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Note 6 - Accrued Retirement Benefits | 12 Months Ended
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Dec. 31, 2016
Notes to Financial Statements |
Pension and Other Postretirement Benefits Disclosure [Text Block] |
6 . | ACCRUED RETIREMENT BENEFITS
Accrued Retirement Benefits at December 31, 2016 and 2015 consisted of the following:
|  | 2016 |  |  | 2015 |
|  | (in thousands) |
Defined benefit pension plans |  | $ | 7,560 |  |  | $ | 6,264 |
Non-qualified retirement plans |  |  | 1,674 |  |  |  | 4,366 |
Total |  |  | 9,234 |  |  |  | 10,630 |
Less current portion |  |  | (175 | ) |  |  | (378 | )
Non-current portion of accrued retirement benefits |  | $ | 9,059 |  |  | $ | 10,252 |
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 unfunded non-qualified retirement plans covering twelve of its former executives. The non-qualified retirement plans were frozen in 2009 and future vesting of additional benefits was discontinued. During the fourth quarter of 2016, participants who had terminated employment and had not started to collect their pension benefits were offered a limited-time opportunity to take their benefits as a one -time lump sum payment. The offer was extended to approximately 500 participants of which 325 participants elected to take the one -time lump sum payment. In total, approximately $9.3 million lump sum payments were paid out of the trust for the defined benefit pension plan settlements. 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 2016 and 2015, and the funded status of the plans, and assumptions used to determine benefit information at December 31, 2016 and 2015 were as follows:
|  | 2016 |  |  | 2015 |
|  | (in thousands) |
Change in benefit obligations: |  |  |  |  |  |  |  |
Benefit obligations at beginning of year |  | $ | 66,852 |  |  | $ | 71,349 |
Interest cost |  |  | 2,804 |  |  |  | 2,753 |
Actuarial loss (gain) |  |  | 1,042 |  |  |  | (2,783 | )
Benefits paid |  |  | (4,217 | ) |  |  | (4,467 | )
Lump sum payments |  |  | (10,103 | ) |  |  | - |
Benefit obligations at end of year |  |  | 56,378 |  |  |  | 66,852 |
Change in plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  |  | 56,434 |  |  |  | 64,341 |
Actual return on plan assets |  |  | 5,188 |  |  |  | (3,463 | )
Employer reimbursement for retirement benefits |  |  | (1,054 | ) |  |  | (271 | )
Employer contributions |  |  | 928 |  |  |  | 294 |
Benefits paid |  |  | (4,217 | ) |  |  | (4,467 | )
Lump sum payments |  |  | (10,103 | ) |  |  | - |
Fair value of plan assets at end of year |  |  | 47,176 |  |  |  | 56,434 |
Funded status |  | $ | (9,202 | ) |  | $ | (10,418 | )
Accumulated benefit obligations |  | $ | 56,378 |  |  | $ | 66,852 |
Weighted average assumptions used to determine benefit obligations at December 31: |  |  |  |  |  |  |  |
Discount rate |  | 4.07% | - | 4.14% |  | 4.30% | - | 4.44%
Expected long-term return on plan assets |  |  | 5.00% |  |  |  | 7.00% |
Rate of compensation increase |  |  | n/a |  |  |  | n/a |
Accumulated other comprehensive loss of $22.3 million and $28.7 million at December 31, 2016 and 2015, respectively, represent the net actuarial loss which has not yet been recognized as a component of pension expense. In 2017, $0.8 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:
|  | 2016 |  |  | 2015 |
|  | (in thousands) |
Pension and other benefits: |  |  |  |  |  |  |  |
Interest cost |  | $ | 2,804 |  |  | $ | 2,753 |
Expected return on plan assets |  |  | (2,713 | ) |  |  | (3,306 | )
Recognized net actuarial loss |  |  | 1,030 |  |  |  | 843 |
Settlement/Curtailment Expense |  |  | 3,958 |  |  |  | - |
Pension expense |  | $ | 5,079 |  |  | $ | 290 |
Other changes in plan assets and benefit obligations recognized in comprehensive income: |  |  |  |  |  |  |  |
Net (gain) loss |  | $ | (1,384 | ) |  | $ | 3,986 |
Recognized loss |  |  | (4,988 | ) |  |  | (893 | )
Total recognized (gain) loss in comprehensive income |  | $ | (6,372 | ) |  | $ | 3,093 |
Weighted average assumptions used to determine net periodic benefit cost: |  | 2016 |  |  | 2015 |
Pension benefits: |  |  |  |  |  |  |  |  |  |
Discount rate |  | 4.30% | - | 4.44% |  |  | 3.96% | - | 4.07% |
Expected long-term return on plan assets |  |  | 5.00% |  |  |  |  | 5.32% |  |
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 presumed 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, 2016 and 2015, by asset category, were as follows:
|  | 2016 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 |  | $ | - |  |  | $ | 7,177 |  |  | $ | 7,177 |
AHGT pooled fixed income funds |  |  | - |  |  |  | 39,025 |  |  |  | 39,025 |
Cash management funds |  |  | - |  |  |  | 974 |  |  |  | 974 |
|  | $ | - |  |  | $ | 47,176 |  |  | $ | 47,176 |
|  | 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 |
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):
2017 |  |  |  | $ | 4,283 |
2018 |  |  |  |  | 4,180 |
2019 |  |  |  |  | 4,123 |
2020 |  |  |  |  | 4,084 |
2021 |  |  |  |  | 3,995 |
2022 | - | 2026 |  |  | 18,332 |
In 2012, the Company’s cessation of its golf operations and corresponding reduction in active participant counts triggered the requirement that the Company provide security to the Pension Benefits Guaranty Corporation (PBGC) of approximately $18.7 million to support the unfunded liabilities of its pension plans at the time or make contributions to the plans in excess of the minimum required amounts. In 2012, the Company pledged a total of 6,800 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. The Company does not expect to be required to make minimum contributions to its pension plans in 2017. No required minimum contributions were made in 2016 or 2015.

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