10. RETIREMENT PLANS

12 Months Ended

Dec. 31, 2011

Pension and Other Postretirement Benefits Disclosure [Text Block]

10. RETIREMENT PLANS

Prior to the end of 2011, we sponsored a noncontributory defined benefit pension plan covering our non-union workers in our Ohio and Puerto Rico operations. Benefits under the non-union plan were based upon years of service and highest compensation levels as defined. We contributed to the plan the minimum amount required by regulation. On December 31, 2005 we froze the noncontributory defined benefit pension plan for all non-U.S. territorial employees.

In the fourth quarter of 2011, we made a decision to fully fund and terminate the pension plan. During the fourth quarter, we contributed $4.9 million into the plan and incurred related expenses and other adjustments of $0.4 million. As a result of these actions, we recorded pension termination charges totaling $5.3 million and an income tax benefit of $1.6 million.

F- 21

The funded status of the Company’s plan and reconciliation of accrued pension cost at December 31, 2011 and 2010 is presented below (information with respect to benefit obligations and plan assets are as of December 31):

	December 31,			December 31,
	2011			2010
Change in benefit obligation:
Projected benefit obligation at beginning of the year	$	11,548,148		$	11,181,550
Service cost		123,360			79,909
Interest cost		625,322			646,708
Change in discount rate		-			-
Curtailment decrease		-			-
Actuarial (gain)/loss		296,751			24,926
Benefits paid		(12,593,581	)		(384,945	)
Projected benefit obligation at end of year	$	-		$	11,548,148
Change in plan assets:
Fair value of plan assets at beginning of year	$	8,028,855		$	6,891,675
Employer contributions		5,038,632			715,192
Actual return on plan assets		(473,906	)		806,933
Benefits paid		(12,593,581	)		(384,945	)
Fair value of plan assets at end of year	$	-		$	8,028,855
Funded status:
Underfunded	$	-		$	(3,519,293	)
Remaining unrecognized benefit obligation existing at transition		-			-
Unrecognized prior service costs due to plan amendments		-			-
Unrecognized net loss		-			-
Total	$	-		$	(3,519,293	)
Amounts in accumulated other comprehensive income that have not yet been recognized as net pension cost:
Remaining unrecognized benefit obligation existing at transition	$	-		$	-
Unrecognized prior service costs due to plan amendments		-			253,651
Unrecognized net loss		-			4,236,846
Total	$	-		$	4,490,497
Amounts recognized in the consolidated financial statements:
Pension liability	$	-		$	(3,519,293	)
Accumulated other comprehensive loss, net of tax effect of $1,661,508 for 2010		-			2,828,989
Net amount recognized	$	-		$	(690,304	)
Accumulated benefit obligation	$	-		$	11,548,148

F- 22

Net pension cost of our plan is as follows:

	Years Ended December 31,
	2011			2010			2009
Service cost	$	123,360		$	79,909		$	115,372
Interest cost		625,322			646,708			605,817
Expected return on assets		(626,365	)		(532,218	)		(486,454	)
Amortization of unrecognized net  loss		219,050			287,413			247,143
Amortization of unrecognized transition obligation		-			-			-
Amortization of unrecognized prior service cost		75,205			72,392			72,392
Net periodic pension cost	$	416,572		$	554,204		$	554,270

Our unrecognized benefit obligation existing at the date of transition for the plan was being amortized over 21 years. Actuarial assumptions used in the accounting for the plan was as follows:

	December 31,
	2010
Discount rate	5.51		%
Average rate increase in compensation levels		3.00	%
Expected long-term rate of return on plan assets		8.00	%

Our pension plan’s asset allocations at December 31, 2010 by asset category were:

	December 31,
	2010
Rocky common stock		9.0	%
Other equity securities		61.0	%
Municipal bonds		15.0	%
Corporate obligations		5.0	%
Cash and cash equivalents		10.0	%
Total		100.0	%

F- 23

The fair values of our pension plan assets at December 31, 2010, by asset category were as follows:

	December 31, 2010
	Quoted Prices		Other significant observable inputs		Significant unobservable inputs
Asset Category	(Level 1)		(Level 2)		(Level 3)		Total
Cash and cash equivalents	$	832,672	$	-	$	-	$	832,672
Equity Securities:
U. S. companies		4,716,610		-		-		4,716,610
International companies		850,766		-		-		850,766
Corporate obligations		410,841						410,841
Government securites:
U.S. government agencies		1,217,966		-		-		1,217,966
	$	8,028,855	$	-	$	-	$	8,028,855

We also sponsor a 401(k) savings plan for substantially all of our employees. We provide a contribution of 3% of applicable salary to the plan for all employees with greater than six months of service. Additionally, we match eligible employee contributions at a rate of 0.25%, per one percent of applicable salary contributed to the plan by the employee. This matching contribution will be made by us up to a maximum of 1% of the employee’s applicable salary for all qualified employees. Our contributions to the 401(k) plan were approximately $1.0 million in 2011, $1.0 million in 2010 and $1.0 million in 2009.