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 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 Company uses a December 31 measurement date for its Plan.

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

	2017			2016			2015
Service cost	$	255		$	203		$	189
Interest cost		1,456			1,465			1,436
Expected return on plan assets		(1,903	)		(1,824	)		(1,849	)
Recognized net actuarial loss		468			522			583
Net periodic pension cost	$	276		$	366		$	359

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

	2017			2016
Projected benefit obligation at beginning of the year	$	34,858		$	34,763
Service cost		255			203
Interest cost		1,456			1,465
Actuarial (gain) loss		2,215			(516	)
Benefits paid		(2,753	)		(1,057	)
Projected benefit obligation at end of year	$	36,031		$	34,858

Fair value of plan assets at beginning of the year	$	24,435		$	23,136
Actual return on plan assets		3,460			1,365
Employer contributions		225			991
Benefits paid		(2,753	)		(1,057	)
Fair value of plan assets at end of the year	$	25,367		$	24,435

Unfunded pension obligation	$	10,664		$	10,423

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:

	2017			2016
Balance at January 1	$	(5,855	)	$	(6,216	)

Reclassification adjustments:
Pre-tax amortized net actuarial loss		468			522
Tax provision		(199	)		(196	)
		269			326

Adjustment to recognize gain (loss) on unfunded pension obligations:
Pre-tax (loss) gain		(657	)		56
Tax provision		247			(21	)
		(410	)		35

Balance at December 31	$	(5,997	)	$	(5,855	)

The pre-tax unfunded pension obligation loss of $.7 million included a loss of $2.8 million due to a .5% reduction in the discount rate to 3.75%, partially offset by a gain of $.3 million associated with the industry updates to the mortality table used, a gain of $.2 million due to demographic changes and a gain of $1.6 million resulting from asset performance in excess of the 8.0% rate of return assumption. The estimated net loss for the Plan that will be amortized from Accumulated other comprehensive income into periodic benefit cost for 2018 is $.2 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:

	2017		2016
Accumulated benefit obligation	$	36,030	$	34,858
Fair market value of assets		25,367		24,435

	2017	2016
Discount rate	3.75%		4.25%
Rate of compensation increase	n/a	n/a

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

	2017		2016		2015
Discount rate		4.25%		4.25%		4.00%
Rate of compensation increase	n/a		n/a		n/a
Expected long-term return on plan assets		8.00		8.00		8.00

The net periodic pension cost for 2017 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, 2017 and 2016, the fair value of the 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 Plan assets as of December 31, 2017 and 2016, by category, are as follows:

	At December 31, 2017
	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	$	453	$	453	$	0	$	0
Equity Securities		16,667		16,667		0		0
U.S. Treasury Bonds		3,517		3,517		0		0
Corporate Bonds		4,730	0			4,730		0
Total	$	25,367	$	20,637	$	4,730	$	0

	At December 31, 2016
	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	$	1,042	$	1,042	$	0	$	0
Equity Securities		14,814		14,814		0		0
U.S. Treasury Bonds		3,893		3,893		0		0
Corporate Bonds		4,686	0			4,686		0
Total	$	24,435	$	19,749	$	4,686	$	0

The Plan weighted-average asset allocations at December 31, 2017 and 2016, by asset category, are as follows:

	Plan assets
	at December 31
	2017			2016
Asset category
Equity securities		66	%		61	%
Debt securities		32			35
Cash and equivalents		2			4
		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, 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 does not expect to contribute to the Plan in 2018.

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
2018	$	1,011
2019		1,091
2020		1,167
2021		1,251
2022		1,368
2023-2027		8,269

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 $5.1 million in 2017, $5.8 million in 2016 and $5.5 million in 2015.

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, 2017 and 2016, the interest rate for the Supplemental Profit Sharing Plan was 2.76% and 1.65%, respectively. Expense for the Supplemental Profit Sharing Plan was $.5 million for 2017, $.5 million for 2016 and $.3 million for 2015. The Supplemental Profit Sharing Plan unfunded status as for each of the years ended December 31, 2017 and 2016 was $4.8 million and $4.3 million, respectively, and is included in Other noncurrent liabilities.