|
11. Employee Benefit Plans
ASC Topic 718, "Compensation—Retirement Benefits" requires employers to recognize the under funded or over funded status of a defined benefit post retirement plan as an asset or liability in its statements of financial position and to recognize changes in the funded status in the year in which the changes occur through accumulated other comprehensive income. Additionally, ASC Topic 718 requires employers to measure the funded status of a plan as of the date of its year-end statement of financial position. At the time of adoption of ASC Topic 718, the full funded status of our defined benefit post retirement plan had been recognized in prior years' purchase accounting due to the Transaction. The adoption had no impact to the measurement date used in our year-end statement of financial position as related to our noncontributory defined benefit pension plan.
Pension plan benefits are to be paid to eligible employees after retirement based primarily on years of credited service and participants' compensation. The Company uses a December 31 measurement date. Effective December 31, 2002, the Company froze the benefits under the pension plan. The change in benefit obligation, pension plan assets and funded status as of and for the years ended December 31, 2010 and 2009.
Change in Benefit Obligation
|
|
|
|
|
|
|
|
|
(in thousands) |
|
2010 |
|
2009 |
|
|
Benefit obligations at beginning of Period |
|
$ |
18,608 |
|
$ |
17,772 |
|
|
Interest cost |
|
|
1,088 |
|
|
1,065 |
|
|
Actuarial loss |
|
|
1,560 |
|
|
527 |
|
|
Benefits paid |
|
|
(767 |
) |
|
(756 |
) |
| |
|
|
|
|
|
|
Benefit obligation at end of period |
|
$ |
20,489 |
|
$ |
18,608 |
|
| |
|
|
|
|
|
Change in Plan Assets
|
|
|
|
|
|
|
|
|
(in thousands) |
|
2010 |
|
2009 |
|
|
Fair value of plan assets at beginning of year |
|
$ |
12,202 |
|
$ |
9,925 |
|
|
Actual return on plan assets |
|
|
1,759 |
|
|
2,673 |
|
|
Benefits paid |
|
|
(767 |
) |
|
(756 |
) |
|
Employer contribution |
|
|
865 |
|
|
360 |
|
| |
|
|
|
|
|
|
Fair value of plan assets at end of year |
|
$ |
14,059 |
|
$ |
12,202 |
|
| |
|
|
|
|
|
Funded Status
|
|
|
|
|
|
|
|
|
(in thousands) |
|
2010 |
|
2009 |
|
|
Funded Status |
|
$ |
(6,430 |
) |
$ |
(6,406 |
) |
|
Unrecognized net actuarial loss/Accumulated Other Comprehensive Loss |
|
|
7,230 |
|
|
6,365 |
|
| |
|
|
|
|
|
|
Net (accrued) amount recognized |
|
$ |
800 |
|
$ |
(41 |
) |
| |
|
|
|
|
|
A summary of our pension plan projected benefit obligation, accumulated obligation and fair value of pension plan assets at December 31, are as follows:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
2010 |
|
2009 |
|
|
Projected benefit obligation |
|
$ |
20,489 |
|
$ |
18,608 |
|
|
Accumulated benefit obligation ("ABO") |
|
|
20,489 |
|
|
18,608 |
|
|
Fair value of plan assets |
|
|
14,059 |
|
|
12,202 |
|
|
ABO less Fair value of plan assets |
|
|
6,430 |
|
|
6,406 |
|
Amounts recognized in the Balance Sheets at December 31, are as follows:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
2010 |
|
2009 |
|
|
Current liabilities |
|
$ |
975 |
|
$ |
685 |
|
|
Noncurrent liabilities |
|
|
5,455 |
|
|
5,721 |
|
| |
|
|
|
|
|
|
Total amount recognized |
|
$ |
6,430 |
|
$ |
6,406 |
|
| |
|
|
|
|
|
Net Periodic Benefit Cost (Benefit)
The components of net periodic benefit cost (benefit) are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
(in thousands) |
|
2010 |
|
2009 |
|
2008 |
|
|
Interest cost |
|
$ |
1,088 |
|
$ |
1,065 |
|
$ |
1,033 |
|
|
Expected return on plan assets |
|
|
(1,218 |
) |
|
(1,213 |
) |
|
(1,231 |
) |
|
Recognized net actuarial loss |
|
|
154 |
|
|
12 |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
Net periodic benefit cost (benefit) |
|
$ |
24 |
|
$ |
(136 |
) |
$ |
(198 |
) |
| |
|
|
|
|
|
|
|
Change in Accumulated Other Comprehensive Loss
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|
(in thousands) |
|
2010 |
|
2009 |
|
|
Beginning of year |
|
$ |
(6,365 |
) |
$ |
(7,310 |
) |
|
Net actuarial gains(losses) |
|
|
(1,019 |
) |
|
933 |
|
|
Amortization of net gains |
|
|
154 |
|
|
12 |
|
| |
|
|
|
|
|
|
|
|
$ |
(7,230 |
) |
$ |
(6,365 |
) |
| |
|
|
|
|
|
Pension Plan Assets
Our target pension plan asset allocation and actual pension plan allocation of assets at December 31, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Asset Category |
|
Target
Allocation |
|
2010 |
|
2009 |
|
|
Equity securities |
|
|
70 |
% |
|
77 |
% |
|
71 |
% |
|
Debt securities and cash |
|
|
30 |
|
|
23 |
|
|
29 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
100 |
% |
|
100 |
% |
|
100 |
% |
| |
|
|
|
|
|
|
|
The pension plan assets are invested with the objective of maximizing long-term returns while minimizing material losses in order to meet future benefit obligations when they come due.
The Company utilizes an investment approach with a mix of equity and debt securities used to maximize the long-term return on assets. Risk tolerance is established through consideration of pension plan liabilities, funded status and corporate financial condition. The investment portfolio consists of a diversified blend of mutual funds and fixed-income investments. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews and annual asset and liability reviews.
Fair Value Measurement
The following table presents our plan assets using the fair value hierarchy as of December 31, 2010 and 2009.
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|
(in thousands) |
|
2010 |
|
2009 |
|
|
Level 1 |
|
|
|
|
|
|
|
| |
Equity Securities |
|
$ |
10,769 |
|
$ |
8,643 |
|
| |
Debt Securities and Cash |
|
|
3,290 |
|
|
3,559 |
|
|
Level 2 |
|
|
— |
|
|
— |
|
|
Level 3 |
|
|
— |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
$ |
14,059 |
|
$ |
12,202 |
|
| |
|
|
|
|
|
Investments in Equity and Debt Securities are valued at the net asset value of units held at the end of the period based upon the value of the underlying investments as determined by quoted market prices. These investments are classified as Level 1.
Contributions
The Company contributed $0.9, $0.4 and $0.8 million to the pension plan during the years ended December 31, 2010, 2009 and 2008, respectively. The Company expects to make contributions of approximately $1.0 million in 2011.
Estimated Future Benefit Payments
The following benefit payments are expected to be paid:
|
|
|
|
|
|
(in thousands) |
|
|
|
|
2011 |
|
$ |
770 |
|
|
2012 |
|
|
813 |
|
|
2013 |
|
|
832 |
|
|
2014 |
|
|
883 |
|
|
2015 |
|
|
923 |
|
|
2016 to 2020 |
|
|
5,429 |
|
Pension Plan Assumptions
The following weighted-average assumptions were used as of each of the years ended December 31, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
2009 |
|
2008 |
|
|
Weighted-average actuarial assumptions used to determine benefit obligations: |
|
|
|
|
|
|
|
|
|
|
| |
Discount rate |
|
|
5.42 |
% |
|
5.92 |
% |
|
6.10 |
% |
| |
Expected return on assets |
|
|
8.00 |
% |
|
8.00 |
% |
|
8.00 |
% |
|
Weighted-average assumptions used to determine net periodic benefit cost (benefit): |
|
|
|
|
|
|
|
|
|
|
| |
Discount rate |
|
|
5.92 |
% |
|
6.10 |
% |
|
6.47 |
% |
| |
Expected return on assets |
|
|
8.00 |
% |
|
8.00 |
% |
|
8.00 |
% |
| |
Rate of compensation increase |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
These assumptions are reviewed on an annual basis. In determining the expected return on asset assumption, the Company evaluates the long-term returns earned by the pension plan, the mix of investments that comprise pension plan assets and forecasts of future long-term investment returns.
Other Employee Benefits
The Company also sponsors a defined contribution plan, which qualifies under Section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code") and covers substantially all of the Company's employees. Employees may contribute annually up to 60% of their base compensation on a pre-tax basis (subject to Internal Revenue Service limitation). The company matching contribution is 50% of the first 6% of base compensation that an employee contributes. We made matching contributions to the plan of approximately $1.4, $1.3 and $1.3 million for the years ended December 31, 2010, 2009 and 2008, respectively.
The Company is self-insured for employee health care up to $130,000 per member per plan year and aggregate claims up to 125% of expected claims per plan year. Also, the Company purchases workers' compensation and automobile liability coverage with related deductibles. The Company is liable for workers' compensation and automobile liability claims up to $250,000 and $100,000 per individual claim, respectively. Self-insurance and deductible costs are included in other accrued expenses in the Balance Sheets and are accrued based upon the aggregate of the liability for reported claims and an actuarially determined estimated liability for claims development and incurred but not reported. |