Retirement and Postretirement Benefit Plans

12 Months Ended

Feb. 28, 2011

Retirement and Postretirement Benefit Plans [Abstract]

RETIREMENT AND POSTRETIREMENT BENEFIT PLANS

NOTE 12 – RETIREMENT AND POSTRETIREMENT BENEFIT PLANS

The Corporation has a discretionary profit-sharing plan with a contributory 401(k) provision covering most of its United States employees. Corporate contributions to the profit-sharing plan were $9,759 and $9,338 for 2011 and 2010, respectively. In addition, the Corporation matches a portion of 401(k) employee contributions. The Corporation’s matching contributions were $4,875 and $4,787 for 2011 and 2010, respectively. Based on the 2009 operating results, the Corporation elected not to make profit-sharing or 401(k) matching contributions for 2009.

The Corporation also participates in a multi-employer pension plan covering certain domestic employees who are part of a collective bargaining agreement. Total pension expense for the multi-employer plan, representing contributions to the plan, was $467, $417 and $511 in 2011, 2010 and 2009, respectively.

The Corporation has nonqualified deferred compensation plans that provide certain officers and directors with the opportunity to defer receipt of compensation and director fees, respectively, including compensation received in the form of the Corporation’s common shares. The Corporation funds these deferred compensation liabilities by making contributions to a rabbi trust. In accordance with ASC Topic 710-10-25, “Compensation – Recognition – Deferred Compensation – Rabbi Trust,” both the trust assets and the related obligation associated with deferrals of the Corporation’s common shares are recorded in equity at cost and offset each other. There were approximately 0.2 million common shares in the trust at February 28, 2011 with a cost of $3,368 compared to approximately 0.2 million common shares with a cost of $2,856 at February 28, 2010.

In 2001, in connection with its acquisition of Gibson Greetings, Inc. (“Gibson”), the Corporation assumed the obligations and assets of Gibson’s defined benefit pension plan (the “Gibson Retirement Plan”) that covered substantially all Gibson employees who met certain eligibility requirements. Benefits earned under the Gibson Retirement Plan have been frozen and participants no longer accrue benefits after December 31, 2000. The Gibson Retirement Plan has a measurement date of February 28 or 29. No contributions were made to the plan in either 2011 or 2010. The Gibson Retirement Plan was under-funded at February 28, 2011 and 2010.

The Corporation also has an unfunded nonqualified defined benefit pension plan (the “Supplemental Executive Retirement Plan”) covering certain management employees. The Supplemental Executive Retirement Plan has a measurement date of February 28 or 29.

The Corporation also has several defined benefit pension plans at its Canadian subsidiary. These include a defined benefit pension plan covering most Canadian salaried employees, which was closed to new participants effective January 1, 2006, but eligible members continue to accrue benefits and an hourly plan in which benefits earned have been frozen and participants no longer accrue benefits after March 1, 2000. There are also two unfunded plans, one that covers a supplemental executive retirement pension relating to an employment agreement and one that pays supplemental pensions to certain former hourly employees pursuant to a prior collective bargaining agreement. All plans have a measurement date of February 28 or 29. During 2010, the Corporation settled a portion of its obligation under the Canadian hourly plan. The Corporation made a contribution to the plan, which was used to purchase annuities for the affected participants. As a result, a settlement expense of $126 was recorded.

The Corporation sponsors a defined benefit health care plan that provides postretirement medical benefits to full-time United States employees who meet certain age, service and other requirements. The plan is contributory, with retiree contributions adjusted periodically, and contains other cost-sharing features such as deductibles and coinsurance. The Corporation maintains a trust for the payment of retiree health care benefits. This trust is funded at the discretion of management. The plan has a measurement date of February 28 or 29. The Corporation made changes to its postretirement health care plan in the current year by reducing the employer subsidy by the Corporation for certain groups as well as removing the death coverage for the spouses of active employees and removing the disability coverage for disabled employees unless the employee was already eligible for retiree medical coverage at the time of death or disability, respectively.

The following table sets forth summarized information on the defined benefit pension plans and postretirement benefits plan:

	Pension Plans						Postretirement Benefits
	2011			2010			2011			2010
Change in benefit obligation:
Benefit obligation at beginning of year	$	162,845		$	140,116		$	110,921		$	120,113
Service cost		957			730			2,290			2,365
Interest cost		8,757			9,279			6,014			7,359
Participant contributions		28			32			4,165			4,591
Retiree drug subsidy payments		-			-			1,670			-
Plan amendments		198			53			(7,263	)		-
Actuarial loss (gain)		5,825			22,034			(18,639	)		(14,649	)
Benefit payments		(10,567	)		(10,080	)		(8,123	)		(8,858	)
Settlements		52			(3,512	)		-			-
Currency exchange rate changes		2,065			4,193			-			-
Benefit obligation at end of year		170,160			162,845			91,035			110,921
Change in plan assets:
Fair value of plan assets at beginning of year		102,092			86,489			66,928			61,898
Actual return on plan assets		11,311			21,691			7,130			11,180
Employer contributions		3,187			4,001			(3,165	)		(1,883	)
Participant contributions		28			32			4,165			4,591
Benefit payments		(10,567	)		(10,080	)		(8,123	)		(8,858	)
Settlements		52			(3,512	)		-			-
Currency exchange rate changes		1,778			3,471			-			-
Fair value of plan assets at end of year		107,881			102,092			66,935			66,928
Funded status at end of year	$	(62,279	)	$	(60,753	)	$	(24,100	)	$	(43,993	)

Amounts recognized on the Consolidated Statement of Financial Position consist of the following:

	Pension Plans						Postretirement Benefits
	2011			2010			2011			2010
Accrued compensation and benefits	$	(2,347	)	$	(2,335	)	$	-		$	-
Other liabilities		(59,932	)		(58,418	)		(24,101	)		(43,993	)
Net amount recognized	$	(62,279	)	$	(60,753	)	$	(24,101	)	$	(43,993	)
Amounts recognized in accumulated     other comprehensive income:
Net actuarial loss	$	56,938		$	55,275		$	1,268		$	23,611
Net prior service cost (credit)		847			828			(11,316	)		(11,766	)
Net transition obligation		43			46			-			-
Accumulated other comprehensive income	$	57,828		$	56,149		$	(10,048	)	$	11,845

For the defined benefit pension plans, the estimated net loss, prior service cost and transition obligation that will be amortized from accumulated other comprehensive income into periodic benefit cost over the next fiscal year are approximately $2,392, $180 and $6, respectively. For the postretirement benefit plan, the estimated net loss and prior service credit that will be amortized from accumulated other comprehensive income into periodic benefit cost over the next fiscal year are approximately $0 and ($2,500), respectively.

The following table presents significant weighted-average assumptions to determine benefit obligations and net periodic benefit cost:

	Pension Plans		Postretirement Benefits
	2011	2010	2011	2010
Weighted average discount rate used to determine:
Benefit obligations at measurement date
US	5.25%	5.50-5.75%	5.50%	5.75%
International	5.15%	5.50%	N/A	N/A
Net periodic benefit cost
US	5.50-5.75%	6.75%	5.75%	6.75%
International	5.50%	7.50%	N/A	N/A
Expected long-term return on plan assets:
US	7.00%	7.00%	7.00%	7.00%
International	5.50%	6.00%	N/A	N/A
Rate of compensation increase:
US	Up to 6.50%	Up to 6.50%	N/A	N/A
International	Up to 3.00%	Up to 3.50%	N/A	N/A
Health care cost trend rates:
For year ending February 28 or 29	N/A	N/A	8.50%	9.00%
For year following February 28 or 29	N/A	N/A	10.00%	8.50%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	N/A	N/A	5.00%	5.00%
Year the rate reaches the ultimate trend rate	N/A	N/A	2021	2017

For 2011, the net periodic pension cost for the pension plans was based on long-term asset rates of return as noted above. In developing these expected long-term rate of return assumptions, consideration was given to expected returns based on the current investment policy and historical return for the asset classes.

For 2011, the Corporation assumed a long-term asset rate of return of 7% to calculate the expected return for the postretirement benefit plan. In developing the 7% expected long-term rate of return assumption, consideration was given to various factors, including a review of asset class return expectations based on historical compounded returns for such asset classes.

	2011			2010
Effect of a 1% increase in health care cost trend rate on:
Service cost plus interest cost	$	915		$	1,036
Accumulated postretirement benefit obligation		7,571			10,262
Effect of a 1% decrease in health care cost trend rate on:
Service cost plus interest cost		(739	)		(841	)
Accumulated postretirement benefit obligation		(6,030	)		(8,373	)

The following table presents selected pension plan information:

	2011		2010
For all pension plans:
Accumulated benefit obligation	$	164,823	$	158,351
For pension plans that are not fully funded:
Projected benefit obligation		170,160		162,845
Accumulated benefit obligation		164,823		158,351
Fair value of plan assets		107,881		102,092

A summary of the components of net periodic benefit cost for the pension plans is as follows:

	2011			2010			2009
Components of net periodic benefit cost:
Service cost	$	957		$	730		$	954
Interest cost		8,757			9,279			9,128
Expected return on plan assets		(6,588	)		(5,637	)		(8,049	)
Amortization of transition obligation		6			6			6
Amortization of prior service cost		178			261			260
Amortization of actuarial loss		133			1,942			459
Settlements		(3	)		126			-
Net periodic benefit cost		3,440			6,707			2,758
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Actuarial loss		1,175			6,069			27,681
Prior service cost		198			53			-
Amortization of prior service cost		(178	)		(261	)		(260	)
Amortization of actuarial loss		(133	)		(1,942	)		(459	)
Amortization of transition obligation		(6	)		(6	)		(6	)
Settlements		3			(126	)		-
Total recognized in net periodic benefit cost and other comprehensive income	$	4,499		$	10,494		$	29,714

A summary of the components of net periodic benefit cost for the postretirement benefit plan is as follows:

	2011			2010			2009
Components of net periodic benefit cost:
Service cost	$	2,290		$	2,365		$	3,495
Interest cost		6,014			7,359			8,682
Expected return on plan assets		(4,503	)		(4,107	)		(5,100	)
Amortization of prior service credit		(7,712	)		(7,418	)		(7,418	)
Amortization of actuarial loss		1,078			2,386			4,224
Net periodic benefit cost		(2,833	)		585			3,883
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Actuarial gain		(21,265	)		(21,723	)		(14,739	)
Prior service credit added during the year		(7,263	)		-			-
Amortization of actuarial loss		(1,078	)		(2,386	)		(4,224	)
Amortization of prior service credit		7,712			7,418			7,418
Total recognized in net periodic benefit cost and other comprehensive income	$	(24,727	)	$	(16,106	)	$	(7,662	)

At February 28, 2011 and 2010, the assets of the plans are held in trust and allocated as follows:

	Pension Plans				Postretirement Benefits
	2011		2010		2011	2010	Target Allocation
Equity securities:
US		51%		46%	43%	37%	15% - 35%
International		31%		31%	N/A	N/A	N/A
Debt securities:
US		48%		53%	54%	59%	55% - 75%
International		67%		67%	N/A	N/A	N/A
Cash and cash equivalents:
US		1%		1%	3%	4%	0% - 20%
International		2%		2%	N/A	N/A	N/A

As of February 28, 2011, the investment policy for the U.S. pension plans targets an approximately even distribution between equity securities and debt securities with a minimal level of cash maintained in order to meet obligations as they come due. The investment policy for the international pension plans targets an approximately 30/60/10 distribution between equity securities, debt securities and cash and cash equivalents.

The investment policy for the postretirement benefit plan targets a distribution among equity securities, debt securities and cash and cash equivalents as noted above. All investments are actively managed, with debt securities averaging 2.5 years to maturity with a credit rating of ‘A’ or better. This policy is subject to review and change.

The following table summarizes the fair value of the defined benefit pension plan assets at February 28, 2011:

	Fair value at February 28, 2011		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
U.S. plans:
Short-term investments	$	689	$	689	$	-
Equity securities		42,776		-		42,776
Fixed-income funds		40,717		-		40,717
International plans:
Short-term investments		639		639		-
Equity securities		7,191		-		7,191
Fixed-income funds		15,869		-		15,869
Total:	$	107,881	$	1,328	$	106,553

The following table summarizes the fair value of the defined benefit pension plan assets at February 28, 2010:

	Fair value at February 28, 2010		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
U.S. plans:
Short-term investments	$	683	$	683	$	-
Equity securities		38,079		-		38,079
Fixed-income funds		43,073		-		43,073
International plans:
Short-term investments		241		241		-
Equity securities		6,487		-		6,487
Fixed-income funds		13,529		-		13,529
Total:	$	102,092	$	924	$	101,168

The following table summarizes the fair value of the postretirement benefit plan assets at February 28, 2011:

	Fair value at February 28, 2011		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Short-term investments	$	1,176	$	1,176	$	-
Equity securities		29,229		29,229		-
Fixed-income funds		36,530		-		36,530
Total:	$	66,935	$	30,405	$	36,530

The following table summarizes the fair value of the postretirement benefit plan assets at February 28, 2010:

	Fair value at February 28, 2010		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Short-term investments	$	2,565	$	2,565	$	-
Equity securities		25,035		25,035		-
Fixed-income funds		39,328		-		39,328
Total:	$	66,928	$	27,600	$	39,328

Short-term investments: Short-term investments are valued at the closing price on the active market based on exchange rate to the United States dollar.

Equity securities: The fair value of common / collective trust funds are determined based on the quoted prices of the underlying investments. Common stock is valued at the closing price reported on the active market on which the individual securities are traded.

Fixed-income funds: The fair value of common / collective trust funds are determined based on the quoted prices of the underlying investments. Fixed income funds, which primarily consist of corporate and government bonds, are valued using evaluated prices, such as dealer quotes, available trade information, spreads, bids and offers, prepayment speeds, U.S. Treasury curves and interest rate movements, provided by a pricing vendor.

Although the Corporation does not anticipate that contributions to the Gibson Retirement Plan will be required in 2012, it may make contributions in excess of the legally required minimum contribution level. Any voluntary contributions by the Corporation are not expected to exceed deductible limits in accordance with Internal Revenue Service (“IRS”) regulations.

Based on historic patterns and currently scheduled benefit payments, the Corporation expects to contribute $2,196 to the Supplemental Executive Retirement Plan in 2012. The plan is a nonqualified and unfunded plan, and annual contributions, which are equal to benefit payments, are made from the Corporation’s general funds.

In addition, the Corporation does not anticipate contributing to the postretirement benefit plan in 2012.

The benefits expected to be paid out are as follows:

			Postretirement Benefits
	Pension Plans		Excluding Effect of Medicare Part D Subsidy		Including Effect of Medicare Part D Subsidy
2012	$	11,131	$	5,289	$	4,529
2013		11,334		5,609		4,792
2014		11,392		5,826		4,874
2015		11,317		6,085		5,030
2016		11,784		6,305		6,059
2017 – 2021		57,969		33,717		32,433