XML 35 R15.htm IDEA: XBRL DOCUMENT v2.4.0.6
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2011
Compensation and Retirement Disclosure [Abstract]  
Employee Benefit Plans
8. Employee Benefit Plans
 
The Company has migrated its retirement benefits from defined-benefit pension plans to defined-contribution retirement plans, utilizing its current 401(k) plan.
 
Defined-Benefit Plans
 
The Company sponsors two qualified defined-benefit pension plans that cover substantially all employees. A third defined-benefit pension plan is non-qualified and covered certain executive officers of the Company. The Company also sponsors a defined-contribution 401(k) plan that covers substantially all employees.
 
In 2007, the Company amended its hourly and salaried defined-benefit pension plans so that employees no longer accrue benefits under them effective December 31, 2007. This action “froze” the benefits for all employees and prevented future hires from joining the plans, effective December 31, 2007. Currently, the Company provides supplemental discretionary contributions to substantially all employees’ individual 401(k) accounts.
 
Minimum cash contributions of $2.0 million were required for the defined-benefit plans for 2011. The Company contributed $2 million to the defined-benefit plans in both 2011 and 2010.
 
In future years, the Company may again be required to make cash contributions to the two defined-benefit pension plans. The annual contributions will be based on the amount of the unfunded plan liabilities derived from the frozen benefits and will not include liabilities for any future accrued benefits for any new or existing participants. The total amount of these future cash contributions will depend on the investment returns generated by the plans’ assets and the then-applicable discount rates used to calculate the plans’ liabilities.
 
The Company plans to contribute approximately $3 million in 2012, but will increase the amount of the contribution if required to do so. The intent of these contributions is to reduce the amount of time that the Company will be required to continue to operate the frozen plans. The ongoing cost of running the plans (even if frozen) is approximately $0.2 million per year, which includes PBGC premiums, actuary and audit fees, and other expenses.
 
The measurement dates of the assets and liabilities of all plans presented for 2011 and 2010 were December 31, 2011 and December 31, 2010, respectively.
 
In the first quarter of 2009, the Company settled $2.1 million of pension liabilities through the purchases of group annuities. This transaction resulted in an insignificant actuarial gain.
 
Summarized information on the Company’s defined-benefit pension plans is as follows:
 
Obligations and Funded Status at December 31,
  
2011
    
2010
  
Change in Benefit Obligation
Benefit obligation at beginning of year
 $ 68,793 $ 64,140
Service cost
 - -
Interest cost
 3,545 3,576
Actuarial loss
 7,662 3,694
Benefits paid
     (2,770 )     (2,617 )
Benefit obligation at end of year
     77,230       68,793  
Change in Plan Assets
                 
Fair value of plan assets at beginning of year
 59,423 51,946
Actual return on plan assets
 (661 ) 7,940
Employer contributions
 2,156 2,155
Benefits paid
     (2,770 )     (2,617 )
Fair value of plan assets at end of year
     58,148       59,424  
Funded Status
Funded status
 (19,082 ) (9,369 )
Unrecognized net actuarial loss
 43,719 31,691
Unrecognized prior service cost
     -       -  
Net amount recognized
   $ 24,637     $ 22,322  
 
Weighted Average Assumptions for the years
ended December 31,
   
2011
    
2010
  
Discount rate
 5.25 % 5.75 %
Expected long-term return on plan assets
 8.00 % 8.00 %
Rate of compensation increases
     N/A       N/A  
 
 
Components of Net Periodic Pension Cost
  
2011
    
2010
  
Service cost
 $ - $ -
Interest cost
 3,546 3,576
Expected return on assets
 (4,739 ) (4,127 )
Recognized gains
 1,034 1,031
Prior service cost recognized
      -       -  
Net periodic pension cost
    $  (159 )   $ 480  
 
Amounts Recognized on the Balance Sheet
  
2011
    
2010
Accrued benefit liability
   $ (19,082 )   $ (9,369 )
Accumulated other comprehensive loss, net of tax
 27,543 19,648
Deferred tax asset
     16,176       12,043
    $ 24,637     $ 22,322  
 
Weighted Average Assumptions as of December 31,
  
 2011
    
2010
  
Discount rate
 4.75 % 5.25 %
Rate of compensation increases
     N/A         N/A  
                      
Information for Pension Plans with an Accumulated Benefit Obligation in excess of plan assets
     2011       2010  
Projected benefit obligation
 $ 77,230 $ 68,793
Accumulated benefit obligation
 $ 77,230 $ 68,793
Fair value of plan assets
    $ 58,148     $ 59,424  
                       
Pension Weighted Average Asset Allocations as of December 31,
     2011       2010  
Debt securities
 27 % 26 %
Equity securities
 67 % 68 %
Real estate
 5 % 5 %
Money market funds
       1 %     1 %
      100 %     100 %
 
The estimated future benefit payments for the defined-benefit plans for each of the next five years and the total amount for years six through ten, are as follows: 2012-$3.2 million, 2013-$3.4 million, 2014-$3.6 million, 2015-$3.8 million, 2016-$4.0 million and for the five year period ending 2021-$22.0 million.
 
The Company determines the expected return on plan assets based on the target asset allocations. In addition, the historical returns of the plan assets are also considered in arriving at the expected rate of return.
 
The Company recorded an additional minimum pension liability adjustment, net of tax, which decreased comprehensive income by $7.9 million in 2011 and increased comprehensive income by $2.6 million and $0.7 million in 2010 and 2009, respectively.
 
Plan Assets
 
The current investment objective is to produce income and long-term appreciation through a target asset allocation of 35% debt securities and other fixed income investments including cash and short-term instruments, and 65% equity investments, to provide for the current and future benefit payments of the plans. The pension plans are not invested in the common stock of the Company.
 
The Company adopted the provisions of ASC 820.10 which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The Company has determined that all financial assets of both its defined-benefit pension plans are level 2 in the fair value hierarchy established by ASC 820.10. The valuation of level 2 assets are based on inputs, other than quoted prices in active markets, that are either directly or indirectly observable for the assets.
 
The disclosures focus on the inputs used to measure fair value. The following is a description of the valuation methodologies used to measure the plans’ assets at fair value:
 
Pooled separate accounts: Valued at the net asset value (“NAV”) of units held by the plans at year end, which is determined by aggregating the quoted market values of the underlying assets.
 
Money market funds: Valued at the NAV of shares held by the plans at year end, which is generally intended to approximate one dollar per share.
 
The following table sets forth the defined-benefit plans’ assets at fair value:
 
 
December 31,
  
2011
    
2010
  
Pooled separate accounts:
Equity securities:
 
 
U.S. small cap equity funds
 $ 6,742 $ 7,190
U.S. mid-cap equity funds
 16,037 16,987
U.S. large-cap equity funds
 5,236 5,700
International equity funds
 11,229 10,866
Domestic real estate funds
 3,136 3,013
Fixed income securities:
Corporate bond funds
 15,459 15,615
Money market fund
     309       53  
    $ 58,148     $ 59,424  
 
Defined-Contribution Plans
 
Prior to 2007, the Company also sponsored two qualified defined-contribution plans that covered substantially all of its hourly and salaried employees. Effective January 1, 2007, the qualified defined-contribution plans were merged into a single 401(k) plan. Under the terms of the 401(k) plan, the Company matches a certain portion of employee contributions. Expenses related to matching employee contributions to the 401(k) plan were $2.0 million, $1.8 million and $1.8 million in 2011, 2010 and 2009, respectively.
 
Additionally, in 2011, 2010 and 2009 the Company provided supplemental discretionary contributions to the individual 401(k) accounts of substantially all employees. Each employee received a supplemental contribution to their account based on a uniform percentage of qualifying base compensation established annually. The cost of these supplemental contributions totaled $2.1 million, $1.8 million and $1.7 million in 2011, 2010 and 2009, respectively.
 
Non-Qualified Plan
 
The Company also sponsors a non-qualified defined-contribution plan, the Supplemental Executive Retirement Plan, which covered certain of its salaried employees. Only one participant, who is retired, remains in this plan.