Note 7. RETIREMENT BENEFIT PLANS

12 Months Ended

Dec. 31, 2012

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note 7.   RETIREMENT BENEFIT PLANS

Pension and Other Postretirement Plans

Certain subsidiaries have pension plans covering substantially all of their employees.  These plans are noncontributory, defined benefit pension plans.  The benefits to be paid under these plans are generally based on employees’ retirement age and years of service.  The Company’s funding policies, subject to the minimum funding requirements of employee benefit and tax laws, are to contribute such amounts as determined on an actuarial basis to provide the plans with assets sufficient to meet the benefit obligations.  Plan assets consist primarily of fixed income investments, corporate equities and government securities.  The Company also provides certain health care and life insurance benefits for some of its retired employees.  The postretirement health plans are unfunded.

The Company recognizes the overfunded or underfunded positions of defined benefit postretirement plans as an asset or liability in its Consolidated Balance Sheets and recognizes as a component of other comprehensive loss the gains or losses and prior service costs or credits that arise during the period but were not recognized as components of net periodic benefit cost.

The Company expects to contribute $96,000 to the pension plans in fiscal 2013.  The Company uses a December 31 measurement date for its pension and other postretirement benefit plans.  The fair value of plan assets was determined by using quoted prices in active markets for identical assets (Level 1 inputs per the fair value hierarchy).  The fair value and allocation of pension plan assets is as follows (amounts in thousands):

	December 31,
	2012					2011
	Plan Assets					Plan Assets
Asset Category	Fair Value		Percentage			Fair Value		Percentage
Equity Securities	$	550		58	%	$	472		49	%
Fixed Income Securities		273		29	%		444		47	%
Money Market		103		11	%		-		0	%
Other		15		2	%		39		4	%
	$	941		100	%	$	955		100	%

The following table presents the funded status of the Company’s pension and postretirement benefit plans for the years ended December 31, 2012 and 2011:

	Pension Benefits						Other Benefits
	2012			2011			2012			2011
				(Amounts in Thousands)
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	1,395		$	1,352		$	2,699		$	1,782
Interest cost		64			69			123			128
Actuarial loss (gain)		122			73			214			1,049
Benefits paid		(127	)		(99	)		(267	)		(260	)
Projected benefit obligation at end of year	$	1,454		$	1,395		$	2,769		$	2,699
Change in plan assets:
Fair value of plan assets at beginning of year	$	955		$	931		$	-		$	-
Actuarial return on plan assets		46			46			-			-
Employer contributions		67			77			266			260
Benefits paid		(127	)		(99	)		(266	)		(260	)
Fair value of plan assets at end of year	$	941		$	955		$	-		$	-
Funded status at end of year	$	(513	)	$	(440	)	$	(2,769	)	$	(2,699	)
Amounts recognized in Consolidated Balance Sheets:
Other non-current assets	$	(36	)	$	(24	)	$	-		$	-
Accrued expenses		-			-			231			241
Other liabilities		549			464			2,538			2,458
Total	$	513		$	440		$	2,769		$	2,699

Accumulated other comprehensive loss at December 31, 2012 and 2011 included unrecognized actuarial losses related to pension benefits of $0.8 million that had not yet been recognized in net periodic pension cost.  Accumulated other comprehensive loss at December 31, 2012 included unrecognized actuarial losses related to other benefits of $1.2 million that had not yet been recognized in net periodic pension cost.  The actuarial loss included in accumulated other comprehensive loss and expected to be recognized in net periodic pension cost during the fiscal year ending December 31, 2013 is $46,000 for pension benefits and $58,000 for other benefits.  The accumulated benefit obligation for all pension plans was $1.5 million and $1.4 million at December 31, 2012 and 2011, respectively.

The following table lists the projected benefit obligation (“PBO”), accumulated benefit obligation (“ABO”) and fair value of plan assets for the pension plans with PBOs and ABOs in excess of plan assets at December 31, 2012 and 2011 (amounts in thousands):

	2012				2011
	Projected benefit  obligation exceeds plan assets		Accumulated  benefit obligation exceeds plan assets		Projected benefit obligation exceeds plan assets		Accumulated benefit obligation  exceeds plan  assets
Projected benefit obligation	$	1,284	$	1,284	$	1,206	$	1,206
Accumulated benefit obligation	$	1,284	$	1,284	$	1,206	$	1,206
Fair value of plan assets	$	735	$	735	$	742	$	742

The following table presents the assumptions used to determine the Company’s benefit obligations at December 31, 2012 and 2011 along with sensitivity of the Company’s plans to potential changes in certain key assumptions (dollars in thousands):

	Pension Benefits						Other Benefits
	2012			2011			2012			2011
Assumptions as of December 31:
Discount rates		4.80	%		5.25	%		4.80	%		5.25	%
Expected long-term return rate on assets		6.00	%		7.00	%		N/A			N/A
Assumed rates of compensation increases		N/A			N/A			N/A			N/A
Medical trend rate pre-65 (initial)		N/A			N/A			7.50	%		7.00	%
Medical trend rate post-65 (initial)		N/A			N/A			7.50	%		8.00	%
Medical trend rate (ultimate)		N/A			N/A			5.00	%		5.00	%
Years to ultimate rate pre-65		N/A			N/A			8			5
Years to ultimate rate post-65		N/A			N/A			8			7
Impact of one-percent increase in medical trend rate:
Increase in accumulated postretirement benefit obligation							$	287		$	263
Increase in service cost and interest cost							$	12		$	11
Impact of one-percent decrease in medical trend rate:
Decrease in accumulated postretirement benefit obligation							$	246		$	227
Decrease in service cost and interest cost							$	10		$	10

The discount rate was based on several factors comparing Moody’s AA Corporate rate and actuarial-based yield curves.  In determining the expected return on plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance.  In addition, the Company may consult with and consider the opinions of financial and other professionals in developing appropriate return benchmarks.

The following table presents components of the net periodic benefit cost for the Company’s pension and postretirement benefit plans during 2012 and 2011 (amounts in thousands):

	Pension Benefits						Other Benefits
	2012			2011			2012		2011
Interest cost	$	64		$	70		$	123	$	128
Expected return on plan assets		(56	)		(64	)		-		-
Amortization of net loss		48			48			44		32
Net periodic benefit cost	$	56		$	54		$	167	$	160

The following table presents estimated future benefit payments (amounts in thousands):

	Pension Benefits		Other Benefits
2013	$	35	$	230
2014		43		231
2015		315		232
2016		38		205
2017		80		195
Thereafter		398		907
	$	909	$	2,000

In addition to the plans described above, in 1993 the Company’s Board of Directors approved a retirement compensation program for certain officers and employees of the Company and a retirement compensation arrangement for the Company’s then Chairman and Chief Executive Officer.  The Board approved a total of $3.5 million to fund such plans.  Participants were allowed to defer 50% of their annual compensation as well as be eligible to participate in a profit sharing arrangement in which they vest over a five year period.  In 2001, the Company limited participation to existing participants as well as discontinued any profit sharing arrangements.  Participants can withdraw from the plan upon the latter of age 62 or termination from the Company.  The obligation created by this plan is partially funded.  Assets are held in a rabbi trust invested in various mutual funds.  Gains and/or losses are earned by the participant.  For the unfunded portion of the obligation, interest was accrued at 4% each year until March 2011, when interest earnings were suspended by the Company.  The Company had $0.4 million and $0.5 million recorded in accrued compensation and other liabilities at December 31, 2012 and 2011, respectively, for this obligation.

401(k) Plans

The Company offers its employees the opportunity to voluntarily participate in one of two 401(k) plans administered by the Company.  The Company makes matching and other contributions in accordance with the provisions of the plans and, under certain provisions, at the discretion of the Company.    The Company suspended matching and other contributions on January 1, 2011 and will evaluate on an annual basis whether such contributions will be reinstated.