Retirement Plans

6 Months Ended

Jul. 03, 2011

Retirement Plans

Retirement Plans

N. Retirement Plans

Defined Benefit Pension Plans

Teradyne has defined benefit pension plans covering a portion of domestic employees and employees of certain non-U.S. subsidiaries. Benefits under these plans are based on employees' years of service and compensation. Teradyne's funding policy is to make contributions to these plans in accordance with local laws and to the extent that such contributions are tax deductible. The assets of these plans consist primarily of equity and fixed income securities. In addition, Teradyne has foreign unfunded defined benefit pension plans and an unfunded supplemental executive defined benefit plan in the United States to provide retirement benefits in excess of levels allowed by the Employment Retirement Income Security Act and the Internal Revenue Code.

Components of net periodic pension cost for all plans were as follows:

	For the Three Months Ended						For the Six Months Ended
	July 3,  2011			July 4,  2010			July 3,  2011			July 4,  2010
	(in thousands)
Service cost	$	668		$	921		$	1,493		$	1,952
Interest cost		4,459			4,268			8,849			8,816
Expected return on plan assets		(4,187	)		(5,273	)		(8,375	)		(10,140	)
Amortization of unrecognized:
Prior service cost		155			181			310			363
Net loss		2,341			1,022			4,386			2,768
Settlement		935			—			935			—
Total net periodic pension cost	$	4,371		$	1,119		$	7,598		$	3,759

In the six months ended July 3, 2011, Teradyne contributed $4.4 million primarily to its foreign pension plans.

Post-Retirement Benefit Plans

In addition to receiving pension benefits, U.S. Teradyne employees who meet early retirement eligibility requirements as of their termination dates may participate in Teradyne's Welfare Plan, which includes death, and medical and dental benefits up to age 65. Death benefits provide a fixed sum to retirees' survivors and are available to all retirees. Substantially all of Teradyne's current U.S. employees could become eligible for these benefits, and the existing benefit obligation relates primarily to those employees.

Components of net periodic post-retirement cost were as follows:

	For the Three Months Ended						For the Six Months Ended
	July 3, 2011			July 4, 2010			July 3, 2011			July 4, 2010
	(in thousands)
Service cost	$	14		$	7		$	30		$	27
Interest cost		134			174			269			392
Amortization of unrecognized:
Prior service benefit		(150	)		(59	)		(299	)		(117	)
Net loss		45			(25	)		90			29
Total net periodic post-retirement cost	$	43		$	97		$	90		$	331