Note 18. Retirement benefits

Woodward provides various benefits to eligible members of the Company, including contributions to various defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits and postretirement life insurance benefits. Eligibility requirements and benefit levels vary depending on employee location.

Defined contribution plans

Substantially all U.S. employees are eligible to participate in the U.S. defined contribution plan. The U.S. defined contribution plan allows employees to defer part of their annual income for income tax purposes into their personal 401(k) accounts. The Company makes contributions to eligible employee accounts, which are also deferred for employee personal income tax purposes. Certain foreign employees are also eligible to participate in foreign plans.

The amount of expense associated with defined contribution plans totaled $16,927 in fiscal year 2011, $16,474 in fiscal year 2010, and $16,869 in fiscal year 2009.

Woodward operates one multiemployer plan for certain employees in the Netherlands. The amount of contributions associated with the multiemployer plan totaled $476 in fiscal year 2011, $495 in fiscal year 2010, and $550 in fiscal year 2009.

Defined benefit plans

Woodward has defined benefit plans which provide pension benefits for certain retired employees in the U.S., the United Kingdom, Japan and Switzerland. Approximately 1,000 current employees may receive future benefits under the plans and approximately 550 retired employees are eligible to receive future benefits or are currently receiving benefits. A September 30 measurement date is utilized to value plan assets and obligations for all of Woodward's defined benefit pension plans.

In connection with the acquisition of IDS in the third quarter of fiscal year 2011 (see Note 4, Business acquisitions and dispositions), Woodward assumed pension benefit obligations that contributed to increases in recognized expenses for the fiscal year ending September 30, 2011 compared to the fiscal year ending September 30, 2010. In addition, in connection with the acquisition of HRT in the third quarter of fiscal year 2009 (see Note 4, Business acquisitions and dispositions), Woodward assumed pension benefit obligations that contributed to increases in recognized expenses for the fiscal year ending September 30, 2010 compared to the fiscal year ending September 30, 2009.

Excluding the Woodward HRT Plan, the defined benefit plans in the U.S. were frozen in fiscal year 2007 and no additional employees may participate in the U.S. plans and no additional service costs will be incurred.

The actuarial assumptions used in measuring the net periodic benefit cost and plan obligations of retirement pension benefits were as follows:


	2011			2010			2009
United States:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		5.55	%		5.85	%		5.50	%
Rate of compensation increase		4.00			4.00			4.00

Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		5.85			5.50			6.50
Rate of compensation increase		4.00			4.00			n/a
Long-term rate of return on plan assets		7.90			7.50			7.50

United Kingdom:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		5.10	%		4.90	%		5.40	%
Rate of compensation increase		4.30			4.30			4.10

Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		4.90			5.40			6.90
Rate of compensation increase		4.30			4.10			4.70
Long-term rate of return on plan assets		6.00			6.50			6.50

Japan:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		1.50	%		1.25	%		1.75	%
Rate of compensation increase		2.00			2.00			2.50

Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		1.25			1.75			1.90
Rate of compensation increase		2.00			2.50			2.00
Long-term rate of return on plan assets		3.00			3.30			3.11

Switzerland:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		2.50	%		n/a	%		n/a	%
Rate of compensation increase		2.00			n/a			n/a

Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		3.00			n/a			n/a
Rate of compensation increase		2.00			n/a			n/a
Long-term rate of return on plan assets		3.00			n/a			n/a

The discount rate assumption is intended to reflect the rate at which the retirement benefits could be effectively settled based upon the assumed timing of the benefit payments. In the U.S., Woodward used a bond portfolio matching analysis based on recently traded, non-callable bonds rated AA or better, which have at least $50 million outstanding. In the United Kingdom, Woodward used the iBoxx AA-rated corporate bond index (applicable for bonds over 15 years) to determine a blended rate to use as the benchmark. In Japan, Woodward used Standard & Poors AA-rated corporate bond yields (applicable for bonds over 10 years) as the benchmark. In Switzerland, Woodward used high quality swap rates plus a credit spread of 0.36% as high quality swaps are available in Switzerland at various durations and trade at higher volumes than bonds. Woodward's assumed rates do not differ significantly from any of these benchmarks.

Compensation increase assumptions are based upon historical experience and anticipated future management actions.

In determining the long-term rate of return on plan assets, Woodward assumes that the historical long-term compound growth rates of equity and fixed-income securities will predict the future returns of similar investments in the plan portfolio. Investment management and other fees paid out of the plan assets are factored into the determination of asset return assumptions.

Net periodic benefit costs consist of the following components reflected as expense in Woodward's Consolidated Statements of Earnings:


	Year Ending September 30,
	United States									Other Countries									Total
	2011			2010			2009			2011			2010			2009			2011			2010			2009

Service cost	$	3,433		$	3,647		$	1,409		$	992		$	784		$	716		$	4,425		$	4,431		$	2,125
Interest cost		5,646			4,890			2,964			2,284			2,261			2,175			7,930			7,151			5,139
Expected return on plan assets		(6,693	)		(4,759	)		(2,627	)		(2,541	)		(2,361	)		(2,178	)		(9,234	)		(7,120	)		(4,805	)
Amortization of:
Transition obligation		—			—			—			—			86			81			—			86			81
Net (gains) losses		312			583			337			900			753			135			1,212			1,336			472
Net prior service (benefit) cost		75			(260	)		(259	)		(9	)		(8	)		(7	)		66			(268	)		(266	)
Settlement costs		—			—			—			—			345			—			—			345			—
Curtailment costs		—			165			—			—			—			237			—			165			237

Net periodic (benefit) cost	$	2,773		$	4,266		$	1,824		$	1,626		$	1,860		$	1,159		$	4,399		$	6,126		$	2,983

Settlements costs were expensed in the fiscal years ending September 30, 2010 and 2009, respectively, as a result of normal attrition among participants in the Company's defined benefit plan in Japan. Woodward did not have any settlement costs in fiscal year 2011. Curtailment costs were associated with planned or actual workforce reduction actions.

The following tables provide a reconciliation of the changes in the projected benefit obligation and fair value of assets for the defined benefit pension plans:


	At or for the Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	$	97,786		$	89,551		$	56,657		$	53,450		$	154,443		$	143,001
Obligation assumed in IDS Acquisition		—			—			2,038			—			2,038			—
Service cost		3,433			3,647			992			784			4,425			4,431
Interest cost		5,646			4,890			2,284			2,261			7,930			7,151
Net actuarial (gains) losses		1,686			(2,877	)		(3,498	)		2,902			(1,812	)		25
Contribution by participants		—			—			122			25			122			25
Benefits paid		(2,210	)		(1,552	)		(2,090	)		(3,139	)		(4,300	)		(4,691	)
Amounts paid by Company for Pension Protection Fund levy		—			—			(67	)		—			(67	)		—
Curtailment loss		—			165			—			—			—			165
Plan amendments		—			3,962			—			—			—			3,962
Foreign currency exchange rate changes		—			—			917			374			917			374

Projected benefit obligation at end of year	$	106,341		$	97,786		$	57,355		$	56,657		$	163,696		$	154,443


Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	$	85,128		$	64,102		$	43,539		$	40,726		$	128,667		$	104,828
Plan assets received in connection with IDS Acquisition		—			—			1,604			—			1,604			—
Actual return on plan assets		482			7,998			708			3,209			1,190			11,207
Contributions by the company		6,580			14,580			4,151			2,793			10,731			17,373
Contributions by plan participants		—			—			122			25			122			25
Benefits paid		(2,210	)		(1,552	)		(2,090	)		(3,139	)		(4,300	)		(4,691	)
Foreign currency exchange rate changes		—			—			333			(75	)		333			(75	)

Fair value of plan assets at end of year	$	89,980		$	85,128		$	48,367		$	43,539		$	138,347		$	128,667

Underfunded status at end of year	$	(16,361	)	$	(12,658	)	$	(8,988	)	$	(13,118	)	$	(25,349	)	$	(25,776	)

The Company's defined benefit pension plans in the United Kingdom, Japan and Switzerland represented $39,677, $15,140 and $2,538, respectively, of the total projected benefit obligation at September 30, 2011 and $37,546, $8,947 and $1,874, respectively, of the total fair value of plan assets at September 30, 2011.

Woodward makes periodic cash contributions to its defined pension plans based on applicable regulations in jurisdictions that oversee its various pension plans, if any, and other factors. Contributions in fiscal year 2010 included a $10,000 discretionary contribution to the U.S. plans.

The following tables provide the amounts recognized in the statement of financial position and accumulated comprehensive income for the defined benefit pension plans:


	At or for the Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Amounts recognized in statement of financial position consist of:
Other non-current liabilities	$	(16,361	)	$	(12,658	)	$	(8,988	)	$	(13,118	)	$	(25,349	)	$	(25,776	)

Underfunded status at end of year	$	(16,361	)	$	(12,658	)	$	(8,988	)	$	(13,118	)	$	(25,349	)	$	(25,776	)


Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net prior service (benefit) cost	$	1,517		$	1,593		$	(24	)	$	(30	)	$	1,493		$	1,563
Unrecognized net (gains) losses		16,769			9,183			13,779			15,963			30,548			25,146

Total amounts recognized		18,286			10,776			13,755			15,933			32,041			26,709
Deferred taxes		(6,949	)		(4,095	)		(4,763	)		(5,585	)		(11,712	)		(9,680	)

Amounts recognized in accumulated other comprehensive income	$	11,337		$	6,681		$	8,992		$	10,348		$	20,329		$	17,029

The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were as follows:


	At or for the Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010

Projected benefit obligation	$	(106,341	)	$	(97,786	)	$	(57,355	)	$	(56,657	)	$	(163,696	)	$	(154,443	)
Accumulated benefit obligation		(96,630	)		(86,260	)		(54,304	)		(54,139	)		(150,934	)		(140,399	)
Fair value of plan assets		89,980			85,128			48,367			43,539			138,347			128,667

Other changes in plan assets and benefit obligations recognized in other comprehensive income were as follows:


	Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010

Net (gain) loss	$	7,897		$	(6,182	)	$	(1,664	)	$	2,233		$	6,233		$	(3,949	)
Prior service (benefit) cost		—			3,963			—			—			—			3,963
Amortization of net gains (losses)		(312	)		(583	)		(899	)		(753	)		(1,211	)		(1,336	)
Amortization of transition obligation asset		—			—			—			(86	)		—			(86	)
Amortization of prior service benefit (cost)		(75	)		260			9			8			(66	)		268
Settlement loss		—			—			—			(345	)		—			(345	)
Foreign currency exchange rate changes		—			—			376			(60	)		376			(60	)

Total recognized in accumulated other comprehensive income	$	7,510		$	(2,542	)	$	(2,178	)	$	997		$	5,332		$	(1,545	)

The amounts expected to be amortized from Accumulated Other Comprehensive Income and reported as a component of net periodic benefit cost during fiscal year 2012 is as follows:


	United		Other
	States		Countries			Total
Prior service (benefit) cost	$	75	$	(9	)	$	66
Net actuarial (gains) losses		524		667			1,191

Pension benefit payments are made from the assets of the pension plans. Using foreign exchange rates as of September 30, 2011 and expected future service assumptions, it is anticipated that the future benefit payments will be as follows:


	United		Other
Year Ending September 30,	States		Countries		Total
2012	$	3,109	$	2,468	$	5,577
2013		3,581		2,673		6,254
2014		4,154		2,583		6,737
2015		4,732		2,925		7,657
2016		5,250		2,704		7,954
2017 — 2021		36,000		15,771		51,771

Woodward expects its pension plan contributions in fiscal year 2012 will be $600 in the U.S., $1,787 in the United Kingdom, $1,382 in Japan and $191 in Switzerland.

Defined benefit plan assets

The overall investment objective of the pension plan assets is to earn a rate of return over time which, when combined with Company contributions, satisfies the benefit obligations of the pension plans and maintains sufficient liquidity to pay benefits.

As the timing and nature of the plan obligations varies for each Company sponsored pension plan, investment strategies have been individually designed for each pension plan with a common focus on maintaining diversified investment portfolios that provide for long-term growth while minimizing the risk to principal associated with short-term market behavior. The strategy for each of the plans balances the requirements to generate returns, using investments expected to produce higher returns, such as equity securities, with the need to control risk within the pension plans using less volatile investment assets, such as debt securities. A strategy of more equity-oriented allocation is adopted for those plans which have a longer-term investment plan based on the timing of the associated benefit obligations.

A pension oversight committee is assigned by the Company to each pension plan, excluding the pension plans in Switzerland which are statutory plans. Among other responsibilities, each committee is responsible for all asset class allocation decisions. Asset class allocations, which are reviewed by the respective pension committee on at least an annual basis, are designed to meet or exceed certain market benchmarks which align with each plan's investment objectives. In evaluating the asset allocation choices, consideration is given to the proper long-term level of risk for each plan, particularly with respect to the long-term nature of each plan's liabilities, the impact of asset allocation on investment results and the corresponding impact on the volatility and magnitude of plan contributions and expense and the impact certain actuarial techniques may have on the plans' recognition of investment experience. From time to time, the plans may move outside the prescribed asset class allocation in order to meet significant liabilities with respect to one or more individuals approaching retirement.

Risks associated with the plan assets include interest rate fluctuation risk, market fluctuation risk, risk of default by debt issuers, and liquidity risk. To manage these risks, the assets are managed by established, professional investment firms and performance is evaluated regularly against specific benchmarks. Liability management and asset class diversification are central to the Company's risk management approach and overall investment strategy.

The assets of the U.S. plans are invested in actively managed mutual funds. The assets of the plan in Japan and the plan in the United Kingdom are invested in actively managed pooled investment funds. Each individual mutual fund or pooled investment fund has been selected based on the investment strategy of the related plan, which mirrors a specific asset class within the associated target allocation. The assets of the plans in Switzerland are insured through an insurance contract that guarantees a federally mandated annual rate of return. Pension plan assets at September 30, 2011 and 2010 do not include any direct investment in Woodward's common stock.

The asset allocations are monitored and rebalanced regularly by investment managers assigned to the individual pension plans. The actual allocations of pension plan assets and target allocation ranges by asset class, are as follows:


	At September 30,
	2011						2010
	Percentage			Target			Percentage			Target
	of Plan			Allocation			of Plan			Allocation
	Assets			Ranges			Assets			Ranges
United States:
Asset Class
Equity Securities		58.7	%		39.7- 79.7	%		49.8	%		40.0- 60.0	%
Debt Securities		41.1	%		30.3- 50.3	%		50.0	%		40.0- 60.0	%
Other		0.2	%		0.0	%		0.2	%		0.0	%

		100.0	%					100.0	%
United Kingdom:
Asset Class
Equity Securities		37.7	%		40.0- 60.0	%		40.7	%		46.0- 54.0	%
Debt Securities		62.2	%		35.0- 65.0	%		58.9	%		46.5- 53.5	%
Other		0.1	%		0.0	%		0.4	%		0.0	%

		100.0	%					100.0	%
Japan:
Asset Class
Equity Securities		39.9	%		36.0- 44.0	%		55.2	%		50.0- 58.0	%
Debt Securities		59.2	%		55.0- 63.0	%		43.1	%		41.0- 49.0	%
Other		0.9	%		0.0- 2.0	%		1.7	%		0.0- 2.0	%

		100.0	%					100.0	%
Switzerland:
Asset Class
Equity Securities		0.0	%		0.0	%		n/a			n/a
Debt Securities		0.0	%		0.0	%		n/a			n/a
Other		100.0	%		100.0	%		n/a			n/a

		100.0	%					n/a

Actual allocations to each asset class vary from target allocations due to periodic market value fluctuations, investment strategy changes, and the timing of benefit payments and contributions.

The variance at September 30, 2010 in the Company's United Kingdom pension plan between the actual allocation and target allocation ranges is the result of a decision made by the plan trustees to invest a September 2007 £3,000 special contribution from the Company, into an index linked long-term government securities pooled fund. At September 30, 2010, the fair value of the assets held for the United Kingdom pension plan in the index linked long-term government securities pooled fund is approximately $5,707.

The following table presents Woodward's pension plan assets using the fair value hierarchy as of September 30, 2011. The fair value hierarchy established by U.S. GAAP prioritizes the inputs used to measure fair value into the following levels:

Level 1: Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date.

Level 2: Quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable and can be corroborated by observable market data.

Level 3: Inputs reflect management's best estimates and assumptions of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments.


	At September 30, 2011
	Level 1				Level 2				Level 3
	United		Other		United		Other		United		Other
	States		Countries		States		Countries		States		Countries		Total
Asset Category:
Cash and cash equivalents	$	198	$	125	$	—	$	—	$	—	$	—	$	323
Mutual funds:
U.S. corporate bond fund		36,958		—		—		—		—		—		36,958
U.S. equity large cap fund		29,169		—		—		—		—		—		29,169
International equity large cap growth fund		23,655		—		—		—		—		—		23,655
Pooled funds:
Japanese equity securities		—		—		—		1,921		—		—		1,921
International equity securities		—		—		—		1,652		—		—		1,652
Japanese fixed income securities		—		—		—		3,958		—		—		3,958
International fixed income securities		—		—		—		1,336		—		—		1,336
Index linked U.K. equity fund		—		—		—		7,098		—		—		7,098
Index linked international equity fund		—		—		—		7,062		—		—		7,062
Index linked U.K. corporate bonds fund		—		—		—		13,255		—		—		13,255
Index linked U.K. government securities fund		—		—		—		3,646		—		—		3,646
Index linked U.K. long-term government securities fund		—		—		—		6,440		—		—		6,440
Insurance backed assets:
Insurance backed assets		—		—		—		—		—		1,874		1,874

Total assets	$	89,980	$	125	$	—	$	46,368	$	—	$	1,874	$	138,347

Cash and cash equivalents: Cash and cash equivalents held by the Company's pension plans are held on deposit with creditworthy financial institutions. The fair value of the cash and cash equivalents are based on the quoted market price of the respective currency in which the cash is maintained.

Pension assets invested in mutual funds: The assets of the Company's U.S. pension plans are invested in various mutual funds which invest in both equity and debt securities. The fair value of the mutual funds is determined based on the quoted market price of each fund.

Pension assets invested in pooled funds: The assets of the Company's Japan and United Kingdom pension plans are invested in pooled investment funds, which include both equity and debt securities. The assets of the United Kingdom pension plan are invested in index-linked pooled funds which aim to replicate the movements of an underlying market index to which the fund is linked. Fair value of the pooled funds is based on the net asset value of shares held by the plan as reported by the fund sponsors. All pooled funds held by plans outside of the U.S. are considered to be invested in international equity and debt securities. Although the underlying securities may be largely domestic to the plan holding the investment assets, the underlying assets are considered international from the perspective of the Company.

Pension assets invested in insurance backed assets: A reputable Swiss insurer insures the assets of the Company's Swiss pension plans. The insurance contract guarantees a federally mandated annual rate of return. The value of the plan assets is effectively the value of the insurance contract. The performance of the underlying assets held by the insurance company has no direct impact on the surrender value of the insurance contract. The insurance backed assets are not traded and therefore have no active market.

Other postretirement benefit plans

Woodward provides other postretirement benefits to its employees including postretirement medical benefits and life insurance benefits. Postretirement medical benefits are provided to certain current and retired employees and their covered dependants and beneficiaries in the U.S. and the United Kingdom. Benefits include the option to elect company provided medical insurance coverage to age 65 and a Medicare supplemental plan after age 65. Life insurance benefits are provided to certain retirees in the U.S. under frozen plans which are no longer available to current employees. A September 30 measurement date is utilized to value plan assets and obligations for Woodward's other postretirement benefit plans.

In connection with the acquisition of HRT (see Note 4, Business acquisitions and dispositions), Woodward assumed estimated benefit obligations of approximately $2,251 related to a Textron-sponsored postretirement medical benefit plan for certain former HRT employees. Participation in the assumed plan for retirees over age 65 is frozen. Active HRT employees have the opportunity to remain on the active employee plan and pay the full premium cost upon retirement.

The postretirement medical benefit plans, other than the assumed HRT plan, were frozen in fiscal year 2006 and no additional employees may participate in the plans. Generally, employees who had attained age 55 and had rendered 10 or more years of service before the plans were frozen were eligible for these postretirement medical benefits.

Certain participating retirees are required to contribute to the plans in order to maintain coverage. The plans, including the assumed HRT plan, provide postretirement medical benefits for approximately 1,100 retired employees and their covered dependants and beneficiaries and may provide future benefits to approximately 70 active employees and their covered dependants and beneficiaries, upon retirement, if the employees elect to participate. As the result of a plan amendment in fiscal year 2009, all the postretirement medical plans are fully insured for retirees who have attained age 65.

The actuarial assumptions used in measuring the net periodic benefit cost and plan obligations of postretirement benefits were as follows:


	2011			2010			2009
Weighted-average discount rate used to determine benefit obligation at September 30		5.54	%		5.84	%		5.50	%

Weighted-average discount rate used to determine net periodic benefit cost for years ended September 30		5.84			5.50			6.51

The discount rate assumption is intended to reflect the rate at which the postretirement benefits could be effectively settled based upon the assumed timing of the benefit payments. In the U.S., Woodward used a bond portfolio matching analysis based on recently traded, non-callable bonds rated AA or better, which have at least $50 million outstanding. In the United Kingdom, Woodward used the iBoxx AA-rated corporate bond index (applicable for bonds over 15 years) to determine a blended rate to use as the benchmark. Woodward's assumed rates do not differ significantly from any of these benchmarks.

Assumed healthcare cost trend rates at September 30, were as follows:


	2011			2010
Health care cost trend rate assumed for next year		8.0	%		8.5	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.0	%		5.0	%
Year that the rate reaches the ultimate trend rate		2018			2018

Healthcare costs have generally trended upward in recent years, sometimes by amounts greater than 5%. Assumed health care cost trend rates have a significant effect on the amounts reported for postretirement medical plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:


	1% increase		1% decrease
Effect on projected fiscal year 2012 service and interest cost	$	182	$	(159	)
Effect on accumulated postretirement benefit obligation at September 30, 2011		3,107		(2,722	)

Net periodic benefit costs consist of the following components reflected as expense in Woodward's Consolidated Statements of Earnings:


	Year Ending September 30,
	2011			2010			2009

Service cost	$	92		$	120		$	169
Interest cost		1,974			2,081			2,330
Amortization of:
Net (gains) losses		128			189			97
Net prior service (benefit) cost		(871	)		(1,249	)		(3,232	)


Net periodic (benefit) cost	$	1,323		$	1,141		$	(636	)

The following table provides a reconciliation of the changes in the accumulated postretirement benefit obligation and fair value of assets for the postretirement benefits for the fiscal years ending September 30:


	Year Ending September 30,
	2011			2010
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	$	37,222		$	42,427
Service cost		92			120
Interest cost		1,974			2,081
Premiums paid by plan participants		2,133			2,274
Net actuarial (gains) losses		(3,146	)		(3,932	)
Benefits paid		(5,349	)		(5,738	)
Foreign currency exchange rate changes		(3	)		(10	)


Projected benefit obligation at end of year	$	32,923		$	37,222


Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Contributions by the company		3,216			3,464
Premiums paid by plan participants		2,133			2,274
Benefits paid		(5,349	)		(5,738	)


Fair value of plan assets at end of year	$	—		$	—


Funded status at end of year	$	(32,923	)	$	(37,222	)

The Company's postretirement medical plan in the United Kingdom represents $509 of the total benefit obligation at September 30, 2011. The Company paid $46 in medical benefits to participants of the United Kingdom postretirement medical plan in fiscal year 2011.

During 2009, as part of Woodward's postretirement medical benefits, Woodward provided a prescription drug benefit in the U.S. that was at least actuarially equivalent to Medicare Part D. As a result, Woodward was entitled to a federal subsidy that was introduced by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. On January 1, 2009, Woodward converted its prescription drug benefit to a fully insured plan that was no longer eligible for additional federal subsidies.

The following tables provide the amounts recognized in the statement of financial position and accumulated comprehensive income for the postretirement plans:


	Year Ending September 30,
	2011			2010
Amounts recognized in statement of financial position consist of:
Accrued liabilities	$	(2,503	)	$	(2,693	)
Other non-current liabilities		(30,420	)		(34,529	)


Funded status at end of year	$	(32,923	)	$	(37,222	)


Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net prior service (benefit) cost	$	(1,501	)	$	(2,372	)
Unrecognized net (gains) losses		(2,272	)		1,001


Total amounts recognized		(3,773	)		(1,371	)
Deferred taxes		1,437			530


Amounts recognized in accumulated other comprehensive income	$	(2,336	)	$	(841	)

Woodward pays plan benefits from its general funds; therefore, there are no segregated plan assets as of September 30, 2011 or September 30, 2010.

The accumulated benefit obligation was as follows:


	Year Ending
	September 30,
	2011			2010

Accumulated postretirement benefit obligation	$	(32,923	)	$	(37,222	)

Other changes in plan assets and benefit obligations recognized in other comprehensive income were as follows:


	Year Ending
	September 30
	2011			2010

Net (gain) loss	$	(3,145	)	$	(3,924	)
Amortization of net (gains) losses		(128	)		(189	)
Amortization of prior service benefit (cost)		871			1,249

Total recognized in accumulated other comprehensive income	$	(2,402	)	$	(2,864	)

Using foreign currency exchange rates as of September 30, 2011 and expected future service, it is anticipated that the future Company contributions to pay benefits, excluding participate contributions, will be as follows:


Year Ending September 30,
2012	$	4,493
2013		4,763
2014		4,911
2015		4,834
2016		4,841
2017 — 2021		21,991