Pension And Other Benefit Programs
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Sep. 30, 2011
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Pension And Other Benefit Programs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension And Other Benefit Programs | 10. PENSION AND OTHER BENEFIT PROGRAMS Defined Benefit Pension Plans and Postretirement Benefits Other Than Pensions Certain of the Company's current and former employees are covered by retirement plans. Retirement benefits are primarily a function of years of service and the employee's compensation for a defined period of employment. In 2003, the Company froze the benefits under the salaried pension plan resulting in reductions in future pension obligations. The Company funds pension costs at an actuarially determined amount based on normal cost and the amortization of prior service costs, gains and losses over the remaining service periods. Additionally, the Company previously provided a supplemental non-qualified, unfunded pension plan for certain management members as well as a non-qualified retirement plan for former non-employee directors, which provided benefits based upon years of service as a director and the retainer in effect at the date of a director's retirement. Certain of the Company's employees who meet the applicable eligibility requirements are covered by benefit plans that provide postretirement health care and life insurance benefits to employees. During fiscal 2011, a curtailment loss of $169 thousand was recognized for the Colonial Union Pension Plan due to a reduction in headcount associated with the contribution of the Gramercy refinery assets to LSR. Additionally, Accumulated Other Comprehensive Income increased $1.9 million as a result of the revaluation of the Colonial Union Pension Plan liability triggered by the curtailment. The Company adopted the measurement date provisions of amended authoritative guidance from the FASB related to accounting for defined benefit pension plans and other postretirement plans effective October 1, 2008. As a result of this change, pension and postretirement obligations were measured at September 30th in fiscal 2009 through 2011, as compared to a June 30th measurement date in prior years. The Company applied the "one measurement" approach in its adoption. The effect of applying the measurement date provisions to the balance sheet was as follows:
The following tables present the benefit obligations, changes in plan assets, the funded status of the pension and postretirement benefits plans and the assumptions used (in thousands of dollars):
The assumptions used and the annual costs related to these plans consist of the following (in thousands of dollars):
The prior service cost and estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $49,000 and $5,099,000, respectively.
The prior service cost credit and estimated net loss for postretirement benefits other than pensions that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $1,594,000 and $551,000, respectively. Aggregated accumulated benefit obligations for all plans were $232.9 million and $228.1 million at September 30, 2011 and 2010, respectively. Accumulated benefit obligations were in excess of plan assets for all plans for both periods. Pension plan contributions totaled $15.8 million and $13.6 million during fiscal 2011 and 2010; contributions during fiscal 2012 are expected to be approximately $15.9 million. The assumed health care cost trend rate used in measuring the accumulated benefit obligation for postretirement benefits other than pensions as of September 30, 2011 and 2010 was 8.5%. In 2011, the rate was assumed to decrease gradually to 5% for fiscal 2019 and remain at that level thereafter. In 2010, the rate was assumed to decrease gradually to 5% for fiscal 2018 and remain level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one-percentage-point change in assumed health care cost trend rates would have the following effects:
The plan assets of the defined benefit pension plans are held in a third party master trust, which is administered by the Company's Welfare and Benefits Committee (the "Committee"). The Committee oversees the trust activities and the financial integrity of the pension plans by establishing and managing funds for the immediate and future needs of the plans' operations and programs. The primary investment objective for the portfolio of assets is to meet or exceed the future obligations of the plans' participants. Financial risks and returns are managed through diversification of plan assets, selection of investment managers and quarterly review of portfolio performance results. Plan asset investments are broadly diversified primarily into marketable securities, such as equity and high quality fixed income securities. Target allocations among various asset categories achieve a target mix that is the strategic allocation for the portfolio. Minimum and maximum criteria are used to set boundaries for each target allocation to ensure the portfolio does not drift from the target mix. The Company's plan assets actual and target allocation percentages were as follows:
Plan assets at September 30, 2011 are summarized in the following table at the appropriate level of the fair value hierarchy (in thousands of dollars):
Fair value hierarchy levels are as follows:
Changes in Level 3 assets from October 1, 2010 to September 30, 2011 are as follows:
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands):
The assumed rate of return is based on the results of historical statistical return studies. 401(k) Plans Substantially all of the employees may elect to defer a portion of their annual compensation in the Company- sponsored 401(k) tax deferred savings plans. The Company makes matching contributions in some of these plans. The amount charged to expense for these plans was $1.3 million, $1.5 million and $1.4 million for the years ended September 30, 2011, 2010 and 2009, respectively. The Company suspended its matching contribution effective January 1, 2012. Deferred Compensation The Company has non-current liabilities for an inactive deferred compensation plan aggregating $7.6 million and $7.8 million at September 30, 2011 and 2010, respectively. Interest expense includes $0.5 million, $0.6 million and $0.6 million in fiscal 2011, 2010 and 2009, respectively, for such plan. |