Employer Sponsored Benefit Plans

As of June 30, 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 were made in July 2014 and paid from pension plan assets and will be accounted for during the third quarter of 2014. During the third quarter of 2014, the Company expects to incur a non-cash settlement charge of $4.9 million (see subsequent event footnote).

The Company expects to contribute approximately $4.2 million in cash to its domestic pension plan in 2014. Contributions of $0.4 million were made during the second quarter of 2014 and $3.4 million were made for the six months ended June 30, 2014. Contributions of $0.5 million were made during the second quarter of 2013 and $0.6 million were made during the six months ended June 30, 2013.

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 June 30, 2014 and 2013:



	Quarter Ended June 30,						Six Months Ended June 30,
In thousands	2014			2013			2014			2013
Components of net periodic benefit cost
Interest cost	$	665		$	614		$	1,331		$	1,227
Expected return on assets	(793		)	(673		)	(1,587		)	(1,346		)
Amortization of actuarial loss	180			267			360			534
Net periodic benefit cost	$	52		$	208		$	104		$	415