Note C – Pension Plans

PLP-USA hourly employees of the Company who meet specific requirements as to age and length and date of 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 ceased earning additional benefits under the Plan and no new participants entered 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 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:


	2013			2012			2011
Service cost	$	222		$	1,300		$	1,003
Interest cost		1,251			1,411			1,373
Expected return on plan assets		(1,436	)		(1,186	)		(1,089	)
Recognized net actuarial loss		493			750			412

Net periodic pension cost	$	530		$	2,275		$	1,699

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


	2013			2012
Projected benefit obligation at beginning of the year	$	31,590		$	30,863
Service cost		222			1,300
Interest cost		1,251			1,411
Actuarial (gain) loss		(4,901	)		4,859
Gain on curtailment		0			(6,275	)
Benefits paid		(637	)		(568	)

Projected benefit obligation at end of year	$	27,525		$	31,590

Fair value of plan assets at beginning of the year	$	18,406		$	15,077
Actual return on plan assets		3,154			1,748
Employer contributions		1,576			2,149
Benefits paid		(637	)		(568	)

Fair value of plan assets at end of the year	$	22,499		$	18,406

Unfunded pension obligation	$	5,026		$	13,184

In accordance with ASC 715-20, the Company recognizes the underfunded status of 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:


	2013			2012
Balance at January 1	$	(6,305	)	$	(8,000	)
Reclassification adjustments:
Pretax amortized net actuarial loss		493			750
Tax provision		(187	)		(284	)

		306			466

Adjustment to recognize gain (loss)on unfunded pension obligations:
Pretax gain (loss)		6,619			(4,297	)
Tax (benefit) provision		(2,506	)		1,627

		4,113			(2,670	)

Adjustment to recognize the gain on curtailment of the pension plan:
Pretax curtailment gain		0			6,275
Tax provision		0			(2,376	)

		0			3,899

Balance at December 31	$	(1,886	)	$	(6,305	)

The estimated net loss for the Plan that will be amortized from Accumulated other comprehensive income into periodic benefit cost for 2014 is $12 thousand. 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:


	2013		2012
Accumulated benefit obligation	$	27,525	$	31,590
Fair market value of assets		22,499		18,406

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


	2013	2012
Discount rate	5.00%	4.00%
Rate of compensation increase	n/a	n/a

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


	2013			2012			2011
Discount rate		4.00	%		4.50	%		5.60	%
Rate of compensation increase		n/a			2.50			3.50
Expected long-term return on plan assets		8.00			8.00			8.00

The net periodic pension cost for 2013 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, 2013, 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, 2013 and 2012, by category, are as follows:


	At December 31, 2013
	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	$	1,127	$	1,127	$	0	$	0
Equity Securities		7,455		7,455		0		0
U.S. Treasury Bonds		4,161		4,161		0		0
Mutual Funds - Equity		6,776		6,776		0		0
Corporate Bonds		2,950		0		2,950		0
Mortgage-Backed Securities		30		0		30		0

Total	$	22,499	$	19,519	$	2,980	$	0


	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

The Company’s pension plan weighted-average asset allocations at December 31, 2013 and 2012, by asset category, are as follows:


	Plan assets at December 31
	2013			2012
Asset category
Equity securities		63	%		60	%
Debt securities		32			37
Cash and equivalents		5			3

		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 $.7 million to the Plan in 2014.

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
2014	$	715,302
2015		776,134
2016		852,886
2017		926,748
2018		1,005,382
2019-2023		6,482,705

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 $5.6 million in 2013, $5.7 million in 2012 and $4.8 million in 2011.

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, 2013 and 2012, the interest rate for the Supplemental Profit Sharing Plan was 1.15% and 1.12%, respectively. Expense for the Supplemental Profit Sharing Plan was $.3 million for 2013, $.4 million for 2012 and $.3 million and 2011. The Supplemental Profit Sharing Plan unfunded status as of December 31, 2013 and 2012 was $3 million and $2.6 million and is included in Other noncurrent liabilities.