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Employee Benefit Plans | 12 Months Ended
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Jun. 30, 2012
Compensation and Retirement Disclosure [Abstract] |
Employee Benefit Plans | Employee Benefit Plans The Company provides pension plans for most full time employees. Generally the plans provide benefits based on years of service and/or a combination of years of service and earnings. Certain retirees are also eligible for medical, dental and vision benefits. The Company is required to recognize the funded status of a benefit plan in its balance sheet. The Company is also required to recognize in OCI certain gains and losses that arise during the period but are deferred under pension accounting rules. Single Employer Pension Plans The Company has a defined benefit pension plan, the Farmer Bros. Salaried Employees Pension Plan (the “Farmer Bros. Plan”), for the majority of its employees who are not covered under a collective bargaining agreement. The Company amended the Farmer Bros. Plan, freezing the benefit for all participants effective June 30, 2011. After the plan freeze, participants do not accrue any benefits under the plan, and new hires are not eligible to participate in the plan. As a result, the Company recorded a curtailment charge of $1.5 million in the fourth quarter of fiscal 2011. As all plan participants became inactive following this curtailment, net (gain) loss is now amortized based on the remaining life expectancy of these participants instead of the remaining service period of these participants. The Company also has two defined benefit pensions plan for certain hourly employees covered under a collective bargaining agreement (the “Brewmatic Plan” and the “Hourly Employees’ Plan”). All assets and benefit obligations were determined using a measurement date of June 30. Obligations and Funded Status
|  | Farmer Bros. Plan June 30, |  | Brewmatic Plan June 30, |  | Hourly Employees’ Plan June 30,
|  | 2012 |  | 2011 |  | 2012 |  | 2011 |  | 2012 |  | 2011
|  | (In thousands) |  | (In thousands) |  | (In thousands)
Change in projected benefit obligation |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligation at the beginning of the year |  | $ | 107,071 |  |  | $ | 110,449 |  |  | $ | 3,662 |  |  | $ | 3,707 |  |  | $ | 1,055 |  |  | $ | 578 |
Service cost |  | — |  |  | 4,609 |  |  | 39 |  |  | 57 |  |  | 456 |  |  | 409 |
Interest cost |  | 5,846 |  |  | 5,999 |  |  | 197 |  |  | 199 |  |  | 59 |  |  | 32 |
Plan participant contributions |  | 81 |  |  | 1,005 |  |  | — |  |  | — |  |  | — |  |  | — |
Actuarial (gain) loss |  | 17,066 |  |  | (1,409 | ) |  | 416 |  |  | (24 | ) |  | (38 | ) |  | 39 |
Benefits paid |  | (5,236 | ) |  | (5,022 | ) |  | (292 | ) |  | (284 | ) |  | (12 | ) |  | (3 | )
Effect of curtailment |  | — |  |  | (8,560 | ) |  | — |  |  | 7 |  |  | — |  |  | — |
Projected benefit obligation at the end of the year |  | $ | 124,828 |  |  | $ | 107,071 |  |  | $ | 4,022 |  |  | $ | 3,662 |  |  | $ | 1,520 |  |  | $ | 1,055 |
Change in plan assets |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at the beginning of the year |  | 80,448 |  |  | 63,462 |  |  | 2,871 |  |  | 2,490 |  |  | 421 |  |  | — |
Actual return on plan assets |  | 246 |  |  | 16,619 |  |  | (25 | ) |  | 635 |  |  | (4 | ) |  | 11 |
Employer contributions |  | 6,571 |  |  | 4,384 |  |  | 164 |  |  | 30 |  |  | 608 |  |  | 413 |
Plan participant contributions |  | 81 |  |  | 1,005 |  |  | — |  |  | — |  |  | — |  |  | — |
Benefits paid |  | (5,236 | ) |  | (5,022 | ) |  | (292 | ) |  | (284 | ) |  | (12 | ) |  | (3 | )
Fair value of plan assets at the end of the year |  | $ | 82,110 |  |  | $ | 80,448 |  |  | $ | 2,718 |  |  | $ | 2,871 |  |  | $ | 1,013 |  |  | $ | 421 |
Funded status at end of year (underfunded) overfunded |  | $ | (42,718 | ) |  | $ | (26,623 | ) |  | $ | (1,304 | ) |  | $ | (791 | ) |  | $ | (507 | ) |  | $ | (634 | )
Amounts recognized in balance sheet |  |  |  |  |  |  |  |  |  |  |  |
Noncurrent assets |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Current liabilities |  | (5,700 | ) |  | (5,360 | ) |  | (300 | ) |  | (310 | ) |  | (17 | ) |  | (8 | )
Noncurrent liabilities |  | (37,018 | ) |  | (21,263 | ) |  | (1,004 | ) |  | (481 | ) |  | (490 | ) |  | (626 | )
Total |  | $ | (42,718 | ) |  | $ | (26,623 | ) |  | $ | (1,304 | ) |  | $ | (791 | ) |  | $ | (507 | ) |  | $ | (634 | )
Amounts recognized in balance sheet |  |  |  |  |  |  |  |  |  |  |  |
Total net (gain) loss |  | $ | 48,720 |  |  | $ | 25,900 |  |  | $ | 2,154 |  |  | $ | 1,587 |  |  | $ | 90 |  |  | $ | 96 |
Transition (asset) obligation |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Prior service cost (credit) |  | — |  |  | — |  |  | 53 |  |  | 71 |  |  | — |  |  | — |
Total accumulated OCI (not adjusted for applicable tax) |  | $ | 48,720 |  |  | $ | 25,900 |  |  | $ | 2,207 |  |  | $ | 1,658 |  |  | $ | 90 |  |  | $ | 96 |
Weighted average assumptions used to determine benefit obligations |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 4.55 | % |  | 5.60 | % |  | 4.55 | % |  | 5.60 | % |  | 4.55 | % |  | 5.60 | %
Rate of compensation increase |  | N/A |  |  | 3.00 | % |  | N/A |  |  | N/A |  |  | N/A |  |  | 3.00 | %
Components of Net Periodic Benefit Cost and Other Changes Recognized in Other Comprehensive Income (Loss) (OCI)
|  | Farmer Bros. Plan June 30, |  | Brewmatic Plan June 30, |  | Hourly Employees’ Plan June 30,
|  | 2012 |  | 2011 |  | 2012 |  | 2011 |  | 2012 |  | 2011
|  | (In thousands) |  | (In thousands) |  | (In thousands)
Components of net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | — |  |  | $ | 4,609 |  |  | $ | 39 |  |  | $ | 57 |  |  | $ | 456 |  |  | $ | 409 |
Interest cost |  | 5,846 |  |  | 5,999 |  |  | 197 |  |  | 199 |  |  | 59 |  |  | 32 |
Expected return on plan assets |  | (6,569 | ) |  | (5,323 | ) |  | (213 | ) |  | (179 | ) |  | (28 | ) |  | (9 | )
Amortization of net (gain) loss |  | 570 |  |  | 2,871 |  |  | 87 |  |  | 119 |  |  | — |  |  | — |
Amortization of prior service cost (credit) |  | — |  |  | 122 |  |  | 18 |  |  | 18 |  |  | — |  |  | — |
Amount recognized due to special event (curtailment) |  | — |  |  | 1,456 |  |  | — |  |  | — |  |  | — |  |  | — |
Net periodic benefit cost |  | $ | (153 | ) |  | $ | 9,734 |  |  | $ | 128 |  |  | $ | 214 |  |  | $ | 487 |  |  | $ | 432 |
Other changes recognized in OCI |  |  |  |  |  |  |  |  |  |  |  |
Net (gain) loss |  | $ | 23,389 |  |  | $ | (12,705 | ) |  | $ | 654 |  |  | $ | (480 | ) |  | $ | (6 | ) |  | $ | 37 |
Prior service cost (credit) |  | — |  |  | — |  |  | — |  |  | 7 |  |  | — |  |  | — |
Amortization of net gain (loss) |  | (570 | ) |  | (2,871 | ) |  | (87 | ) |  | (119 | ) |  | — |  |  | — |
Amortization of transition asset (obligation) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Amortization of prior service (cost) credit |  | — |  |  | (122 | ) |  | (18 | ) |  | (18 | ) |  | — |  |  | — |
Amount recognized due to special event (curtailment) |  | — |  |  | (10,016 | ) |  | — |  |  | — |  |  | — |  |  | — |
Total recognized in OCI |  | $ | 22,819 |  |  | $ | (25,714 | ) |  | $ | 549 |  |  | $ | (610 | ) |  | $ | (6 | ) |  | $ | 37 |
Total recognized in net periodic benefit cost and OCI |  | $ | 22,666 |  |  | $ | (15,980 | ) |  | $ | 677 |  |  | $ | (396 | ) |  | $ | 481 |  |  | $ | 469 |
Weighted-average assumptions used to determine net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 5.60 | % |  | 5.60 | % |  | 5.60 | % |  | 5.60 | % |  | 5.60 | % |  | 5.60 | %
Expected long-term return on plan assets |  | 8.25 | % |  | 8.25 | % |  | 8.25 | % |  | 8.25 | % |  | 8.25 | % |  | 8.25 | %
Rate of compensation increase |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |  |  | 3.00 | % |  | 3.00 | %
All qualifying employees of the DSD Coffee Business who accepted the Company’s offer of employment were allowed to enroll in the Farmer Bros. Plan during March 2009. Those who enrolled in the Farmer Bros. Plan were granted full service credit for plan vesting and eligibility but not for purposes of benefit accruals. Basis Used to Determine Expected Long-term Return on Plan Assets Historical and future projected returns of multiple asset classes were analyzed to develop a risk-free real rate of return and risk premiums for each asset class. The overall rate for each asset class was developed by combining a long-term inflation component, the risk-free real rate of return, and the associated risk premium. A weighted average rate was developed based on those overall rates and the target asset allocations of the plans. Description of Investment Policy The Company’s investment strategy is to build an efficient, well-diversified portfolio based on a long-term, strategic outlook of the investment markets. The investment markets outlook utilizes both the historical-based and forward-looking return forecasts to establish future return expectations for various asset classes. These return expectations are used to develop a core asset allocation based on the specific needs of each plan. The core asset allocation utilizes investment portfolios of various asset classes and multiple investment managers in order to maximize the plan’s return while providing multiple layers of diversification to help minimize risk. Additional Disclosures
|  | Farmer Bros. Plan June 30, |  | Brewmatic Plan June 30, |  | Hourly Employees’ Plan June 30,
|  | 2012 |  | 2011 |  | 2012 |  | 2011 |  | 2012 |  | 2011
|  | ($ In thousands) |  | ($ In thousands) |  | ($ In thousands)
Comparison of obligations to plan assets |  |  |  |  |  |  |  |  |  |  |  |
Projected benefit obligation |  | $ | 124,828 |  |  | $ | 107,071 |  |  | $ | 4,022 |  |  | $ | 3,662 |  |  | $ | 1,520 |  |  | $ | 1,055 |
Accumulated benefit obligation |  | $ | 124,828 |  |  | $ | 107,071 |  |  | $ | 4,022 |  |  | $ | 3,662 |  |  | $ | 1,520 |  |  | $ | 1,055 |
Fair value of plan assets at measurement date |  | $ | 82,110 |  |  | $ | 80,448 |  |  | $ | 2,718 |  |  | $ | 2,871 |  |  | $ | 1,013 |  |  | $ | 421 |
Plan assets by category |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  | $ | 53,396 |  |  | $ | 56,792 |  |  | $ | 1,767 |  |  | $ | 2,016 |  |  | $ | 686 |  |  | $ | 297 |
Debt securities |  | 24,610 |  |  | 18,945 |  |  | 815 |  |  | 688 |  |  | 261 |  |  | 99 |
Real estate |  | 4,104 |  |  | 4,711 |  |  | 136 |  |  | 167 |  |  | 66 |  |  | 25 |
Total |  | $ | 82,110 |  |  | $ | 80,448 |  |  | $ | 2,718 |  |  | $ | 2,871 |  |  | $ | 1,013 |  |  | $ | 421 |
Plan assets by category |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  | 65 | % |  | 70 | % |  | 65 | % |  | 70 | % |  | 68 | % |  | 70 | %
Debt securities |  | 30 | % |  | 24 | % |  | 30 | % |  | 24 | % |  | 26 | % |  | 24 | %
Real estate |  | 5 | % |  | 6 | % |  | 5 | % |  | 6 | % |  | 6 | % |  | 6 | %
Total |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | %
As of June 30, 2012, fair values of plan assets were as follows:
(In thousands) |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Farmer Bros. Plan |  | $ | 82,110 |  |  | $ | — |  |  | $ | 78,006 |  |  | $ | 4,104 |
Brewmatic Plan |  | $ | 2,718 |  |  | $ | — |  |  | $ | 2,582 |  |  | $ | 136 |
Hourly Employees’ Plan |  | $ | 1,013 |  |  | $ | — |  |  | $ | 947 |  |  | $ | 66 |
As of June 30, 2011, fair values of plan assets were as follows:
(In thousands) |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Farmer Bros. Plan |  | $ | 80,447 |  |  | $ | — |  |  | $ | 75,736 |  |  | $ | 4,711 |
Brewmatic Plan |  | $ | 2,871 |  |  | $ | — |  |  | $ | 2,704 |  |  | $ | 167 |
Hourly Employees’ Plan |  | $ | 421 |  |  | $ | — |  |  | $ | 396 |  |  | $ | 25 |
As of June 30, 2012 and 2011, approximately 95.0% and 94.0%, respectively, of the assets in each of the Farmer Bros. Plan, the Brewmatic Plan and the Hourly Employees’ Plan were invested in pooled separate accounts which did not have publicly quoted prices. The pooled separate accounts invest in publicly traded mutual funds. The fair values of the mutual funds were publicly quoted pricing input (Level 1) and were used to determine the net asset value of the pooled separate accounts. Therefore, these assets have Level 2 pricing inputs. As of June 30, 2012 and 2011, approximately 5.0% and 6.0% respectively, of the assets in each of the Farmer Bros. Plan, the Brewmatic Plan and the Hourly Employees’ Plan were invested in commercial real estate and include mortgage loans which are backed by the associated properties. These underlying real estate investments have unobservable Level 3 pricing inputs. The fair value of the underlying real estate is estimated using discounted cash flow valuation models that utilize public real estate market data inputs such as transaction prices, market rents, vacancy levels, leasing absorption, market capitalization rates and discount rates. In addition, each property is appraised annually by an independent appraiser. The amounts and types of investments within plan assets did not change significantly from June 30, 2011. The following is a reconciliation of asset balances with Level 3 input pricing:
|  | Beginning Balance |  | Total Gains |  | Settlements |  | Ending Balance |  | Unrealized Gains
As of June 30, 2012 |  | (In thousands)
Farmer Bros. Plan |  | $ | 4,711 |  |  | $ | 561 |  |  | $ | (1,168 | ) |  | $ | 4,104 |  |  | $ | 561 |
Brewmatic Plan |  | $ | 167 |  |  | $ | 19 |  |  | $ | (50 | ) |  | $ | 136 |  |  | $ | 19 |
Hourly Employees’ Plan |  | $ | 25 |  |  | $ | 5 |  |  | $ | 36 |  |  | $ | 66 |  |  | $ | 5 |
|  | Beginning Balance |  | Total Gains |  | Settlements |  | Ending Balance |  | Unrealized Gains
As of June 30, 2011 |  | (In thousands)
Farmer Bros. Plan |  | $ | 3,147 |  |  | $ | 652 |  |  | $ | 912 |  |  | $ | 4,711 |  |  | $ | 652 |
Brewmatic Plan |  | $ | 132 |  |  | $ | 28 |  |  | $ | 7 |  |  | $ | 167 |  |  | $ | 28 |
Hourly Employees’ Plan |  | $ | — |  |  | $ | — |  |  | $ | 25 |  |  | $ | 25 |  |  | $ | — |
Target Plan Asset Allocation for Farmer Bros. Plan and Brewmatic Plan
| Fiscal 2013
U.S. large cap equity securities | 35.8 | %
U.S. small cap equity securities | 9.2 | %
International equity securities | 15.0 | %
Debt securities | 30.0 | %
Real estate | 10.0 | %
Total | 100.0 | %
Estimated Amounts in OCI Expected To Be Recognized In fiscal 2013, the Company expects to recognize $0.6 million as a component of net periodic benefit cost for the Farmer Bros. Plan, $0.2 million for the Brewmatic Plan, and $0.4 million for the Hourly Employees’ Plan. Estimated Future Contributions and Refunds In fiscal 2013, the Company expects to contribute $3.9 million to the Farmer Bros. Plan, $0.4 million to the Brewmatic Plan, and $0.1 million to the Hourly Employees’ Plan. The Company is not aware of any refunds expected from postretirement plans. Estimated Future Benefit Payments The following benefit payments are expected to be paid over the next 10 fiscal years: Estimated future benefit payments
Year ending |  | Farmer Bros. Plan |  | Brewmatic Plan |  | Hourly Employees’ Plan
|  | (In thousands)
June 30, 2013 |  | $ | 5,700 |  |  | $ | 300 |  |  | $ | 17 |
June 30, 2014 |  | $ | 5,840 |  |  | $ | 290 |  |  | $ | 31 |
June 30, 2015 |  | $ | 6,010 |  |  | $ | 290 |  |  | $ | 45 |
June 30, 2016 |  | $ | 6,200 |  |  | $ | 290 |  |  | $ | 61 |
June 30, 2017 |  | $ | 6,460 |  |  | $ | 280 |  |  | $ | 78 |
June 30, 2018 to June 30, 2022 |  | $ | 36,230 |  |  | $ | 1,420 |  |  | $ | 680 |
These amounts are based on current data and assumptions and reflect expected future service, as appropriate. Multiemployer Pension Plans The Company participates in a multiemployer defined benefit pension plan, the Western Conference of Teamsters Pension Plan (“WCTPP”), that is union sponsored and collectively bargained for the benefit of certain employees subject to collective bargaining agreements. The Company makes contributions to WCTPP generally based on the number of hours worked by the participants in accordance with the provisions of negotiated labor contracts. The risks of participating in multiemployer pension plans are different from single-employer plans in that: (i) assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers; (ii) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; and (iii) if the Company stops participating in the multiemployer plan, the Company may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The Company's participation in WCTPP is outlined in the table below. The Pension Protection Act (“PPA”) Zone Status available in the Company's fiscal year 2012 and fiscal year 2011 is for the plan's year ended December 31, 2010 and December 31, 2009, respectively. The zone status is based on information obtained from WCTPP and is certified by WCTPP's actuary. Among other factors, plans in the green zone are generally more than 80% funded. Based on WCTPP's annual report on Form 5500, WCTPP was 90.3% and 93.4% funded for its plan year beginning January 1, 2012 and 2011, respectively. The “FIP/RP Status Pending/Implemented” column indicates if a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented.
| Pension Plan |  | Employer Identification Number |  | Pension Plan Number |  | PPA Zone Status |  | FIP/RP Status Pending/ Implemented |  | Surcharge Imposed |  | Expiration Date of Collective Bargaining Agreements
| July 1, 2012 |  | July 1, 2011 |
| Western Conference of Teamsters Pension Plan |  | 91-6145047 |  | 001 |  | Green |  | Green |  | No |  | No |  | January 2014 to August 2014
Based upon the most recent information available from the trustees managing WCTPP, the Company's share of the unfunded vested benefit liability for the plan was estimated to be approximately $7.7 million if the withdrawal had occurred in calendar year 2011. These estimates were calculated by the trustees managing WCTPP. Although the Company believes the most recent plan data available from WCTPP was used in computing this 2011 estimate, the actual withdrawal liability amount is subject to change based on, among other things, the plan's investment returns and benefit levels, interest rates, financial difficulty of other participating employers in the plan such as bankruptcy, and continued participation by the Company and other employers in the plan, each of which could impact the ultimate withdrawal liability. If withdrawal liability were to be triggered, the withdrawal liability assessment can be paid in a lump sum or on a monthly basis. The amount of the monthly payment is determined as follows: Average number of hours reported to the pension plan trust during the three consecutive years with highest number of hours in the 10-year period prior to the withdrawal is multiplied by the highest hourly contribution rate during the 10-year period to determine the amount of withdrawal liability that has to be paid annually. The annual amount is divided by 12 to arrive at the monthly payment due. If monthly payments are elected, interest is assessed on the unpaid balance after 12 months at the rate of 7% per annum. Effective October 2011, the Company withdrew from the defined benefit pension plan, United Teamsters Pension Fund, and replaced it with the defined contribution pension plan, “United Teamsters Annuity Fund” (“Annuity Fund”), for its employees covered by a certain collective bargaining agreement with a term expiring in 2014. The Company incurred no withdrawal liabilities related to the withdrawal from the United Teamsters Pension Fund. The Company's contributions to the Annuity Fund are based on the number of compensable hours worked by the Company's employees who participate in the Annuity Fund. In fiscal 2012, the Company withdrew from the Labor Management Pension Fund and recorded a charge of $4.3 million associated with withdrawal from this plan, representing the present value of the estimated withdrawal liability expected to be paid in quarterly installments of $0.1 million over 80 quarters. Installment payments will commence once the final determination of the amount of withdrawal liability is established, which determination may take up to 24 months from the date of withdrawal from the pension plan. Upon withdrawal, the employees covered under this multiemployer pension plan were included in the Company's 401(k) plan (the “401(k) Plan”). The $4.3 million estimated withdrawal charge is included in the Company's consolidated statement of operations for the fiscal year ended June 30, 2012 as “Pension withdrawal expense” and in current and long-term liabilities on the Company's balance sheet at June 30, 2012. In the fourth quarter ended June 30, 2012, the Company paid a final settlement of $0.3 million towards withdrawal from the Central States Pension Fund that was part of the DSD Coffee Business acquisition and recorded the charge as "Pension withdrawal expense." Future collective bargaining negotiations may result in the Company withdrawing from the remaining multiemployer pension plans in which it participates and, if successful, the Company may incur a withdrawal liability, the amount of which could be material to the Company's results of operations and cash flows. Company contributions to the multiemployer pension plans:
(In thousands) |  | WCTPP(1)(2)(3) |  | All other Plans(4)
Fiscal Year Ended: |  |  |  |
June 30, 2012 |  | $ | 3,048 |  |  | $ | 113 |
June 30, 2011 |  | $ | 2,929 |  |  | $ | 254 |
June 30, 2010 |  | $ | 2,820 |  |  | $ | 282 |
____________
(1) | Individually significant plan.
(2) | Less than 5% of total contribution to WCTPP based on WCTPP's most recent annual report on Form 5500 for the calendar year ended December 31, 2010.
(3) | The Company guarantees that one hundred seventy-three (173) hours will be contributed upon for all employees who are compensated for all available straight time hours for each calendar month. An additional 6.5% of the basic contribution must be paid for PEER or the Program for Enhanced Early Retirement.
(4) | Includes plans that are not individually significant.
For the fiscal year ending June 30, 2013, the Company expects to make $3.2 million in contributions to multiemployer pension plans. Multiemployer Plans Other Than Pension Plans The Company participates in nine defined contribution multiemployer plans other than pension plans that provide medical, vision and dental healthcare and disability benefits for certain retirees subject to collective bargaining agreements who meet the eligibility rules in effect when they retire and/or qualified members of their families. The plans are subject to the provisions of the Employee Retirement Income Security Act of 1974, and provide that participating employers make monthly contributions to the plans in an amount as specified in the collective bargaining agreements. Also, the plans provide that retired participants make self-payments to the plans, the amounts of which are fixed from time to time by the boards of trustees of the plans. The Company's participation in these plans is governed by the collective bargaining agreements which expire on or before September 2014. The Company's contributions in the fiscal years ended June 30, 2012, 2011 and 2010 were $5.8 million, $5.4 million and $4.8 million, respectively. The Company expects to contribute $6.4 million towards multiemployer plans other than pension plans in fiscal 2013. 401(k) Plan The Company's 401(k) Plan is available to all eligible employees who have worked more than 1,000 hours during a calendar year and were employed at the end of the calendar year. Participants in the 401(k) Plan may choose to contribute 1% to 15% of their annual pay subject to the maximum contribution allowed by the Internal Revenue Service. The Company's matching contribution is discretionary based on approval by the Company's Board of Directors. For the calendar years 2011 and 2012, the Company's Board of Directors approved a Company matching contribution of 50.0% of an employee's annual contribution to the 401(k) Plan, up to 6.0% of the employee's eligible income. The matching contributions (and any earnings thereon) vest at the rate of 20.0% for each of the participant's first 5 years of vesting service, so that a participant is fully vested in his or her matching contribution account after 5 years of vesting service. A participant is automatically vested in the event of death, disability or attainment of age 65 while employed by the Company. Employees are 100% vested in their contributions. For employees subject to a collective bargaining agreement, the match is only available if so provided in the labor agreement. The Company recorded matching contributions of $1.4 million and $0.1 million in operating expenses for the fiscal years ended June 30, 2012 and June 30, 2011. No contributions were recorded in the Company's consolidated financial statements for the fiscal year ended June 30, 2010. Postretirement Benefits The Company sponsors an unfunded postretirement medical, dental and vision plan that covers qualified non-union retirees and certain qualified union retirees. Under this postretirement plan, the Company’s contributions toward premiums for retiree medical, dental and vision coverage for participants and dependents are scaled based on length of service, with greater Company contributions for retirees with greater length of service, but subject to a maximum monthly Company contribution. The following table shows the components of net periodic postretirement benefit cost for the fiscal years ended June 30, 2012 and 2011. Postretirement cost (income) for fiscal 2012 was based on employee census information as of July 1, 2011 and asset information as of June 30, 2012.
|  | June 30,
|  | 2012 |  | 2011
Components of Net Periodic Postretirement Benefit Cost |  | (In thousands)
Service cost |  | $ | 1,634 |  |  | $ | 1,564 |
Interest cost |  | 1,319 |  |  | 1,205 |
Expected return on plan assets |  | — |  |  | — |
Amortization of net gain |  | (794 | ) |  | (802 | )
Amortization of unrecognized transition (asset) obligation |  | — |  |  | — |
Amortization of prior service cost (credit) |  | (230 | ) |  | (230 | )
Net periodic benefit cost |  | $ | 1,929 |  |  | $ | 1,737 |
The difference between the assets and the Accumulated Postretirement Benefit Obligation (APBO) at the adoption of ASC 715-60, "Defined Benefit Plans-Other Postretirement," was established as a transition (asset) obligation and is amortized over the average expected future service for active employees as measured at the date of adoption. Any plan amendments that retroactively increase benefits create prior service cost. The increase in the APBO due to any plan amendment is established as a base and amortized over the average remaining years of service to the full eligibility date of active participants who are not yet fully eligible for benefits at the plan amendment date. Gains and losses due to experience different than that assumed or from changes in actuarial assumptions are not immediately recognized. The tables below show the remaining bases for the transition (asset) obligation, prior service cost (credit), and the calculation of the amortizable gain or loss.
Amortization Schedule |  |
Transition (Asset) Obligation: The transition (asset) obligations have been fully amortized.
Prior Service Cost (Credit) (dollars in thousands):
Date Established |  | Balance at July 1, 2011 |  | Annual Amortization |  | Years Remaining |  | Curtailment |  | Balance at June 30, 2012
January 1, 2008 |  | $ | (1,884 | ) |  | $ | 230 |  |  | 8.20 |  |  | — |  |  | $ | (1,654 | )
Amortization of Net (Gain) Loss (dollars in thousands): |  |
Net (gain) loss as of July 1, 2011 |  | $ | (12,086 | )
Asset (gains) losses not yet recognized in market related value of assets |  | — |
Net (gain) loss subject to amortization |  | $ | (12,086 | )
Corridor (10% of greater of APBO or assets) |  | 2,473 |
Net (gain) loss in excess of corridor |  | $ | (9,613 | )
Amortization years |  | 12.11 |
Amortization of net (gain) loss for the year |  | $ | (794 | )
The following tables provide a reconciliation of the benefit obligation and plan assets:
|  | Year Ended June 30,
|  | 2012 |  | 2011
Change in Benefit Obligation |  | (In thousands)
Projected benefit obligation at beginning of year |  | $ | 24,733 |  |  | $ | 23,261 |
Service cost |  | 1,634 |  |  | 1,564 |
Interest cost |  | 1,319 |  |  | 1,205 |
Participant contributions |  | 665 |  |  | 1,103 |
Losses (gains) |  | 8,953 |  |  | (378 | )
Benefits paid |  | (1,384 | ) |  | (2,022 | )
Projected benefit obligation at end of year |  | $ | 35,920 |  |  | $ | 24,733 |
|  | Year Ended June 30,
|  | 2012 |  | 2011
Change in Plan Assets |  | (In thousands)
Fair value of plan assets at beginning of year |  | $ | — |  |  | $ | — |
Actual return on assets |  | — |  |  | — |
Employer contributions |  | 719 |  |  | 919 |
Participant contributions |  | 665 |  |  | 1,103 |
Benefits paid |  | (1,384 | ) |  | (2,022 | )
Fair value of plan assets at end of year |  | $ | — |  |  | $ | — |
Funded status of plan |  | $ | (35,920 | ) |  | $ | (24,733 | )
|  | As of June 30,
|  | 2012 |  | 2011
Amounts Recognized in the Balance Sheet Consist of: |  | (In thousands)
Noncurrent assets |  | $ | — |  |  | $ | — |
Current liabilities |  | 1,363 |  |  | 1,148 |
Noncurrent liabilities |  | 34,557 |  |  | 23,585 |
Total |  | $ | 35,920 |  |  | $ | 24,733 |
|  | Year Ended June 30,
|  | 2012 |  | 2011
Amounts Recognized in Accumulated OCI Consist of: |  | (In thousands)
Net gain |  | $ | (2,338 | ) |  | $ | (12,086 | )
Transition obligation |  | — |  |  | — |
Prior service credit |  | (1,654 | ) |  | (1,884 | )
Total accumulated OCI |  | $ | (3,992 | ) |  | $ | (13,970 | )
|  | Year Ended June 30,
|  | 2012 |  | 2011
Other Changes in Plan Assets and Benefit Obligations Recognized in OCI |  | (In thousands)
Unrecognized actuarial loss (gain) |  | $ | 8,953 |  |  | $ | (379 | )
Unrecognized transition (asset) obligation |  | — |  |  | — |
Unrecognized prior service cost |  | — |  |  | — |
Amortization of net loss |  | 794 |  |  | 802 |
Amortization of prior service cost |  | 230 |  |  | 230 |
Total recognized in OCI |  | 9,977 |  |  | 653 |
Net periodic benefit cost |  | 1,929 |  |  | 1,737 |
Total recognized in OCI and net periodic benefit cost |  | $ | 11,906 |  |  | $ | 2,390 |
The estimated net gain and prior service cost credit that will be amortized from accumulated OCI into net periodic benefit cost in fiscal 2013 are $0.8 million and $0.2 million, respectively.
Estimated Future Benefit Payments (in thousands) |
Fiscal 2013 | $ | 1,363 |
Fiscal 2014 | $ | 1,450 |
Fiscal 2015 | $ | 1,846 |
Fiscal 2016 | $ | 2,106 |
Fiscal 2017 | $ | 2,362 |
Fiscal 2018-2022 | $ | 15,559 |
Expected Contributions (in thousands) |
Fiscal 2013 | $ | 1,363 |
Sensitivity in Fiscal 2012 Results Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one percentage point change in assumed health care cost trend rates would have the following effects in fiscal 2012 (in thousands):
|  | 1-Percentage Point
|  | Increase |  | Decrease
Effect on total of service and interest cost components |  | $ | 81 |  |  | $ | (89 | )
Effect on accumulated postretirement benefit obligation |  | $ | 1,816 |  |  | $ | (1,854 | )

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References No definition available. + Details
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