Retirement Plans

12 Months Ended

Dec. 31, 2012

Retirement Plans [Abstract]

Retirement Plans

(16)         Retirement Plans

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. Benefits accruing under both plans were frozen as of August 31, 2007. 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.

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 $733, $604 and $649 in 2012, 2011 and 2010, 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, 2012 and 2011 is $1,118 and $1,230, 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, 2012 and 2011 is $1,118 and $1,230, 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, 2012 and 2011 were 49,121, and are included as a reduction of equity. The value of the shares held in trust and the corresponding liability of $559 and $353 at December 31, 2012 and 2011, 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, 2012 and 2011 are as follows:

	Pension Plans
	Domestic						SERP						International
	2012			2011			2012			2011			2012			2011
Change in benefit obligation
Benefit obligation, beginning of year	$	75,430		$	66,268		$	4,153		$	5,139		$	23,020		$	20,877
Service cost		-			-			-			-			660			611
Interest cost		3,284			3,462			85			150			795			944
Actuarial loss		4,699			8,904			88			90			1,852			2,034
Benefits paid		(3,455	)		(3,204	)		(636	)		(1,226	)		(755	)		(744	)
Currency translation affect		-			-			-			-			1,461			(702	)
Benefit obligation, end of year	$	79,958		$	75,430		$	3,690		$	4,153		$	27,033		$	23,020

The plan assets and funded status of the Domestic Pension Plan as of December 31, 2012 and 2011 are as follows:

	2012			2011
Change in plan assets
Fair value of plan assets, beginning of period	$	49,104		$	47,323
Actual return on plan assets		5,945			619
Contributions		2,306			4,366
Benefits paid		(3,455	)		(3,204	)
Fair value of plan assets, end of period	$	53,900		$	49,104
Unfunded status		(26,058	)		(26,326	)
Accrued benefit cost, end of period	$	(26,058	)	$	(26,326	)

The unfunded status of the SERP was ($3,690) and ($4,153) as of December 31, 2012 and 2011, respectively. The unfunded status of the International Pension Plan was ($27,033) and ($23,020) as of December 31, 2012 and 2011, respectively.

The amounts recognized in AOCI as of December 31, 2012 and 2011 consist of the following:

	Pension Plans
	Domestic				SERP				International
	2012		2011		2012		2011		2012			2011
Actuarial loss	$	32,646	$	31,083	$	958	$	946	$	7,354		$	5,658
Prior service cost/(benefit)		-		60		287		344		(31	)		(38	)
	$	32,646	$	31,143	$	1,245	$	1,290	$	7,323		$	5,620

The components of net periodic benefit cost are as follows:

	Pension Plans
	Domestic									SERP						International
	2012			2011			2010			2012		2011		2010		2012			2011			2010
Components of net periodic benefit cost
Service cost	$	-		$	-		$	-		$	-	$	-	$	-	$	660		$	611		$	577
Interest cost		3,284			3,462			3,519			85		150		200		795			944			857
Expected return on plan assets		(3,674	)		(3,787	)		(3,177	)		-		-		-		-			-			-
Amortization of prior service cost/(benefit)		60			436			436			57		57		57		(7	)		(7	)		176
Recognized actuarial loss		864			458			429			76		49		33		200			111			102
Net periodic benefit cost	$	534		$	569		$	1,207		$	218	$	256	$	290	$	1,648		$	1,659		$	1,712

The estimated amounts that will be amortized from AOCI into net periodic benefit cost in 2013 are as follows:

	Pension Plans
	Domestic		SERP		International
Actuarial loss	$	937	$	99	$	284
Prior service cost/(benefit)		-		57		(7	)
Total	$	937	$	156	$	277

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

	2012			2011
Discount rate:
Domestic Pension Plan		3.90	%		4.45	%
SERP		1.35	%		2.40	%
International Pension Plan		3.40	%		4.40	%
Rate of compensation increase:
International Pension Plan		2.40	%		2.80	%

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

	2012			2011			2010
Discount rate:
Domestic Pension Plan		4.45	%		5.35	%		5.90	%
SERP		2.40	%		3.40	%		4.15	%
International Pension Plan		3.40	%		4.40	%		4.70	%
Expected return on plan assets:
Domestic Pension Plan		7.50	%		7.50	%		7.50	%
Rate of compensation increase:
International Pension Plan		2.40	%		2.80	%		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 $79,958 exceeds plan assets by $26,058 as of December 31, 2012 for the Domestic Pension Plan. The aggregate ABO is $25,946 for the International Pension Plan as of December 31, 2012. The International Pension Plan is unfunded.

The Company expects to contribute approximately $985 in cash to the Domestic Pension Plan in 2013. The Company does not expect to contribute cash to its International Pension Plan in 2013.

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

	Pension Plans
	Domestic		SERP		International
2013	$	3,201	$	636	$	771
2014	$	3,434	$	636	$	772
2015	$	3,435	$	636	$	780
2016	$	3,408	$	636	$	784
2017	$	3,560	$	636	$	807
2018-2022	$	19,994	$	636	$	5,162

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, 2012 using:
Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Equity securities:
U.S. companies	$	19,238	$	-	$	19,238	$	-
International companies		10,337		-		10,337		-
U.S. fixed income		17,625		-		15,465		2,160
Commodities		4,131		-		4,131		-
TIPS		2,569		-		2,569		-
	$	53,900	$	-	$	51,740	$	2,160

			Fair Value Measurements at December 31, 2011 using:
Asset Category	Total		(Level 1)		(Level 2)		(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, 2012:

	Group Annuity Contract
Balance at December 31, 2011	$	2,100
Actual return on plan assets:
Relating to assets still held at the reporting date		113
Purchases, issuances, and settlements		(53	)
Balance at December 31, 2012	$	2,160