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Pension Plans
 12 Months Ended
Dec. 31, 2012
Pension Plans [Abstract]  
Pension Plans

Note C—Pension Plans

PLP-USA hourly employees of the Company who meet specific requirements as to age and service are covered by a defined benefit pension plan (“Plan”). On December 12, 2012, the Company approved a freeze on further benefit accruals under the PLP-USA hourly employee pension plan and notified the participants of the freeze on December 19, 2012. Beginning February 1, 2013, participants will cease earning additional benefits under the Plan and no new participants will enter the plan. The Plan freeze required an evaluation of the Plans’ assets and obligations as of December 31, 2012, which resulted in a non-cash curtailment gain of $6.3 million, which was recognized in the Other comprehensive income (loss) during the fourth quarter 2012. The measurement of the Plans’ assets and obligations also resulted in a reduction in the Company’s pension liability of $6.3 million. The evaluation did not have an effect on net periodic pension expense for the year ended December 31, 2012. The Company uses a December 31 measurement date for its Plan.

 

Net periodic pension cost for the Plan consists of the following components for the years ended December 31:

 

                         
    2012     2011     2010  

Service cost

   $ 1,300     $ 1,003     $ 813  

Interest cost

     1,411       1,373       1,195  

Expected return on plan assets

     (1,186 )      (1,089 )      (960 ) 

Recognized net actuarial loss

     750       412       280  
   

 

 

    

 

 

    

 

 

  

Net periodic pension cost

   $ 2,275     $ 1,699     $ 1,328  
   

 

 

    

 

 

    

 

 

  

The following tables set forth benefit obligations, plan assets and the accrued benefit cost of the Plan at December 31:

 

                 
    2012     2011  

Projected benefit obligation at beginning of the year

   $ 30,863     $ 23,665  

Service cost

     1,300       1,003  

Interest cost

     1,411       1,373  

Actuarial loss

     4,859       5,364  

Gain on curtailment

     (6,275 )      0  

Benefits paid

     (568 )      (542 ) 
   

 

 

    

 

 

  

Projected benefit obligation at end of year

   $ 31,590     $ 30,863  
   

 

 

    

 

 

  

Fair value of plan assets at beginning of the year

   $ 15,077     $ 14,192  

Actual return on plan assets

     1,748       297  

Employer contributions

     2,149       1,130  

Benefits paid

     (568 )      (542 ) 
   

 

 

    

 

 

  

Fair value of plan assets at end of the year

   $ 18,406     $ 15,077  
   

 

 

    

 

 

  

Unfunded pension obligation

   $ 13,184     $ 15,786  
   

 

 

    

 

 

  

 

In accordance with ASC 715-20, the Company recognizes the underfunded status the Plan as a liability. The amount recognized in Accumulated other comprehensive loss related to the Plan at December 31 is comprised of the following:

 

                 
    2012     2011  

Balance at January 1

   $ (8,000 )    $ (4,431 ) 

Reclassification adjustments:

                

Pretax amortized net actuarial loss

     750       412  

Tax provision

     (284 )      (156 ) 
   

 

 

    

 

 

  
      466       256  
   

 

 

    

 

 

  

Adjustment to recognize (loss) gain on unfunded pension obligations:

                

Pretax (loss) gain

     (4,297 )      (6,156 ) 

Tax (benefit)

     1,627       2,331  
   

 

 

    

 

 

  
      (2,670 )      (3,825 ) 
   

 

 

    

 

 

  

Adjustment to recognized the gain on curtailment of the pension plan:

                

Pretax curtailment gain

     6,275       0  

Tax provision

     (2,376 )      0  
   

 

 

    

 

 

  
      3,899       0  
   

 

 

    

 

 

  

Balance at December 31

   $ (6,305 )    $ (8,000 ) 
   

 

 

    

 

 

  

The estimated net loss for the Plan that will be amortized from Accumulated other comprehensive income into periodic benefit cost for 2013 is $.5 million. There is no prior service cost to be amortized in the future.

The Plan had accumulated benefit obligations in excess of Plan assets as follows:

 

                 
    2012     2011  

Accumulated benefit obligation

   $ 31,590     $ 26,302  

Fair market value of assets

     18,406       15,077  

Weighted-average assumptions used to determine benefit obligations at December 31 are as follows:

 

                 
    2012     2011  

Discount rate

     4.00 %      4.50 % 

Rate of compensation increase

     n/a       2.50  

Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31 are as follows:

 

                         
    2012     2011     2010  

Discount rate

     4.50 %      5.60 %      6.00 % 

Rate of compensation increase

     2.50       3.50       3.50  

Expected long-term return on plan assets

     8.00       8.00       8.00  

The net periodic pension cost for 2012 was based on a long-term asset rate of return of 8.0%. This rate is based upon management’s estimate of future long-term rates of return on similar assets and is consistent with historical returns on such assets. Using the Plan’s current mix of assets and based on the average historical returns and expected future returns for such mix, an expected long-term rate-of-return of 8.0% is justified.

 

At December 31, 2012, the fair value of the Company’s pension plan assets included inputs in Level 1: Quoted market prices in active markets for identical assets or liabilities, and Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. The fair value of the Company’s pension plan assets as of December 31, 2012 and 2011, by category, are as follows:

 

                                 
    At December 31, 2012  
    Total Assets at
Fair Value		     Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		     Significant
Observable
Inputs (Level 2)		     Significant
Unobservable
Inputs (Level 3)		  

Asset Category

                                

Cash

   $ 464     $ 464     $ 0     $ 0  

Equity Securities

     6,121       6,121       0       0  

U.S. Treasury Bonds

     4,205       4,205       0       0  

Mutual Funds—Equity

     4,944       4,944       0       0  

Corporate Bonds

     2,640       0       2,640       0  

Mortgage-Backed Securities

     32       0       32       0  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 18,406     $ 15,734     $ 2,672     $ 0  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

                                 
    At December 31, 2011  
    Total Assets at
Fair Value		     Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		     Significant
Observable
Inputs (Level 2)		     Significant
Unobservable
Inputs (Level 3)		  

Asset Category

                                

Cash

   $ 304     $ 304     $ 0     $ 0  

Equity Securities

     5,445       5,445       0       0  

U.S. Treasury Bonds

     1,880       1,880       0       0  

Agency Bonds

     905       905       0       0  

Etf-Equity

     458       458       0       0  

Mutual Funds—Equity

     3,226       3,226       0       0  

Corporate Bonds

     2,827       0       2,827       0  

Mortgage-Backed Securities

     32       0       32       0  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 15,077     $ 12,218     $ 2,859     $ 0  
   

 

 

    

 

 

    

 

 

    

 

 

  

The Company’s pension plan weighted-average asset allocations at December 31, 2012 and 2011, by asset category, are as follows:

 

                 
    Plan assets  
    at December 31  
    2012     2011  

Asset category

                

Equity securities

     60 %      61 % 

Debt securities

     37       37  

Cash and equivalents

     3       2  
   

 

 

    

 

 

  
      100 %      100 % 
   

 

 

    

 

 

  

Management seeks to maximize the long-term total return of financial assets consistent with the fiduciary standards of ERISA. The ability to achieve these returns is dependent upon the need to accept moderate risk to achieve long-term capital appreciation.

 

In recognition of the expected returns and volatility from financial assets, retirement plan assets are invested in the following ranges with the target allocation noted:

 

                 
    Range     Target  

Equities

     30-80 %      60 % 

Fixed Income

     20-70 %      40 % 

Cash Equivalents

     0-10 %         

Investment in these markets is projected to provide performance consistent with expected long-term returns with appropriate diversification.

The Company’s policy is to fund amounts deductible for federal income tax purposes. The Company expects to contribute $2.6 million to the Plan in 2013.

The benefits expected to be paid out of the Plan assets in each of the next five years and the aggregate benefits expected to be paid for the subsequent five years are as follows:

 

         

Year

   Pension Benefits  

2013

   $ 648,924  

2014

     710,806  

2015

     744,577  

2016

     858,720  

2017

     933,449  

2018-2022

     5,982,583  

The Company also provides retirement benefits through various defined contribution plans including PLP-USA’s Profit Sharing Plan. Expense for these defined contribution plans was $5.7 million in 2012, $4.8 million in 2011 and $4.6 million in 2010.

Further, the Company also provides retirement benefits through the Supplemental Profit Sharing Plan. To the extent an employee’s award under PLP-USA’s Profit Sharing Plan exceeds the maximum allowable contribution permitted under existing tax laws, the excess is accrued for (but not funded) under a non-qualified Supplemental Profit Sharing Plan. The return under this Supplemental Profit Sharing Plan is calculated at a weighted average of the one year Treasury Bill rate plus 1%. At December 31, 2012 and 2011, the interest rate for the Supplemental Profit Sharing Plan was 1.12% and 1.29%, respectively. Expense for the Supplemental Profit Sharing Plan was $.4 million for 2012 and $.3 million for 2011 and 2010, respectively. The Supplemental Profit Sharing Plan unfunded status as of December 31, 2012 and 2011 was $2.6 million and $2.2 million and is included in Other noncurrent liabilities.