Retirement Plans and Other Postretirement Benefits

12 Months Ended

Dec. 31, 2011

Retirement Plans and Other Postretirement Benefits [Abstract]

Retirement Plans and Other Postretirement Benefits

(16) Retirement Plans and Other Postretirement Benefits

Domestic Pension Plan

The Company maintains a defined-benefit pension plan (“Domestic Pension Plan”) for certain salaried and certain hourly employees.  Benefits are based on salary and years of service or negotiated benefits for employees covered by a collective bargaining agreement.  The Company's policy is to fund pension costs to the full extent required by the Internal Revenue Code.  The Company also has a Supplemental Executive Retirement Plan (“SERP”) for key executives.  This plan is non-qualified and unfunded.  These plans were frozen as of August 31, 2007 and no additional accrual will be granted for participants after this date.  In July 2008, the Board of Directors of the Company amended the SERP to allow for lump sum payments effective January 1, 2009.  The lump sum value as of January 1, 2009 will be paid in 10 equal actuarial equivalent installments.

International Pension Plans

A foreign subsidiary of the Company maintains a pension plan (“International Pension Plan”) for its employees that conforms to the common practice in that country.  Based on local laws and customs, this plan is unfunded.

Other Postretirement Benefits

Cambrex previously provided limited post-retirement health and life insurance benefits ("postretirement benefits") to all eligible retired employees.  Certain subsidiaries and all employees hired after December 31, 2002 (excluding those covered by collective bargaining) were not eligible for these benefits.  Effective December 31, 2009, the Company terminated these postretirement benefits for all participants resulting in a benefit of approximately $1,200 in 2009.

Savings Plan

Cambrex makes available to all domestic employees a savings plan.  Employee contributions are matched in part by Cambrex.  The cost of this plan amounted to $604, $649 and $631 in 2011, 2010 and 2009, respectively.

Other

The Company has a non-qualified Deferred Compensation Plan for Key Executives (“The Plan”).  Under this Plan, officers and key employees may elect to defer all or any portion of their pre-tax earnings or elect to defer receipt of the Company's stock which would otherwise have been issued upon the exercise of the Company's options.  Included within other liabilities at December 31, 2011 and 2010 there is $1,230 and $2,420, respectively, representing the Company's obligation under the plan.  The Company invests in certain mutual funds and as such, included within other assets at December 31, 2011 and 2010 is $1,230 and $2,420, respectively, representing the fair value of these funds.  The fair values of these mutual funds are based on quoted market prices in active markets (Level 1).  The number of Cambrex shares held in trust under this plan as of December 31, 2011 and 2010 were 49,121 and 113,513, respectively, and are included as a reduction of equity.  The value of the shares held in trust and the corresponding liability of $353 and $587 at December 31, 2011 and 2010, respectively, have also been recorded in equity.  The Plan is not funded by the Company, but the Company has established a Deferred Compensation Trust Fund which holds the shares issued. Effective December 2011 the Board of Directors suspended employee contributions to this Plan.

The benefit obligations as of December 31, 2011 and 2010 are as follows:

	Pension Plans
	Domestic						SERP						International
	2011			2010			2011			2010			2011			2010
Change in benefit obligation
Benefit obligation, beginning of year	$	66,268		$	61,086		$	5,139		$	5,538		$	20,877		$	18,491
Service cost		-			-			-			-			611			577
Interest cost		3,462			3,519			150			200			944			857
Actuarial loss		8,904			4,955			90			121			2,034			91
Benefits paid		(3,204	)		(3,292	)		(1,226	)		(720	)		(744	)		(532	)
Unrecognized prior service costs		-			-			-			-						183
Currency translation affect		-			-			-			-			(702	)		1,210
Benefit obligation, end of year	$	75,430		$	66,268		$	4,153		$	5,139		$	23,020		$	20,877

The plan assets and funded status of the Domestic Pension Plan as of December 31, 2011 and 2010 are as follows:

	2011			2010
Change in plan assets
Fair value of plan assets, beginning of period	$	47,323		$	43,222
Actual return on plan assets		619			5,684
Contributions		4,366			1,709
Benefits paid		(3,204	)		(3,292	)
Fair value of plan assets, end of period	$	49,104		$	47,323
Unfunded status		(26,326	)		(18,945	)
Accrued benefit cost, end of period	$	(26,326	)	$	(18,945	)

The unfunded status of the SERP was ($4,153) and ($5,139) as of December 31, 2011 and 2010, respectively.  The unfunded status of the International Pension Plan was ($23,020) and ($20,877) as of December 31, 2011 and 2010, respectively.

The amounts recognized in AOCI as of December 31, 2011 and 2010 consist of the following:

	Pension Plans
	Domestic				SERP				International
	2011		2010		2011		2010		2011			2010
Actuarial loss	$	31,083	$	19,469	$	946	$	904	$	5,658		$	3,806
Prior service cost/(benefit)		60		496		344		402		(38	)		(45	)
	$	31,143	$	19,965	$	1,290	$	1,306	$	5,620		$	3,761

The components of net periodic benefit cost are as follows:

	Pension Plans
	Domestic									SERP						International								Postretirement Plans
	2011			2010			2009			2011		2010		2009		2011			2010		2009			2011		2010		2009
Components of net periodic benefit cost
Service cost	$	-		$	-		$	-		$	-	$	-	$	-	$	611		$	577	$	533		$	-	$	-	$	26
Interest cost		3,462			3,519			3,427			150		200		279		944			857		747			-		-		110
Expected return on plan assets		(3,787	)		(3,177	)		(2,924	)		-		-		-		-			-		-			-		-		-
Amortization of prior service cost/(benefit)		436			436			625			57		57		57		(7	)		176		(6	)		-		-		(156	)
Recognized actuarial loss		458			429			355			49		33		-		111			102		130			-		-		52
Curtailments		-			-			-			-		-		-		-			-		-			-		-		(1,178	)
Net periodic benefit cost	$	569		$	1,207		$	1,483		$	256	$	290	$	336	$	1,659		$	1,712	$	1,404		$	-	$	-	$	(1,146	)

The estimated amounts that will be amortized from AOCI into net periodic benefit cost in 2012 are as follows:

	Pension Plans
	Domestic		SERP		International
Actuarial loss	$	794	$	76	$	197
Prior service cost/(benefit)		60		57		(7	)
Total	$	854	$	133	$	190

Major assumptions used in determining the benefit obligations are presented in the following table:

	2011			2010
Discount rate:
Domestic Pension Plan		4.45	%		5.35	%
SERP		2.40	%		3.40	%
International Pension Plan		4.40	%		4.70	%
Rate of compensation increase:
International Pension Plan		2.80	%		3.00	%

Major assumptions used in determining the net benefit cost are presented in the following table:

	2011			2010			2009
Discount rate:
Domestic Pension Plan		5.35	%		5.90	%		6.00	%
SERP		3.40	%		4.15	%		5.60	%
International Pension Plan		4.40	%		4.70	%		4.70	%
Postretirement Plan		N/A			N/A			6.00	%
Expected return on plan assets:
Domestic Pension Plan		7.50	%		7.50	%		8.00	%
Rate of compensation increase:
International Pension Plan		2.80	%		3.00	%		3.00	%

In making its assumption for the long-term rate of return on plan assets, the Company has utilized historical rates earned on securities allocated consistently with its investments.  The discount rate was selected by projecting cash flows associated with plan obligations, which were matched to a yield curve of high quality corporate bonds.  The Company then selected the single rate that produced the same present value as if each cash flow were discounted by the corresponding spot rate on the yield curve.

The aggregate Accumulated Benefit Obligation (“ABO”) of $75,430 exceeds plan assets by $26,326 as of December 31, 2011 for the Domestic Pension Plan.  The aggregate ABO is $22,326 for the International Pension Plan as of December 31, 2011.  The International Pension Plan is unfunded.

The Company expects to contribute approximately $3,000 in cash to the Domestic Pension Plan in 2012.  The Company does not expect to contribute cash to its International Pension Plan in 2012.

The following benefit payments are expected to be paid out of the plans:

	Pension Plans
	Domestic		SERP		International
2012	$	3,292	$	636	$	822
2013	$	3,259	$	636	$	721
2014	$	3,491	$	636	$	739
2015	$	3,502	$	636	$	744
2016	$	3,497	$	636	$	746
2017-2021	$	19,649	$	1,272	$	4,576

The investment objective for the Domestic Pension Plan's assets is to achieve long-term growth with exposure to risk at an appropriate level.  The Company invests in a diversified asset mix consisting of equities (domestic and international) and taxable fixed income securities.  Assets are managed to obtain the highest total rate of return in keeping with a moderate level of risk.  The target allocations for plan assets are 30% - 80% equity securities, 25% - 45% U.S. fixed income and 0% - 10% all other investments.  Equity securities primarily include investments in large-cap and small-cap companies, U.S. Fixed income securities include high quality corporate bonds and U.S. government securities.  Other types of investments include real asset funds, consisting primarily of investments in commodities, and Treasury Inflation-Protected Securities (“TIPS”).

The fair values of the Company's pension plan assets by asset category are as follows:

			Fair Value Measurements at December 31, 2011 using:
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities:
U.S. companies	$	17,403	$	-	$	17,403	$	-
International companies		9,481		-		9,481		-
U.S. fixed income		16,136		-		14,036		2,100
Commodities		3,756		-		3,756		-
TIPS		2,328		-		2,328		-
	$	49,104	$	-	$	47,004	$	2,100

The following table sets forth a summary of the changes in the fair value of the Domestic Plan's Level 3 assets, which are annuity contracts with an insurance company, for the year ended December 31, 2011:

	Group Annuity Contract
Balance at December 31, 2010	$	2,027
Actual return on plan assets:
Relating to assets still held at the reporting date		126
Purchases, issuances, and settlements		(53	)
Balance at December 31, 2011	$	2,100