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Note 6 - Accrued Retirement Benefits | 12 Months Ended
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Dec. 31, 2015
Notes to Financial Statements |
Pension and Other Postretirement Benefits Disclosure [Text Block] |
6 . | ACCRUED RETIREMENT BENEFITS
Accrued Retirement Benefits at December 31, 2015 and 2014 consisted of the following:
|  | 2015 |  |  | 2014 |
|  | (in thousands) |
Defined Benefit Pension Plans |  | $ | 6,264 |  |  | $ | 2,540 |
Supplemental Executive Retirement Plan |  |  | 4,154 |  |  |  | 4,468 |
Deferred Compensation Plan |  |  | 212 |  |  |  | 276 |
Total |  |  | 10,630 |  |  |  | 7,284 |
Less current portion |  |  | (378 | ) |  |  | (391 | )
Non-current portion of accrued retirement benefits |  | $ | 10,252 |  |  | $ | 6,893 |
The Company has two defined benefit pension plans which cover substantially all of its former bargaining and non-bargaining full-time, part-time and intermittent employees. In 2011, pension benefits under both plans were frozen. The Company also has an unfunded nonqualified supplemental executive retirement plan which covers seventeen of its former executives. The supplemental executive retirement plan was frozen in 2009 and future vesting of additional benefits was discontinued. The measurement date for the Company’s benefit plan disclosures is December 31 st of each year. The changes in benefit obligations and plan assets for 2015 and 2014, and the funded status of the plans, and assumptions used to determine benefit information at December 31, 2015 and 2014 were as follows:
|  | 2015 |  |  | 2014 |
|  | (in thousands) |
Change in benefit obligations: |  |  |  |  |  |  |  |
Benefit obligations at beginning of year |  | $ | 71,349 |  |  | $ | 66,091 |
Interest cost |  |  | 2,753 |  |  |  | 3,093 |
Actuarial (gain) loss |  |  | (2,783 | ) |  |  | 6,577 |
Benefits paid |  |  | (4,467 | ) |  |  | (4,412 | )
Benefit obligations at end of year |  |  | 66,852 |  |  |  | 71,349 |
Change in plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  |  | 64,341 |  |  |  | 45,178 |
Actual return on plan assets |  |  | (3,463 | ) |  |  | 3,404 |
Employer reimbursement for retirement benefits |  |  | (271 | ) |  |  | - |
Employer contributions |  |  | 294 |  |  |  | 20,171 |
Benefits paid |  |  | (4,467 | ) |  |  | (4,412 | )
Fair valu e of plan assets at end of year |  |  | 56,434 |  |  |  | 64,341 |
Funded status |  | $ | (10,418 | ) |  | $ | (7,008 | )
Accumulated benefit obligations |  | $ | 66,852 |  |  | $ | 71,349 |
Weighted average assumptions used to determine benefit obligations at December 31: |  |  |  |  |  |  |  |  |  |
Discount rate |  | 4.30% | - | 4.44% |  |  | 3.96% | - | 4.07% |
Expected long-term return on plan assets |  |  | 7% |  |  |  |  | 5.32% |  |
Rate of compensation increase |  |  | n/a |  |  |  |  | n/a |  |
Accumulated other comprehensive loss of $28.7 million and $25.6 million at December 31, 2015 and 2014, respectively, represent the net actuarial loss which has not yet been recognized as a component of pension expense. In 2016, $1.0 million of net actuarial loss is expected to be recognized as a component of net pension expense. Components of net periodic benefit cost and other amounts recognized in comprehensive income were as follows:
|  | 2015 |  |  | 2014 |
|  | (in thousands) |
Pension and other benefits: |  |  |  |  |  |  |  |
Interest cost |  | $ | 2,753 |  |  | $ | 3,093 |
Expected return on plan assets |  |  | (3,306 | ) |  |  | (3,316 | )
Recognized net actuarial loss |  |  | 843 |  |  |  | 604 |
Pension expense |  | $ | 290 |  |  | $ | 381 |
Other changes in plan assets and benefit obligations recognized in comprehensive income: |  |  |  |  |  |  |  |
Net loss |  | $ | 3,986 |  |  | $ | 6,486 |
Recognized loss |  |  | (893 | ) |  |  | (604 | )
Total recognized loss in comprehensive income |  | $ | 3,093 |  |  | $ | 5,882 |
Weighted average assumptions used to determine net periodic benefit cost: |  | 2015 |  |  | 2014 |
Pension benefits: |  |  |  |  |  |  |  |  |  |
Discount rate |  | 3.96% | - | 4.07% |  |  | 4.68% | - | 4.92% |
Expected long-term return on plan assets |  |  | 5.32% |  |  |  |  | 7.00% |  |
Rate of compensation increase |  |  | n/a |  |  |  |  | n/a |  |
The expected long-term rate of return on plan assets was based on a building-block approach. Historical markets are studied and long-term historical relationships between equities and fixed income are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors, such as inflation and interest rates, are evaluated before long-term capital markets are determined. Diversification and rebalancing of plan assets are properly considered as part of establishing long-term portfolio returns. The fair values of the Company’s pension plan assets at December 31, 2015 and 2014, by asset category, were as follows:
|  | 2015 Fair Value Measurements (in thousands) |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Total |
AHGT pooled equity funds |  | $ | - |  |  | $ | 8,120 |  |  | $ | 8,120 |
AHGT pooled fixed income funds |  |  | - |  |  |  | 46,069 |  |  |  | 46,069 |
Cash management funds |  |  | - |  |  |  | 2,245 |  |  |  | 2,245 |
|  | $ | - |  |  | $ | 56,434 |  |  | $ | 56,434 |
|  | 2014 Fair Value Measurements (in thousands) |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Total |
AHGT pooled equity funds |  | $ | - |  |  | $ | 9,884 |  |  | $ | 9,884 |
AHGT pooled fixed income funds |  |  | - |  |  |  | 51,483 |  |  |  | 51,483 |
Cash management funds |  |  | - |  |  |  | 2,974 |  |  |  | 2,974 |
|  | $ | - |  |  | $ | 64,341 |  |  | $ | 64,341 |
Aon Hewitt Group Trust (AHGT) p ooled equity and fixed income funds: Pooled equity and fixed income funds consist of various AHGT Funds offered through private placements. The units are valued daily using net asset values (NAV). NAV are based on the fair value of each fund’s underlying investments. Level 1 assets are priced using quotes for trades occurring in active markets for the identical asset. Level 2 assets are priced using observable inputs for the asset (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs). An administrative committee consisting of certain senior management employees administers the Company’s defined benefit pension plans. The pension plan assets are allocated among approved asset types based on the plans current funded status and other characteristics set by the administrative committee, and subject to liquidity requirements of the plans. Estimated future benefit payments are as follows (in thousands):
| 2016 |  |  | $ | 4,618 |
| 2017 |  |  |  | 4,564 |
| 2018 |  |  |  | 4,519 |
| 2019 |  |  |  | 4,522 |
| 2020 |  |  |  | 4,544 |
2021 | - | 2025 |  |  | 22,039 |
The Company’s cessation of its agriculture and golf operations and the corresponding reduction in active participant counts triggered the requirement that the Company provide security to the Pension Benefits Guaranty Corporation (PBGC) of approximately $23.9 million to support the unfunded liabilities of its pension plans or to make contributions to the plans in excess of the minimum required amounts. In 2011 and 2012, the Company pledged a total of 8,400 acres of former agricultural lands in West Maui to the PBGC for five years in satisfaction of the requirement. No formal appraisal or determination of the fair value of the pledged properties was performed by the Company or the PBGC. In October 2014, the Company sold its Lipoa Point property to the State of Hawaii for $19.8 million. The sale resulted from a bill enacted by the State of Hawaii in June 2013 which provided for the purchase of Lipoa Point with the stipulation that the proceeds from the sale be designated for the benefit of the Company’s pension plans. The Lipoa Point property was part of the 8,400 acres of former agricultural lands pledged to the PBGC. Upon the closing of the Lipoa Point sale, the $19.8 million sale price, less closing costs of approximately $400,000, was transferred to the trustee of the Company’s pension plans and the mortgage on the property held by the PBGC was released. With the funding of the Company’s pension plans from the Lipoa Point sale, the Company does not expect to be required to make minimum contributions to its pension plans in 2016. Required minimum contributions totaled $0 and $2.8 million for 2015 and 2014, respectively.

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