Defined Benefit Plans

On December 1, 2005, the Company adopted a defined benefit plan ("Cash Balance Plan") to provide retirement income to all eligible employees of the Company and its subsidiaries in accordance with the terms and conditions in the plan document. The Plan blends the features of a traditional defined benefit plan with the features of a defined contribution plan. In this plan, hypothetical individual accounts periodically receive a contribution credit and an interest credit. The contribution credits are a flat dollar amount that vary with age. Investment policies and strategies of the Cash Balance Plan are set by the Retirement Plan Committee and approved by the plan trustees. The plan trustee will oversee the actual investment of plan assets into permitted asset classes to achieve targeted plan returns. There were net assets of $5.6 million and $5.8 million in the Cash Balance Plan as of December 31, 2011 and 2010, respectively. Hypothetical participant balances are vested at all times. The method of payment for Cash Balance Plan is an annuity unless the participant elects an alternate choice of payment. The Cash Balance Plan is developed to meet the requirements of Section 401(a) and Section 501(a) of the Internal Revenue Code.

The Company's funding policy for the Cash Balance Plan is to contribute annually at least the minimum amount required by the Employee Retirement Income Security Act ("ERISA") of 1974. The Company contributed $0.6 million into the plan during 2011. The Company did not contribute into the plan during 2010. The Company contributed $1 million into the plan during 2009. The Company recorded a settlement loss of approximately $28,000 during the year ended December 31, 2009 in connection with terminations and related payouts occurring during the period. The Trustees of the Cash Balance Plan have decided to temporarily suspend plan contributions credits effective from January 1, 2009.

The Company has wound down the operations of Ramius GmbH ("GmbH"), and as a result, a defined benefit plan for employees of GmbH (the "GmbH Plan") ceased. During the year ended December 31, 2009 the Company recorded additional compensation expense of $0.4 million related to the GmbH Plan and made payments of $1.0 million. As of December 31, 2009 all liabilities under the GmbH Plan had been settled.

In addition, Ramius Japan Ltd. also established a defined benefit plan (the "Retirement Allowance Plan") covering its employees. There are no plan assets associated with this plan and the benefits are based on years of credited service and a percentage of the employees' compensation.

The estimated future benefits for the above plans are an actuarial estimate of the benefits that the Company will be required to pay. A measurement date of December 31 was used for each of the actuarial calculations.

The following amounts contained in the following tables relate to the above plans in aggregate as of December 31, 2011 and 2010 and for the years ended December 31, 2011, 2010, and 2009:



	As of December 31,
	2011			2010
	(dollars in thousands)
Projected benefit obligation
Benefit obligation at beginning of year	$	6,311		$	6,596
Service cost	50			54
Interest cost	264			317
Actuarial loss (gain)	(55		)	(47		)
Curtailments	—			(140		)
Lump sum settlement	(991		)	(480		)
Effect of change in currency conversion	12			11
Benefit obligation at end of year	$	5,591		$	6,311
Change in plan assets
Fair value of plan assets at beginning of year	$	5,791		$	5,846
Actual return on plan assets	206			534
Employer contributions	633			—
Benefits paid	(991		)	(589		)
Fair value of plan assets at the end of year	$	5,639		$	5,791
Funded balance at end of year	$	48		$	(520	)
Amounts recognized in the consolidated statement of financial condition
Liabilities	$	48		$	(520	)
Accumulated benefit obligation	$	5,533		$	6,270



	Year ended December 31,
	2011			2010			2009
	(dollars in thousands)
Components of net periodic benefit cost included in employee compensation and benefits
Service cost	$	51		$	54		$	72
Interest cost	264			317			339
Expected return on plan assets	(277		)	(294		)	(328		)
Amortization of (loss) / gain	—			—			(4		)
Amortization of prior service cost	23			23			24
Effect of curtailment	—			(10		)	62
Effect of settlement	(31		)	(7		)	12
Net periodic benefit cost	$	30		$	83		$	177
Other changes in plan assets and benefit obligations recognized in other comprehensive loss
Net loss	$	17		$	(234	)	$	(542	)
Effect of curtailment	—			10			(62		)
Effect of settlement	31			6			(12		)
Amortization of loss / (gain)	—			—			4
Amortization of prior service cost	(23		)	(23		)	(24		)
Total recognized in other comprehensive loss	$	25		$	(241	)	$	(636	)
Total recognized in net periodic benefit cost and other comprehensive loss	$	55		$	(158	)	$	(459	)
Amounts recognized in accumulated other comprehensive loss
Net gain (loss)	$	80		$	127		$	(154	)
Prior service cost	(441		)	(463		)	(449		)
Effect of change in currency conversion	—			—			26
Total recognized in accumulated other comprehensive loss	$	(361	)	$	(336	)	$	(577	)
Estimated amounts to be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year
Prior service cost	$	19		$	3		$	19
Net gain (loss)	$	—		$	—		$	—

The discount rates as of December 31, 2011, 2010, and 2009 used to measure the year-end benefit obligations and the earnings effects for the subsequent year were as follows:



	Cash Balance Plan						GmbH Plan				Retirement Allowance Plan
	2011		2010		2009		2011		2010	2009	2011		2010		2009
Discount Rate	6	%	6	%	6	%	—	%	N/A	N/A	—	%	2.25	%	2.50	%
Rate of Compensation Increase	N/A		N/A		N/A		—	%	N/A	N/A	—	%	2.40	%	2.50	%

The assumed long term rate of return on the Cash Balance Plan assets was 6% as of December 31, 2011, 2010 and 2009. The Company's approach in determining the long-term rate of return for plan assets is based upon historical financial market relationships that have existed over time with the presumption that this trend will generally remain constant in the future.

The composition of plan assets by asset category for the Cash Balance Plan are set forth below:



	As of December 31,
	2011		2010
	(dollars in thousands)
Ramius Multi-Strategy Fund Ltd(a)	$	506	$	812
Ramius Global Credit Fund Ltd(b)	1,040		725
External Mutual Funds—Total return(c)	1,785		2,699
External Mutual Funds—Real Return(d)	1,079		362
External Mutual Funds—Conservative(e)	1,229		1,193
	$	5,639	$	5,791

The investment approach of the Cash Balance Plan is to generate a return equal to or greater than the 30-year treasury rate with relatively low risk by investing in a variety of vehicles. The Company has valued the assets in the Cash Balance Plan at fair value in accordance with the Company's investment policies (see Note 3e). The assets in the Cash Balance Plan are categorized in level 2 of the fair value hierarchy. Investment risk is measured and monitored on an ongoing basis through semi-annual retirement committee meetings and annual liability measurements.


(a)	Ramius Multi-Strategy Fund Ltd invests substantially all of its capital through a "master feeder" structure in Ramius Intermediate Fund, L.P. which invests in funds that employ a variety of diversified, non-directional investment strategies that seek to achieve, over the long term, a target return with low volatility.


(b)	Ramius Global Credit Fund Ltd invests substantially all of its capital through a "master-feeder" structure in Ramius Global Credit Intermediate Fund, LP which invests in a fund whose objective is to seek to achieve superior returns.


(c)	External Mutual Funds—Total Return's main objective is to achieve maximum total return by investing assets in a diversified portfolio of fixed income instruments of varying maturities which may be represented by derivatives.


(d)	External Mutual Funds—Real Return's main objective is to seek to achieve maximum total return after inflation consistent with preservation of real capital and prudent investment management.


(e)	External Mutual Funds—Conservative's main objective is to seek to achieve a high level of current income with some consideration given to the growth of capital by investing in fixed-income securities.

Estimated future benefits payments

The following benefit payments, which reflect future service, as appropriate, are expected to be paid:



	(dollars in thousands)
2012	$	3,653
2013	261
2014	1,641
2015	261
2016	1,477
2017 - 2021	3,198
	$	10,491

The Company does not plan to contribute any additional amounts to the pension plan during calendar year 2012.