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 $7,536, $9,401 and $9,759 for 2013, 2012 and 2011, respectively. In addition, the Corporation matches a portion of employee 401(k) contributions. The Corporation’s matching contributions were $6,273, $5,976 and $4,875 for 2013, 2012 and 2011, respectively.

The Corporation also has defined contribution plans that cover certain employees in the United Kingdom. Under these plans, the employees contribute to the plans and the Corporation matches a portion of the employee contributions. The Corporation’s matching contributions were $1,970, $2,012 and $1,226 for 2013, 2012 and 2011, respectively.

The Corporation also participates in a multiemployer pension plan covering certain domestic employees who are part of a collective bargaining agreement. Total pension expense for the multiemployer plan, representing contributions to the plan, was $544, $513 and $467 in 2013, 2012 and 2011, 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 generally funds these deferred compensation liabilities by making contributions to a rabbi trust. On December 8, 2011, the Corporation froze the deferred compensation plans. Accordingly, participants are no longer permitted to make new deferral elections, although deferral elections previously made will continue to be honored and amounts already deferred may be re-deferred in accordance with deferred compensation plans. In accordance with ASC Topic 710-10-25, “Compensation – Recognition – Deferred Compensation – Rabbi Trusts,” 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, 2013 with a cost of $3,143 compared to approximately 0.2 million common shares with a cost of $2,772 at February 29, 2012.

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 2013 or 2012. The Gibson Retirement Plan was underfunded at February 28, 2013 and February 29, 2012.

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.

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 2011 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.

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


	Pension Plans						Postretirement Benefits
	2013			2012			2013			2012
Change in benefit obligation:
Benefit obligation at beginning of year	$	184,344		$	170,160		$	82,344		$	91,035
Service cost		1,369			1,106			684			726
Interest cost		7,394			8,353			2,841			3,929
Participant contributions		22			29			3,963			4,585
Retiree drug subsidy payments		—			—			822			1,072
Plan amendments		232			924			—			—
Actuarial loss (gain)		6,970			15,310			(15,880	)		(10,726	)
Benefit payments		(11,035	)		(11,036	)		(7,322	)		(8,277	)
Currency exchange rate changes		(1,150	)		(502	)		—			—

Benefit obligation at end of year		188,146			184,344			67,452			82,344
Change in plan assets:
Fair value of plan assets at beginning of year		106,341			107,881			57,563			66,935
Actual return on plan assets		7,774			7,172			1,319			(1,301	)
Employer contributions		2,424			2,736			(3,729	)		(4,379	)
Participant contributions		22			29			3,963			4,585
Benefit payments		(11,035	)		(11,036	)		(7,322	)		(8,277	)
Currency exchange rate changes		(1,005	)		(441	)		—			—

Fair value of plan assets at end of year		104,521			106,341			51,794			57,563

Funded status at end of year	$	(83,625	)	$	(78,003	)	$	(15,658	)	$	(24,781	)

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


	Pension Plans						Postretirement Benefits
	2013			2012			2013			2012
Accrued compensation and benefits	$	(2,267	)	$	(2,257	)	$	—		$	—
Other liabilities		(81,358	)		(75,746	)		(15,658	)		(24,781	)

Net amount recognized	$	(83,625	)	$	(78,003	)	$	(15,658	)	$	(24,781	)

Amounts recognized in accumulated other comprehensive loss (income):
Net actuarial loss (gain)	$	71,385		$	69,632		$	(16,397	)	$	(3,081	)
Net prior service cost (credit)		1,522			1,531			(6,780	)		(8,855	)
Net transition obligation		30			37			—			—

Accumulated other comprehensive loss (income)	$	72,937		$	71,200		$	(23,177	)	$	(11,936	)

For the defined benefit pension plans, the estimated net loss, prior service cost and transition obligation that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year are approximately $3,610, $195 and $6, respectively. For the postretirement benefit plan, the estimated net gain and prior service credit that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are approximately ($870) and ($1,300), respectively.

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


	Pension Plans						Postretirement Benefits
	2013			2012			2013			2012
Weighted average discount rate used to determine:
Benefit obligations at measurement date
U.S.		3.75-4.00	%		4.00-4.25	%		3.75	%		4.00	%
International		3.90	%		4.45	%		N/A			N/A
Net periodic benefit cost
U.S.		4.00-4.25	%		5.25	%		4.00	%		5.50	%
International		4.45	%		5.15	%		N/A			N/A
Expected long-term return on plan assets:
U.S.		6.75	%		7.00	%		6.50	%		7.00	%
International		5.25	%		5.50	%		N/A			N/A
Rate of compensation increase:
U.S.		6.50	%		6.50	%		N/A			N/A
International		3.00	%		3.00	%		N/A			N/A
Health care cost trend rates:
For year following February 28 or 29		N/A			N/A			9.00	%		9.50	%
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			2021

For 2013, 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, current mix of investments and historical return for the asset classes.

For 2013, the Corporation assumed a long-term asset rate of return of 6.50% to calculate the expected return for the postretirement benefit plan. In developing the 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.


	2013			2012
Effect of a 1% increase in health care cost trend rate on:
Service cost plus interest cost	$	140		$	210
Accumulated postretirement benefit obligation		2,304			3,854
Effect of a 1% decrease in health care cost trend rate on:
Service cost plus interest cost		(122	)		(184	)
Accumulated postretirement benefit obligation		(2,011	)		(3,332	)

The following table presents selected pension plan information:


	2013		2012
For all pension plans:
Accumulated benefit obligation	$	180,558	$	177,489
For pension plans that are not fully funded:
Projected benefit obligation		187,855		184,041
Accumulated benefit obligation		180,267		177,186
Fair value of plan assets		104,230		106,038

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


	2013			2012			2011
Components of net periodic benefit cost:
Service cost	$	1,369		$	1,106		$	957
Interest cost		7,394			8,353			8,757
Expected return on plan assets		(6,473	)		(6,858	)		(6,588	)
Amortization of transition obligation		7			6			6
Amortization of prior service cost		240			240			178
Amortization of actuarial loss		3,514			2,126			133
Settlements		—			—			(3	)

Net periodic benefit cost		6,051			4,973			3,440
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Actuarial loss		5,657			14,996			1,175
Prior service cost		231			924			198
Amortization of prior service cost		(240	)		(240	)		(178	)
Amortization of actuarial loss		(3,514	)		(2,126	)		(133	)
Amortization of transition obligation		(7	)		(6	)		(6	)
Settlements		—			—			3

Total recognized in other comprehensive income		2,127			13,548			1,059

Total recognized in net periodic benefit cost and other comprehensive income	$	8,178		$	18,521		$	4,499

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


	2013			2012			2011
Components of net periodic benefit cost:
Service cost	$	684		$	726		$	2,290
Interest cost		2,841			3,929			6,014
Expected return on plan assets		(3,430	)		(4,310	)		(4,503	)
Amortization of prior service credit		(2,075	)		(2,461	)		(7,712	)
Amortization of actuarial (gain) loss		(452	)		(766	)		1,078

Net periodic benefit cost		(2,432	)		(2,882	)		(2,833	)
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Actuarial gain		(13,768	)		(5,115	)		(21,265	)
Prior service credit added during the year		—			—			(7,263	)
Amortization of actuarial gain (loss)		452			766			(1,078	)
Amortization of prior service credit		2,075			2,461			7,712

Total recognized in other comprehensive income		(11,241	)		(1,888	)		(21,894	)

Total recognized in net periodic benefit cost and other comprehensive income	$	(13,673	)	$	(4,770	)	$	(24,727	)

At February 28, 2013 and February 29, 2012, the assets of the plans are held in trust and allocated as follows:


	Pension Plans						Postretirement Benefits
	2013			2012			2013			2012			Target Allocation
Equity securities:
U.S.		51	%		51	%		27	%		30	%		15%—30	%
International		33	%		31	%		N/A			N/A			N/A
Debt securities:
U.S.		48	%		48	%		69	%		69	%		65%—85	%
International		64	%		64	%		N/A			N/A			N/A
Cash and cash equivalents:
U.S.		1	%		1	%		4	%		1	%		0%—15	%
International		3	%		5	%		N/A			N/A			N/A

As of February 28, 2013, 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 30/65/5 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 approximately 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, 2013:


	Fair value at February 28, 2013		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
U.S. plans:
Short-term investments	$	713	$	—	$	713
Equity securities (collective funds)		41,106		—		41,106
Fixed-income funds		38,223		—		38,223
International plans:
Short-term investments		651		—		651
Equity securities (collective funds)		8,193		—		8,193
Fixed-income funds		15,635		—		15,635

Total:	$	104,521	$	—	$	104,521

The following table summarizes the fair value of the defined benefit pension plan assets at February 29, 2012:


	Fair value at February 29, 2012		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
U.S. plans:
Short-term investments	$	710	$	—	$	710
Equity securities (collective funds)		41,322		—		41,322
Fixed-income funds		39,510		—		39,510
International plans:
Short-term investments		1,163		—		1,163
Equity securities (collective funds)		7,753		—		7,753
Fixed-income funds		15,883		—		15,883

Total:	$	106,341	$	—	$	106,341

The following table summarizes the fair value of the postretirement benefit plan assets at February 28, 2013:


	Fair value at February 28, 2013		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Short-term investments	$	1,706	$	—	$	1,706
Equity securities		14,195		14,195		—
Fixed-income funds		35,893		—		35,893

Total:	$	51,794	$	14,195	$	37,599

The following table summarizes the fair value of the postretirement benefit plan assets at February 29, 2012:


	Fair value at February 29, 2012		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Short-term investments	$	849	$	—	$	849
Equity securities		17,245		17,245		—
Fixed-income funds		39,469		—		39,469

Total:	$	57,563	$	17,245	$	40,318

Short-term investments: Short-term investments, which are primarily money market funds, are valued based on exit prices or net asset values. These investments are generally classified as Level 2 since the valuations use observable inputs.

Equity securities: The fair value of collective funds is valued at the closing net asset value or at the executed exchange trade prices. Pricing for these securities is typically provided by a recognized pricing service. Generally, these collective fund investments are classified as Level 2 because the valuations are based on observable inputs. Common stock and exchange traded mutual funds are valued at the closing price reported on the active market on which such securities are traded. These investments are classified as Level 1 because a quoted price in an active market is available.

Fixed-income funds: Fixed-income funds primarily consist of U.S. and foreign-issued corporate notes and bonds, convertible bonds, asset-backed securities, government agency obligations, government obligations, municipal bonds and interest-bearing commercial paper. The fair value of these securities is valued using evaluated prices provided by a recognized pricing service. Because the evaluated prices are based on observable inputs, such as dealer quotes, available trade information, spread, bids and offers, prepayment speeds, U.S. Treasury curves and interest rate movements, securities in this category are classified as Level 2.

Although the Corporation does not anticipate that contributions to the Gibson Retirement Plan will be required in 2014, 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 approximately $2,100 to the Supplemental Executive Retirement Plan in 2014 which represents the expected benefit payment for that period. 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 expects to contribute $250 to the postretirement benefit plan in 2014.

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
2014	$	11,235	$	4,519	$	3,832
2015		11,507		4,528		3,915
2016		11,565		4,534		3,864
2017		11,567		4,489		4,323
2018		11,566		4,464		4,311
2019 – 2023		56,629		21,737		20,973