Note 12 - Employee Benefit and Retirement Plans

12 Months Ended

Jun. 30, 2014

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).

The Company amended its Postretirement Medical Plan effective December 31, 2013 whereby the Company terminated eligibility for employees ages 55-64.  For retirees 65 and older, the Company’s contribution is fixed at $28.50 or $23.00 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 2014, 2013 and 2012, considering the combined projected benefits and funds of the 1984 ESOP as well as the other plans, was $5.0 million, $4.4 million and $18.0 million, respectively. Included in these amounts are the Company’s contributions to the defined contribution plans amounting to $1.2 million, $1.0 million and $0.2 million in fiscal 2014, 2013 and 2012, 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 2014 and 2013, the Company used a discount rate assumption of 4.29% and 4.96% for the U.S. plan and 4.30% and 4.70% 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, 2014, the U.S. plan will require a $6.4 million contribution in fiscal 2015 and the U.K. plan will require a $0.8 million contribution in fiscal 2015.

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

	2014			2013
Asset category:
Cash equivalents		1	%		1	%
Fixed income		14	%		14	%
Equities		24	%		24	%
Mutual and pooled funds		61	%		61	%
		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, 2014 and June 30, 2013 (in thousands).

June 30, 2014
Asset Category	Level 1		Level 2		Level 3		Total		%
Cash Equivalent	$	1,105					$	1,105		1	%
Fixed Income				16,791				16,791		14	%
Equities		26,210		3,428				29,638		24	%
Mutual & Pooled Funds		37,563		33,932		3,895		75,390		61	%
Total	$	64,878	$	54,151	$	3,895	$	122,924		100	%

June 30, 2013
Asset Category	Level 1		Level 2		Level 3		Total		%
Cash Equivalent	$	1,416	$	—	$	—	$	1,416		1	%
Fixed Income		—		15,307		—		15,307		14	%
Equities		23,210		2,475		—		25,685		24	%
Mutual & Pooled Funds		28,357		35,553		3,008		66,918		61	%
Total	$	52,983	$	53,335	$	3,008	$	109,326		100	%

Included in equity securities at June 30, 2014 and 2013 are shares of the Company’s common stock having a fair value of $13.2 million and $9.2 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)
	2014		2013
Beginning balance	$	3,008	$	3,034
Actual returns on assets		887		(26	)
Ending balance	$	3,895	$	3,008

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):

	2014			2013			2012
Change in benefit obligation
Benefit obligation at beginning of year	$	141,316		$	145,595		$	119,892
Service cost		2,709			3,017			2,168
Interest cost		6,922			6,057			6,538
Participant contributions		183			242			249
Exchange rate changes		5,359			(1,344	)		(852	)
Benefits paid		(5,956	)		(5,918	)		(5,803	)
Actuarial (gain) loss		10,529			(6,333	)		23,403
Benefit obligation at end of year	$	161,062		$	141,316		$	145,595
Change in plan assets
Fair value of plan assets at beginning of year	$	109,326		$	107,368		$	108,547
Actual return on plan assets		14,105			6,878			3,770
Employer contributions		1,171			1,795			1,268
Participant contributions		183			242			249
Benefits paid		(5,956	)		(5,918	)		(5,803	)
Exchange rate changes		4,095			(1,039	)		(663	)
Fair value of plan assets at end of year		122,924			109,326			107,368
Funded status at end of year	$	(38,138	)	$	(31,990	)	$	(38,227	)
Amounts recognized in balance sheet
Current liability	$	(37	)	$	(33	)	$	(23	)
Noncurrent liability		(38,101	)		(31,957	)		(38,204	)
Net amount recognized in balance sheet	$	(38,138	)	$	(31,990	)	$	(38,227	)
Amounts not yet reflected in net periodic benefit costs and included in accumulated other comprehensive loss
Prior service cost	$	0		$	(116	)	$	(349	)
Accumulated loss		(8,686	)		(5,919	)		(13,248	)
Amounts not yet recognized as a component of net periodic benefit cost		(8,686	)		(6,035	)		(13,597	)
Accumulated net periodic benefit cost in excess of contributions		(29,452	)		(25,955	)		(24,630	)
Net amount recognized	$	(38,138	)	$	(31,990	)	$	(38,227	)
Components of net periodic benefit cost
Service cost	$	2,709		$	3,017		$	2,168
Interest cost		6,922			6,057			6,538
Expected return on plan assets		(6,332	)		(5,961	)		(6,473	)
Amortization of prior service cost		116			234			234
Recognized actuarial loss		398			0			15,298
Net periodic benefit cost	$	3,813		$	3,347		$	17,765
Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year
Prior service cost	$	(30	)	$	(127	)	$	(234	)
Information for pension plans with accumulated benefits in excess of plan assets
Projected benefit obligation	$	161,062			141,316			145,595
Accumulated benefit obligation		154,163			134,594			138,587
Fair value of assets		122,924			109,326			107,368

U.S. Plan:

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

	2014			2013			2012
Change in benefit obligation
Benefit obligation at beginning of year	$	99,788		$	104,537		$	83,491
Service cost		2,326			2,562			1,763
Interest cost		4,868			4,289			4,530
Benefits paid		(4,263	)		(4,101	)		(4,170	)
Actuarial (gain) loss		7,335			(7,499	)		18,923
Benefit obligation at end of year	$	110,054		$	99,788		$	104,537
Weighted average assumptions - benefit obligation
Discount rate		4.29	%		4.96	%		3.92	%
Rate of compensation increase		2.64	%		2.64	%		2.64	%
Change in plan assets
Fair value of plan assets at beginning of year	$	77,208		$	76,778		$	78,577
Actual return on plan assets		11,661			3,958			2,348
Employer contributions		23			573			23
Benefits paid		(4,263	)		(4,101	)		(4,170	)
Fair value of plan assets at end of year		84,629			77,208			76,778
Funded status at end of year	$	(25,425	)	$	(22,580	)	$	(27,759	)
Amounts recognized in balance sheet
Current liability	$	(37	)	$	(33	)	$	(23	)
Noncurrent liability		(25,388	)		(22,547	)		(27,736	)
Net amount recognized in balance sheet	$	(25,425	)	$	(22,580	)	$	(27,759	)
Weighted average assumptions – net periodic benefit cost
Discount rate		4.96	%		3.92	%		5.44	%
Rate of compensation increase		2.64	%		2.64	%		2.64	%
Return on plan assets		6.00	%		6.00	%		6.00	%
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive loss
Prior service cost	$	0		$	(116	)	$	(349	)
Accumulated loss		(3,585	)		(3,438	)		(10,420	)
Amounts not yet recognized as a component of net periodic benefit cost		(3,585	)		(3,554	)		(10,769	)
Accumulated contributions less than net periodic benefit cost		(21,840	)		(19,026	)		(16,990	)
Net amount recognized	$	(25,425	)	$	(22,580	)	$	(27,759	)
Components of net periodic benefit cost
Service cost	$	2,326		$	2,562		$	1,763
Interest cost		4,868			4,289			4,530
Expected return on plan assets		(4,484	)		(4,474	)		(4,570	)
Amortization of prior service cost		116			234			234
Recognized actuarial loss		12			-			15,298
Net periodic benefit cost	$	2,838		$	2,611		$	17,255
Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year
Prior service cost	$	(30	)	$	(127	)	$	(234	)
Information for plan with accumulated benefits in excess of plan assets
Projected benefit obligation	$	110,054			99,788			104,537
Accumulated benefit obligation		103,155			93,066			97,529
Fair value of assets		84,629			77,208			76,778

U.K. Plan:

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

	2014			2013			2012
Change in benefit obligation
Benefit obligation at beginning of year	$	41,528		$	41,058		$	36,400
Service cost		383			455			405
Interest cost		2,054			1,768			2,008
Participant contributions		183			242			249
Exchange rate changes		5,359			(1,344	)		(851	)
Benefits paid		(1,693	)		(1,817	)		(1,633	)
Actuarial (gain) loss		3,194			1,166			4,480
Benefit obligation at end of year	$	51,008		$	41,528		$	41,058
Weighted average assumptions - benefit obligation
Discount rate		4.30	%		4.70	%		4.40	%
Rate of compensation increase		3.20	%		3.10	%		2.60	%
Change in plan assets
Fair value of plan assets at beginning of year	$	32,118		$	30,590		$	29,971
Actual return on plan assets		2,444			2,920			1,422
Employer contributions		1,148			1,222			1,245
Participant contributions		183			242			249
Benefits paid		(1,693	)		(1,817	)		(1,633	)
Exchange rate changes		4,095			(1,039	)		(664	)
Fair value of plan assets at end of year		38,295			32,118			30,590
Funded status at end of year	$	(12,713	)	$	(9,410	)	$	(10,468	)
Amounts recognized in balance sheet
Current liability				$	—		$	—
Noncurrent liability		(12,713	)		(9,410	)		(10,468	)
Net amount recognized in balance sheet	$	(12,713	)	$	(9,410	)	$	(10,468	)
Weighted average assumptions – net periodic benefit cost
Discount rate		4.70	%		4.40	%		5.70	%
Rate of compensation increase		3.10	%		2.60	%		3.30	%
Return on plan assets		5.40	%		4.90	%		6.40	%
Amounts not yet reflected in net periodic benefit costs and included in accumulated other comprehensive loss
Prior service cost	$	0		$	—		$	—
Accumulated loss		(5,101	)		(2,481	)		(2,828	)
Amounts not yet recognized as a component of net periodic benefit cost		(5,101	)		(2,481	)		(2,828	)
Accumulated net periodic benefit cost in excess of contributions		(7,612	)		(6,929	)		(7,639	)
Net amount recognized	$	(12,713	)	$	(9,410	)	$	(10,467	)
Components of net periodic benefit cost
Service cost	$	383		$	455		$	405
Interest cost		2,054			1,768			2,008
Expected return on plan assets		(1,848	)		(1,487	)		(1,903	)
Amortization of prior service cost		-			-			-
Amortization of net loss		386
Recognized actuarial loss		-			-			-
Net periodic benefit cost	$	975		$	736		$	510
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	$	51,008		$	41,528		$	41,058
Accumulated benefit obligation		51,008			41,528			41,058
Fair value of assets		38,295			32,118			30,590

Postretirement Medical and Life Insurance Benefits:

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

	2014			2013			2012
Change in benefit obligation:
Benefit obligation at beginning of year	$	10,964		$	14,230		$	11,804
Service cost		225			484			386
Interest cost		396			518			611
Plan amendments		(5,730	)
Benefits paid		(429	)		(351	)		(552	)
Actuarial (gain) loss		441			(3,917	)		1,981
Benefit obligation at end of year	$	5,867		$	10,964		$	14,230
Weighted average assumptions: benefit obligations
Discount rate		4.29	%		4.96	%		3.92	%
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		429			351			552
Benefits paid, net of employee contributions		(429	)		(351	)		(552	)
Fair value of plan assets at end of year					—			—
Amounts recognized in balance sheet
Current postretirement benefit obligation	$	(379	)	$	(536	)	$	(624	)
Non-current postretirement benefit obligation		(5,488	)		(10,428	)		(13,606	)
Net amount recognized in balance sheet	$	(5,867	)	$	(10,964	)	$	(14,230	)
Weighted average assumptions – net periodic benefit cost
Discount rate		4.96	%		3.92	%		5.44	%
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	$	6,104		$	1,145		$	1,888
Accumulated gain (loss)		185			627			(3,400	)
Amounts not yet recognized as a component of net periodic benefit cost		6,289			1,772			(1,512	)
Net periodic benefit cost in excess of accumulated contributions		(12,156	)		(12,736	)		(12,718	)
Net amount recognized	$	(5,867	)	$	(10,964	)	$	(14,230	)
Components of net periodic benefit cost
Service cost	$	225		$	484		$	386
Interest cost		396			518			611
Amortization of prior service credit		(771	)		(743	)		(905	)
Amortization of accumulated loss		(1	)		111			2
Net periodic benefit cost	$	(151	)	$	370		$	94
Estimated amounts that will be amortized from accumulated other comprehensive loss over the next year
Prior service credit	$	799		$	502		$	905
Net gain (loss)		0			—			(158	)
	$	799		$	502		$	747
Healthcare cost trend rate assumed for next year		8.30	%		7.80	%		8.80	%
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			2026

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
	2014		2013		2012
Effect on total of service and interest cost	$	35	$	91	$	111
Effect on postretirement benefit obligation		7		1,041		1,430

	1% Decrease
	2014			2013			2012
Effect on total of service and interest cost	$	(30	)	$	(77	)	$	(93	)
Effect on postretirement benefit obligation		(7	)		(881	)		(1,208	)

For fiscal 2015, the Company expects to make a $6.4 million contribution to the qualified domestic pension plan, $33,000 to the nonqualified domestic pension plan, $0.8 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
2015	$	6,423	$	379
2016		6,719		345
2017		7,083		315
2018		7,424		292
2019		7,725		286
2020-2024		43,925		1484