[7] Employee Benefit Plans

Defined Benefit Pension Plan

The Company has a defined benefit pension plan that covers certain of its executive, professional, administrative and clerical employees, subject to certain specified service requirements. The plan is noncontributory and benefits are based on an employee’s years of service and “final average earnings”, as defined. The plan provides reduced benefits for early retirement and takes into account offsets for social security benefits. The Company also has an unfunded supplemental retirement plan (“Benefit Equalization Plan”) for certain employees whose benefits under the defined benefit pension plan were reduced because of compensation limitations under federal tax laws. Effective June 1, 2004, all benefits accruals under the Company’s pension plan and Benefit Equalization Plan were frozen; however, the current vested benefit was preserved. Pension disclosure as presented below includes aggregated amounts for both of the Company’s plans, except where otherwise indicated.

The Company historically has used the date of its fiscal year-end as its measurement date to determine the funded status of the plan.

A summary of net periodic benefit cost is as follows:



	Year ended December 31,
	2014			2013			2012
	(dollars in thousands)
Interest cost on projected benefit obligation	$	4,144		$	3,710		$	4,011
Return on plan assets		(4,797)			(4,509)			(4,783)
Recognized net actuarial losses		4,385			6,330			5,487
Net periodic benefit cost	$	3,732		$	5,531		$	4,715

Actuarial assumptions used to determine net cost:
Discount rate		4.47%	%		3.58%	%		4.10%	%
Expected return on assets		6.75%	%		6.75%	%		7.00%	%
Rate of increase in compensation		n.a.			n.a.			n.a.

The target asset allocation for the Company’s pension plan by asset category for 2014 and the actual asset allocation at December 31, 2014 and 2013 by asset category are as follows:



	Percentage of Plan Assets at December 31,
	Target
	Allocation
Asset Category	2015		2014		2013
Cash	5.0	%	6.2	%	5.2	%
Equity securities:
Domestic	65.0		62.9		63.4
International	25.0		25.9		25.9
Fixed income securities	5.0		5.0		5.5
Total	100	%	100	%	100	%

The Company’s target allocation for 2014 will include 65.0% domestic equity securities, 25.0% international equity securities, and 5.0% fixed income securities.

As of December 31, 2014 and 2013, plan assets included approximately $45.5 million and $44.7 million, respectively, of investments in hedge funds which do not have readily determinable fair values. The underlying holdings of the funds are comprised of a combination of assets for which the estimate of fair value is determined using information provided by fund managers.

The Company expects to contribute approximately $2.3 million to its defined benefit pension plan in 2015. Future benefit payments under the plans are estimated as follows:



Year ended December 31,	(in thousands)
2015	$	6,288
2016		6,359
2017		6,392
2018		6,557
2019		6,644
Thereafter		33,459
	$	65,699

The following tables provide a reconciliation of the changes in the fair value of plan assets and plan benefit obligations during 2014 and 2013, and a summary of the funded status as of December 31, 2014 and 2013:



	Year ended December 31,
	2014		2013
	(in thousands)
Change in Fair Value of Plan Assets
Balance at beginning of year	$	72,617	$	66,137
Actual return on plan assets		3,711		8,545
Company contribution		5,213		3,478
Benefit payments		(5,585)		(5,543)
Balance at end of year	$	75,956	$	72,617



	Year ended December 31,
	2014		2013
	(in thousands)
Change in Benefit Obligations
Balance at beginning of year	$	95,178	$	105,320
Interest cost		4,144		3,710
Assumption change loss (gain)		17,054		(9,627)
Actuarial loss		132		1,318
Benefit payments		(5,585)		(5,543)
Balance at end of year	$	110,923	$	95,178



	At December 31,
	2014		2013
	(in thousands)
Funded Status
Funded status at December 31,	$	(34,967)	$	(22,561)

Amounts recognized in Consolidated Balance Sheets consist of:
Current liabilities	$	(218)	$	(194)
Long-term liabilities		(34,749)		(22,367)

Net amount recognized in Consolidated Balance Sheets	$	(34,967)	$	(22,561)



	Year ended December 31,
	2014		2013
	(in thousands)
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive loss:
Net actuarial loss	$	(56,147)	$	(42,261)
Accumulated other comprehensive loss		(56,147)		(42,261)
Cumulative Company contributions in excess of net periodic benefit cost		21,180		19,700
Net amount recognized in Consolidated Balance Sheets	$	(34,967)	$	(22,561)

The net actuarial gain arising during the period, netted against the amortization of the previously existing actuarial loss resulted in a net other comprehensive loss of $13.9 million in 2014, and a net comprehensive gain of $18.7 million in 2013 and $1.7 million in 2012. Other comprehensive loss attributable to a change in the unfunded projected benefit obligation amounted to a net increase of $59.3 million recognized in prior years. The cumulative net amount of $56.2 million represents the excess of the projected benefit obligations of the Company’s pension plans over the fair value of the plans’ assets as of December 31, 2014, compared to $42.3 million of contributions in excess of the net periodic benefit cost previously recognized. The net amount of $34.9 million is reflected as a liability as of December 31, 2014 with the offset being a reduction in stockholders’ equity. Adjustments to the amount of this pension liability will be recorded in future years, as required, based upon periodic re-evaluation of the funded status of the Company’s pension plans.

The estimated amount of the net accumulated loss that will be amortized from accumulated other comprehensive loss into net period benefit cost in 2014 is $5.8 million.



	Year ended December 31,
	2014		2013
Actuarial assumptions used to determine benefit obligation:
Discount rate	3.75	%	4.47	%
Rate of increase in compensation	n.a.		n.a.
Measurement date	December 31		December 31

The expected long-term rate of return on assets assumption remained at 6.75% for 2013 and 2014. The expected long-term rate of return on assets assumption was developed considering forward looking capital market assumptions and historical return expectations for each asset class assuming the Company’s target asset allocation and full availability of invested assets.

The following table sets forth the plan assets at fair value in accordance with the fair value hierarchy described in Note 2 — Fair Value Measurements:



	Quoted Prices
	in Active
	Markets for		Significant		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs
At December 31, 2014	(Level 1)		(Level 2)		(Level 3)		Total Value
	(in thousands)
Cash and cash equivalents	$	4,693	$	—	$	—	$	4,693
Fixed Income		3,824		—		—		3,824
Equities		7,676		—		—		7,676
Mutual Funds		6,550		—		—		6,550
Equity Partnerships		—		7,723		—		7,723
Hedge Fund Investments:
Cash		1,010		—		—		1,010
Long-Short Equity Fund		—		15,878		12,755		28,633
Event Driven Fund		—		3,471		9,562		13,033
Distressed Credit		—		—		1,320		1,320
Multi-Strategy Fund		—		—		1,494		1,494
Total	$	23,753	$	27,072	$	25,131	$	75,956



	Quoted Prices
	in Active
	Markets for		Significant		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs
At December 31, 2013	(Level 1)		(Level 2)		(Level 3)		Total Value
	(in thousands)
Cash and cash equivalents	$	3,762	$	—	$	—	$	3,762
Fixed Income		4,000		—		—		4,000
Mutual Funds		13,234		—		—		13,234
Equity Partnerships		—		6,876		—		6,876
Hedge Fund Investments:
Cash		527		—		—		527
Long-Short Equity Fund		—		14,566		11,655		26,221
Event Driven Fund		—		5,928		8,752		14,680
Distressed Credit		—		—		1,429		1,429
Multi-Strategy Fund		—		—		1,888		1,888
Total	$	21,523	$	27,370	$	23,724	$	72,617

Fund strategies seek to capitalize on inefficiencies identified across different asset classes or markets. Hedge fund strategy types include long-short, event driven, multi-strategy and distressed credit. Generally the redemption of the Company’s hedge fund investments is subject to certain notice-period requirements and as such the Company has classified these assets as Level 3 assets.

The table below sets forth a summary of changes in the fair value of the Level 3 assets:



	Changes in Fair Value of Level 3 Assets
	Long-
	Short		Event				Multi-
	Equity		Driven		Distressed		Strategy
	Fund			Fund	Credit		Fund		Total
	(in thousands)
Balance, December 31, 2013	$	10,863	$	8,863	$	2,199	$	1,799	$	23,724
Realized gains		—		—		13		3		16
Unrealized gains		843		505		57		59		1,464
Purchases		1,049		16		5		6		1,076
Sales		—		(2,512)		(954)		(373)		(3,839)
Transfer to Level 2 (1)		—		2,690		—		—		2,690
Balance, December 31, 2014	$	12,755	$	9,562	$	1,320	$	1,494	$	25,131

______________

(1)

The transfer of $2.7 million from Level 3 to Level 2 was comprised of certain hedge funds that were moved due to liquidity classifications.



	Changes in Fair Value of Level 3 Assets
	Long-
	Short		Event				Multi-
	Equity		Driven		Distressed		Strategy
	Fund			Fund	Credit		Fund		Total
	(in thousands)
Balance, December 31, 2012	$	9,992	$	7,152	$	2,559	$	1,950	$	21,653
Realized gains		—		—		(7)		(5)		(12)
Unrealized gains		2,971		1,252		158		223		4,604
Purchases		1,343		459		6		9		1,817
Sales		—		—		(517)		(378)		(895)
Transfer to Level 2 (2)		(3,443)		—		—		—		(3,443)
Balance, December 31, 2013	$	10,863	$	8,863	$	2,199	$	1,799	$	23,724

______________

(2)

The transfer of $3.4 million from Level 3 to Level 2 was comprised of certain hedge funds that became redeemable within 90 days from December 31, 2014.

The Company’s plans have benefit obligations in excess of the fair value of the plans’ assets. The following table provides information relating to each of the plans’ benefit obligations compared to the fair value of its assets:



	At December 31, 2014						At December 31, 2013
			Benefit						Benefit
	Pension		Equalization				Pension		Equalization
	Plan		Plan		Total		Plan		Plan		Total
	(in thousands)
Projected benefit obligation	$	107,570	$	3,353	$	110,923	$	91,946	$	3,232	$	95,178
Accumulated benefit obligation	$	107,570	$	3,353	$	110,923	$	91,946	$	3,232	$	95,178
Fair value of plan assets	$	75,956	$	—	$	75,956	$	72,617	$	—	$	72,617

Projected benefit obligation greater than fair value of plan assets	$	31,614	$	3,353	$	34,967	$	19,329	$	3,232	$	22,561

Accumulated benefit obligation greater than fair value of plan assets	$	31,614	$	3,353	$	34,967	$	19,329	$	3,232	$	22,561

Section 401(k) Plans

The Company has several contributory Section 401(k) plans which cover its executive, professional, administrative and clerical employees, subject to certain specified service requirements. The 401(k) expense provision approximated $3.6 million in 2014, $3.8 million in 2013 and $3.8 million in 2012. The Company’s contribution is based on a non-discretionary match of employees’ contributions, as defined.

Cash-Based Compensation Plans

The Company has multiple cash-based compensation plans and a stock-based incentive compensation plan for key employees which are generally based on the Company’s achievement of a certain level of profit. For information on the Company’s stock-based incentive compensation plan, see Note 10 — Stock-Based Compensation.

Multiemployer Plans

The Company also contributes to various multi-employer union retirement plans under collective bargaining agreements which provide retirement benefits for substantially all of its union employees. The Company’s participation in the plans that it considers to be significant for the years ended December 31, 2014 and 2013, is outlined in the tables below. The “EIN/Pension Plan Number” column provides the Employer Identification Number (EIN) and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2014 and 2013 is for the plan’s year-end at December 31, 2013, and December 31, 2012, respectively. The zone status is based on information that the Company received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. The last column lists the expiration date(s) of the collective-bargaining agreement(s) to which the plans are subject. Under the Employee Retirement Income Security Act, a contributor to a multi-employer plan is liable, only upon termination or withdrawal from a plan, for its proportionate share of a plan’s unfunded vested liability. The Company currently has no intention of withdrawing from any of the multiemployer pension plans in which it participates.

Expiration

FIP/RP

Date of

Pension Protections Act

Status

Company Contributions

Collective

EIN/Pension

Zone Status

Pending Or

(amounts in millions)

Surcharge

Bargaining

Pension Fund

Plan Number

2014

2013

Implemented

2014

2013

2012

Imposed

Agreement

Pension, Hospitalization and Benefit Plan of the Electrical Industry - Pension Trust Account

13-6123601 / 001

Green

11.8 (b)

(a)

13.4 (b)

(a)

12.9 (b)

5/8/2016

Steamfitters Industry Pension Fund

13-6149680 / 001

Yellow

Implemented

5.1 (b)

(a)

4.3 (b)

(a)

3.5 (b)

6/30/2014

Excavators Union Local 731 Pension Fund

13-1809825 / 002

Green

5.3

3.2

3.3

6/30/2016

Carpenters Pension Trust Fund for Northern California

94-6050970 / 001

Red

Implemented

1.8

2.1

2.3

6/30/2015

______________

(a)

These amounts exceeded 5% of the respective total plan contributions.

In addition to the individually significant plans described above, the Company also contributed approximately $35.5 million in 2014, $31.6 million in 2013 and $29.9 million in 2012 to other multiemployer pension plans.