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Note 12 - Employee Benefit and Retirement Plans
 12 Months Ended
Jun. 30, 2013
Compensation and Retirement Disclosure [Abstract]  
Pension and Other Postretirement Benefits Disclosure [Text Block]

12. EMPLOYEE BENEFIT AND RETIREMENT PLANS


The Company has two defined benefit pension plans, one for U.S. employees and another for U.K. employees.   The UK plan was closed to new entrants in fiscal 2009.  The Company has a postretirement medical and life insurance benefit plan for U.S. employees. The Company also has defined contribution plans.  In addition, certain U.S. employees, as part of their pension plan benefits, participate in an Employee Stock Ownership Plan (1984 ESOP) which was formed in a previous year.


The Company’s contribution toward medical benefits for qualified retirees between ages 55 and 64 is based on a sliding scale ranging from 15% to 75% of the current annual premium rates.  For retirees 65 and older, the Company’s contribution is fixed at $28.50 or $23 per month depending upon the plan the retiree has chosen.


In previous years the Company made contributions to the 1984 ESOP in the form of Company stock or in cash to be invested in Company stock. Employees are not required or permitted to make contributions to the 1984 ESOP. Ninety percent of the actuarially determined annuity value of their 1984 ESOP shares is used to offset benefits otherwise due under the domestic defined benefit pension plan.


The total cost of all such plans for fiscal 2013, 2012 and 2011, considering the combined projected benefits and funds of the 1984 ESOP as well as the other plans, was $4.4 million, $18.0 million and $1.9 million, respectively. Included in these amounts are the Company’s contributions to the defined contribution plans amounting to $1.0 million, $0.2 million and $0.2 million in fiscal 2013, 2012 and 2011, respectively.


Under both U.S and U.K. defined benefit plans, benefits are based on years of service and final average earnings. Plan assets, including those of the1984 ESOP, consist primarily of investment grade debt obligations, marketable equity securities and shares of the Company’s common stock. The asset allocation of the Company’s domestic pension plan is diversified, consisting primarily of investments in equity and debt securities. The Company seeks a long-term investment return that is reasonable given prevailing capital market expectations. Target allocations are 40% to 70% in equities (including 10% to 20% in Company stock), and 30% to 60% in cash and debt securities.


The Company currently uses an expected long-term rate of return assumption of 6.0% for the U.S. domestic pension plan, and 6.4% for the U.K. plan. In determining these assumptions, the Company considers the historical returns and expectations for future returns for each asset class as well as the target asset allocation of the pension portfolio as a whole. In fiscal 2013 and 2012, the Company used a discount rate assumption of 4.96% and 3.92% for the U.S. plan and 4.70% and 4.40% for the U.K. plan, respectively. In determining these assumptions, the Company considers published third party data appropriate for the plans.


Other than the discount rate, pension valuation assumptions are generally long-term and not subject to short-term market fluctuations, although they may be adjusted as warranted by structural shifts in economic or demographic outlooks.  Long-term assumptions are reviewed annually to ensure they do not produce results inconsistent with current market conditions. The discount rate is adjusted annually based on corporate investment grade (rated AA or better) bond yields, the maturities of which are correlated with the expected timing of future benefit payments, as of the measurement date.


Based upon the actuarial valuations performed on the Company’s defined benefit plans as of June 30, 2013, the U.S. plan will require no contributions in fiscal 2014 and the U.K. plan will require a $1.2 million contribution in fiscal 2014.


The table below sets forth the actual asset allocation for the assets within the Company’s plans.


   

2013

   

2012

 

Asset category:

               

Cash equivalents

    1 %     0 %

Fixed income

    20 %     12 %

Equities

    24 %     27 %

Mutual and pooled funds (balanced funds)

    44 %     54 %

Other

    11 %     7 %
      100 %     100 %

The Company determines its investments strategies based upon the composition of the beneficiaries in its defined benefit plans and the relative time horizons that those beneficiaries are projected to receive payouts from the plans. The Company engages an independent investment firm to manage the U.S. pension assets.


Cash equivalents are held in money market funds.


The Company’s fixed income portfolio includes mutual funds that hold a combination of short-term, investment-grade fixed income securities and a diversified selection of investment-grade, fixed income securities, including corporate securities and U.S. government securities.


The Company invests in equity securities, which are diversified across a spectrum of value and growth in large, medium and small capitalization as appropriate to achieve the objective of a balanced portfolio and optimize the expected returns and volatility in the various asset classes.


Other assets include pooled investment funds whose underlying assets consist primarily of property holdings as well as financial instruments designed to offset the long-term impact of inflation and interest rate fluctuations.


In accordance with ASC 820 Fair Value Measurement, the Company has categorized its financial assets (including its pension plan assets), based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below. If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.


Financial assets are categorized based on the inputs to the valuation techniques as follows:


o  

Level 1 – Financial assets whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market which the Company has the ability to access at the measurement.


o  

Level 2 – Financial assets whose value are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets.


o  

Level 3 – Financial assets whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own view about the assumptions a market participant would use in pricing the asset.


The tables below show the portfolio by valuation category as of June 30, 2013 and June 30, 2012 (in thousands).


June 30, 2013

                                       

Asset Category

 

Level 1

   

Level 2

   

Level 3

   

Total

   

%

 

Cash Equivalent

  $ 1,416     $ —     $ —     $ 1,416       1

%

Fixed Income

    —       22,245       —       22,245       20

%

Equities

    23,210       2,475       —       25,685       24

%

Mutual & Pooled Funds

    28,357       19,476       —       47,833       44

%

Other

    —       9,139       3,008       12,147       11

%

Total

  $ 52,983     $ 53,335     $ 3,008     $ 109,326       100

%


June 30, 2012

                                       

Asset Category

 

Level 1

   

Level 2

   

Level 3

   

Total

   

%

 

Cash Equivalent

  $ 79             $ —     $ 79       0

%

Fixed Income

    —       12,617       —       12,617       12

%

Equities

    25,212       3,379       —       28,591       27

%

Mutual & Pooled Funds

    34,627       24,204       —       58,831       54

%

Other

    —       4,216       3,034       7,250       7

%

Total

  $ 59,918     $ 44,416     $ 3,034     $ 107,368       100

%


Included in equity securities at June 30, 2013 and 2012 are shares of the Company’s common stock having a fair value of $9.2 million and $10.4 million, respectively.


A reconciliation of the beginning and ending balances of Level 3 assets is as follows (in thousands):


   

Fair Value Measurement Using

Significant Unobservable Inputs

(Level 3)

 
   

2013

   

2012

 
                 

Beginning balance

  $ 3,034     $ 2,869  

Actual returns on assets

    (26

)

    165  
                 

Ending balance

  $ 3,008     $ 3,034  

The Level 3 assets consist of units of a pooled investment fund which invests in a mix of properties selected from across retail, office, industrial and other sectors predominantly located in the U.K. In addition to direct investments, the fund may also invest indirectly in property through investment vehicles such as quoted and unquoted property companies or collective investment trusts. Redemptions from the fund are not readily available given the illiquid nature of its assets.


U.S. and U.K. Plans Combined:


The status of these defined benefit plans, including the 1984 ESOP, is as follows (in thousands):


   

2013

   

2012

   

2011

 

Change in benefit obligation

                       

Benefit obligation at beginning of year

  $ 145,595     $ 119,892     $ 117,974  

Service cost

    3,017       2,168       2,278  

Interest cost

    6,057       6,538       6,541  

Participant contributions

    242       249       202  

Exchange rate changes

    (1,344 )     (852

)

    2,683  

Benefits paid

    (5,918 )     (5,803

)

    (5,307

)

Actuarial (gain) loss

    (6,333 )     23,403       (4,480

)

Benefit obligation at end of year

  $ 141,316     $ 145,595     $ 119,891  
                         

Change in plan assets

                       

Fair value of plan assets at beginning of year

  $ 107,368     $ 108,547     $ 98,867  

Actual return on plan assets

    6,878       3,770       12,271  

Employer contributions

    1,795       1,268       625  

Participant contributions

    242       249       202  

Benefits paid

    (5,918 )     (5,803

)

    (5,307

)

Exchange rate changes

    (1,039 )     (663

)

    1,889  

Fair value of plan assets at end of year

    109,326       107,368       108,547  

Funded status at end of year

  $ (31,990 )   $ (38,227

)

  $ (11,344

)

Amounts recognized in balance sheet

                       

Current liability

  $ (33 )   $ (23

)

  $ (23

)

Noncurrent liability

    (31,957 )     (38,204

)

    (11,321

)

Net amount recognized in balance sheet

  $ (31,990 )   $ (38,227

)

  $ (11,344

)

                         

Amounts not yet reflected in net periodic benefit costs and included in accumulated other comprehensive loss

                       

Prior service cost

  $ (116 )   $ (349

)

  $ (585

)

Accumulated loss

    (5,919 )     (13,248

)

    (2,450

)

Amounts not yet recognized as a component of net periodic benefit cost

    (6,035 )     (13,597

)

    (3,035

)

Accumulated net periodic benefit cost in excess of contributions

    (25,955 )     (24,630

)

    (8,309

)

Net amount recognized

  $ (31,990 )   $ (38,227

)

  $ (11,344

)

                         

Components of net periodic benefit cost

                       

Service cost

  $ 3,017     $ 2,168     $ 2,278  

Interest cost

    6,057       6,538       6,541  

Expected return on plan assets

    (5,961 )     (6,473

)

    (7,305

)

Amortization of prior service cost

    234       234       249  

Recognized actuarial (gain) loss

    0       15,298       (2

)

Net periodic benefit cost

  $ 3,347     $ 17,765     $ 1,761  
                         

Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year

                       

Prior service cost

  $ (127 )   $ (234

)

  $ (234

)

                         

Information for pension plans with accumulated benefits in excess of plan assets

                       

Projected benefit obligation

  $ 141,316       145,595       119,891  

Accumulated benefit obligation

    134,594       138,587       115,306  

Fair value of assets

    109,326       107,368       108,547  

U.S. Plan:


The status of the U.S. defined benefit plan is as follows (in thousands):


   

2013

   

2012

   

2011

 

Change in benefit obligation

                       

Benefit obligation at beginning of year

  $ 104,537     $ 83,491     $ 81,678  

Service cost

    2,562       1,763       1,787  

Interest cost

    4,289       4,530       4,498  

Benefits paid

    (4,101

)

    (4,170

)

    (3,821

)

Actuarial (gain) loss

    (7,499

)

    18,923       (651

)

Benefit obligation at end of year

  $ 99,788     $ 104,537     $ 83,491  
                         

Weighted average assumptions - benefit obligation

                       

Discount rate

    4.96

%

    3.92

%

    5.44

%

Rate of compensation increase

    2.64

%

    2.64

%

    2.64

%

                         

Change in plan assets

                       

Fair value of plan assets at beginning of year

  $ 76,778     $ 78,577     $ 73,832  

Actual return on plan assets

    3,958       2,348       8,543  

Employer contributions

    573       23       23  

Benefits paid

    (4,101

)

    (4,170

)

    (3,821

)

Fair value of plan assets at end of year

    77,208       76,778       78,577  

Funded status at end of year

  $ (22,580

)

  $ (27,759

)

  $ (4,914

)

                         

Amounts recognized in balance sheet

                       

Current liability

  $ (33

)

  $ (23

)

  $ (23

)

Noncurrent liability

    (22,547

)

    (27,736

)

    (4,891

)

Net amount recognized in balance sheet

  $ (22,580

)

  $ (27,759

)

  $ (4,914

)

                         

Weighted average assumptions – net periodic benefit cost

                       

Discount rate

    3.92

%

    5.44

%

    5.37

%

Rate of compensation increase

    2.64

%

    2.64

%

    2.64

%

Return on plan assets

    6.00

%

    6.00

%

    8.00

%

                         

Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive loss

                       

Prior service cost

  $ (116

)

  $ (349

)

  $ (585

)

Accumulated loss

    (3,438

)

    (10,420

)

    (4,572

)

Amounts not yet recognized as a component of net periodic benefit cost

    (3,554

)

    (10,769

)

    (5,157

)

Accumulated contributions in excess of (less than) net periodic benefit cost

    (19,026

)

    (16,990

)

    243  

Net amount recognized

  $ (22,580

)

  $ (27,759

)

  $ (4,914

)

                         

Components of net periodic benefit cost

                       

Service cost

  $ 2,562     $ 1,763     $ 1,787  

Interest cost

    4,289       4,530       4,498  

Expected return on plan assets

    (4,474

)

    (4,570

)

    (5,724

)

Amortization of prior service cost

    234       234       249  

Recognized actuarial (gain) or loss

    -       15,298       (2

)

Net periodic benefit cost

  $ 2,611     $ 17,255     $ 808  
                         

Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year

                       

Prior service cost

  $ (127

)

  $ (234

)

  $ (234

)

                         
                         

Information for plan with accumulated benefits in excess of plan assets

                       

Projected benefit obligation

  $ 99,788       104,537       83,491  

Accumulated benefit obligation

    93,066       97,529       78,905  

Fair value of assets

    77,208       76,778       78,577  

 U.K. Plan:


The status of the U.K. defined benefit plan is as follows (in thousands):

 
   

2013

   

2012

   

2011

 

Change in benefit obligation

                       

Benefit obligation at beginning of year

  $ 41,058     $ 36,400          

Service cost

    455       405       491  

Interest cost

    1,768       2,008       2,043  

Participant contributions

    242       249       202  

Exchange rate changes

    (1,344

)

    (851

)

    2,683  

Benefits paid

    (1,817

)

    (1,633

)

    (1,486

)

Actuarial (gain) loss

    1,166       4,480       (3,829

)

Benefit obligation at end of year

  $ 41,528     $ 41,058          
                         

Weighted average assumptions - benefit obligation

                       

Discount rate

    4.70

%

    4.40 %     5.70 %

Rate of compensation increase

    3.10

%

    2.60 %     3.30 %
                         

Change in plan assets

                       

Fair value of plan assets at beginning of year

  $ 30,590     $ 29,971          

Actual return on plan assets

    2,920       1,422       3,728  

Employer contributions

    1,222       1,245       602  

Participant contributions

    242       249       202  

Benefits paid

    (1,817

)

    (1,633

)

    (1,486

)

Exchange rate changes

    (1,039

)

    (664

)

    1,889  

Fair value of plan assets at end of year

    32,118       30,590       29,970  

Funded status at end of year

  $ (9,410

)

  $ (10,468

)

  $ (6,430

)

Amounts recognized in balance sheet

                       

Current liability

  $ —     $ —     $ —  

Noncurrent liability

    (9,410

)

    (10,468

)

    (6,430

)

Net amount recognized in balance sheet

  $ (9,410

)

  $ (10,468

)

  $ (6,430

)

                         

Weighted average assumptions – net periodic benefit cost

                       
                         

Discount rate

    4.40

%

    5.70

%

    5.40 % 

Rate of compensation increase

    2.60

%

    3.30

%

    3.10 % 

Return on plan assets

    4.90

%

    6.40

%

    6.00 % 
                         

Amounts not yet reflected in net periodic benefit costs and included in accumulated other comprehensive loss

                       

Prior service cost

  $ —     $ —     $ —  

Accumulated gain (loss)

    (2,481

)

    (2,828

)

    2,122  

Amounts not yet recognized as a component of net periodic benefit cost

    (2,481

)

    (2,828

)

    2,122  

Accumulated net periodic benefit cost in excess of contributions

    (6,929

)

    (7,640

)

    (8,552

)

Net amount recognized

  $ (9,410

)

  $ (10,468

)

  $ (6,430

)

                         

Components of net periodic benefit cost

                       

Service cost

  $ 455     $ 405     $ 491  

Interest cost

    1,768       2,008       2,043  

Expected return on plan assets

    (1,487

)

    (1,903

)

    (1,581

)

Amortization of prior service cost

    -       -       -  

Recognized actuarial loss

    -       -       -  

Net periodic benefit cost

  $ 736     $ 510     $ 953  
                         

Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year

  $ —     $ —     $ —  
                         
                         

Information for plan with accumulated benefits in excess of plan assets

                       

Projected benefit obligation

  $ 41,528     $ 41,058     $ 36,400  

Accumulated benefit obligation

    41,528       41,058       36,400  

Fair value of assets

    32,118       30,590       29,970  

Postretirement Medical and Life Insurance Benefits:


The status of the U.S. postretirement medical and life insurance benefit plan is as follows (in thousands):


   

2013

   

2012

   

2011

 

Change in benefit obligation:

                       

Benefit obligation at beginning of year

  $ 14,230     $ 11,804     $ 11,603  

Service cost

    484       386       353  

Interest cost

    518       611       591  

Benefits paid

    (351

)

    (552

)

    (662

)

Actuarial (gain) loss

    (3,917

)

    1,981       (81

)

Benefit obligation at end of year

  $ 10,964     $ 14,230     $ 11,804  
                         

Weighted average assumptions: benefit obligations

                       

Discount rate

    4.96

%

    3.92

%

    5.44

%

Rate of compensation increase

    2.64

%

    2.64

%

    2.64

%

                         

Change in plan assets

                       

Fair value of plan assets at beginning of year

  $ —     $ —     $ —  

Employer contributions

    351       552       662  

Benefits paid

    (351

)

    (552

)

    (662

)

Fair value of plan assets at end of year

    —       —       —  
                         

Amounts recognized in balance sheet

                       

Current postretirement benefit obligation

  $ (536

)

  $ (623

)

  $ (657

)

Non-current postretirement benefit obligation

    (10,428

)

    (13,606

)

    (11,147

)

Net amount recognized in balance sheet

  $ (10,964

)

  $ (14,230

)

  $ (11,804

)

                         

Weighted average assumptions – net periodic benefit cost

                       

Discount rate

    3.92

%

    5.44

%

    5.37

%

Rate of compensation increase

    2.64

%

    2.64

%

    2.64

%

                         

Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive loss

                       

Prior service credit

  $ 1,145     $ 1,888     $ 2,793  

Accumulated gain (loss)

    627       (3,400

)

    (1,422

)

Amounts not yet recognized as a component of net periodic benefit cost

    1,772       (1,512

)

    1,371  

Net periodic benefit cost in excess of accumulated contributions

    (12,736

)

    (12,718

)

    (13,175

)

Net amount recognized

  $ (10,964

)

  $ (14,230

)

  $ (11,804

)

                         

Components of net periodic benefit cost

                       

Service cost

  $ 484     $ 386     $ 353  

Interest cost

    518       611       591  

Amortization of prior service credit

    (743

)

    (905

)

    (905

)

Amortization of accumulated loss

    111       2       10  

Net periodic benefit cost

  $ 370     $ 94     $ 49  

Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year

                       

Prior service credit

  $ 502     $ 905     $ 905  

Net gain (loss)

    —

 

    (158

)

    (19

)

    $ 502     $ 747     $ 886  
                         
                         

Healthcare cost trend rate assumed for next year

    7.80

%

    8.80

%

    9.70

%

Rate to which the cost trend rate gradually declines

    4.50

%

    4.50

%

    4.50

%

Year that the rate reaches the rate at which it is assumed to remain

 

2026

   

2026

   

2027

 

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one percentage point change in assumed health care cost trend rates would have the following effects (in thousands):


   

1% Increase

 
   

2013

   

2012

   

2011

 

Effect on total of service and interest cost

  $ 91     $ 111     $ 104  

Effect on postretirement benefit obligation

    1,041       1,430       1,067  

   

1% Decrease

 
   

2013

   

2012

   

2011

 

Effect on total of service and interest cost

  $ (77

)

  $ (93

)

  $ (87

)

Effect on postretirement benefit obligation

    (881

)

    (1,208

)

    (915

)


For fiscal 2014, the Company expects to make no contribution to the qualified domestic pension plan, $33,000 to the nonqualified domestic pension plan, $1.2 million to the U.K. pension plan, and $536,000 to the postretirement medical and life insurance plan.


Future pension and other benefit payments are as follows (in thousands):


Fiscal Year

 

Pension

   

Other

Benefits

 

2014

  $ 6,412     $ 536  

2015

    6,623       574  

2016

    6,870       613  

2017

    7,197       634  

2018

    7,468       676  

2019-2023

    42,085       4,442