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Employee Benefit Plans
12 Months Ended
Dec. 31, 2015
Compensation and Retirement Disclosure [Abstract]  
Employee Benefit Plans [Text Block]
Employee Benefit Plans

The company maintains an unfunded Arrow supplemental executive retirement plan ("SERP") under which the company will pay supplemental pension benefits to certain employees upon retirement. As of December 31, 2015, there were 8 current and 20 former corporate officers participating in this plan. The Board determines those employees who are eligible to participate in the Arrow SERP.

The Arrow SERP, as amended, provides for the pension benefits to be based on a percentage of average final compensation, based on years of participation in the Arrow SERP. The Arrow SERP permits early retirement, with payments at a reduced rate, based on age and years of service subject to a minimum retirement age of 55. Participants whose accrued rights under the Arrow SERP, prior to the 2002 amendment, which were adversely affected by the amendment, will continue to be entitled to such greater rights.

Additionally, as part of the company's acquisition of Wyle in 2000, Wyle provided retirement benefits for certain employees under a defined benefit plan. Benefits under this plan were frozen as of December 31, 2000.


The company uses a December 31 measurement date for the Arrow SERP and the Wyle defined benefit plan. Pension information for the year ended December 31 is as follows:
 
Arrow SERP
 
Wyle Defined Benefit Plan
 
2015
 
2014
 
2015
 
2014
Accumulated benefit obligation
$
83,310

 
$
76,261

 
$
129,029

 
$
136,298

Changes in projected benefit obligation:
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year
$
85,114

 
$
75,312

 
$
136,298

 
$
126,481

Service cost
1,669

 
1,330

 

 

Interest cost
3,484

 
3,280

 
5,318

 
5,491

Actuarial loss (gain)
2,220

 
8,668

 
(6,571
)
 
10,206

Benefits paid
(3,758
)
 
(3,476
)
 
(6,016
)
 
(5,880
)
Projected benefit obligation at end of year
$
88,729

 
$
85,114

 
$
129,029

 
$
136,298

Changes in plan assets:
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
$

 
$

 
$
105,598

 
$
104,714

Actual return on plan assets

 

 
2,277

 
2,264

Company contributions

 

 

 
4,500

Benefits paid

 

 
(6,016
)
 
(5,880
)
Fair value of plan assets at end of year
$

 
$

 
$
101,859

 
$
105,598

Funded status
$
(88,729
)
 
$
(85,114
)
 
$
(27,170
)
 
$
(30,700
)
Amounts recognized in the company's consolidated balance sheets:
 
 
 
 
 
 
 
Current liabilities
$
(3,816
)
 
$
(3,700
)
 
$

 
$

Noncurrent liabilities
(84,913
)
 
(81,414
)
 
(27,170
)
 
(30,700
)
Net liabilities at end of year
$
(88,729
)
 
$
(85,114
)
 
$
(27,170
)
 
$
(30,700
)
Components of net periodic pension cost:
 
 
 
 
 
 
 
Service cost
$
1,669

 
$
1,330

 
$

 
$

Interest cost
3,484

 
3,280

 
5,318

 
5,491

Expected return on plan assets

 

 
(7,159
)
 
(7,066
)
Amortization of net loss
3,615

 
1,997

 
1,668

 
1,270

Amortization of prior service cost
25

 
42

 

 

Net periodic pension cost
$
8,793

 
$
6,649

 
$
(173
)
 
$
(305
)
Weighted-average assumptions used to determine benefit obligation:
 
 
 
 
 
 
 
Discount rate
4.00
%
 
4.00
%
 
4.25
%
 
4.00
%
Rate of compensation increase
5.00
%
 
5.00
%
 
N/A

 
N/A

Expected return on plan assets
N/A

 
N/A

 
6.25
%
 
6.75
%
Weighted-average assumptions used to determine net periodic pension cost:
 
 
 
 
 
 
 
Discount rate
4.00
%
 
4.50
%
 
4.00
%
 
4.50
%
Rate of compensation increase
5.00
%
 
5.00
%
 
N/A

 
N/A

Expected return on plan assets
N/A

 
N/A

 
6.75
%
 
6.75
%


The amounts reported for net periodic pension cost and the respective benefit obligation amounts are dependent upon the actuarial assumptions used. The company reviews historical trends, future expectations, current market conditions, and external data to determine the assumptions. The discount rate represents the market rate for a high-quality corporate bond. The rate of compensation increase is determined by the company, based upon its long-term plans for such increases. The expected return on plan assets is based on current and expected asset allocations, historical trends, and projected returns on those assets. The actuarial assumptions used to determine the net periodic pension cost are based upon the prior year's assumptions used to determine the benefit obligation.

Benefit payments are expected to be paid as follows:

 
Arrow SERP
 
Wyle Defined Benefit Plan
2016
$
3,885

 
$
6,918

2017
3,853

 
7,019

2018
4,365

 
7,073

2019
5,729

 
7,249

2020
5,689

 
7,429

2021-2025
29,531

 
38,759



The company makes contributions to the Wyle defined benefit plan so that minimum contribution requirements, as determined by government regulations, are met. The company made contributions of $0 and $4,500 in 2015 and 2014, respectively. The company does not expect to make contributions in 2016.

The fair values of the company's pension plan assets for the Wyle defined benefit plan at December 31, 2015, utilizing the fair value hierarchy discussed in Note 7, are as follows:

 
Level 1
 
Level 2
 
Level 3
 
Total
Equities:
 
 
 
 
 
 
 
U.S. common stocks
$
40,757

 
$

 
$

 
$
40,757

International mutual funds
14,750

 

 

 
14,750

Index mutual funds
13,812

 

 

 
13,812

Fixed Income:
 
 
 
 
 
 
 
Mutual funds
29,345

 

 

 
29,345

Insurance contracts

 
3,195

 

 
3,195

Total
$
98,664

 
$
3,195

 
$

 
$
101,859


The fair values of the company's pension plan assets for the Wyle defined benefit plan at December 31, 2014, utilizing the fair value hierarchy discussed in Note 7, are as follows:

 
Level 1
 
Level 2
 
Level 3
 
Total
Equities:
 
 
 
 
 
 
 
U.S. common stocks
$
44,100

 
$

 
$

 
$
44,100

International mutual funds
14,873

 

 

 
14,873

Index mutual funds
16,477

 

 

 
16,477

Fixed Income:
 
 
 
 
 
 
 
Mutual funds
29,134

 

 

 
29,134

Insurance contracts

 
1,014

 

 
1,014

Total
$
104,584

 
$
1,014

 
$

 
$
105,598



The investment portfolio contains a diversified blend of common stocks, bonds, cash equivalents, and other investments, which may reflect varying rates of return. The investments are further diversified within each asset classification. The portfolio diversification provides protection against a single security or class of securities having a disproportionate impact on aggregate performance. The long-term target allocations for plan assets are 65% in equities and 35% in fixed income, although the actual plan asset allocations may be within a range around these targets. The actual asset allocations are reviewed and rebalanced on a periodic basis to maintain the target allocations.

Comprehensive Income Items

In 2015, 2014, and 2013, actuarial (gains) losses of $185, $14,901, and $(7,615), respectively, were recognized in comprehensive income, net of related taxes, related to the company's defined benefit plans. In 2015, 2014, and 2013, the following amounts were recognized as a reclassification adjustment of comprehensive income, net of related taxes, as a result of being recognized in net periodic pension cost: prior service cost of $15, $19, and $19, respectively and an actuarial loss of $3,282, $1,994, and $2,854, respectively.

Included in accumulated other comprehensive income (loss) at December 31, 2015 and 2014 are the following amounts, net of related taxes, that have not yet been recognized in net periodic pension cost: unrecognized prior service costs (credits) of $0 and $(12), respectively, and unrecognized actuarial losses of $46,725 and $49,491, respectively.

The prior service cost and actuarial loss included in accumulated other comprehensive income (loss), net of related taxes, which are expected to be recognized in net periodic pension cost for the year ended December 31, 2016 are $0 and $3,123, respectively.

Defined Contribution Plan

The company has defined contribution plans for eligible employees, which qualify under Section 401(k) of the Internal Revenue Code. The company's contribution to the plans, which are based on a specified percentage of employee contributions, amounted to $13,604, $12,584, and $14,102 in 2015, 2014, and 2013, respectively. The company made discretionary contributions to the company's defined benefit 401(k) plan, which amounted to $7,151, $7,139, and $7,403 in 2015, 2014, and 2013, respectively. Certain international subsidiaries maintain separate defined contribution plans for their employees and made contributions thereunder, which amounted to $26,945, $27,284, and $26,038 in 2015, 2014, and 2013, respectively.