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Retirement Plans | 12 Months Ended
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Dec. 31, 2016
Retirement Plans [Abstract] |
Retirement Plans | ﻿ Note 16. ﻿ Retirement Plans ﻿ The Company has seven retirement plans that cover its hourly and salaried employees in the United States: three defined benefit plans (one active / two frozen) and f our defined contribution plans. Employees are eligible to participate in the appropriate plan based on employment classification. The Company's contributions to the defined benefit and defined contribution plans are governed by the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Company’s policy and investment guidelines of the applicable plan. The Company’s policy is to contribute at least the minimum in accordance with the funding standards of ERISA. ﻿ Rail Technologies maintains two defined contribution plans for its employees in Canada, as well as a post-retirement benefit plan. In the United Kingdom, Rail Technologies maintains two defined contribution plans and a defined benefit plan. These plans are discussed in further detail below. ﻿ United States Defined Benefit Plans ﻿ The following tables present a reconciliation of the changes in the benefit obligation, the fair market value of the assets, and the funded status of the plans, as of December 31, 2016 and 2015: ﻿
﻿ |  |  |  |
﻿ |  |  |  |
﻿ |  | 2016 |  | 2015
﻿ |  |
﻿Changes in benefit obligation: |  |  |  |
﻿Benefit obligation at beginning of year | $ | 17,759 | $ | 18,925
﻿Service cost |  | 36 |  | 38
﻿Interest cost |  | 746 |  | 742
﻿Actuarial loss (gain) |  | 534 |  | (1,148)
﻿Benefits paid |  | (834) |  | (798)
﻿Benefit obligation at end of year | $ | 18,241 | $ | 17,759
﻿ ﻿
﻿ |  |  |  |
﻿ |  |  |  |
﻿Change to plan assets: |  |  |  |
﻿Fair value of assets at beginning of year | $ | 14,235 | $ | 15,205
﻿Actual gain (loss) on plan assets |  | 779 |  | (172)
﻿Employer contribution |  | - |  | -
﻿Benefits paid |  | (834) |  | (798)
﻿Fair value of assets at end of year |  | 14,180 |  | 14,235
﻿Funded status at end of year | $ | (4,061) | $ | (3,524)
﻿
﻿ |  |  |  |
﻿ |  |  |  |
﻿Amounts recognized in the consolidated balance sheet consist of: |  |  |  |
﻿Other long-term liabilities | $ | (4,061) | $ | (3,524)
﻿ ﻿
﻿ |  |  |  |
﻿ |  |  |  |
﻿Amounts recognized in accumulated other comprehensive income consist of: |  |  |  |
﻿Net loss | $ | 4,186 | $ | 3,993
﻿ The actuarial loss included in accumulated other comprehensive loss that will be recognized in net periodic pension cost during 2017 is $130, before taxes. Net periodic pension costs for the three years ended December 31, 2016 are as follows: ﻿
﻿ |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |
﻿ |  | 2016 |  | 2015 |  | 2014 |
﻿Components of net periodic benefit cost: |  |  |
﻿Service cost | $ | 36 | $ | 38 | $ | 23 |
﻿Interest cost |  | 746 |  | 742 |  | 771 |
﻿Expected return on plan assets |  | (717) |  | (816) |  | (968) |
﻿Amortization of prior service cost |  | - |  | 3 |  | 1 |
﻿Recognized net actuarial loss |  | 276 |  | 275 |  | 65 |
﻿Net periodic pension cost (income) | $ | 341 | $ | 242 | $ | (108) |
﻿ The weighted average assumptions in the following table represent the rates used to develop the actuarial present value of the projected benefit obligation for the year listed and also the net periodic benefit cost for the following year. ﻿
﻿ |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |
﻿ |  | 2016 |  | 2015 |  | 2014 |
﻿Discount rate |  | 4.3 | % | 4.3 | % | 4.0 | %
﻿Expected rate of return on plan assets |  | 5.2 | % | 5.2 | % | 5.5 | %
﻿ ﻿ The expected long-term rate of return is based on numerous factors including the target asset allocation for plan assets, historical rate of return, long-term inflation assumptions, and current and projected market conditions. The decline in the expected rate of return on plan assets reflects a shift in the Plans’ investment strategy toward a higher focus on fixed income investments. ﻿ Amounts applicable to the Company’s pension plans with accumulated benefit obligations in excess of plan assets are as follows at December 31: ﻿
﻿ |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |
﻿ |  |  |  | 2016 |  | 2015 |
﻿ |  |  |  |  |
﻿Projected benefit obligation |  |  | $ | 18,241 | $ | 17,759 |
﻿Accumulated benefit obligation |  |  |  | 18,241 |  | 17,759 |
﻿Fair value of plan assets |  |  |  | 14,180 |  | 14,235 |
﻿ Plan assets consist primarily of various fixed income and equity investments. The Company’s primary investment objective is to provide long-term growth of capital while accepting a moderate level of risk. The investments are limited to cash and cash equivalents, bonds, preferred stocks, and common stocks. The investment target ranges and actual allocation of pension plan assets by major category at December 31, 2016 and 2015 are as follows: ﻿
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﻿ |  |  |  |  |  |  |
﻿ |  | Target |  | 2016 |  | 2015 |
﻿Asset Category |  |  |  |  |  |  |
﻿Cash and cash equivalents |  | 0 - 10 | % | 5 | % | 9 | %
﻿Total fixed income funds |  | 25 - 50 |  | 33 |  | 35 |
﻿Total mutual funds and equities |  | 50 - 70 |  | 62 |  | 56 |
﻿Total |  |  |  | 100 | % | 100 | %
﻿ In accordance with the fair value disclosure requirements of FASB ASC 820, “Fair Value Measurements and Disclosures,” the following assets were measured at fair value on a recurring basis at December 31, 2016 and 2015. Additional information regarding FASB ASC 820 and the fair value hierarchy can be found in Note 18 Fair Value Measurements. ﻿
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﻿ |  |  |  |
﻿ |  |
﻿ |  | 2016 |  | 2015
﻿ |  |
﻿Asset Category |  |  |  |
﻿Cash and cash equivalents | $ | 660 | $ | 1,248
﻿Fixed income funds |  |  |  |
﻿Corporate bonds |  | 4,767 |  | 4,926
﻿Total fixed income funds |  | 4,767 |  | 4,926
﻿Equity funds and equities |  |  |  |
﻿Mutual funds |  | 8,753 |  | 8,061
﻿Common stock |  | - |  | -
﻿Total mutual funds and equities |  | 8,753 |  | 8,061
﻿Total | $ | 14,180 | $ | 14,235
﻿ Cash equivalents. The Company uses quoted market prices to determine the fair value of these investments in interest-bearing cash accounts and they are classified in Level 1 of the fair value hierarchy. The carrying amounts approximate fair value because of the short maturity of the instruments. ﻿ Fixed income funds. Investments within the fixed income funds category consist of fixed income corporate debt. The Company uses quoted market prices to determine the fair value of these fixed income funds. These instruments consist of exchange-traded government and corporate bonds and are classified in Level 1 of the fair value hierarchy. ﻿ Equity funds and equities. The valuation of investments in registered investment companies is based on the underlying investments in securities. Securities traded on security exchanges are valued at the latest quoted sales price. Securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the average of the last reported bid and ask quotations. These investments are classified in Level 1 of the fair value hierarchy. ﻿ The Company currently does not anticipate contributions to its United States defined benefit plans in 2017. ﻿ The following benefit payments are expected to be paid: ﻿
﻿ |  |
﻿ |  |
﻿ |  | Pension
﻿ |  | Benefits
﻿ |  |
﻿2017 | $ | 894
﻿2018 |  | 905
﻿2019 |  | 972
﻿2020 |  | 1,013
﻿2021 |  | 1,078
﻿Years 2022-2026 |  | 5,647
﻿ United Kingdom Defined Benefit Plan ﻿ The Portec Rail Products (UK) Limited Pension Plan covers certain current employees, former employees, and retirees. The plan has been frozen to new entrants since April 1, 1997 and also covers the former employees of a merged plan after January 2002. Benefits under the plan were based on years of service and eligible compensation during defined periods of service. Our funding policy for the plan is to make minimum annual contributions required by applicable regulations. ﻿ The funded status of the United Kingdom defined benefit plan at December 31, 2016 and 2015 is as follows: ﻿
﻿ |  |  |  |
﻿ |  |  |  |
﻿ |  | 2016 |  | 2015
﻿ |  |
﻿Changes in benefit obligation: |  |  |  |
﻿Benefit obligation at beginning of year | $ | 7,862 | $ | 8,797
﻿Interest cost |  | 259 |  | 295
﻿Actuarial (gain) loss |  | 1,532 |  | (416)
﻿Benefits paid |  | (273) |  | (339)
﻿Foreign currency exchange rate changes |  | (1,276) |  | (475)
﻿Benefit obligation at end of year | $ | 8,104 | $ | 7,862
﻿ ﻿
﻿ |  |  |  |
﻿ |  |  |  |
﻿Change to plan assets: |  |  |  |
﻿Fair value of assets at beginning of year | $ | 6,661 | $ | 6,757
﻿Actual gain on plan assets |  | 265 |  | 307
﻿Employer contribution |  | 253 |  | 302
﻿Benefits paid |  | (273) |  | (339)
﻿Foreign currency exchange rate changes |  | (1,080) |  | (366)
﻿Fair value of assets at end of year |  | 5,826 |  | 6,661
﻿Funded status at end of year | $ | (2,278) | $ | (1,201)
﻿
﻿ |  |  |  |
﻿ |  |  |  |
﻿ |  |  |  |
﻿Amounts recognized in the consolidated balance sheet consist of: |  |  |  |
﻿Other long-term liabilities | $ | (2,278) | $ | (1,201)
﻿ |  |  |  |
﻿ |  |  |  |
﻿Amounts recognized in accumulated other comprehensive income consist of: |  |  |  |
﻿Net loss | $ | 2,015 | $ | 706
﻿Prior service cost |  | 53 |  | 85
﻿ | $ | 2,068 | $ | 791
﻿ Net periodic pension costs for the three years ended December 31 are as follows: ﻿ ﻿
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ |  | 2016 |  | 2015 |  | 2014
﻿Components of net periodic benefit cost: |  |
﻿Interest cost | $ | 259 | $ | 295 | $ | 360
﻿Expected return on plan assets |  | (290) |  | (324) |  | (370)
﻿Amortization of transition obligation |  | - |  | - |  | (50)
﻿Amortization of prior service cost |  | 17 |  | 27 |  | 30
﻿Recognized net actuarial loss |  | 275 |  | 225 |  | 185
﻿Net periodic pension cost | $ | 261 | $ | 223 | $ | 155
﻿ The weighted average assumptions in the following table represent the rates used to develop the actuarial present value of the projected benefit obligation for the year listed and also the net periodic benefit cost for the following year. ﻿
﻿ |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |
﻿ |  | 2016 |  | 2015 |  | 2014 |
﻿Discount rate |  | 2.7 | % | 4.0 | % | 3.6 | %
﻿Expected rate of return on plan assets |  | 4.4 | % | 5.2 | % | 5.0 | %
﻿ Amounts applicable to the Company’s pension plans with accumulated benefit obligations in excess of plan assets are as follows at December 31: ﻿
﻿ |  |  |  |  |
﻿ |  |  |  |  |
﻿ |  | 2016 |  | 2015 |
﻿ |  |  |
﻿Projected benefit obligation | $ | 8,104 | $ | 7,862 |
﻿Accumulated benefit obligation |  | 8,104 |  | 7,862 |
﻿Fair value of plan assets |  | 5,826 |  | 6,661 |
﻿ The Company has estimated the long-term rate of return on plan assets based primarily on historical returns on plan assets, adjusted for changes in target portfolio allocations, and recent changes in long-term interest rates based on publicly available information. ﻿ Plan assets are invested by the trustees in accordance with a written statement of investment principles. This statement permits investment in equities, corporate bonds, United Kingdom government securities, commercial property, and cash, based on certain target allocation percentages. Asset allocation is primarily based on a strategy to provide steady growth without undue fluctuations. The target asset allocation percentages for 2016 are as follows: ﻿
﻿ |
﻿ |
﻿ | Portec Rail
﻿ | Plan
﻿Equity securities | Up to 100%
﻿Commercial property | Not to exceed 50%
﻿U.K. Government securities | Not to exceed 50%
﻿Cash | Up to 100%
﻿ Plan assets held within the Portec Rail Plan consist of cash and marketable securities that have been classified as Level 1 of the fair value hierarchy. All other plan assets have been classified as Level 2 of the fair value hierarchy. ﻿ The plan assets by category for the two years ended December 31, 2016 and 2015 are as follows: ﻿
﻿ |  |  |  |  |
﻿ |  |  |  |  |
﻿ |  |  |
﻿ |  | 2016 |  | 2015 |
﻿Asset Category |  |  |
﻿Cash and cash equivalents | $ | 707 | $ | 242 |
﻿Equity securities |  | 2,617 |  | 2,656 |
﻿Bonds |  | 1,347 |  | 1,301 |
﻿Other |  | 1,155 |  | 2,462 |
﻿Total | $ | 5,826 | $ | 6,661 |
﻿ United Kingdom regulations require trustees to adopt a prudent approach to funding required contributions to defined benefit pension plans. The Company anticipates making contributions of $231 to the Portec Rail Plan during 2017. ﻿ The following estimated future benefits payments are expected to be paid under the Portec Rail Plan: ﻿
﻿ |  |
﻿ |  |
﻿ |  | Pension
﻿ |  | Benefits
﻿ |  |
﻿2017 | $ | 219
﻿2018 |  | 238
﻿2019 |  | 252
﻿2020 |  | 268
﻿2021 |  | 274
﻿Years 2022-2026 |  | 1,750
﻿ Other Post-Retirement Benefit Plan ﻿ Rail Technologies' operation near Montreal, Quebec, Canada, maintains a post-retirement benefit plan, which provides retiree life insurance, health care benefits, and, for a closed group of employees, dental care. Retiring employees with a minimum of 10 years of service are eligible for the plan benefits. The plan is not funded. Cost of benefits earned by employees is charged to expense as services are rendered. The expense related to this plan was not material for 2016 or 2015. Rail Technologies' accrued benefit obligation was $909 and $823 as of December 31, 2016 and 2015, respectively. This obligation is recognized within other long-term liabilities. Benefit payments anticipated for 2017 are not material. ﻿ The weighted average assumptions in the following table represent the rates used to develop the actuarial present value of the projected benefit obligation for the year listed and also the net periodic benefit cost for the following year.
﻿ |  |  |  |  |
﻿ |  |  |  |  |
﻿ |  | 2016 |  | 2015 |
﻿Discount rate |  | 4.0 | % | 4.2 | %
﻿Weighted average health care trend rate |  | 5.1 | % | 5.0 | %
﻿ ﻿ The weighted average health care rate trends downward to an ultimate rate of 4.4% in 2035. ﻿ Defined Contribution Plans ﻿ The Company sponsors eight defined contribution plans for hourly and salaried employees across our domestic and international facilities. The following table summarizes the expense associated with the contributions made to these plans. ﻿ ﻿
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﻿ |  |  |  |  |  |
﻿ |  | Twelve Months Ended
﻿ |  | December 31,
﻿ |  | 2016 |  | 2015 |  | 2014
﻿ |  |
﻿United States | $ | 1,813 | $ | 2,434 | $ | 2,425
﻿Canada |  | 225 |  | 226 |  | 227
﻿United Kingdom |  | 376 |  | 494 |  | 158
﻿ | $ | 2,414 | $ | 3,154 | $ | 2,810
﻿

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