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Retirement Plans And Other Postretirement Benefits | 12 Months Ended
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Dec. 31, 2011
Retirement Plans And Other Postretirement Benefits [Abstract] |
Retirement Plans And Other Postretirement Benefits | 13 RETIREMENT PLANS AND OTHER POSTRETIREMENT BENEFITS We have noncontributory defined benefit (pension) plans covering most employees. The plans for salaried and hourly employees currently in effect are based on a formula using the participant's years of service and compensation or using the participant's years of service and a dollar amount. In addition to providing pension benefits, we provide postretirement life insurance and health care benefits for certain groups of employees. Tredegar and retirees share in the cost of postretirement health care benefits, with employees hired on or before January 1, 1993, receiving a fixed subsidy to cover a portion of their health care premiums. We eliminated prescription drug coverage for Medicare-eligible retirees as of January 1, 2006. Consequently, we are not eligible for any federal subsidies. Assumptions used for financial reporting purposes to compute net benefit income or cost and benefit obligations for continuing operations, and the components of net periodic benefit income or cost for continuing operations, are as follows:
|  |  |  |  |  |  |  | Other Post- |  |
|  | Pension Benefits |  |  | Retirement Benefits |
(In Thousands) |  | 2011 |  |  | 2010 |  |  | 2011 |  |  | 2010 |
Change in benefit obligation: |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligation, beginning of year | $ | 247,969 |  | $ | 235,015 |  | $ | 7,350 |  | $ | 8,687 |
Service cost |  | 3,361 |  |  | 3,315 |  |  | 54 |  |  | 76 |
Interest cost |  | 13,024 |  |  | 13,071 |  |  | 395 |  |  | 467 |
Effect of actuarial (gains) losses related |  |  |  |  |  |  |  |  |  |  |  |
to the following: |  |  |  |  |  |  |  |  |  |  |  |
Discount rate change |  | 16,986 |  |  | 8,587 |  |  | 414 |  |  | 307 |
Retirement rate assumptions and |  |  |  |  |  |  |  |  |  |  |  |
mortality table adjustments |  | 6,314 |  |  | 1,175 |  |  | (52 | ) |  | 25 |
Retiree medical participation rate change |  | - |  |  | - |  |  | 449 |  |  | (1,424 | )
Other |  | (3,399 | ) |  | (1,853 | ) |  | 122 |  |  | (477 | )
Benefits paid |  | (11,819 | ) |  | (11,341 | ) |  | (310 | ) |  | (311 | )
Benefit obligation, end of year | $ | 272,436 |  | $ | 247,969 |  | $ | 8,422 |  | $ | 7,350 |
Change in plan assets: |  |  |  |  |  |  |  |  |  |  |  |
Plan assets at fair value, |  |  |  |  |  |  |  |  |  |  |  |
beginning of year | $ | 239,706 |  | $ | 228,984 |  | $ | - |  | $ | - |
Actual return on plan assets |  | (13,413 | ) |  | 21,896 |  |  | - |  |  | - |
Employer contributions |  | 173 |  |  | 167 |  |  | 310 |  |  | 311 |
Benefits paid |  | (11,819 | ) |  | (11,341 | ) |  | (310 | ) |  | (311 | )
Plan assets at fair value, end of year | $ | 214,647 |  | $ | 239,706 |  | $ | - |  | $ | - |
Funded status of the plans | $ | (57,789 | ) | $ | (8,263 | ) | $ | (8,422 | ) | $ | (7,350 | )
Amounts recognized in the consolidated |  |  |  |  |  |  |  |  |  |  |  |
balance sheets: |  |  |  |  |  |  |  |  |  |  |  |
Prepaid benefit cost | $ | - |  | $ | - |  | $ | - |  | $ | - |
Accrued benefit liability |  | (57,789 | ) |  | (8,263 | ) |  | (8,422 | ) |  | (7,350 | )
Net amount recognized | $ | (57,789 | ) | $ | (8,263 | ) | $ | (8,422 | ) | $ | (7,350 | )
The following tables reconcile the changes in benefit obligations and plan assets in 2011 and 2010, and reconcile the funded status to prepaid or accrued cost at December 31, 2011 and 2010:
|  |  |  |  |  |  |  |  |  |  | Other Post- |  |  |  |
|  | Pension Benefits |  |  |  |  |  | Retirement Benefits |  |
(In Thousands, Except Percentages) |  | 2011 |  |  | 2010 |  |  | 2009 |  |  | 2011 |  |  | 2010 |  |  | 2009 |
Weighted-average assumptions used |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
to determine benefit obligations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 4.95 | % |  | 5.45 | % |  | 5.70 | % |  | 4.90 | % |  | 5.35 | % |  | 5.75 | %
Rate of compensation increases |  | n/a |  |  | n/a |  |  | n/a |  |  | 4.00 | % |  | 4.00 | % |  | 4.00 | %
Weighted-average assumptions used |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
to determine net periodic benefit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 5.45 | % |  | 5.70 | % |  | 6.50 | % |  | 5.35 | % |  | 5.75 | % |  | 6.50 | %
Rate of compensation increases |  | n/a |  |  | n/a |  |  | n/a |  |  | 4.00 | % |  | 4.00 | % |  | 4.00 | %
Expected long-term return on |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
plan assets, during the year |  | 8.00 | % |  | 8.25 | % |  | 8.25 | % |  | n/a |  |  | n/a |  |  | n/a |
Components of net periodic benefit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost | $ | (3,361 | ) | $ | (3,315 | ) | $ | (3,077 | ) | $ | (54 | ) | $ | (76 | ) | $ | (70 | )
Interest cost |  | (13,024 | ) |  | (13,071 | ) |  | (13,287 | ) |  | (395 | ) |  | (467 | ) |  | (495 | )
Expected return on plan assets |  | 20,448 |  |  | 20,530 |  |  | 20,680 |  |  | - |  |  | - |  |  | - |
Amortization of prior service |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
costs and gains or losses |  | (6,359 | ) |  | (4,806 | ) |  | (1,224 | ) |  | 264 |  |  | 79 |  |  | 127 |
Net periodic benefit income (cost) | $ | (2,296 | ) | $ | (662 | ) | $ | 3,092 |  | $ | (185 | ) | $ | (464 | ) | $ | (438 | )
Net benefit income or cost is determined using assumptions at the beginning of each year. Funded status is determined using assumptions at the end of each year. Pension and other postretirement liabilities for continuing operations of $66.2 million and $15.6 million are included in "Other noncurrent liabilities" in the consolidated balance sheets at December 31, 2011 and 2010, respectively. The amount of our accumulated benefit obligation is the same as our projected benefit obligation. At December 31, 2011, the effect of a 1% change in the health care cost trend rate assumptions would be immaterial. Expected benefit payments for continuing operations over the next five years and in the aggregate for 2017-2021 are as follows:
|  |  |  | Other
|  |  | Post | -
|  | Pension Retirement
(In Thousands) |  | Benefits |  | Benefits
2012 | $ | 13,291 | $ | 482
2013 |  | 13,982 |  | 508
2014 |  | 14,655 |  | 522
2015 |  | 15,348 |  | 536
2016 |  | 15,869 |  | 548
2017 - 2021 |  | 87,166 |  | 2,821
Amounts recognized in 2011, 2010 and 2009 before related deferred income taxes in accumulated other comprehensive income consist of:
|  |  |  |  |  |  |  |  |  |  | Other Post- |  |  |  |
|  |  |  |  | Pension |  |  |  |  |  |  |  | Retirement |  |  |  |
(In Thousands) |  | 2011 |  |  | 2010 |  |  | 2009 |  |  | 2011 |  |  | 2010 |  |  | 2009 |
Prior service cost (benefit) | $ | (1,890 | ) | $ | (2,966 | ) | $ | (4,035 | ) | $ | - |  | $ | - |  | $ | - |
Net actuarial (gain) loss |  | 148,364 |  |  | 102,037 |  |  | 101,368 |  |  | (1,401 | ) |  | (2,598 | ) |  | (1,107 | )
The amounts before related deferred income taxes in accumulated other comprehensive income that are expected to be recognized as components of net periodic benefit or cost during 2012 are as follows:
|  |  |  |  | Other Post- |
(In Thousands) |  | Pension |  |  | Retirement |
Prior service cost (benefit) | $ | (1,077 | ) | $ | - |
Net actuarial (gain) loss |  | 11,583 |  |  | (212 | )
The percentage composition of assets held by pension plans for continuing operations at December 31, 2011, 2010 and 2009 are as follows:
| % Composition of Plan Assets |
| at December 31, |  |  |
| 2011 |  | 2010 |  | 2009 |
Pension plans related to continuing operations: |  |  |  |  |  |
Low-risk fixed income securities | 9.7 | % | 1.9 | % | 3.5 | %
Large capitalization equity securities | 15.9 |  | 22.3 |  | 21.7 |
Small-capitalization equity securities | 6.2 |  | 6.7 |  | 5.8 |
International and emerging market equity securities | 14.3 |  | 21.6 |  | 21.4 |
Total equity securities | 36.4 |  | 50.6 |  | 48.9 |
Hedge and private equity funds | 41.8 |  | 42.7 |  | 42.9 |
Other assets | 12.1 |  | 4.8 |  | 4.7 |
Total for continuing operations | 100.0 | % | 100.0 | % | 100.0 | %
Our targeted allocation percentage for pension plan assets and the expected long-term rate of return on assets is as follows:
| Target % |  | Expected |
| Composition of |  | Long-term |
| Plan Assets * |  | Return % |
Pension plans related to continuing operations: |  |  |  |
Low-risk fixed income securities | 32.0 | % | 5.8 | %
Large capitalization equity securities | 6.0 |  | 8.7 |
Mid-capitalization equity securities | 4.0 |  | 10.5 |
Small-capitalization equity securities | 4.0 |  | 10.7 |
International and emerging market equity securities | 13.0 |  | 10.9 |
Total equity securities | 27.0 |  | 10.4 |
Hedge and private equity funds | 41.0 |  | 8.3 |
Other assets | - |  | - |
Total for continuing operations | 100.0 | % | 8.0 | %
* | Target percentages for the composition of plan assets represents a neutral position within the approved range of allocations for such assets.
Expected long-term returns are estimated by asset class and generally are based on inflation-adjusted historical returns, volatilities, risk premiums and managed asset premiums. The portfolio of fixed income securities is structured with maturities that generally match estimated benefit payments over the next 1-2 years. Other assets are primarily comprised of cash and contracts with insurance companies. Our primary investment objective is to maximize total return with a strong emphasis on the preservation of capital. We believe that over the long term a diversified portfolio of equity securities, hedge funds and private equity funds has a better risk-return profile than fixed income securities. The average remaining duration of benefit payments for our pension plans is about 12 years. We expect our required contributions to be approximately $5.3 million in 2012. Estimates of the fair value of assets held by our pension plans are provided by third parties not affiliated with Tredegar. At December 31, 2011, the pension plan assets are categorized by level within the fair value measurement hierarchy as follows:
(In Thousands) |  |  |  | Quoted Prices |  | Signficant |  |
|  |  |  | in Active |  | Other |  | Significant
|  |  |  | Markets for |  | Observable |  | Unobservable
|  |  |  | Identical Assets |  | Inputs |  | Inputs
December 31, 2011 |  | Total |  | (Level 1) |  | (Level 2) |  | (Level 3)
Large capitalization equity securities | $ | 34,095 | $ | 31,490 | $ | 2,605 | $ | -
Small-capitalization equity securities |  | 13,281 |  | 13,281 |  | - |  | -
International and emerging market |  |  |  |  |  |  |  |
equity securities |  | 30,611 |  | 30,611 |  | - |  | -
Hedge and private equity funds |  | 89,620 |  | - |  | 82,628 |  | 6,992
Low-risk fixed income securities |  | 20,895 |  | 10,960 |  | 9,935 |  | -
Other assets |  | 16,899 |  | 11,899 |  | 5,000 |  | -
Total plan assets at fair value | $ | 205,401 | $ | 98,241 | $ | 100,168 | $ | 6,992
Contracts with insurance companies |  | 9,246 |  |  |  |  |  |
Total plan assets, December 31, 2011 | $ | 214,647 |  |  |  |  |  |
December 31, 2010 |  |  |  |  |  |  |  |
Large capitalization equity securities | $ | 53,543 | $ | 39,827 | $ | 13,716 | $ | -
Small-capitalization equity securities |  | 16,170 |  | 16,170 |  | - |  | -
International and emerging market |  |  |  |  |  |  |  |
equity securities |  | 51,840 |  | 51,840 |  | - |  | -
Hedge and private equity funds |  | 102,309 |  | - |  | 94,267 |  | 8,042
Low-risk fixed income securities |  | 4,469 |  | 1,613 |  | 2,856 |  | -
Other assets |  | 2,290 |  | 2,290 |  | - |  | -
Total plan assets at fair value | $ | 230,621 | $ | 111,740 | $ | 110,839 | $ | 8,042
Contracts with insurance companies |  | 9,085 |  |  |  |  |  |
Total plan assets, December 31, 2010 | $ | 239,706 |  |  |  |  |  |
For fair value measurements of plan assets using significant unobservable inputs (Level 3), a reconciliation of the balances from January 1, 2010 to December 31, 2011 are as follows:
|  | Hedge and private |
(In Thousands) |  | equity funds |
Balance at January 1, 2010 | $ | 11,637 |
Purchases |  | - |
Sales |  | (2,218 | )
Distributions |  | (709 | )
Actual return on plan assets still held |  |  |
at year end |  | (668 | )
Transfers in and/or out of Level 3 |  | - |
Balance at December 31, 2010 | $ | 8,042 |
Purchases |  | 2,554 |
Sales |  | (663 | )
Distributions |  | (2,673 | )
Actual return on plan assets still held |  |  |
at year end |  | (268 | )
Transfers in and/or out of Level 3 |  | - |
Balance at December 31, 2011 | $ | 6,992 |
We also have a non-qualified supplemental pension plan covering certain employees. Effective December 31, 2005, further participation in this plan was terminated and benefit accruals for existing participants were frozen. The plan was designed to restore all or a part of the pension benefits that would have been payable to designated participants from our principal pension plans if it were not for limitations imposed by income tax regulations. The projected benefit obligation relating to this unfunded plan was $2.6 million at December 31, 2011 and $2.5 million at December 31, 2010. Pension expense recognized for this plan was $0.1 million in 2011, $0.2 million in 2010 and $0.2 million in 2009. This information has been included in the preceding pension benefit tables. Approximately 111 employees at our films manufacturing facility in Kerkrade, The Netherlands are covered by a collective bargaining agreement that includes participation in a multi-employer pension plan. Pension expense recognized for participation in this plan, which is equal to required contributions, was $0.6 million in 2011, $0.6 million in 2010 and $0.8 million in 2009. This information has been excluded from the preceding pension benefit tables.

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- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 87 -Paragraph 264 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 158 -Paragraph 7, 21, 22 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph b -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Staff Position (FSP) -Number FAS106-2 -Paragraph 20, 21, 22 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Implementation Guide (Q and A) -Number FAS88 -Paragraph 63 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph h -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 30 -Paragraph 26 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph a -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Emerging Issues Task Force (EITF) -Number 03-2 -Paragraph 8 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5, 6, 7, 8 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 8 -Subparagraph m -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph q -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 106 -Paragraph 518 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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