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EMPLOYEE BENEFIT PLANS | 12 Months Ended
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Dec. 31, 2011
EMPLOYEE BENEFIT PLANS [Abstract] |
EMPLOYEE BENEFIT PLANS | NOTE 9 EMPLOYEE BENEFIT PLANS 401(k) Plan Artesian Resources has a defined contribution 401(k) Salary Deduction Plan, or the 401(k) Plan, which covers substantially all employees. Under the terms of the 401(k) Plan, Artesian Resources contributed 2% of eligible salaries and wages and matched employee contributions up to 6% of gross pay at a rate of 50%. Artesian Resources may, at its option, make additional contributions of up to 3% of eligible salaries and wages. No such additional contributions were made in 2011, 2010 and 2009. The 401(k) Plan expenses, which include Company contributions and administrative fees, for the years 2011, 2010 and 2009, were approximately $719,000, $681,000, and $618,000, respectively. 55 Table of Contents Supplemental Pension Plan Effective October 1, 1994, Artesian Water established a Supplemental Pension Plan, or the Supplemental Plan, to provide additional retirement benefits to full-time employees hired prior to April 26, 1994. The Supplemental Plan is a defined contribution plan that enables employees to save for future retiree medical costs, which will be paid by employees. The Supplemental Plan accomplishes this objective by providing additional cash resources to employees upon a termination of employment or retirement, to meet the cost of future medical expenses. Artesian Water has established a contribution based upon each employee's years of service ranging from 2% to 6% of eligible salaries and wages. Artesian Water also provides additional benefits to individuals who were over age 50 as of January 1, 1994. These individuals are referred to as the Transition Group. Effective November 1, 1994, individuals eligible for the Transition Group had the opportunity to defer compensation to the Supplemental Plan, and to receive a transition matching contribution for 5 years. Each one-dollar of eligible salaries and wages deferred by the Transition Group was matched with three, four, or five dollars by Artesian Water based on the employee's years of service subject to certain limitations under the federal tax rules. Plan expenses, which include Company contributions and administrative fees, for the years 2011, 2010 and 2009, were approximately $264,000, $263,000, and $268,000, respectively. Postretirement Benefit Plan Artesian Water has a Postretirement Benefit Plan, or the Benefit Plan, which provides medical and life insurance benefits to certain retired employees. Prior to the amendment of the Benefit Plan, substantially all employees could become eligible for these benefits if they reached retirement age while still working for Artesian Water. The amendment excludes any current employees from becoming eligible for these benefits upon retirement. FASB ASC Topic 715 stipulates that Artesian Water accrue the expected cost of providing postretirement health care and life insurance benefits as employees render the services necessary to earn the benefits. Artesian Water recognizes an offsetting regulatory asset with respect to its post retirement liability. This asset is recorded based on the DEPSC order, which permits Artesian Water to continue recovery of postretirement health care and life insurance expense on a pay-as-you-go basis for the remaining eligible employees. Further, expenses recovery as a percentage of rates is expected to remain generally constant over the initial years, and then decline until the obligation is liquidated. The amounts recognized in consolidated financial statements are determined based on an actuarial basis, which uses assumptions about inflation, mortality, medical trend rates and discount rates. A change in these assumptions could cause actual results to differ from those reported. Amounts charged to expense were $112,000, $115,000, and $114,000 for 2011, 2010 and 2009, respectively. The Company uses December 31 as the measurement date to determine the postretirement benefit obligation. According to our actuarial report, the funded status of our defined benefit postretirement plan was calculated contemplating FASB ASC Topic 715 and the obligation is recorded at that amount. There was no other comprehensive income impact because we record a regulatory asset as provided by FASB ASC Topic 980. Additional disclosures required for our postretirement benefit obligation are presented below. 56 Table of Contents
Benefit Obligations and Funded Status |  |  |
In thousands |  | Year Ended |
|  | December 31 |
|  | 2011 |  |  | 2010 |
Change in Accumulated Postretirement Benefit Obligation |  |  |  |  |  |
Accumulated Postretirement Benefit Obligation at the Beginning of the Year |  | $ | 678 |  |  | $ | 785 |
Service Cost |  |  | --- |  |  |  | --- |
Interest Cost |  |  | 34 |  |  |  | 44 |
Actuarial (Gain) or Loss |  |  | 123 |  |  |  | (40 | )
Benefits Paid |  |  | (117 | ) |  |  | (115 | )
Plan Participant's Contributions |  |  | 5 |  |  |  | 4 |
Accumulated Postretirement Benefit Obligation at the End of the Year |  |  | 723 |  |  |  | 678 |
Change in Plan Assets |  |  |  |  |  |  |  |
Fair Value of Plan Assets at the Beginning of the Year |  |  | --- |  |  |  | --- |
Benefits Paid |  |  | (117 | ) |  |  | (115 | )
Employer Contributions |  |  | 112 |  |  |  | 111 |
Plan Participant's Contributions |  |  | 5 |  |  |  | 4 |
Fair Value of Assets at the End of the Year |  |  | --- |  |  |  | --- |
Net Amount Recognized |  |  |  |  |  |  |  |
Funded Status |  |  | (723 | ) |  |  | (678 | )
Unrecognized Transition Obligation Asset |  |  | 17 |  |  |  | 26 |
Unrecognized Net Gain or Loss |  |  | 139 |  |  |  | 15 |
Net Amount Recognized: |  |  | (567 | ) |  |  | (637 | )
Amounts Recognized in the Statement of Financial Position |  |  |  |  |  |  |  |
Accrued Benefit Liability-Current |  |  | (112 | ) |  |  | (112 | )
Accrued Benefit Liability-Noncurrent |  |  | (455 | ) |  |  | (525 | )
Net Amount Recognized |  | $ | (567 | ) |  | $ | (637 | )
Weighted Average Assumptions at the End of the Year |  |  |  |  |  |  |  |
Discount Rate |  |  | 4.50 | % |  |  | 5.50 | %
Assumed Health Care Cost Trend Rates |  |  |  |  |  |  |  |
Health Care Cost Trend Rate Assumed for Next Year |  |  | 7.00 | % |  |  | 7.00 | %
Ultimate Rate |  |  | 3.50 | % |  |  | 4.50 | %
Year that the Ultimate Rate is Reached |  |  | 2015 |  |  |  | 2014 |
Impact of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates |
|  | Increase |  |  | Decrease |
Effect on Service Cost & Interest Cost |  | $ | 1 |  |  | $ | (1 | )
Effect on Postretirement Benefit Obligation |  | $ | 27 |  |  | $ | (25 | )
57 Table of Contents Contributions Artesian Water expects to contribute $111,500 to its postretirement benefit plan in 2012. The following table represents the approximate annual benefits expected to be paid for the years ended December 31:
In thousands |  | Other Benefits |
2012 |  | $ | 112 |
2013 |  |  | 105 |
2014 |  |  | 96 |
2015 |  |  | 87 |
2016 |  |  | 77 |
2017 through 2020 |  |  | 250 |
|  | $ | 727 |

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References No definition available. + Details
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