Deferred Compensation and Other Benefits

6 Months Ended

Jun. 28, 2013

Compensation and Retirement Disclosure [Abstract]

Deferred Compensation and Other Benefits

Deferred Compensation and Other Benefits

The Company maintains a non-qualified defined-benefit Executive Supplemental Benefit Plan (ESBP) that provides certain former key executives with deferred compensation benefits, based on years of service and base compensation, payable during retirement. The plan was amended as of November 30, 1994, to freeze benefits for the participants in the plan at that time.

Net periodic pension cost for the quarter and two quarters ended June 28, 2013 and June 29, 2012 for the ESBP is as follows:

	For the Quarter Ended				For the Two Quarters Ended
(amounts in thousands)	June 28, 2013		June 29, 2012		June 28, 2013		June 29, 2012
Interest cost	$	61	$	85	$	122	$	170
Amortization of actuarial loss	48		70		96		140
Net periodic pension cost	$	109	$	155	$	218	$	310

The ESBP is deemed to be unfunded as the Company has not specifically identified assets to be used to discharge the deferred compensation benefit liabilities. The Company has purchased insurance on the lives of certain plan participants in amounts deemed to be sufficient to reimburse the Company for the costs associated with the plan for those participants. The Company does not anticipate making contributions to the plan other than for benefit payments as required in 2013 and future years. The Company expects to make payments totaling approximately $0.7 million in 2013.

The Company also retained a contributory defined-benefit plan for its previous employees located in the Netherlands (NDBP) when the Company disposed of its subsidiary, CTG Nederland, B.V. Benefits paid are a function of a percentage of career average pay. This plan was curtailed for additional contributions in January 2003. Net periodic pension cost was approximately $35,000 and $16,000 in the 2013 and 2012 second quarters, respectively, and $70,000 and $32,000 in the year-to-date periods ended June 28, 2013 and June 29, 2012, respectively.

The Company does not anticipate making significant contributions to the NDBP in 2013. The assets for the NDBP are held by Aegon, a financial services firm located in the Netherlands. The assets for the plan are included in a general portfolio of government bonds, a portion of which is allocated to the NDBP based upon the estimated pension liability associated with the plan. The fair market value of the plan’s assets equals the amount allocated to the NDBP at any point in time. The fair value of the assets is determined using a Level 3 methodology (see note 2 for “Fair Value”). The calculation of fair value includes determining the present value of the future expected payments under the plan, including using assumptions such as expected market rates of return, equity and interest rate volatility, credit risk, correlations of market returns, and discount rates. In 2013 the plan investments have a targeted minimum return to the Company of 4.0%, which is consistent with historical returns and the 4.0% return guaranteed to the participants of the plan. The Company, in conjunction with Aegon, intends to maintain the current investment strategy of investing plan assets solely in government bonds throughout 2013.

The change in the fair value of plan assets for the NDBP for the two quarters ended June 28, 2013 and June 29, 2012 is as follows:

	For the Two Quarters Ended
(amounts in thousands)	June 28, 2013			June 29, 2012
Fair value of plan assets at beginning of period	$	8,143		$	7,811
Return on plan assets	160			156
Contributions	—			—
Benefits paid	(68		)	(55		)
Effect of exchange rate changes	(117		)	(300		)
Fair Value of plan assets at end of quarter	$	8,118		$	7,612

The Company also maintains the Key Employee Non-Qualified Deferred Compensation Plan for certain key executives. Company contributions to this plan, if any, are based on annually defined financial performance objectives. The Company made contributions to this plan for amounts earned in 2012 totaling $0.3 million in the 2013 first quarter. The investments in the plan are included in the total assets of the Company, and are discussed in note 4, “Investments.” Participants in the plan have the ability to exchange a portion of their investments for stock units which represent shares of the Company's common stock. One participant in the plan has exchanged their investments for stock units in 2013 through the end of the second quarter. In exchange for the funds received, the Company issued shares out of treasury stock equivalent to the number of share units received by the participants. These shares of common stock receive dividends if any are paid, but are not entitled to any voting rights. The shares are being held by the Company, and will be released to the participants as prescribed by their payment elections under the plan.

The Company maintains the Non-Employee Director Deferred Compensation Plan for its non-employee directors. Cash contributions totaling less than $0.1 million were made to the plan for one director in the first two quarters of 2013.  At the time the contributions were made, the non-employee director elected to exchange his cash contributions to the plan for the purchase of stock units which represent shares of the Company’s common stock. Consistent with the Key Employee Non-Qualified Deferred Compensation Plan, in exchange for funds received, the Company issued stock out of treasury stock equivalent to the number of share units received by the participant.  These shares of common stock receive dividends if any are paid, but are not entitled to any voting rights.  The shares are being held by the Company, and will be released to the non-employee director as prescribed by their payment election under the plan, as either shares of stock or the cash equivalent.