Employer Sponsored Benefit Plans

As of March 31, 2014, the Company maintains a defined benefit pension plan that covers certain domestic Lydall employees (“domestic pension plan”) that is closed to new employees and benefits are no longer accruing. The domestic pension plan is noncontributory and benefits are based on either years of service or eligible compensation paid while a participant is in the plan. The Company’s funding policy is to fund not less than the ERISA minimum funding standard and not more than the maximum amount that can be deducted for federal income tax purposes. On April 1, 2014, the Company offered a voluntary lump sum payment option to certain former U.S. employees who are vested defined benefit plan participants not currently receiving monthly payments. The voluntary lump sum payments are expected to be accounted for during the third quarter of 2014, and will be paid from pension plan assets. During the third quarter of 2014, the Company expects to incur a non-cash settlement charge of approximately $3.0 million to $6.0 million depending on the discount rate and actual elections made by participants. The Company expects to contribute approximately $4.2 million in cash to its domestic pension plan in 2014. Contributions of $3.0 million and $0.1 million were made during the first quarters of 2014 and 2013, respectively.

The following is a summary of the components of net periodic benefit cost, which is recorded primarily within selling, product development and administrative expenses, for the domestic pension plan for the quarters ended March 31, 2014 and 2013:

	Quarter Ended
	March 31,
In thousands	2014		2013
Components of net periodic benefit cost
Interest cost	$	666	$	613
Expected return on assets		(794)		(673)
Amortization of actuarial loss		180		267
Net periodic benefit cost	$	52	$	207