EMPLOYEE RETIREMENT PLANS

Pension

The Company has an unfunded supplemental pension plan which provides defined pension benefits to certain salaried employees upon retirement. Benefits under the plan are based on the salaries of individual plan participants in the year they were admitted into the plan. The plan has been frozen and no additional participants will be added to the plan in the future.The following table presents the changes in the plan’s projected benefit obligation, fair value of plan assets, and funded status for the years ended December 31 (in thousands):



	2016			2015			2014
Projected benefit obligation at January 1	$	1,685		$	1,961		$	2,179
Interest cost	59			66			88
Actuarial losses (gains)	5			(39		)	9
Benefits paid	(372		)	(303		)	(315		)
Projected benefit obligation at December 31	1,377			1,685			1,961
Fair value of plan assets	—			—			—
Under funded status	(1,377		)	(1,685		)	(1,961		)
Unamortized prior service cost	4			10			24
Unrecognized actuarial gain	(200		)	(218		)	(179		)
Net amount recognized	$	(1,573	)	$	(1,893	)	$	(2,116	)

Amounts recognized in the consolidated financial statements consisted of (in thousands):



Accrued pension liability:
Current portion	$	(360	)	$	(372	)	$	(395	)
Long term portion	(1,016		)	(1,313		)	(1,566		)
Pre-tax accumulated other comprehensive income – retirement benefit liability adjustment	(197		)	(208		)	(155		)
Net amount recognized	$	(1,573	)	$	(1,893	)	$	(2,116	)

The plan’s accumulated benefit obligation equaled the projected benefit obligation as of December 31, 2016, 2015, and 2014. The measurement date used to determine pension benefit measures was December 31.

Components of net periodic pension cost for the years ended December 31 were as follows (in thousands):



	2016			2015			2014
Interest cost	$	59		$	66		$	88
Amortization of unrecognized prior service cost	6			14			15
Gain amortization	(13		)	—			—
Net periodic pension cost	$	52		$	80		$	103
Assumptions used to calculate the benefit obligation:
Discount rate	3.81		%	3.94		%	3.74		%

Expected benefit payments from the plan for the years ended December 31 are as follows (in thousands):



2017	$	360
2018	$	327
2019	$	228
2020	$	137
2021	$	100
Years 2022 - 2026	$	392

Foreign Pension

The Company had another unfunded supplemental pension plan at one of our previously owned European subsidiaries which provided defined pension benefits to certain employees upon retirement. The Company sold this subsidiary on April 15, 2016. The projected benefit obligation at December 31, 2015 was $362,000. A pre-tax accumulated other comprehensive loss retirement benefit liability adjustment of $91,000 had been recognized in 2015 in the Company’s financial statements, for a net liability of $271,000 at December 31, 2015.

401(k)

Employees of all U.S. subsidiaries are eligible to participate in the Company’s 401(k) Plan.

Multiemployer Pension Plans

In addition, the Company contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover union-represented employees. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects:


a)	Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.


b)	If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.


c)	If the Company chooses to stop participating in some of the multiemployer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The Company’s participation in these plans for the year ended December 31, 2016 is outlined in the table below. The “EIN/ Pension Plan Number” column provides the Employee Identification Number (EIN) and three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act (PPA) zone status available in 2016 and 2015 is for the plan’s year ended December 31, 2015 and 2014, respectively. The zone status is based on information that the Company received from the plans and is certified by the plans’ actuaries. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are less than 80% funded, and plans in the green zone are at least 80% funded.



	EIN/ Pension	PPA Zone Status		Surcharge
Pension Fund	Plan Number	2015	2014	Imposed
National Integrated Group Pension Plan	22-6190618-001	Red	Red	Yes
Sheet Metal Workers’ National Pension Plan	52-6112463-001	Yellow	Yellow	Yes
Sheet Metal Workers’ Pension Plan of Northern California	51-6115939-001	Red	Red	No

At December 31, 2016, the Company employed 2,311 people, of which approximately 11% were represented by unions through various collective bargaining agreements (CBAs). Three of the Company's six CBAs expired and were successfully renegotiated in 2016. None of our CBA's expire until April 30, 2018. All of the funds have rehabilitation plans in place. Each plan with a rehabilitation plan requires minimum contributions from the Company. Given the status of these plans, it is reasonably possible that future contributions to the plans will increase although the Company cannot reasonably estimate a possible range of increased contributions as of December 31, 2016.

The Company did not contribute more than 5% of any fund’s total contributions in any of the three years in the period ended December 31, 2016. The table below sets forth the contributions made by the Company to each multiemployer plan for the years ended December 31 (in thousands):



Pension Fund	2016		2015		2014
National Integrated Group Pension Plan	$	218	$	246	$	233
Sheet Metal Workers’ National Pension Plan	50		56		61
Sheet Metal Workers’ Pension Plan of Northern California	28		31		35
	$	296	$	333	$	329

At the date the financial statements were issued, Forms 5500 were not available for the plan year ended December 31, 2016.

Total Retirement Plan Expense

Total expense for all retirement plans for the years ended December 31 was (in thousands):



2016		2015		2014
$	2,887	$	2,934	$	2,816