Employee benefit plans

9 Months Ended

Jun. 30, 2012

Employee benefit plans [Abstract]

Employee benefit plans

(9)           Employee benefit plans

Sevcon has a defined benefit plan sponsored by, Sevcon Limited, covering the majority of its U.K. employees and a frozen defined benefit pension plan sponsored by, Sevcon USA, Inc. There is also a small defined contribution plan covering senior managers in the capacitor business and a defined contribution plan for employees in the U.S. controls business.  The following table sets forth the components of the net pension cost for the defined benefit plans:

	(in thousands of dollars)
	Three Months ended						Nine months ended
	June 30, 2012			July 2, 2011			June 30, 2012			July 2, 2011
Service cost	$	67		$	78		$	198		$	299
Interest cost		308			315			958			951
Expected return on plan assets		(288	)		(294	)		(858	)		(844	)
Amortization of net loss		98			71			232			210
Amortization of prior service cost		(6	)		16			(18	)		7
Net periodic benefit cost	$	179		$	186		$	512		$	623
Net cost of defined contribution plans	$	35		$	55		$	125		$	69

Amounts recognized in the balance sheet consist of:

	(in thousands of dollars)
	June 30, 2012		September 30, 2011
Non current liabilities	$	7,523	$	7,634

Amounts recognized in accumulated other comprehensive loss consist of:

	(in thousands of dollars)
	Three Months ended						Nine Months ended
	June 30, 2012			July 2, 2011			June 30, 2012			July 2, 2011
Amortization of net actuarial loss net of tax benefit	$	68		$	56		$	169		$	156
Amortization of prior service cost net of tax benefit		(3	)		(4	)		(12	)		(10	)
Actuarial gain net of tax benefit		-			31			-			837
Net cost of defined contribution plans	$	65		$	83		$	157		$	983

Sevcon, Inc. contributed $25,000 to its frozen U.S. pension plan in the nine months ended June 30, 2012; it presently anticipates contributing a further $98,000 to fund this U.S. plan in the remainder of 2012. In addition, employer contributions to the U.K. defined benefit plan were $371,000 in the first nine months and are estimated to total $484,000 in 2012.

The table below presents information about the Company's pension plan assets measured and recorded at fair value as of June 30, 2012 and indicates the fair value hierarchy of the inputs utilized by the Company to determine the fair values.

	(in thousands of dollars)
	Level 1* (Quoted prices  in active  markets)		Level 2** (Significant observable  inputs)		Level 3*** (Unobservable inputs)
Mutual Funds				-		-
Standard Life Pension Global Absolute Returns Strategies Fund		5,649		-		-
Standard Life UK Indexed Linked Fund		1,567		-		-
Standard Life Long Corporate Bond Fund		1,421		-		-
CF Ruffer Absolute Return Fund		5,871		-		-
U.S. Equity Funds		175		-		-
U.S. Mutual and Fixed Income Funds		1,869		-		-
Other Types of Investments
Cash		156		-		-
Total		16,708		-		-

* Level 1 investments represent mutual funds for which a quoted market price is available on an active market. These investments will primarily hold stocks or bonds, or a combination of stocks and bonds.

** The Company currently does not have any Level 2 pension plan financial assets.

*** The Company currently does not have any Level 3 pension plan financial assets.

The following estimated benefit payments, which reflect future service, as appropriate have been or are expected to be paid:

	(in thousands of dollars)
2012	$	406
2013		371
2014		513
2015		658
2016		726
2017 - 2021		3,910

The following table sets forth the movement in the liability for pension benefits in the nine months ended June 30, 2012:

(in thousands of dollars)
	Nine months ended
	June 30, 2012
Liability for pension benefits at September 30, 2011	$	7,634
Net periodic benefit cost		512
Plan contributions		(396	)
Amortization of net loss		(232	)
Amortization of prior service costs		18
Actuarial gain		-
Effect of exchange rate changes		(13	)
Liability for pension benefits at June 30, 2012	$	7,523