Employee Benefit Plans

12 Months Ended

Dec. 31, 2012

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Employee Benefit Plans

Pension Plans

Substantially all employees who meet certain requirements of age, length of service and hours worked per year are covered by Company-sponsored pension plans and supplemental pension plan (collectively, the “pension plans”). These pension plans are defined benefit, noncontributory plans. Benefits paid to retirees are based upon age at retirement, years of credited service and average earnings. The Company also has a supplemental pension plan, which is a non-qualified, unfunded plan. The Company uses a December 31 measurement date for the pension plans.

The Company-sponsored pension plans are frozen for all employees except for employees of certain subsidiaries and employees represented by the United Steelworkers of America. The assets of the Company-sponsored pension plans are maintained in a single trust account.

The Company’s funding policy is to satisfy the minimum funding requirements of the Employee Retirement Income Security Act of 1974, commonly called ERISA.

Components of net periodic pension credit are as follows:

	2012			2011			2010
Service cost	$	608		$	539		$	623
Interest cost	6,832			7,393			7,456
Expected return on assets	(9,855		)	(10,054		)	(9,342		)
Amortization of prior service cost	324			324			231
Amortization of actuarial loss	594			229			237
Net periodic pension credit	$	(1,497	)	$	(1,569	)	$	(795	)

The expected 2013 amortization of pension prior service cost and actuarial loss is $323 and $1,942, respectively.

The status of the plans at December 31, 2012 and 2011 are as follows:

	2012			2011
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	164,407		$	144,235
Service cost	608			539
Interest cost	6,832			7,393
Benefit payments	(6,558		)	(6,151		)
Actuarial loss	15,848			18,391
Projected benefit obligation at end of year	$	181,137		$	164,407
Change in plan assets:
Fair value of plan assets at beginning of year	$	174,938		$	157,996
Actual return on assets	18,463			22,867
Employer contributions	307			226
Benefit payments	(6,558		)	(6,151		)
Fair value of plan assets at end of year	$	187,150		$	174,938
Funded status – net prepaid	$	6,013		$	10,531
Amounts recognized in the consolidated balance sheets consist of:
Prepaid pension cost	$	12,891		$	15,956
Accrued liabilities	(309		)	(219		)
Pension benefit obligations	(6,569		)	(5,206		)
Net amount recognized	$	6,013		$	10,531
Pre-tax components of accumulated other comprehensive income (loss):
Unrecognized actuarial loss	$	(29,778	)	$	(23,131	)
Unrecognized prior service cost	(1,617		)	(1,942		)
Total	$	(31,395	)	$	(25,073	)
Accumulated benefit obligation	$	180,551		$	163,874

For the plan with an accumulated benefit obligation in excess of plan assets, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets were $5,893, $5,893 and $0, respectively, at December 31, 2012; and $5,425, $5,425 and $0, respectively, at December 31, 2011.

The assumptions used to measure the projected benefit obligations for the Company’s defined benefit pension plans are as follows:

	2012	2011
Discount rate	3.50 - 3.75%	4.25	%
Projected annual salary increases	0 - 3.00%	0 - 3.00%

The assumptions used to determine net periodic pension credit are as follows:

	2012		2011		2010
Discount rate	4.25	%	5.25	%	5.75	%
Expected long-term rate of return on plan assets	5.75	%	6.50	%	6.50	%
Projected annual salary increases	0 - 3.00%		0 - 3.00%		0 - 3.00%

The Company’s expected return on plan assets is derived from reviews of asset allocation strategies and historical and anticipated future long-term performance of individual asset classes. The Company’s analysis gives consideration to historical returns and long-term, prospective rates of return.

The Company’s pension plan assets are allocated entirely to fixed income securities at December 31, 2012 and 2011.

The Company’s pension plans’ funds are managed in accordance with investment policies recommended by its investment advisor and approved by the Human Resources Committee of the Board of Directors. The overall target portfolio allocation is 100% fixed income securities. These funds’ conformance with style profiles and performance is monitored regularly by management, with the assistance of the Company’s investment advisor. Adjustments are typically made in the subsequent quarters when investment allocations deviate from the target range. The investment advisor provides quarterly reports to management and the Human Resources Committee of the Board of Directors.

The fair values of the Company’s pension plan assets fall within the following levels of the fair value hierarchy as of December 31, 2012:

	Level 1		Level 2		Level 3		Total
Fixed income securities (1)	$	10,562	$	176,610	$	—	$	187,172
Accounts payable – pending trades							(22		)
Total							$	187,150

(1) Fixed income securities are comprised of corporate bonds (75%), government bonds (16%), government agencies securities (6%) and other fixed income securities (3%).

The fair values of the Company’s pension plan assets fall within the following levels of the fair value hierarchy as of December 31, 2011:

	Level 1		Level 2		Level 3		Total
Fixed income securities (2)	$	9,949	$	172,694	$	—	$	182,643
Accounts payable – pending trades							(7,705		)
Total							$	174,938

(2) Fixed income securities are comprised of corporate bonds (74%), government bonds (16%), government agencies securities (7%) and other fixed income securities (3%).

The estimated future pension benefit payments are:

2013	$	7,974
2014	8,213
2015	8,828
2016	9,115
2017	9,607
2018 — 2022	51,839

The Company is also party to certain multi-employer pension plans. The overall cost of such plans to the Company is insignificant. If the Company withdraws from a multi-employer pension plan in the future, it could potentially incur a withdrawal liability at that time.

Postretirement Plan

The Company also provides declining value life insurance to its retirees and a maximum of three years of medical coverage to qualified individuals who retire between the ages of 62 and 65. The Company does not fund these benefits in advance, and uses a December 31 measurement date.

Components of net periodic postretirement benefit cost for 2012, 2011 and 2010 were as follows:

	2012		2011		2010
Service cost	$	161	$	164	$	177
Interest cost	170		222		219
Amortization of prior service cost	—		—		29
Amortization of actuarial gain	—		—		(16		)
Net periodic postretirement benefit cost	$	331	$	386	$	409

The expected 2012, amortization of postretirement prior service cost and actuarial gain are insignificant.

The status of the postretirement benefit plans at December 31, 2012 and 2011 were as follows:

	2012			2011
Change in accumulated postretirement benefit obligations:
Accumulated postretirement benefit obligation at beginning of year	$	4,635		$	4,339
Service cost	161			164
Interest cost	170			222
Benefit payments	(193		)	(100		)
Actuarial (gain) loss	(394		)	10
Accumulated postretirement benefit obligation at end of year	$	4,379		$	4,635
Funded status – net liability	$	4,379		$	4,635
Amounts recognized in the consolidated balance sheets consist of:
Accrued liabilities	$	(296	)	$	(218	)
Postretirement benefit obligations	(4,083		)	(4,417		)
Net amount recognized	$	(4,379	)	$	(4,635	)
Pre-tax components of accumulated other comprehensive income (loss):
Unrecognized actuarial gain	$	661		$	266
Total	$	661		$	266

The assumed health care cost trend rates for medical plans at December 31 were as follows:

	2012		2011		2010
Medical cost trend rate	8.00	%	8.50	%	8.00	%
Ultimate medical cost trend rate	5.00	%	5.00	%	5.00	%
Year ultimate medical cost trend rate will be reached	2019		2018		2013

A 1% increase in the health care cost trend rate assumptions would have increased the accumulated postretirement benefit obligation at December 31, 2012 by $259 with no significant impact on the annual periodic postretirement benefit cost. A 1% decrease in the health care cost trend rate assumptions would have decreased the accumulated postretirement benefit obligation at December 31, 2012 by $235 with no significant impact on the annual periodic postretirement benefit cost.

The weighted average discount rate used to determine the net periodic postretirement benefit costs and the accumulated postretirement benefit obligations were as follows:

	2012		2011		2010
Net periodic postretirement benefit costs	3.75	%	5.25	%	5.75	%
Accumulated postretirement benefit obligations	3.50	%	3.75	%	5.25	%

Retirement Savings Plan

The Company’s retirement savings plan includes features under Section 401(k) of the Internal Revenue Code. Effective July 1, 2011, the Company’s 401(k) matching contribution was increased to 100% of each dollar on eligible employee contributions up to the first 6% of the employee’s pre-tax compensation and the Company’s fixed contribution of 4% of eligible earnings for all employees was eliminated. Company contributions cliff vest after two years of employment.

Effective July 1, 2012, the Company's 401(k) plan was amended to include the U.S. employees of Tube Supply. Employees were eligible to participate in the Company's 401(k) plan immediately. Tube Supply's existing plan assets were rolled over into the Company's 401(k) plan during 2012 as a result of this amendment.

The amounts expensed are summarized below:

	2012		2011		2010
Supplemental contributions and 401(k) match	$	5,260	$	4,414	$	1,634