Employee Benefit Plans

12 Months Ended

Dec. 31, 2011

Employee Benefit Plans

Employee Benefit Plans

Note 12 – Employee Benefit Plans

The Company has qualified, defined benefit pension plans that were established to cover certain employees. The Company also provides certain postretirement health care benefits for certain of its salaried and hourly retired employees. Generally, employees may become eligible for health care benefits if they retire after attaining specified age and service requirements. These benefits are subject to deductibles, co-payment provisions and other limitations.

The Company's decision in December 2007 to close its manufacturing facility in Johnstown, Pennsylvania significantly affected current and future employment levels and resulted in a decrease in the estimated remaining future service years for the employees covered by the plans. The decrease in the estimated remaining future service years resulted in plan curtailments for the defined benefit pension plans and the postretirement benefit plan and caused the Company to recognize in 2007 a substantial portion of the net actuarial losses and prior service costs relating to these plans that had not yet been recognized in earnings. In addition, the plant closure decision triggered contractual special pension benefits and contractual termination benefits for the Company's postretirement plan that totaled $18,977 and were recognized in 2008.

A substantial portion of the Company's postretirement benefit plan obligation relates to a settlement with the union representing employees at the Company's and its predecessors' Johnstown manufacturing facilities. The terms of that settlement require the Company to pay until November 30, 2012 certain monthly amounts toward the cost of retiree health care coverage. The Company's current postretirement benefit plan obligation assumes for accounting purposes a continuation of those monthly payments indefinitely after November 30, 2012 (as would be permitted under the settlement). However, the Company's postretirement benefit plan obligation could significantly increase or decrease, if payments were to cease, if litigation should ensue or if the parties should agree on a modified settlement.

As of December 31, 2009, the Company suspended its pension plan for salaried employees who are not part of a collective bargaining unit. As a result of this decision, the Company immediately recognized a substantial portion of the net actuarial loss and prior service cost relating to this plan that had not yet been recognized in earnings. Additional pension costs of $786 were recognized during 2009 related to this action.

Generally, contributions to the plans are not less than the minimum amounts required under the Employee Retirement Income Security Act of 1974 ("ERISA") and not more than the maximum amount that can be deducted for federal income tax purposes. The plans' assets are held by independent trustees and consist primarily of equity and fixed income securities.

The changes in benefit obligation, change in plan assets and funded status as of December 31, 2011 and 2010, are as follows:

	Pension Benefits						Postretirement Benefits
	2011			2010			2011			2010
Change in benefit obligation
Benefit obligation—Beginning of year	$	62,296		$	61,462		$	65,256		$	63,291
Service cost		—			—			55			57
Interest cost		3,136			3,422			3,211			3,481
Actuarial loss (gain)		2,411			3,181			1,032			2,767
Benefits paid		(5,440	)		(5,769	)		(4,493	)		(4,340	)
Benefit obligation—End of year		62,403			62,296			65,061			65,256
Change in plan assets
Plan assets—Beginning of year		46,752			45,916			—			—
Return on plan assets		2,633			6,577			—			—
Employer contributions		4,405			28			4,493			4,340
Benefits paid		(5,440	)		(5,769	)		(4,493	)		(4,340	)
Plan assets at fair value—End of year		48,350			46,752			—			—
Funded status of plans—End of year	$	(14,053	)	$	(15,544	)	$	(65,061	)	$	(65,256	)

	Pension Benefits						Postretirement Benefits
	2011			2010			2011			2010
Amounts recognized in the Consolidated Balance Sheets
Noncurrent assets	$	149		$	145		$	—		$	—
Current liabilities		—			—			(5,174	)		(5,347	)
Noncurrent liabilities		(14,202	)		(15,689	)		(59,887	)		(59,909	)
Net amount recognized at December 31	$	(14,053	)	$	(15,544	)	$	(65,061	)	$	(65,256	)

Amounts recognized in accumulated other comprehensive loss but not yet recognized in earnings at December 31, 2011 and 2010, are as follows:

	Pension Benefits				Postretirement Benefits
	2011		2010		2011		2010
Net actuarial loss	$	20,682	$	17,472	$	13,915	$	13,172
Prior service cost		—		—		1,007		1,248
	$	20,682	$	17,472	$	14,922	$	14,420

The estimated net loss for the defined benefit pension plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2012 is $511. The estimated net loss and prior service cost for the postretirement benefit plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2012 are $404 and $241, respectively.

Components of net periodic benefit cost for the years ended December 31, 2011, 2010 and 2009, are as follows:

	Pension Benefits									Postretirement Benefits
	2011			2010			2009			2011		2010		2009
Components of net periodic benefit cost
Service cost	$	—		$	—		$	408		$	55	$	57	$	58
Interest cost		3,136			3,422			3,843			3,211		3,481		3,949
Expected return on plan assets		(3,797	)		(3,557	)		(2,943	)		—		—		—
Amortization of unrecognized prior service cost		—			—			103			241		241		241
Amortization of unrecognized net loss		365			425			492			289		182		—
Curtailment recognition		—			—			786			—		—		—
Total net periodic benefit cost	$	(296	)	$	290		$	2,689		$	3,796	$	3,961	$	4,248

The increase (decrease) in accumulated other comprehensive loss (pre-tax) for the years ended December 31, 2011 and 2010, are as follows:

		00000000			00000000			00000000			00000000
	2011						2010
	Pension Benefits			Postretirement Benefits			Pension Benefits			Postretirement Benefits
Net actuarial loss	$	3,575		$	1,032		$	161		$	2,767
Amortization of net actuarial gain		(365	)		(289	)		(425	)		(182	)
Amortization of prior service cost		—			(241	)		—			(241	)
Total recognized in accumulated other comprehensive loss (gain)	$	3,210		$	502		$	(264	)	$	2,344

The following benefit payments, which reflect expected future service, as appropriate, were expected to be paid as of December 31, 2011:

	Pension Benefits		Postretirement Benefits
2012	$	5,346	$	5,200
2013		5,001		5,000
2014		4,634		4,900
2015		4,283		4,800
2016		3,978		4,700
2017 through 2021		18,059		21,200

The Company expects to make $2,667 in contributions to its pension plans in 2012 to meet its minimum funding requirements.

The assumptions used to determine end of year benefit obligations are shown in the following table:

	Pension Benefits						Postretirement Benefits
	2011			2010			2011			2010
Discount rates		4.90	%		5.36	%		4.80	%		5.26	%
Rate of compensation increase		N/A			N/A

The discount rate is determined using a yield curve model that uses yields on high quality corporate bonds (AA rated or better) to produce a single equivalent rate. The yield curve model excludes callable bonds except those with make-whole provisions, private placements and bonds with variable rates.

The assumptions used in the measurement of net periodic cost are shown in the following table:

	Pension Benefits									Postretirement Benefits
	2011			2010			2009			2011			2010			2009
Discount rate		5.36	%		5.76	%		6.85	%		5.26	%		5.76	%		6.85	%
Expected return on plan assets		7.99	%		8.25	%		8.25	%		—			—			—
Rate of compensation increase		N/A			N/A			3.00	%		—			—			—

Assumed health care cost trend rates at December 31 are set forth below:

	2011			2010			2009
Health care cost trend rate assigned for next year		9.00	%		9.00	%		9.00	%
Rate to which cost trend is assumed to decline		5.50	%		5.00	%		5.50	%
Year the rate reaches the ultimate trend rate		2017			2018			2016

As benefits under these postretirement healthcare plans have been capped, assumed health care cost trend rates have no effect on the amounts reported for the health care plans.

The Company's pension plans' weighted average asset allocations at December 31, 2011 and 2010, and target allocations for 2012, by asset category, are as follows:

		00000			00000			00000
	Plan Assets at December 31,						Target Allocation
	2011			2010			2012
Asset Category
Equity securities		53	%		58	%		55	%
Debt securities		42	%		38	%		40	%
Real estate		5	%		4	%		5	%
		100	%		100	%		100	%

The basic goal underlying the pension plan investment policy is to ensure that the assets of the plans, along with expected plan sponsor contributions, will be invested in a prudent manner to meet the obligations of the plans as those obligations come due under a broad range of potential economic and financial scenarios, maximize the long-term investment return with an acceptable level of risk based on such obligations, and broadly diversify investments across and within the capital markets to protect asset values against adverse movements in any one market. The Company's investment strategy balances the requirement to maximize returns using potentially higher return generating assets, such as equity securities, with the need to manage the risk of such investments with less volatile assets, such as fixed-income securities. Investment practices must comply with the requirements of ERISA and any other applicable laws and regulations. The Company, in consultation with its investment advisors, has determined a targeted allocation of invested assets by category and it works with its advisors to reasonably maintain the actual allocation of assets near the target.

The long term return on assets was estimated based upon historical market performance, expectations of future market performance for debt and equity securities and the related risks of various allocations between debt and equity securities. Numerous asset classes with differing expected rates of return, return volatility and correlations are utilized to reduce risk through diversification.

The Company's pension plan assets are invested in one mutual fund for each fund classification. The following table presents the fair value of pension plan assets classified under the appropriate level of the ASC 820 fair value hierarchy (see Note 2 for a description of the fair value hierarchy) as of December 31, 2011 and 2010:

		00000000		00000000		00000000		00000000
Pension Plan Assets	As of December 31, 2011
	Level 1		Level 2		Level 3		Total
Mutual funds:
Fixed income fund	$	20,435	$	—	$	—	$	20,435
Large cap stock fund		14,429		—		—		14,429
Small cap stock fund		4,612		—		—		4,612
International fund		6,340		—		—		6,340
Real estate fund		1,962		—		—		1,962
Cash and cash equivalents		572		—		—		572
Total	$	48,350	$	—	$	—	$	48,350

		00000000		00000000		00000000		00000000
Pension Plan Assets	As of December 31, 2010
	Level 1		Level 2		Level 3		Total
Mutual funds:
Fixed income fund	$	17,707	$	—	$	—	$	17,707
Large cap stock fund		15,526		—		—		15,526
Small cap stock fund		4,483		—		—		4,483
International fund		7,134		—		—		7,134
Real estate fund		1,848		—		—		1,848
Cash and cash equivalents		54		—		—		54
Total	$	46,752	$	—	$	—	$	46,752

The Company also maintains qualified defined contribution plans, which provide benefits to their employees based on employee contributions, years of service and employee earnings, with discretionary contributions allowed. Expenses related to these plans were $1,409, $706 and $1,007 for the years ended December 31, 2011, 2010 and 2009, respectively.