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Employee Benefit Plans
9 Months Ended
Sep. 30, 2011
Employee Benefit Plans [Abstract] 
Employee Benefit Plans [TextBlock]

NOTE L – Employee Benefit Plans

 

Defined Benefit Plan

 

The Company has a contributory defined benefit plan that covers certain employees in the United Kingdom (“U.K.”) and Germany. The net pension and supplemental retirement benefit obligations and the related periodic costs are based on, among other things, assumptions regarding the discount rate, estimated return on plan assets and mortality rates. These obligations and related periodic costs are measured using actuarial techniques and assumptions. The projected unit credit method is the actuarial cost method used to compute the pension liabilities and related expenses.

 

For the nine months ended September 30, 2011, net period benefit costs associated with the defined benefit plan were approximately $0 million.

 

The following tables set forth the benefit obligation, the fair value of plan assets, and the funded status of the Company's plan (in thousands):

   Defined Benefit Plan
    
Change in benefit obligation:   
    
Balance at December 31, 2010 $ 118,505
    
Service cost   242
    
Interest cost   4,613
    
Actuarial gain   (7,696)
    
Benefits paid   (2,943)
    
Currency changes   (388)
    
Benefit obligation at September 30, 2011 $ 112,333
    
Change in plan assets:   
    
Fair value of plan assets at December 31, 2010 $ 93,642
    
Actual return on plan assets   (2,136)
    
Employer contribution   1,534
    
Benefits paid   (2,943)
    
Currency changes   (343)
    
Fair value of plan assets at September 30, 2011 $ 89,754
    
Underfunded status at September 30, 2011 $ (22,579)

Based on an actuarial study performed as of September 30, 2011, the plan is underfunded and a liability is reflected in the Company's consolidated financial statements as a long-term liability. The weighted-average discount rate assumption used to determine benefit obligations as of September 30, 2011 was 5.1%.

 

The following are weighted-average assumptions used to determine net periodic benefit costs for the nine months ended September 30, 2011:

 

Discount rate  5.4%
Expected long-term return on plan assets  6.6%

The Company previously adopted a payment plan with the trustees of the defined benefit plan, in which the Company will pay approximately ₤1.0 million GBP (approximately $1.6 million based on a USD:GBP exchange rate of 1.6:1) every year from 2009 through 2012. Contribution amounts, if any, for 2013 and thereafter have not yet been determined, but discussions are ongoing with the trustees of the defined benefit plan as to the required payments going forward.

 

The Company also has pension plans in Asia for which the benefit obligation, fair value of the plan assets and the funded status amounts are deemed immaterial and therefore, are not included in the figures or assumptions above.

 

Deferred Compensation

 

The Company maintains a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) for executive officers, key employees and members of the Board of Directors (the “Board”). The Deferred Compensation Plan allows eligible participants to defer the receipt of eligible compensation, including equity awards, until designated future dates. The Company offsets its obligations under the Deferred Compensation Plan by investing in the actual underlying investments. These investments are classified as trading securities and are carried at fair value. At September 30, 2011, these investments totaled approximately $4 million. All gains and losses in these investments are materially offset by corresponding gains and losses in the Deferred Compensation Plan liabilities.