Retirement Plans

6 Months Ended

Jun. 30, 2012

13. RETIREMENT PLANS

Retirement Plans

The Company has five plans which cover its hourly and salaried employees in the United States: three defined benefit plans (one active / two frozen) and two defined contribution plans. Employees are eligible to participate in the appropriate plan based on employment classification. The Company's funding to the defined benefit and defined contribution plans are governed by the Employee Retirement Income Security Act of 1974 (ERISA), applicable plan policy and investment guidelines. The Company policy is to contribute at least the minimum funding standards of ERISA.

The Company's subsidiary, Portec Rail Products, Inc. (Portec Rail), maintains two defined contribution plans for its employees in Canada, as well as a post-retirement benefit plan. In the United Kingdom, Portec Rail maintains both a defined contribution plan and a defined benefit plan. These plans are discussed in further detail below.

United States Defined Benefit Plans

Net periodic pension costs for the United States defined benefit pension plans for the three and six-month periods ended June 30, 2012 and 2011 are as follows:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2012	2011	2012	2011
	In thousands
Service cost	$8	$8	$16	$15
Interest cost	311	200	621	402
Expected return on plan assets	(338)	(191)	(673)	(383)
Recognized net actuarial loss	56	28	112	56
Net periodic benefit cost	$37	$45	$76	$90

The Company expects to contribute approximately $741,000 to its United States defined benefit plans in 2012. For the six months ended June 30, 2012, the Company contributed approximately $421,000 to these plans.

United Kingdom Defined Benefit Plans

Net periodic pension costs for the United Kingdom defined benefit pension plan for the three and six months ended June 30 is as follows:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2012	2011	2012	2011
	In thousands
Interest cost	$80	$68	$163	$135
Expected return on plan assets	(68)	(68)	(139)	(137)
Amortization of transition amount	(12)	(12)	(24)	(24)
Recognized net actuarial loss	52	28	107	56
Net periodic cost	$52	$16	$107	$30

United Kingdom regulations require trustees to adopt a prudent approach to funding required contributions to defined benefit pension plans. The Company anticipates making contributions of $231,000 to the United Kingdom Portec Rail pension plan during 2012. For the six months ended June 30, 2012, the Company contributed approximately $110,000 to the United Kingdom Portec Rail plan.

Defined Contribution Plans

The Company has a domestic defined contribution plan that covers all non-union hourly and all salaried employees (Salaried Plan). The Salaried Plan permits both pre-tax and after-tax employee contributions. Participants can contribute, subject to statutory limitations, between 1% and 75% of eligible pre-tax pay and between 1% and 100% of eligible after-tax pay. The Company's employer match is 100% of the first 1% of deferred eligible compensation and up to 50% of the next 6%, based on years of service, of deferred eligible compensation, for a total maximum potential match of 4%. The Company may also make discretionary contributions to the Salaried Plan.

The Company also has a domestic defined contribution plan for union hourly employees with contributions made by both the participants and the Company based on various formulas (Union Plan).

The Company's Portec Rail subsidiary maintains a defined contribution plan covering all non-union employees at its Montreal, Quebec, Canada location (Montreal Plan). Under the terms of the Montreal Plan, Portec Rail may contribute 4% of each employee's compensation as a non-elective contribution and may also contribute 30% of the first 6% of each employee's compensation contributed to the Montreal Plan.

The Company's Portec Rail subsidiary also maintains a defined contribution plan covering substantially all employees of Portec Rail Products (UK) Ltd (UK Plan). Benefits under the UK Plan are provided under no formal written agreement. Under the terms of the defined contribution UK Plan, Portec Rail may make non-elective contributions of between 3% and 10% of each employee's compensation.

Finally, the Company's Portec Rail subsidiary maintains a defined contribution plan covering substantially all of the employees of Kelsan Technologies Corp., a wholly-owned subsidiary of the Company (Kelsan Plan). Under the terms of the Kelsan Plan, Portec Rail makes a non-elective contribution of 4% of each employee's compensation and may also contribute 30% of the first 6% of each employee's compensation contributed to the Kelsan Plan.

The following table summarizes the expense associated with the contributions made to these plans:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2012	2011	2012	2011
	In thousands
Salaried Plan	$620	$450	$1,075	$978
Union Plan	19	15	36	28
Montreal Plan	32	25	59	48
UK Plan	16	18	30	36
Kelsan Plan	31	30	77	61
	$718	$538	$1,277	$1,151

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References

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