v2.4.0.8
Pension Liabilities
 12 Months Ended
Dec. 31, 2013
Pension Liabilities [Abstract]  
Pension Liabilities

Note 18 – Pension Liabilities

Supplemental Executive Retirement Plan

In March 1, 2007, the Board of Directors of Reading International, Inc. (“Reading”) approved a Supplemental Executive Retirement Plan (“SERP”) pursuant to which Reading has agreed to provide James J. Cotter, its Chief Executive Officer and Chairman of the Board of Directors, supplemental retirement benefits effective March 1, 2007.  Under the SERP, Mr. Cotter will receive a monthly payment of the greater of (i) 40% of the average monthly earnings over the highest consecutive 36-month period of earnings prior to Mr. Cotter’s separation from service with Reading or (ii) $25,000 per month for the remainder of his life, with a guarantee of 180 monthly payments following his separation from service with Reading or following his death.  The beneficiaries under the SERP may be designated by Mr. Cotter or by his beneficiary following his or his beneficiary’s death.  The benefits under the SERP are fully vested as of March 1, 2007.

The SERP initially will be unfunded, but Reading may choose to establish one or more grantor trusts from which to pay the SERP benefits.  As such, the SERP benefits are unsecured, general obligations of Reading.  The SERP is administered by the Compensation Committee of the Board of Directors of Reading.  In accordance with FASB ASC 715-30-05 – Defined Benefit Pension Plans (“ASC 715-30-05”), the initial pension benefit obligation of $2.7 million was included in our other liabilities with a corresponding amount of unrecognized prior service cost included in accumulated other comprehensive income on March 1, 2007.  The initial benefit obligation was based on a discount rate of 5.75% and a compensation increase rate of 3.5%.  The $2.7 million is being amortized as a prior service cost over the estimated service period of 10 years combined with an annual interest cost.  For the years ended December 31, 2013,  2012, and 2011, we recognized $202,000,  $149,000, and $195,000, respectively, of interest cost and $304,000 of amortized prior service cost per year.  For the years ended December 31, 2013 and 2012, we recognized $356,000 and $0 of amortized net gains.  The balance of the other liability for this pension plan was $7.4 million and $5.9 million at December 31, 2013 and 2012, respectively, and the accumulated unrecognized prior service costs included in other comprehensive income balance was $3.8 and $3.2 million at December 31, 2013 and 2012, respectively.  The December 31, 2013 and 2012 values of the SERP are based on a discount rate of 4.25% and 3.40%, respectively, and an annual compensation growth rate of 7.50% and 3.50%, respectively. 

The change in the SERP pension benefit obligation and the funded status for the year ending December 31, 2013 and 2012 are as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

For the year ending

Change in Benefit Obligation

 

December 31, 2013

Benefit obligation at January 1, 2013

$
5,944 

Interest cost

 
202 

Actuarial gain

 
1,252 

Benefit obligation at December 31, 2013

 
7,398 

Funded status at December 31, 2013

$
(7,398)

 

 

 

 

 

For the year ending

Change in Benefit Obligation

 

December 31, 2012

Benefit obligation at January 1, 2012

$
3,511 

Interest cost

 
149 

Actuarial gain

 
2,284 

Benefit obligation at December 31, 2012

 
5,944 

Funded status at December 31, 2012

$
(5,944)

Amount recognized in balance sheet consists of (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2013

 

At December 31, 2012

Current liabilities

$
15 

$
14 

Noncurrent liabilities

 
7,383 

 
5,930 

 

 

 

 

 

Items not yet recognized as a component of net periodic pension cost consist of (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2013

 

At December 31, 2012

Unamortized actuarial loss

$
3,166 

$
2,269 

Prior service costs

 
627 

 
931 

Accumulated other comprehensive loss

 
3,793 

 
3,200 

 

The components of the net periodic benefit cost and other amounts recognized in other comprehensive income are as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

Net periodic benefit cost

 

For the year ending December 31, 2013

 

For the year ending December 31, 2012

Interest cost

$
202 

$
149 

Amortization of prior service costs

 
304 

 
304 

Amortization of net gain

 
356 

 

--

Net periodic benefit cost

$
862 

$
453 

 

 

 

 

 

Other changes in plan assets and benefit obligations recognized in other comprehensive income

 

 

 

 

Net loss

$
1,253 

$
2,284 

Amortization of prior service cost

 
(304)

 
(304)

Amortization of net loss

 
(356)

 

--

Total recognized in other comprehensive income

$
593 

$
1,980 

 

 

 

 

 

Total recognized in net periodic benefit cost and other comprehensive income

$
1,455 

$
2,433 

The estimated net loss and prior service cost for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year will be $356,000 and $304,000, respectively.

 

The following weighted average assumptions were used to determine the plan benefit obligations at December 31, 2013 and 2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

2012

Discount rate

 

4.25%

 

3.40%

Rate of compensation increase

 

7.50%

 

3.50%

The following weighted-average assumptions were used to determine net periodic benefit cost for the year ended December 31, 2013 and 2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

2012

Discount rate

 

3.40%

 

4.25%

Expected long-term return on plan assets

 

0.00%

 

0.00%

Rate of compensation increase

 

3.50%

 

3.50%

 

Other Pension Liabilities

In addition to the aforementioned SERP, we have defined contribution pension plans for selected current and former executives of our corporation resulting in a pension liability of $1.1 million and $1.0 million at December 31, 2013 and 2012, respectively.  These pensions accrued $95,000 and $204,000 of pension expense for the years ended December 31, 2013 and 2012, respectively. 

The benefit payments for all of our pensions, which reflect expected future service, as appropriate, are expected to be paid over the following periods (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Payments

2014

 

 

$
14 

2015

 

 

 
32 

2016

 

 

 
50 

2017

 

 

 
633 

2018

 

 

 
607 

Thereafter

 

 

 
7,191 

Total pension payments

 

 

$
8,527