Note 12 - Benefit Plans

12 Months Ended

Dec. 28, 2013

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

12. Benefit Plans

The company has a company-sponsored defined benefit pension plan, the Littelfuse Inc. Retirement Plan, covering certain of its North American employees. The amount of the retirement benefit is based on years of service and final average pay. The plan also provides a temporary supplemental retirement income benefit to help retirees pay the cost of post-retirement medical coverage if the retiree has reached age 62 and has provided at least ten years of service prior to retirement. Such benefits generally cease once the retiree attains age 65. The plan was frozen in 2009. The company also has company-sponsored defined benefit pension plans covering employees in the U.K., Germany, Japan, Taiwan and the Philippines. The amount of the retirement benefits provided under the plans is based on years of service and final average pay.

During the fourth quarter of 2012, the company recorded $5.3 million in pension settlement and valuation charges. Approximately $5.1 million of these charges were classified in selling, general and administrative expenses and approximately $0.2 million were classified in cost of sales. During the fourth quarter of 2012, the company amended the Littelfuse Inc. Retirement Plan to allow participants who meet certain requirements to elect, during a limited window period, to receive their vested retirement benefits in a lump sum (or for certain participants annuity payments, on and after) December 1, 2012. The $5.1 million settlement charge recorded in selling, general and administrative expenses related to the amended Littelfuse, Inc. Retirement Plan represents the total amount for eligible participants who elected to receive their benefits under the amendment. The $0.2 million charge recorded in cost of sales is related to the company’s Taiwan manufacturing facility that was closed in 2012.

The company’s contributions are made in amounts sufficient to satisfy legal requirements. The company is not expected to be required to make a minimum funding contribution in accordance with the Employee Retirement Income Securities Act of 1974 (“ERISA”) for fiscal year 2014 but made a $5.0 million voluntary contribution to the Littelfuse, Inc. Retirement Plan in February 2014.

Total pension expense was $0.8 million, $5.4 million and $0.5 million in 2013, 2012 and 2011, respectively. The decrease in pension expense in 2013 was related to the pension settlement charge that was recorded in 2012 as described above. The increase in pension expense in 2012 was the result of the pension settlement charge as described above. The increase in pension expense in 2011 resulted from required service and interest costs exceeding net earnings from plan assets for the year.

Benefit plan related information is as follows:

	2013									2012
(In thousands)	U.S.			Foreign			Total			U.S.			Foreign			Total
Change in benefit obligation:
Benefit obligation at beginning of year	$	95,187		$	15,406		$	110,593		$	94,383		$	13,193		$	107,576
Service cost		600			744			1,344			600			601			1,201
Interest cost		3,565			1,376			4,941			4,962			644			5,606
Curtailment (gain)		—			—			—			—			(87	)		(87	)
Net actuarial (gain) loss		(9,854	)		1,111			(8,743	)		20,333			2,562			22,895
Benefits paid from the trust		(5,076	)		(1,755	)		(6,831	)		(21,566	)		(1,201	)		(22,767	)
Benefits paid directly by company		—			(112	)		(112	)		—			(725	)		(725	)
Acquisition		—			31,041			31,041			—			—			—
Settlement (gain)		—			—			—			(3,525	)		—			(3,525	)
Effect of exchange rate movements		—			2,520			2,520			—			419			419
Benefit obligation at end of year	$	84,422		$	50,331		$	134,753		$	95,187		$	15,406		$	110,593
Change in plan assets at fair value:
Fair value of plan assets at beginning of year	$	77,949		$	10,952		$	88,901		$	81,201		$	11,278		$	92,479
Actual return on plan assets		5,875			(196	)		5,679			8,314			604			8,918
Employer contributions		5,000			4,109			9,109			10,000			—			10,000
Benefits paid		(5,076	)		(1,756	)		(6,832	)		(21,566	)		(1,201	)		(22,767	)
Acquisition		—			26,904			26,904			—			—			—
Effect of exchange rate movements		—			2,464			2,464			—			271			271
Fair value of plan assets at end of year		83,748			42,477			126,225			77,949			10,952			88,901
Net amount recognized/(unfunded status)	$	(674	)	$	(7,854	)	$	(8,528	)	$	(17,238	)	$	(4,454	)	$	(21,692	)
Amounts recognized in the Consolidated Balance Sheet consist of:
Prepaid benefit cost	$	—		$	—		$	—		$	—		$	646		$	646
Accrued benefit liability		(674	)		(7,854	)		(8,528	)		(17,238	)		(5,100	)		(22,338	)
Net liability recognized	$	(674	)	$	(7,854	)	$	(8,528	)	$	(17,238	)	$	(4,454	)	$	(21,692	)
Accumulated other comprehensive loss	$	18,095		$	5,594		$	23,689		$	29,406		$	3,292		$	32,698

Amounts recognized in accumulated other comprehensive income (loss), pre-tax consist of:

	2013						2012
(In thousands)	U.S.		Foreign		Total		U.S.		Foreign		Total
Net actuarial loss	$	18,095	$	5,594	$	23,689	$	29,406	$	3,292	$	32,698
Prior service (cost)		—		—		—		—		—		—
Net amount recognized / occurring, pre-tax	$	18,095	$	5,594	$	23,689	$	29,406	$	3,292	$	32,698

The estimated net actuarial loss (gain) which will be amortized from accumulated other comprehensive income (loss) into benefit cost in 2013 is less than $0.6 million.

	U.S.									Foreign
(In thousands)	2013			2012			2011			2013			2012			2011
Components of net periodic benefit cost:
Service cost	$	600		$	600		$	560		$	744		$	601		$	429
Interest cost		3,565			4,962			5,110			1,376			644			632
Expected return on plan assets		(5,360	)		(6,620	)		(6,518	)		(1,207	)		(480	)		(507	)
Amortization of prior service (credit)		—			—			—			—			(1	)		(1	)
Amortization of losses (gains)		942			338			748			130			63			25
Total cost of the plan for the year		(253	)		(720	)		(100	)		1,043			827			578
Expected plan participants’ contributions		—			—			—			—			—			—
Net periodic benefit (credit) cost		(253	)		(720	)		(100	)		1,043			827			578
Settlement loss		—			5,098			—			—			188			11
Total (income) expense for the year	$	(253	)	$	4,378		$	(100	)	$	1,043		$	1,015		$	589

Weighted average assumptions used to determine net periodic benefit cost for the years 2013, 2012 and 2011 are as follows:

	U.S.									Foreign
	2013			2012			2011			2013			2012			2011
Discount rate		3.9	%		5.4	%		5.9%/5.4%	(1)		4.5	%		5.5	%		5.3	%
Expected return on plan assets		6.8	%		7.8	%		8.5%/7.5%	(2)		4.8	%		4.5	%		4.5	%
Compensation increase rate		—			—			—			3.6	%		5.6	%		5.3	%
Measurement dates		12/31/13			12/31/12			12/31/11			12/31/13			12/31/12			12/31/11

(1)	5.9% used for the Littelfuse, Inc. Retirement Plan, and 5.4% used for the Cole Hersee plan.
(2)	8.5% used for the Littelfuse, Inc. Retirement Plan, and 7.5% used for the Cole Hersee plan.

The accumulated benefit obligation for the U.S. defined benefit plan was $84.4 million and $95.2 million at December 28, 2013 and December 29, 2012, respectively. The accumulated benefit obligation for the foreign plans was $46.2 million and $12.5 million at December 28, 2013 and December 29, 2012, respectively.

Weighted average assumptions used to determine benefit obligations at year-end 2013, 2012 and 2011 are as follows:

	U.S.									Foreign
	2013			2012			2011			2013			2012			2011
Discount rate		4.8	%		3.9	%		5.4	%		4.5	%		4.2	%		5.5	%
Compensation increase rate		—			—			—			3.8	%		6.3	%		5.6	%
Measurement dates		12/31/13			12/31/12			12/31/11			12/31/13			12/31/12			12/31/11

Expected benefit payments to be paid to participants for the fiscal year ending are as follows (in thousands):

Year	U.S.		Foreign
2014	$	5,303	$	2,245
2015		5,310		2,106
2016		5,352		2,175
2017		5,405		2,238
2018		5,354		2,278

Defined Benefit Plan Assets

Based upon analysis of the target asset allocation and historical returns by type of investment, the company has assumed that the expected long-term rate of return will be 6.8% on the Littelfuse, Inc. domestic plan assets and 4.8% on foreign plan assets. Assets are invested to maximize long-term return taking into consideration timing of settlement of the retirement liabilities and liquidity needs for benefits payments. Pension plan assets were invested as follows, and were not materially different from the target asset allocation:

	U.S. Asset Allocation						Foreign Asset Allocation
	2013			2012			2013			2012
Equity securities		53	%		53	%		33	%		3	%
Debt securities		46	%		46	%		61	%		95	%
Cash		1	%		1	%		6	%		2	%
		100	%		100	%		100	%		100	%

The following table presents the company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of December 28, 2013 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equities:
MSCI Emg Mkts Index Fund	$	—	$	4,679	$	—	$	4,679
MSCI World Index Fund		—		39,332		—		39,332
Global Equity Index Fund		—		12,859		—		12,859
Philippine Stock		918		—		—		918
Fixed income:
Long U.S. Credit Corp Index Fund		—		24,830		—		24,830
Long U.S. Govt Bond Index Fund		—		8,269		—		8,269
High yield corporate bond funds		—		5,792		—		5,792
Investment grade corporate bond funds		9,637		—		—		9,637
Over 15y Gilts Index Fund		—		5,626		—		5,626
Act Agg Long Dat 50:50 Fixed Int Fund		—		5,174		—		5,174
AAA Fixed Int Over 15 Year Fund		—		5,394		—		5,394
Other		237		—		—		237
Cash and equivalents		3,478		—		—		3,478
Total pension plan assets	$	14,270	$	111,955	$	—	$	126,225

The following table presents the company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of December 29, 2012 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equities:
MSCI Emg Mkts Index Fund	$	—	$	6,243	$	—	$	6,243
MSCI World Index Fund		—		34,666		—		34,666
Fixed income:
Long U.S. Credit Corp Index Fund		—		22,889		—		22,889
Long U.S. Govt Bond Index Fund		—		7,630		—		7,630
High yield corporate bond funds		—		5,378		—		5,378
Investment grade corporate bond funds		—		10,297		—		10,297
Other		—		655		—		655
Cash and equivalents		1,143		—		—		1,143
Total pension plan assets	$	1,143	$	87,758	$	—	$	88,901

Defined Contribution Plans

The company also maintains a 401(k) savings plan covering substantially all U.S. employees. The company matches 100% of the employee’s annual contributions for the first 4% of the employee’s eligible compensation. Employees are immediately vested in their contributions plus actual earnings thereon, as well as the company contributions. Company matching contributions amounted to $1.7 million, $1.5 million and $1.3 million in each of the years 2013, 2012 and 2011, respectively.

On January 1, 2010, the company adopted a non-qualified Supplemental Retirement and Savings Plan. The company will provide additional retirement benefits for certain management employees and named executive officers by allowing participants to contribute up to 90% of their annual compensation with matching contributions of 4% and 5% of the participant’s annual compensation in excess of the IRS compensation limits.

The company previously provided additional retirement benefits for certain key executives through its unfunded defined contribution Supplemental Executive Retirement Plan (“SERP”). The company amended the SERP during 2009 to freeze contributions and set the annual interest rate credited to the accounts until distributed at the five-year Treasury constant maturity rate. The charge to expense for the SERP plan amounted to $0.0 million, $0.1 million and $0.1 million in each of the years 2013, 2012 and 2011, respectively.