Employee Benefits

6 Months Ended

Jun. 29, 2013

Employee Benefits

Employee Benefits

Note 6 – Employee Benefits

Seaboard maintains two defined benefit pension plans for its domestic salaried and clerical employees.  At this time, no contributions are expected to be made to these plans in 2013.  Seaboard also sponsors non-qualified, unfunded supplemental executive plans, and has certain individual, non-qualified, unfunded supplemental retirement agreements for certain retired employees.  Management has no plans to provide funding for these supplemental plans in advance of when the benefits are paid.

The net periodic benefit cost for all of these plans was as follows:

	Three Months Ended				Six Months Ended
	June 29,		June 30,		June 29,		June 30,
(Thousands of dollars)	2013		2012		2013		2012
Components of net periodic benefit cost:
Service cost	$    2,263		$  2,210		$  4,684		$  4,436
Interest cost	2,035		2,177		4,103		4,435
Expected return on plan assets	(1,614	)	(1,617	)	(3,226	)	(3,209	)
Amortization and other	1,543		1,567		3,179		3,097
Agreement termination gain	(3,204	)	-		(3,204	)	-
Settlement	-		1,796		-		1,796
Net periodic benefit cost	$    1,023		$  6,133		$  5,536		$10,555

In late April 2013, Mr. Joseph E. Rodrigues, Seaboard’s board member and retired former Executive Vice President and Treasurer of Seaboard Corporation, passed away.  During retirement, Mr. Rodrigues received retirement payments under an individual, non-qualified, unfunded supplemental retirement agreement.  Upon his death, this agreement terminated which eliminated the remaining accrued pension liability. This resulted in a one-time agreement termination gain of $3,204,000, or $1,954,000 net of tax, which was recognized in net earnings in addition to a gain of $2,148,000, or $1,310,000 net of tax, from the elimination of unrecognized pension cost in other comprehensive income during the second quarter of 2013.

During June 2012 when the actual pension costs for 2012 were finalized, it was determined that a settlement payment made in March 2012 was greater than the actual service cost and interest cost components of the 2012 net periodic pension cost for a non-qualified, unfunded supplemental executive plan.  As a result, during the second quarter of 2012 a settlement loss of $1,796,000 was recorded in the Pork division’s results of operations.