XML 28 R15.htm IDEA: XBRL DOCUMENT v2.4.0.6
Retirement Benefits
 12 Months Ended
Apr. 30, 2012
Retirement Benefits [Abstract]  
Retirement Benefits

Note 8—Retirement Benefits

Defined Benefit Plans

The Company has non-contributory defined benefit pension plans covering a significant number of salaried and hourly employees. These plans were amended as of April 30, 2005; no further benefits have been, or will be, earned under the plans subsequent to the amendment date, and no additional participants will be added to the plans. The defined benefit plan for salaried employees provides pension benefits that are based on each employee’s years of service and average annual compensation during the last 10 consecutive calendar years of employment as of April 30, 2005. The benefit plan for hourly employees provides benefits at stated amounts based on years of service as of April 30, 2005. The Company uses an April 30 measurement date for its defined benefit plans. The change in projected benefit obligations and the change in fair value of plan assets for the non-contributory defined benefit pension plans for each of the years ended April 30 are summarized as follows:

 

                 

$ in thousands

   2012     2011  

Accumulated Benefit Obligation, April 30

   $ 19,061      $ 17,328   
   

 

 

    

 

 

  
     

Change in Projected Benefit Obligations

                

Projected benefit obligations, beginning of year

   $ 17,328      $ 15,775   

Interest cost

     942        959   

Actuarial loss

     1,611        1,328   

Actual benefits paid

     (820)       (734)  
   

 

 

    

 

 

  

Projected benefit obligations, end of year

     19,061        17,328   
   

 

 

    

 

 

  
     

Change in Plan Assets

                

Fair value of plan assets, beginning of year

     14,979        13,110   

Actual return (loss) on plan assets

     (553)       1,884   

Employer contributions

     402        719   

Actual benefits paid

     (821)       (734)  
   

 

 

    

 

 

  

Fair value of plan assets, end of year

     14,007        14,979   
   

 

 

    

 

 

  

Funded status – under

   $ (5,054)     $ (2,349)  
   

 

 

    

 

 

  

 

                 

$ in thousands

   2012     2011  

Amounts Recognized in the Consolidated Balance Sheets consist of:

                

Noncurrent assets

   $ —        $ —     

Noncurrent liabilities

     (5,054)       (2,349)  
   

 

 

    

 

 

  

Net amount recognized

   $ (5,054)     $ (2,349)  
   

 

 

    

 

 

  
     

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

                

Net actual loss

   $ 10,658      $   7,905   

Deferred tax benefit

     (4,146)       (3,075)  
   

 

 

    

 

 

  

After-tax actuarial loss

   $ 6,512      $ 4,830   
   

 

 

    

 

 

  
     

Weighted-Average Assumptions Used to Determine Benefit Obligations at April 30

                

Discount rate

     4.75%        5.60%   

Rate of compensation increase

     N/A        N/A   
     
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended April 30                

Discount rate

     5.60%        6.00%   

Expected long-term return on plan assets

     8.75%        8.75%   

Rate of compensation increase

     N/A        N/A   

The components of the net periodic pension cost (income) for each of the fiscal years ended April 30 are as follows:

 

                         

$ in thousands

   2012     2011     2010  

Interest cost

   $ 942      $ 959      $ 951   

Expected return on plan assets

     (1,306)       (1,155)          (938)  

Recognition of net loss

     717        687        694   
   

 

 

    

 

 

    

 

 

  

Net periodic pension cost (income)

   $ 353      $ 491      $ 707   
   

 

 

    

 

 

    

 

 

  

The estimated net actuarial loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost during the fiscal year 2013 is $1,176,000.

The Company’s funding policy is to contribute to the plans when pension laws and economics either require or encourage funding. Contributions of $402,000 and $719,000 were made to the plan in fiscal years 2012 and 2011, respectively. No contributions were made to the plans in fiscal year 2010. The Company anticipates that contributions in the amount of $1,000,000 will be made to the plans in fiscal year 2013.

The following benefit payments are expected to be paid from the benefit plans in the fiscal years ended April 30:

 

         

$ in thousands

   Amount  

2013

   $ 964   

2014

     1,041   

2015

     1,102   

2016

     1,170   

2017

     1,187   

2018-2022

      6,376   

The Company employs a building block approach in determining the long-term rate of return for plan assets. Historical markets are studied and long-term historical relationships between equities and fixed-income securities are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long-term. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. The expected long-term portfolio return is established via a building block approach with proper consideration of diversification and rebalancing. Peer data and historical returns are also reviewed to check for reasonableness and appropriateness.

 

The Company uses a Yield Curve technique methodology to determine its GAAP discount rate. Under this approach, future benefit payment cash flows are projected from the pension plan on a projected benefit obligation basis. The payment stream is discounted to a present value using an interest rate applicable to the timing of each respective cash flow. The graph of these time-dependent interest rates is known as a yield curve. The interest rates comprising the Yield Curve are determined through a statistical analysis performed by the IRS and issued each month in the form of a pension discount curve. For this purpose, the universe of possible bonds consists of a set of bonds which are designated as corporate, have high quality ratings (AAA, AA, or A) from nationally recognized statistical rating organizations, and have at least $250 million in par amount outstanding on at least one day during the reporting period. A 1% increase/decrease in the discount rate for fiscal years 2012 and 2011 would decrease/increase pension expense by approximately $152,000 and $212,000, respectively.

The Company uses a total return investment approach, whereby a mix of equities and fixed-income investments are used to attempt to maximize the long-term return on plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value, and small and large capitalizations. The target allocations based on the Company’s investment policy were 70% in equity securities and 30% in fixed-income securities at both April 30, 2012 and April 30, 2011. A 1% increase/decrease in the expected return on assets for fiscal years 2012 and 2011 would decrease/increase pension expense by approximately $149,000 and $132,000, respectively.

Plan assets by asset categories as of April 30, 2012 and 2011 were as follows:

 

                                 

$ in thousands

   2012     2011  

Asset Category

   Amount     %     Amount     %  

Equity Securities

   $ 9,417       67     $ 11,342       76  

Fixed Income Securities

     4,547       33       3,458       23  

Cash and Cash Equivalents

     43       —         179       1  
   

 

 

    

 

 

    

 

 

    

 

 

  

Totals

   $ 14,007       100     $ 14,979       100  
   

 

 

    

 

 

    

 

 

    

 

 

  

The following tables present the fair value of the assets in our defined benefit pension plans at April 30, 2012 and 2011:

 

                         
    2012  
       

Asset Category

   Level 1     Level 2     Level 3  

Large Cap

   $ 5,225     $ —       $ —    

Small/Mid Cap

     1,329       —         —    

International

     1,202       —         —    

Emerging Markets

     1,134       —         —    

Real Estate/Commodities

     527       —         —    

Fixed Income

     4,547       —         —    

Cash and Cash Equivalents

     43       —         —    
   

 

 

    

 

 

    

 

 

  

Totals

   $ 14,007     $      —       $      —    
   

 

 

    

 

 

    

 

 

  

 

                         
    2011  
       

Asset Category

   Level 1     Level 2     Level 3  

Large Cap

   $ 6,382     $ —       $ —    

Small/Mid Cap

     1,603       —         —    

International

     1,492       —         —    

Emerging Markets

     1,278       —         —    

Real Estate/Commodities

     587       —         —    

Fixed Income

     3,458       —         —    

Cash and Cash Equivalents

     179       —         —    
   

 

 

    

 

 

    

 

 

  

Totals

   $ 14,979     $      —       $      —    
   

 

 

    

 

 

    

 

 

  

 

Level 1 retirement plan assets include United States currency held by a designated trustee and equity funds of common and preferred securities issued by domestic and foreign corporations. These equity funds are traded actively on exchanges and price quotes for these shares are readily available.

Defined Contribution Plan

The Company has a defined contribution plan covering substantially all salaried and hourly employees. The plan provides benefits to all employees who have attained age 21, completed three months of service, and who elect to participate. The plan provides that the Company make matching contributions equal to 100% of the employee’s qualifying contribution up to 3% of the employee’s compensation, and make matching contributions equal to 50% of the employee’s contributions between 3% and 5% of the employee’s compensation, resulting in a maximum employer contribution equal to 4% of the employee’s compensation. Additionally, the plan provides that the Company may elect to make a non-matching contribution for participants employed by the Company on December 31 of each year up to 1% of the participant’s qualifying compensation for that calendar year. The Company’s contributions to the plan in fiscal years 2012, 2011, and 2010 were $664,000, $847,000, and $862,000, respectively.