Retirement Benefit Plans

3 Months Ended

Apr. 02, 2016

Note I – Retirement Benefit Plans

The Company has non-contributory defined benefit pension plans covering certain U.S. employees. Plan benefits are generally based upon age at retirement, years of service and, for its salaried plan, the level of compensation. The Company also sponsors unfunded nonqualified supplemental retirement plans that provide certain current and former officers with benefits in excess of limits imposed by federal tax law.

The Company also provides health care and life insurance for retired salaried employees in the United States who meet specific eligibility requirements.

Significant disclosures relating to these benefit plans for the first quarter of fiscal 2016 and 2015 follow:

	Pension Benefits						Postretirement Benefits
	Three Months Ended						Three Months Ended
	April 2, 2016			April 4, 2015			April 2, 2016			April 4, 2015
Service cost	$	813,005		$	964,987		$	10,750		$	54,393
Interest cost		766,580			859,259			20,500			38,729
Expected return on plan assets		(1,243,941	)		(1,287,914	)		(11,750	)		(22,984	)
Amortization of prior service cost		50,143			54,647			(6,000	)		(5,972	)
Amortization of the net loss		627,055			472,728			(13,500	)		4,701
Net periodic benefit cost	$	1,012,842		$	1,063,707		$	--		$	68,867

The Company’s funding policy with respect to its qualified plans is to contribute at least the minimum amount required by applicable laws and regulations. In 2016, the Company expects to contribute $3.1 million into its pension plans and $118,000 into its postretirement plan. As of April 2, 2016, the Company has not made contributions into its pension plans and has contributed $46,000 to its postretirement plan and will make the remaining contributions as required during the remainder of the year.

On April 5, 2016 the Board of Directors passed a resolution freezing the benefits of The Salaried Employees Retirement Plan of The Eastern Company effective as of May 31, 2016. The Board also approved several enhancements to The Eastern Company Savings and Investment Plan effective June 1, 2016.

The Company has a contributory savings plan under Section 401(k) of the Internal Revenue Code covering substantially all U.S. non-union employees. The plan allows participants to make voluntary contributions of up to 100% of their annual compensation on a pretax basis, subject to IRS limitations. The plan provides for contributions by the Company at its discretion. The Company made contributions of $56,231 and $52,266 in the first quarter of 2016 and 2015, respectively.