Retirement Benefit Plans

12 Months Ended

Sep. 30, 2012

Retirement Benefit Plans [Abstract]

Retirement Benefit Plans

8. Retirement Benefit Plans

Defined Benefit Plans

The Company and certain of its subsidiaries sponsor defined benefit pension plans covering most of its employees. The Company’s funding policy for its defined benefit pension plans is based on an actuarially determined cost method allowable under Internal Revenue Service regulations. One of the Company’s defined benefit pension plans, which covers substantially all non-union employees of the Company’s U.S. operations who were hired prior to March 1, 2003, was frozen in 2003. Consequently, although the plan otherwise continues, the plan ceased the accrual of additional pension benefits for service subsequent to March 1, 2003.

The Company uses a September 30 measurement date for its U.S. defined benefit pension plans. Net pension expense, benefit obligations and plan assets for the Company-sponsored defined benefit pension plans consists of the following:

	Years Ended September 30,
	2012			2011
Service cost	$	266		$	273
Interest cost		988			1,059
Expected return on plan assets		(1,413	)		(1,454	)
Amortization of prior service cost		47			117
Amortization of net loss		861			682
Early retirement expense		0			61
Settlement cost		513			0
Net pension expense for defined benefit plan	$	1,262		$	738

The status of all defined benefit pension plans at September 30 is as follows:

	2012			2011
Benefit obligations:
Benefit obligations at beginning of year	$	24,030		$	21,889
Service cost		266			273
Interest cost		988			1,059
Amendments		0			0
Actuarial loss		2,659			1,821
Benefits paid		(1,637	)		(1,073	)
Early retirement expense		0			61
Benefit obligations at end of year	$	26,306		$	24,030
Plan assets:
Plan assets at beginning of year	$	16,642		$	16,653
Actual return on plan assets		2,929			364
Employer contributions		1,015			698
Benefits paid		(1,637	)		(1,073	)
Plan assets at end of year	$	18,949		$	16,642

	Plans in which Assets Exceed Benefit Obligations at September 30,				Plans in which Benefit Obligations Exceed Assets at September 30,
	2012		2011		2012			2011
Reconciliation of funded status:
Plan assets in excess of (less than) projected benefit obligations	$	520	$	772	$	(7,877	)	$	(8,160	)
Amounts recognized in accumulated other comprehensive loss:
Net loss		872		562		9,907			10,449
Prior service cost		0		39		31			39
Net amount recognized in the consolidated balance sheets	$	1,392	$	1,373	$	2,061		$	2,328
Amounts recognized in the consolidated balance sheets are:
Other assets	$	520	$	772	$	0		$	0
Other long-term liabilities		0		0		(7,877	)		(8,160	)
Accumulated other comprehensive loss – pretax		872		601		9,938			10,488
Net amount recognized in the consolidated balance sheets	$	1,392	$	1,373	$	2,061		$	2,328

The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit costs during fiscal 2013 are as follows:

	Plans in which Assets Exceed Benefit Obligations		Plans in which Benefit Obligations Exceed Assets
Net loss	$	44	$	862
Prior service cost		0		8
Total	$	44	$	870

Where applicable, the following weighted-average assumptions were used in developing the benefit obligation and the net pension expense for defined benefit pension plans:

	Years Ended September 30,
	2012			2011
Discount rate for liabilities		3.6	%		4.2	%
Discount rate for expenses		4.2	%		5.0	%
Expected return on assets		8.1	%		8.3	%

The Company classifies and discloses pension plan assets in one of the following three categories: (i) Level 1 - quoted market prices in active markets for identical assets; (ii) Level 2 - observable market based inputs or unobservable inputs that are corroborated by market data or (iii) Level 3 - unobservable inputs that are not corroborated by market data. Level 1 and Level 2 assets are valued using market based inputs. Level 3 asset values are determined by the trustees using a discounted cash flow model. The following tables set forth the asset allocation of the Company’s defined benefit pension plan assets and summarize the fair values and levels within the fair value hierarchy for such plan assets as of September 30, 2012 and 2011:

September 30, 2012	Asset Amount		Level 1		Level 2		Level 3
U.S. equity securities:
Large value	$	288	$	0	$	288	$	0
Large blend		8,592		0		8,592		0
Large growth		640		0		640		0
Mid blend		19		0		19		0
Small blend		4		0		4		0
Non-U.S equity securities:
Foreign large blend		1,295		0		1,295		0
Diversified emerging markets		70		0		70		0
U.S. debt securities:
Inflation protected bond		952		0		952		0
Intermediate term bond		6,412		0		4,319		2,093
High inflation bond		299		0		299		0
Non-U.S. debt securities:
Emerging markets bonds		239		0		239		0
Stable value:
Short-term bonds		139		139		0		0
Total plan assets at fair value	$	18,949	$	139	$	16,717	$	2,093

September 30, 2011	Asset Amount		Level 1		Level 2		Level 3
U.S. equity securities:
Large value	$	204	$	0	$	204	$	0
Large blend		6,945		0		6,945		0
Large growth		832		0		832		0
Mid blend		43		0		43		0
Small blend		34		0		34		0
Non-U.S. equity securities:
Foreign large blend		1,048		0		1,048		0
Diversified emerging markets		109		0		109		0
U.S. debt securities:
Inflation protected bond		489		0		489		0
Intermediate term bond		6,176		0		4,083		2,093
High inflation bond		328		0		328		0
Non-U.S. debt securities:
Emerging markets bonds		257		0		257		0
Stable value:
Short-term bonds		177		177		0		0
Total plan assets at fair value	$	16,642	$	177	$	14,372	$	2,093

Changes in the fair value of the Company’s Level 3 investments during the years ending September 30, 2012 and 2011 were as follows:

	2012			2011
Balance at beginning of year	$	2,093		$	1,911
Actual return on plan assets		118			144
Purchases and sales of plan assets, net		(118	)		38
Balance at end of year	$	2,093		$	2,093

Investment objectives relative to the assets of the Company’s defined benefit pension plans are to (i) optimize the long-term return on the plans’ assets while assuming an acceptable level of investment risk, (ii) maintain an appropriate diversification across asset categories and among investment managers, and (iii) maintain a careful monitoring of the risk level within each asset category. Asset allocation objectives are established to promote optimal expected returns and volatility characteristics given the long-term time horizon for fulfilling the obligations of the Company’s defined benefit pension plans. Selection of the appropriate asset allocation for the plans’ assets was based upon a review of the expected return and risk characteristics of each asset category in relation to the anticipated timing of future plan benefit payment obligations. The Company has a long-term objective for the allocation of plan assets. However, the Company realizes that actual allocations at any point in time will likely vary from this objective due principally to (i) the impact of market conditions on plan asset values and (ii) required cash contributions to and distribution from the plans. The “Asset Allocation Range” anticipates these potential scenarios and provides flexibility for the Plan’s investments to vary around the objective without triggering a reallocation of the assets, as noted by the following:

	Percent of Plan Assets at September 30,						Asset Allocation Range
	2012			2011
U.S. equities		50	%		48	%		30% to 70%
Non-U.S. equities		7	%		7	%		0% to 20%
U.S. debt securities		41	%		42	%		20% to 70%
Non-U.S. debt securities		1	%		2	%		0% to 10%
Other securities		1	%		1	%		0% to 60%
Total		100	%		100	%

External consultants assist the Company with monitoring the appropriateness of the above investment strategy and the related asset mix and performance. To develop the expected long-term rate of return assumptions on plan assets, generally the Company uses long-term historical information for the target asset mix selected. Adjustments are made to the expected long-term rate of return assumptions when deemed necessary based upon revised expectations of future investment performance of the overall investments markets.

The Company expects to make contributions of approximately $1,423 to its defined benefit pension plans during fiscal 2013. The Company has carryover balances from previous periods that may be available for use as a credit to reduce the amount of contributions that the Company is required to make to certain of its defined benefit pension plans in fiscal 2013. The Company’s ability to elect to use such carryover balances will be determined based on the actual funded status of each defined benefit pension plan relative to the plan’s minimum regulatory funding requirements. The following defined benefit payment amounts are expected to be made in the future:

Years Ending September 30,	Projected Benefit Payments
2013	$	1,991
2014		1,370
2015		1,269
2016		1,288
2017		1,804
2018-2022		8,279

Multi-Employer Plans

The Company contributes to two (2) U.S. multi-employer retirement plans for certain union employees, as follow:

Pension Fund	Pension Protection Act Zone Status				FIP/RP Status Pending/ Implemented		Contributions by the Company				Surcharge Imposed		Expiration of Collective Bargaining Agreement
	2012		2011				2012		2011
Fund 1		Green		Green		No	$	52	$	60		No		5/31/2015
Fund 2		Yellow		Yellow		Implemented	$	205	$	144		Yes		7/31/2013

1 The fund is the IAM National Pension Fund – EIN 51-6031295 / Plan number 002. The IAM National Pension Fund utilized the special 30-year amortization provided by Public law 111-192, section 211 to amortize its losses from 2008.

2 The fund is the Boilermaker-Blacksmith National Pension Trust – EIN 48-6168020 / Plan number 001.

The plans’ year-end to which the zone status relates is December 31, 2011 and 2010.

The risks of participating in the multi-employer retirement plan are different from a single-employer plan in that i) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers; ii) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers, and iii) if the Company chooses to stop participating in the multi-employer retirement plan, the Company may be required to pay the plan an amount based on the unfunded status of the plan, referred to as a withdrawal liability.

Defined Contribution Plans

Substantially all non-union U.S. employees of the Company and its U.S. subsidiaries are eligible to participate in the Company’s U.S. defined contribution plan. The Company makes non-discretionary, regular matching contributions to this plan equal to an amount that represents one hundred percent (100%) of a participant’s deferral contribution up to one percent (1%) of eligible compensation plus eighty percent (80%) of a participant’s deferral contribution between one percent (1%) and six percent (6%) of eligible compensation. The Company’s regular matching contribution expense for its U.S. defined contribution plan in 2012 and 2011 was $607 and $343, respectively. This defined contribution plan provides that the Company may also make an additional discretionary matching contribution during those periods in which the Company achieves certain performance levels. The Company’s additional discretionary matching contribution expense in 2012 and 2011 was $71 and $185, respectively.

The Company’s United Kingdom subsidiary sponsors a defined contribution plan for certain of its employees. The Company contributes annually 5% of eligible employees’ compensation, as defined. Total contribution expense in 2012 and 2011 was $21 and $20, respectively.

The Company’s Swedish subsidiary sponsors defined contribution plans for its employees. The Company contributes annually a percentage of eligible employees’ compensation, as defined. Total contribution expense in fiscal 2012 and 2011 was $9 and $6, respectively.