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RETIREMENT PLANS
 12 Months Ended
Dec. 31, 2012
RETIREMENT PLANS  
RETIREMENT PLANS

11. RETIREMENT PLANS

        The Company has a noncontributory defined benefit pension plan for eligible employees of GT&T who meet certain age and employment criteria. Company contributions to fund the plan are intended to provide not only for benefits attributed for service to date but also for those expected to be earned in the future. The Company's funding policy is to contribute to the plan such amounts as are actuarially determined to meet funding requirements. The benefits are based on the participants' average salary or hourly wages during the last three years of employment and credited service years.

        The weighted-average rates assumed in the actuarial calculations for the pension plan are as follows as of December 31, 2010, 2011 and 2012:

 
   2010   2011   2012  

Discount rate

     7.00 %   6.25 %   6.00 %

Annual salary increase

     7.50 %   7.50 %   7.50 %

Expected long-term return on plan assets

     8.00 %   8.00 %   8.00 %

        The expected long-term rate of return on pension plan assets was determined based on several factors including input from pension investment consultants, projected long-term returns of equity and bond indices in Guyana and elsewhere, including the United States, and historical returns over the life of the related obligations of the fund. The Company, in conjunction with its pension investment consultants, reviews its asset allocation periodically and rebalances its investments when appropriate in an effort to earn the expected long-term returns. The Company will continue to evaluate its long-term rate of return assumptions at least annually and will adjust them as necessary.

        Changes during the year in the projected benefit obligations and in the fair value of plan assets are as follows for 2011 and 2012 (in thousands):

 
   2011   2012  

Projected benefit obligations:

              

Balance at beginning of year:

   $ 12,580   $ 13,355  

Service cost

     617     612  

Interest cost

     865     810  

Benefits paid

     (659 )   (674 )

Actuarial loss

     (48 )   (2,443 )
           

Balance at end of year

   $ 13,355   $ 11,660  
           

Plan net assets:

              

Balance at beginning of year:

   $ 11,736   $ 11,994  

Actual return on plan assets

     83     759  

Company contributions

     834     853  

Benefits paid

     (659 )   (674 )
           

Balance at end of year

   $ 11,994   $ 12,932  
           

(Under) over funded status of plan

   $ (1,361 ) $ 1,272  
           

        The Company's investment policy for its pension assets is to have a reasonably balanced investment approach, with a long-term bias toward debt investments. The Company's strategy allocates plan assets among equity, debt and other assets in both Guyana and the United States to achieve long-term returns without significant risk to principal. The fund is prohibited under Guyana law from investing in the equity, debt or other securities of the employer, its subsidiaries or associates of the employer or any company of which the employer is a subsidiary or an associate. Furthermore, the plan must invest between 70%-80% of its total plan assets within Guyana.

        The fair values for the pension plan's net assets, by asset category, at December 31, 2012 are as follows (in thousands):

Asset Category
  Total   Level 1   Level 2   Level 3  

Cash, cash equivalents, money markets and other

   $ 10,178   $ 10,178   $ —   $ —  

Equity securities

     1,189     1,189     —     —  

Fixed income securities

     1,564     854     710     —  
                   

Total

   $ 12,931   $ 12,221     710     —  
                   

        The plan's weighted-average asset allocations at December 31, 2011 and 2012, by asset category are as follows:

 
   2011   2012  

Cash, cash equivalents, money markets and other

     80.3 %   78.7 %

Equity securities

     8.0     9.2  

Fixed income securities

     11.7     12.1  
           

Total

     100.0 %   100.0 %
           

        Amounts recognized on the Company's consolidated balance sheets consist of (in thousands):

 
   As of December 31,  
 
   2011   2012  

Other assets

   $ —   $ 1,272  

Other liabilities

     (1,361 )   —  

Accumulated other comprehensive loss, net of tax

     2,714     1,318  

        Amounts recognized in accumulated other comprehensive loss consist of (in thousands):

 
   2011   2012  

Net actuarial loss

   $ (5,390 ) $ (2,918 )

Prior service cost

     —     —  
           

Accumulated other comprehensive loss, pre-tax

   $ (5,390 ) $ (2,918 )
           

Accumulated other comprehensive loss, net of tax

   $ (2,714 ) $ (1,318 )
           

        Components of the plan's net periodic pension cost are as follows for the years ended December 31, 2010, 2011 and 2012 (in thousands):

 
   2010   2011   2012  

Service cost

   $ 545   $ 617   $ 612  

Interest cost

     784     865     810  

Expected return on plan assets

     (835 )   (961 )   (972 )

Amortization of unrecognized net actuarial loss

     177     229     242  

Amortization of prior service costs

     11     11     —  
               

Net periodic pension cost

   $ 682   $ 761   $ 692  
               

        For 2013, the Company expects to contribute approximately $754,000 to its pension plan.

        The following estimated pension benefits, which reflect expected future service, as appropriate, are expected to be paid over the next ten years as indicated below (in thousands):

Fiscal Year
  Pension
Benefits		  

2013

     537  

2014

     327  

2015

     444  

2016

     522  

2017

     541  

2018 - 2022

     4,127  
       

 

     6,498