$	70,319
Interest cost		2,566			2,868			3,346
Actuarial (gain) loss		(294	)		9,420			9,885
Benefits paid		(5,681	)		(5,205	)		(5,071	)

Benefit obligation, end of year		82,153			85,562			78,479
Less: current portion of benefit obligation		(5,593	)		(5,182	)		(4,959	)

Non-current benefit obligation	$	76,560		$	80,380		$	73,520

The components of net periodic benefits costs are as follows:


	Year Ended April 30,
	2014		2013		2012
	(in thousands)
Interest cost	$	2,566	$	2,868	$	3,346
Amortization of actuarial loss		3,111		2,357		1,374

Net periodic benefit cost	$	5,677	$	5,225	$	4,720

The weighted-average assumptions used in calculating the benefit obligations were as follows:


	Year Ended April 30,
	2014			2013			2012
Discount rate, beginning of year		3.12	%		3.79	%		4.94	%
Discount rate, end of year		3.60	%		3.12	%		3.79	%
Rate of compensation increase		0.00	%		0.00	%		0.00	%

Pension Plan

The following tables reconcile the benefit obligation for the pension plan:


	Year Ended April 30,
	2014			2013			2012
	(in thousands)
Change in benefit obligation:
Benefit obligation, beginning of year	$	4,536		$	4,214		$	3,952
Interest cost		137			154			189
Actuarial loss		92			426			289
Benefits paid		(341	)		(258	)		(216	)

Benefit obligation, end of year		4,424			4,536			4,214
Less: current portion of benefit obligation		(274	)		(232	)		(212	)

Non-current benefit obligation	$	4,150		$	4,304		$	4,002

The components of net periodic benefits costs are as follows:


	Year Ended April 30,
	2014		2013		2012
	(in thousands)
Interest cost	$	137	$	154	$	189
Amortization of actuarial loss		8		18		47

Net periodic benefit cost	$	145	$	172	$	236

The weighted-average assumptions used in calculating the benefit obligations were as follows:


	Year Ended April 30,
	2014			2013			2012
Discount rate, beginning of year		3.12	%		3.79	%		4.94	%
Discount rate, end of year		3.60	%		3.12	%		3.79	%
Rate of compensation increase		0.00	%		0.00	%		0.00	%

Benefit payments, which reflect expected future service, as appropriate, are expected to be paid over the next ten years as follows:


Year Ending April 30,	Deferred Compensation Plans		Pension Benefits
	(in thousands)
2015	$	6,766	$	326
2016		6,987		327
2017		6,780		332
2018		6,461		325
2019		6,192		312
2020-2024		31,742		1,386

During fiscal 2015 the Company expects to recognize $3.1 million in net periodic benefit expense from their deferred compensation and pension plans. This cost will be transferred from accumulated other comprehensive income through the amortization of actuarial losses in the consolidated statement income.

International Retirement Plans

The Company also maintains various retirement plans and other miscellaneous deferred compensation arrangements in eight foreign jurisdictions. The aggregate of the long-term benefit obligation accrued at April 30, 2014 and 2013 is $3.7 million for 267 participants and $3.6 million for 221 participants, respectively. The Company’s contribution to these plans was $0.5 million and $1.1 million in fiscal 2014 and 2013, respectively.

Executive Capital Accumulation Plan

The Company’s Executive Capital Accumulation Plan and similar plans in Asia Pacific and Canada (collectively “ECAP”), are intended to provide certain employees an opportunity to defer salary and/or bonus on a pre-tax basis or make an after-tax contribution. In addition, the Company, as part of its compensation philosophy, makes discretionary contributions into the ECAP and such contributions may be granted to key employees annually based on the employee’s performance. Certain key management may also receive Company ECAP contributions upon commencement of employment. The Company amortizes these contributions on a straight-line basis over the service period, generally a four year period. Participants have the ability to allocate their deferrals among a number of investment options and may receive their benefits at termination, retirement or “in service” either in a lump sum or in quarterly installments over five, ten or fifteen years. The ECAP amounts that are expected to be paid to employees over the next 12 months are classified as a current liability included in compensation and benefits payable on the accompanying balance sheet.

The Company made contributions to the ECAP during fiscal 2014, 2013 and 2012, of $17.2 million, $20.0 million and $15.8 million, respectively.

The ECAP is accounted for whereby the changes in the fair value of the vested amounts owed to the participants are adjusted with a corresponding charge (or credit) to compensation and benefits costs. During fiscal 2014, 2013 and 2012, the deferred compensation liability increased; therefore, the Company recognized compensation expense of $8.9 million, $6.3 million and $0.9 million, respectively. Offsetting these increases in compensation and benefits expense was an increase in the fair value of marketable securities classified as trading (held in trust to satisfy obligations under certain deferred compensation plan liabilities) of $9.5 million and $7.6 million in fiscal 2014 and 2013, respectively, recorded in other income (loss), net on the consolidated statements of income.

Changes in the ECAP liability were as follows:


	Year Ended April 30,
	2014			2013
	(in thousands)
Balance, beginning of year	$	75,913		$	71,134
Employee contributions		2,748			1,943
Amortization of employer contributions		11,467			9,010
Gain on investment		8,884			6,281
Employee distributions		(9,044	)		(12,244	)
Exchange rate fluctuations		(660	)		(211	)

Balance, end of year		89,308			75,913
Less: current portion		(4,510	)		(4,537	)

Non-current portion, end of year	$	84,798		$	71,376

As of April 30, 2014 and 2013, the unamortized portion of the Company contributions to the ECAP was $28.3 million and $23.3 million, respectively.

Defined Contribution Plan

The Company has a defined contribution plan (“401(k) plan”) for eligible employees. Participants may contribute up to 50% of their base compensation as defined in the plan agreement. In addition, the Company has the option to make matching contributions and tends to make the contributions related to the current fiscal year in the upcoming year. The Company made a $1.2 million matching contribution in fiscal 2014 related to contributions made by employees in fiscal 2013 and made no contributions in fiscal 2013 and 2012.

Company Owned Life Insurance

The Company purchased COLI contracts insuring employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans. The gross CSV of these contracts of $167.2 million and $159.2 million is offset by outstanding policy loans of $72.9 million and $73.3 million in the accompanying consolidated balance sheets as of April 30, 2014 and 2013, respectively. Total death benefits payable, net of loans under COLI contracts, were $214.2 million and $212.7 million at April 30, 2014 and 2013, respectively. Management intends to use the future death benefits from these insurance contracts to fund the deferred compensation and pension arrangements; however, there may not be a direct correlation between the timing of the future cash receipts and disbursements under these arrangements. The CSV value of the underlying COLI investments increased by $8.2 million and $6.5 million during the year ended April 30, 2014 and 2013, respectively, recorded as a decrease in compensation and benefits expense. In addition, certain policies are held in trusts to provide additional benefit security for the deferred compensation and pension plans, excluding the WEB. As of April 30, 2014, COLI contracts with a net CSV of $68.1 million and death benefits payable, net of loans, of $122.6 million were held in trust for these purposes.