Employee Benefit Plans

Defined Benefit Plans:

Effective April 1, 2002, we converted a noncontributory pension plan to a noncontributory cash balance retirement plan under which each participant received an actuarially determined opening balance. Certain participants were grandfathered under the prior pension plan formula.

The estimated net loss that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $.2 million.

The following tables summarize changes in the benefit obligation, the plan assets and the funded status of our pension plans as well as the components of net periodic benefit costs, including key assumptions (in thousands). The measurement dates for plan assets and obligations were December 31, 2013 and 2012.



	December 31,
	2013			2012
Change in Projected Benefit Obligation:
Benefit obligation at beginning of year	$	42,530		$	68,390
Service cost	1,281			1,314
Interest cost	1,544			1,578
Actuarial (gain) loss	(5,807		)	2,005
Plan amendment (see Note 1)	—			(29,494		)
Benefit payments	(1,476		)	(1,263		)
Benefit obligation at end of year	$	38,072		$	42,530
Change in Plan Assets:
Fair value of plan assets at beginning of year	$	32,161		$	27,649
Actual return on plan assets	6,842			3,275
Employer contributions	1,800			2,500
Benefit payments	(1,476		)	(1,263		)
Fair value of plan assets at end of year	$	39,327		$	32,161
Funded (unfunded) status at end of year (included in other assets in 2013 and accounts payable and accrued expenses in 2012)	$	1,255		$	(10,369	)
Accumulated benefit obligation	$	37,885		$	42,178
Net loss recognized in accumulated other comprehensive loss	$	5,775		$	17,254

The following is the required information for other changes in plan assets and benefit obligations recognized in other comprehensive income (in thousands):



	Year Ended December 31,
	2013			2012			2011
Net (gain) loss	$	(10,200	)	$	979		$	8,234
Amortization of net loss	(1,279		)	(1,569		)	(685		)
Amortization of prior service cost	—			117			117
Total recognized in other comprehensive income	$	(11,479	)	$	(473	)	$	7,666
Total recognized in net periodic benefit costs and other comprehensive income	$	(9,824	)	$	1,622		$	12,794

The following is the required information for plans with an accumulated benefit obligation in excess of plan assets (in thousands):



	December 31,
	2013	2012
Projected benefit obligation	N/A	$	42,530
Accumulated benefit obligation	N/A	42,178
Fair value of plan assets	N/A	32,161

The components of net periodic benefit cost for the plans are as follows (in thousands):



	Year Ended December 31,
	2013			2012			2011
Service cost	$	1,281		$	1,314		$	3,335
Interest cost	1,544			1,578			3,454
Expected return on plan assets	(2,449		)	(2,249		)	(2,229		)
Prior service cost	—			(117		)	(117		)
Recognized loss	1,279			1,569			685
Total	$	1,655		$	2,095		$	5,128

The assumptions used to develop periodic expense for the plans are shown below:



	Year Ended December 31,
	2013		2012		2011
Discount rate – Retirement Plan	3.87	%	4.19	%	5.30	%
Salary scale increases – Retirement Plan	3.50	%	3.50	%	4.00	%
Salary scale increases – SRP (see Note 1)	—	%	—	%	5.00	%
Long-term rate of return on assets – Retirement Plan	7.50	%	8.00	%	8.00	%

The selection of the discount rate is made annually after comparison to yields based on high quality fixed-income investments. The salary scale is the composite rate which reflects anticipated inflation, merit increases, and promotions for the group of covered participants. The long-term rate of return is a composite rate for the trust. It is derived as the sum of the percentages invested in each principal asset class included in the portfolio multiplied by their respective expected rates of return. We considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This analysis resulted in the selection of 7.5% as the long-term rate of return assumption for 2013.

The assumptions used to develop the actuarial present value of the benefit obligations for the plans are shown below:



	Year Ended December 31,
	2013		2012		2011
Discount rate – Retirement Plan	4.70	%	3.87	%	4.19	%
Salary scale increases – Retirement Plan	3.50	%	3.50	%	3.50	%
Salary scale increases – SRP (see Note 1)	—	%	—	%	5.00	%

The expected contribution to be paid for the Retirement Plan by us during 2014 is approximately $2.0 million. The expected benefit payments for the next 10 years for the Retirement Plan is as follows (in thousands):



2014	$	2,680
2015	2,511
2016	2,001
2017	2,106
2018	1,896
2019-2023	11,657

The participant data used in determining the liabilities and costs for the Retirement Plan was collected as of January 1, 2013, and no significant changes have occurred through December 31, 2013.

At December 31, 2013, our investment asset allocation compared to our benchmarking allocation model for our plan assets was as follows:



	Portfolio		Benchmark
Cash and Short-Term Investments	6	%	10	%
U.S. Stocks	58	%	59	%
International Stocks	15	%	11	%
U.S. Bonds	18	%	17	%
International Bonds	3	%	2	%
Other	—	%	1	%
Total	100	%	100	%

The fair value of plan assets was determined based on publicly quoted market prices for identical assets, which are classified as Level 1 observable inputs. The allocation of the fair value of plan assets was as follows:



	December 31,
	2013		2012
Cash and Short-Term Investments	3	%	3	%
Large Company Funds	31	%	20	%
Mid Company Funds	8	%	8	%
Small Company Funds	8	%	6	%
International Funds	11	%	14	%
Fixed Income Funds	21	%	35	%
Growth Funds	18	%	14	%
Total	100	%	100	%

Concentrations of risk within our equity portfolio are investments classified within the following sectors: technology, financial services, consumer cyclical goods, healthcare and industrial, which represents approximately 17%, 15%, 15%, 14% and 13% of total equity investments, respectively.

Defined Contribution Plans:

Compensation expense related to our defined contribution plans was $3.1 million in 2013, $3.3 million in 2012 and $.9 million in 2011.