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Retirement Benefit Plans | 12 Months Ended
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Dec. 31, 2011
Retirement Benefit Plans [Abstract] |
Retirement Benefit Plans |
13. | Retirement Benefit Plans
Defined Contribution Plans We and certain of our subsidiaries maintain various defined contribution plans, which include profit sharing and provide retirement benefits for substantially all of our employees. Matching obligations, in connection with the plans which are funded in cash and typically contributed to the plans in March of the following year, are as follows (in thousands):
|  | U.S. Defined Contribution |  |  | European Defined Contribution |
Year ended December 31, |  |  |  |  |  |
2011 |  | $ | 7,573 |  |  | $ | - |
2010 |  |  | 3,523 |  |  |  | - |
2009 |  |  | 3,444 |  |  |  | 311 |
We maintain an unfunded Supplemental Executive Retirement Plan (“SERP”) for key employees. Under the plan, these employees may elect to defer a portion of their compensation and, in addition, we may at our discretion make contributions to the plan on behalf of the employees. In March 2010, contributions of $67,000 were made related to calendar year 2009. In March 2011, contributions of $247,000 were made related to calendar year 2010. We have recorded an obligation of $594,000 for 2011. We also have an Employee Stock Ownership Plan and Trust (“ESOP”) for employees who are not covered by a collective bargaining agreement. We maintain an employee benefits trust to which we contribute shares of treasury stock. We are authorized to instruct the trustees to distribute such shares toward the satisfaction of our future obligations under employee benefit plans. The shares held in trust are not considered outstanding for purposes of calculating earnings per share until they are committed to be released. The trustees will vote the shares in accordance with its fiduciary duties. During 2011, we contributed to the trust an additional 180,000 shares from our treasury and released 183,000 shares from the trust leaving 3,930 shares remaining in the trust as of December 31, 2011. The provision for expense in connection with the ESOP was approximately $2.5 million in 2011, $1.6 million in 2010 and $0.3 million in 2009. Multi-Employer Benefit Plans We participate in multi-employer plans which provide defined benefits to unionized workers at certain of our manufacturing facilities. Contributions to the plans are determined in accordance with the provisions of a negotiated labor contract. In December 2007, in connection with the shutdown of the manufacturing operations at Long Island City, we entered into an agreement with the UAW. As part of the agreement, we agreed to withdraw from the multi-employer pension plan covering our UAW employees at the Long Island City facility and incurred a withdrawal liability from the plan. The pension plan withdrawal liability related to trust asset under-performance and was payable quarterly for 20 years at $0.3 million per year, which commenced in December 2008. In June 2011, we settled our pension withdrawal liability for $2.8 million and recorded a gain of $0.3 million in connection with the settlement. Defined Benefit Pension Plans We historically have maintained qualified and nonqualified defined benefit retirement plans covering certain current and former U.S. and European employees. The defined benefit retirement plans are generally based on years of service and employee compensation. In October 2001, we adopted a defined benefit unfunded Supplemental Executive Retirement Plan (“SERP”). The SERP, as amended, is a defined benefit plan pursuant to which we will pay supplemental pension benefits to certain key employees upon the attainment of a contractual participant's payment date based upon the employees' years of service and compensation. We use a January 1 measurement date for this plan. Benefit obligations as of the end of each year reflect assumptions in effect as of this date. Through November 30, 2009, the date of the sale of our European distribution business, we maintained a U.K. defined benefit plan that had been closed to new entrants and ceased accruing further benefits. As part of the sale transaction, the new owners assumed ownership of the U.K. defined benefit plan and all future obligations under the plan. The benefit obligation, funded status, and amounts recognized in the consolidated financial statements for our defined benefit retirement plans, as of and for the years ended December 31, 2011 and 2010, were (in thousands):
|  | Defined Benefit Retirement Plan |
|  | U.S. Plan |
|  | 2011 |  |  | 2010 |
Change in benefit obligation: |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 2,673 |  |  | $ | 2,765 |
Service cost |  |  | 111 |  |  |  | 79 |
Interest cost |  |  | 181 |  |  |  | 133 |
Actuarial loss (gain) |  |  | 1,117 |  |  |  | (304 | )
Benefit obligation at end of year |  | $ | 4,082 |  |  | $ | 2,673 |
Funded (unfunded) status of the plan |  | $ | (4,082 | ) |  | $ | (2,673 | )
Amounts recognized in the balance sheet: |  |  |  |  |  |  |  |
Accrued postretirement benefit liabilities |  | $ | 4,082 |  |  | $ | 2,673 |
Accumulated other comprehensive loss (pre-tax) related to: |  |  |  |  |  |  |  |
Unrecognized net actuarial losses |  |  | 1,444 |  |  |  | 500 |
Unrecognized prior service cost (credit) |  |  | 138 |  |  |  | 249 |
The unrecognized amounts recorded in accumulated other comprehensive income will be subsequently recognized as expense consistent with our historical accounting policy for amortizing those amounts. Actuarial gains and losses incurred in future periods and not recognized as expense in those periods will be recognized as increases or decreases in other comprehensive income (loss), net of tax. As they are subsequently recognized as a component of expense, the amounts recorded in other comprehensive income (loss) in prior periods are adjusted. The following defined benefit plan amounts were included in other comprehensive income, net of tax, during the year ended December 31, 2011 (in thousands):
|  | Incurred but Not Recognized |  |  | Reclassification Adjustment for Prior Period Amounts Recognized |
Actuarial gains (losses) |  |  |  |  |  |
SERP defined benefit plan |  | $ | 670 |  |  | $ | 103 |
Prior service (cost) credit |  |  |  |  |  |  |  |
SERP defined benefit plan |  |  | - |  |  |  | 66 |
|  | $ | 670 |  |  | $ | 169 |
The prior service cost (credit) included in accumulated other comprehensive income at the end of 2011 and expected to be recognized in net periodic benefit cost during 2012 is $0.4 million ($240,000 net of tax). No plan assets are expected to be returned to us during the year ended December 31, 2012. The components of net periodic benefit cost for our U.S. and European defined benefit plans includes the following components (in thousands):
|  | December 31, |
U.S. defined benefit retirement plan: |  | 2011 |  |  | 2010 |  |  | 2009 |
Service cost |  | $ | 111 |  |  | $ | 79 |  |  | $ | 89 |
Interest cost |  |  | 181 |  |  |  | 133 |  |  |  | 146 |
Amortization of prior service cost |  |  | 111 |  |  |  | 110 |  |  |  | 110 |
Amortization of unrecognized loss |  |  | 173 |  |  |  | 25 |  |  |  | 96 |
Net periodic benefit cost |  | $ | 576 |  |  | $ | 347 |  |  | $ | 441 |
European defined benefit retirement plan (1): |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | - |  |  | $ | - |  |  | $ | - |
Interest cost |  |  | - |  |  |  | - |  |  |  | 154 |
Amortization of net actuarial loss |  |  | - |  |  |  | - |  |  |  | 110 |
Expected return on plan assets |  |  | - |  |  |  | - |  |  |  | (141 | )
Net periodic benefit cost |  | $ | - |  |  | $ | - |  |  | $ | 123 |
Total net periodic benefit costs |  | $ | 576 |  |  | $ | 347 |  |  | $ | 564 |
| (1) | European defined benefit plan balances for 2009 represent other comprehensive income and net periodic benefit cost activity for the eleven months prior to the sale of our European distribution business. The remaining unrecognized net actuarial loss of $2.5 million included in other comprehensive income at the date of the sale was recognized and included in the $6.6 million loss on the sale of the business.
Actuarial assumptions used to determine costs and benefit obligations related to our U.S. defined benefit plan are as follows:
|  | December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Discount rates |  |  | 4.55 | % |  |  | 5.35 | % |  |  | 5.75 | %
Salary increase |  |  | 4.00 | % |  |  | 4.00 | % |  |  | 4.00 | %
Actuarial assumptions used to determine costs and benefit obligations related to our European defined benefit plan are as follows:
|  | December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Discount rates |  |  | - | % |  |  | - | % |  |  | 5.50 | %
Expected long-term rates of return on assets |  |  | - | % |  |  | - | % |  |  | 6.75 | %
Inflation |  |  | - | % |  |  | - | % |  |  | 3.00 | %
The Company's discount rates are determined by considering current yield curves representing high quality, long-term fixed income instruments. We set our discount rate for the U.S. plan based on a review of the Mercer Pension Discount Yield Curve and Index Rates; and our discount rate for our European plan is based on corporate cash bond yields. We believe that the timing and amount of cash flows related to these instruments is expected to match the estimated defined benefit payment streams of our plans. For defined benefit pension plans in which the accumulated benefit obligation (“ABO”) was in excess of the fair value of the plans' assets, the projected benefit obligation (“PBO”), ABO and fair value of the plans' assets as of December 31, 2011 and 2010 were as follows (in thousands):
|  | U.S. Plan |
|  | 2011 |  |  | 2010 |
Projected benefit obligation |  | $ | 4,082 |  |  | $ | 2,673 |
Accumulated benefit obligation |  |  | 3,662 |  |  |  | 2,122 |
Fair value of plan assets |  |  | - |  |  |  | - |
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows (in thousands):
|  | U.S. Plan Benefits |
2012 |  | $ | - |
2013 |  |  | - |
2014 |  |  | - |
2015 |  |  | 5,694 |
2016 |  |  | - |
Years 2017 – 2021 |  |  | - |

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