Note 12 – Retirement Plans

401(k) Plans

The Company has retirement savings plans available to substantially all full time employees which are intended to qualify as deferred compensation plans under Section 401(k) of the Internal Revenue Code (the “401k Plans”). Pursuant to the 401k Plans, employees may contribute up to the maximum amount allowed by the 401k Plans or by law. The Company at its sole discretion may from time to time make discretionary matching contributions as it deems advisable. The Company made contributions to the plans during both the years ended September 30, 2014 and 2013 of approximately $79,000.

Defined Benefit Pension Plan

Pension Obligations

EMF has a defined benefit pension plan (the “Plan”) covering hourly employees. The Plan provides defined benefits based on years of service and final average salary. As of September 30, 2006, the plan was frozen.

The changes in benefit obligations and plan assets under the Plan were as follows as of and for the years ended September 30, 2014 and 2013:

Change in benefit obligation:	2014		2013
Benefit obligation at beginning of fiscal year	$	565,000	$	641,000
Service costs		-		-
Interest costs		27,000		24,000
Benefits paid		(31,000)		(10,000)
Actuarial losses (gain)		84,000		(90,000)
Benefit obligation at end of fiscal year	$	645,000	$	565,000

Change in plan assets:
Fair value of plan assets at beginning of fiscal year	$	315,000	$	295,000
Actual return on plan assets		(1,000)		(20,000)
Employer contribution		44,000		50,000
Expenses paid		(20,000)		-
Benefits paid		(11,000)		(10,000)
Fair value of plan assets at end of year	$	327,000	$	315,000

Unfunded status at end of year	$	(318,000)	$	(250,000)

The unfunded amounts above are recognized as long-term liabilities in the consolidated balance sheets at September 30, 2014 and 2013. The actuarial loss (gain) amounts above are recognized in accumulated other comprehensive income in the consolidated balance sheets at September 30, 2014 and 2013.

The following table summarizes the Plan, which has a projected benefit obligation that exceeds plan assets:

	2014		2013
Projected benefit obligation in excess of plan assets:
Projected benefit obligation	$	645,000	$	565,000
Fair value of plan assets		327,000		315,000

Because the Plan is frozen, the accumulated benefit obligation is the same as the projected benefit obligation.

The following table summarizes the components of the net periodic pension cost at September 30, 2014 and 2013:

	2014		2013
Interest cost	$	27,000	$	24,000
Expected return on assets		11,000		11,000
Amortization of net loss		7,000		12,000
Net periodic pension cost	$	45,000	$	47,000

Assumptions

Weighted-average assumptions used to determine benefit obligations at September 30, 2014 and 2013 were:

	2014		2013
Discount rate	4.25	%	4.75	%
Expected return on plan assets	2.60	%	2.60	%
Rate of compensation increase	not applicable		not applicable

The expected long-term return on plan assets assumption was developed as a weighted average rate based on the target asset allocation of the Plan and the long-term capital market assumptions. The overall return for each asset class was developed by combining a long-term inflation component and the associated expected real rates.

Plan Termination

On December 1, 2014, the Company terminated and settled its pension liability with each of the remaining participants in the Plan. The total benefit payments made upon termination were $675,000 and the actual plan assets at the date of termination were $320,000. The Company funded and expensed the difference of $355,000 upon settlement of the Plan. See Note 18 – Subsequent Events.