Retirement Plans (Tables)

12 Months Ended

Dec. 31, 2013

Defined Benefit Pension Plans

Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligations

Teradyne uses a December 31 measurement date for all of its plans. The December 31 balances of these defined benefit pension plans assets and obligations are shown below:

	2013			2012
Assets and Obligations		(in thousands)
Change in benefit obligation:
Projected benefit obligation:
Beginning of year	$	376,498		$	390,278
Service cost		3,427			2,787
Interest cost		13,266			15,670
Actuarial (gain) loss		(32,279	)		31,912
Benefits paid		(16,169	)		(65,650	)
Plan participants’ contributions		95			108
Non-U.S. currency movement		1,256			1,393
End of year		346,094			376,498
Change in plan assets:
Fair value of plan assets:
Beginning of year		302,899			339,580
Company contributions		4,260			3,306
Plan participants’ contributions		95			108
Actual return on plan assets		(9,373	)		24,621
Benefits paid		(16,169	)		(65,650	)
Non-U.S. currency movement		417			934
End of year		282,129			302,899
Funded status	$	(63,965	)	$	(73,599	)

Amounts Recorded Within Statement of Financial Position

The following table provides amounts recorded within the account line items of the statement of financial position as of December 31:

	2013			2012
	(in thousands)
Retirement plans assets	$	9,342		$	3,282
Accrued employees’ compensation and withholdings		(2,924	)		(2,810	)
Retirement plans liabilities		(70,383	)		(74,071	)
Funded status	$	(63,965	)	$	(73,599	)

Amounts Recognized in Accumulated Other Comprehensive Income

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

	2013		2012
	(in thousands)
Prior service cost	$	493	$	656
Deferred taxes		380		321
Total recognized in other comprehensive income, net of tax	$	873	$	977

Pension Plans with Accumulated Benefit Obligation and Projected Benefit Obligation in Excess of Plan Assets

Information for pension plans with an accumulated benefit obligation in excess of plan assets as of December 31:

	2013		2012
	(in millions)
Projected benefit obligation	$	74.2	$	75.6
Accumulated benefit obligation		65.5		65.7
Fair value of plan assets		0.9		0.8

Net Periodic Pension and Postretirement Benefit Costs

For the years ended December 31, 2013, 2012 and 2011, Teradyne’s net periodic pension (income) cost was comprised of the following:

	2013			2012			2011
	(in thousands)
Components of Net Periodic Pension (Income) Cost:
Service cost	$	3,427		$	2,787		$	2,735
Interest cost		13,266			15,670			17,466
Expected return on plan assets		(14,591	)		(15,946	)		(15,602	)
Amortization of prior service cost		164			232			621
Net actuarial (gain) loss		(8,315	)		23,237			12,583
Settlement loss		—			—			1,567
Total net periodic pension (income) cost	$	(6,049	)	$	25,980		$	19,370
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Reversal of amortization items:
Prior service cost		(164	)		(232	)		(621	)
Total recognized in other comprehensive income		(164	)		(232	)		(621	)
Total recognized in net periodic pension (income) cost and other comprehensive income	$	(6,213	)	$	25,748		$	18,749

Weighted Average Assumptions to Determine Net Periodic Pension Cost

Weighted Average Assumptions to Determine Net Periodic Pension Cost at January 1

	United States Plans									Foreign Plans
	2013			2012			2011			2013			2012			2011
Discount rate		3.6	%		4.2	%		5.3	%		3.7	%		4.9	%		5.0	%
Expected return on plan assets		5.0			5.0			5.5			3.7			3.1			3.5
Salary progression rate		3.0			3.0			4.0			3.5			3.4			4.0

Weighted Average Assumptions to Determine Pension Obligations

Weighted Average Assumptions to Determine Pension Obligations at December 31

	United States Plans						Foreign Plans
	2013			2012			2013			2012
Discount rate		4.5	%		3.6	%		3.8	%		3.7	%
Salary progression rate		3.0			3.0			3.5			3.5

Weighted Average Pension Asset Allocations by Category

Teradyne’s weighted average pension asset allocation at December 31, 2013 and 2012, by asset category is as follows:

	United States Plan						Foreign Plans
	2013			2012			2013			2012
Fixed Income Securities		86.7	%		85.8	%		77.1	%		49.2	%
Equity Securities		12.1			13.0			21.6			49.6
Other		1.2			1.2			1.3			1.2
		100.0	%		100.0	%		100.0	%		100.0	%

Target Asset Allocation and Index for Each Asset Category

The target asset allocation and the index for each asset category for the U.S. Plan, per the investment policy, is as follows:

Asset Category:	Policy Index:	Target Allocation
Passive and Active Fixed Income	Barclays U.S. Long Government/Credit Bond Index	90%
Equity (Large cap)	S&P 500 Stock Index	7
International Equity	MSCI EAFE Index	3

Changes in Fair Value of Pension Assets

The fair value of pension plan assets by asset category and by level at December 31, 2013 and December 31, 2012 were as follows:

	December 31, 2013
	Level 1		Level 2		Level 3		Total
			(in thousands)
Fixed income securities:
Corporate debt securities	$	—	$	156,860	$	—	$	156,860
U.S. government securities		21,415		41,140		—		62,555
U.K. government securities		—		19,610		—		19,610
Asset backed securities		—		2,919		—		2,919
U.S. equity (large cap)		—		21,309		—		21,309
International equity		—		14,803		—		14,803
Guarantee annuity contract		—		2,985		—		2,985
Other		—		906		—		906
Cash and cash equivalents		146		36		—		182
Total	$	21,561	$	260,568	$	—	$	282,129

	December 31, 2012
	Level 1		Level 2		Level 3		Total
	(in thousands)
Fixed income securities:
Corporate debt securities	$	—	$	157,263	$	—	$	157,263
U.S. government securities		23,712		58,962		—		82,674
U.K. government securities		—		8,593		—		8,593
Asset backed securities		—		2,042		—		2,042
U.S. equity (large cap)		—		23,832		—		23,832
International equity		—		23,990		—		23,990
Guarantee annuity contract		—		3,108		—		3,108
Other		—		839		—		839
Cash and cash equivalents		—		558		—		558
Total	$	23,712	$	279,187	$	—	$	302,899

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

	United States		Foreign
	(in thousands)
2014	$	14,607	$	1,177
2015		16,124		1,085
2016		16,636		959
2017		17,370		1,085
2018		18,011		1,140
2019-2023		98,269		8,946

Post-Retirement Benefit Plans

Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligations

Teradyne uses a December 31 measurement date for its plan. The December 31 balances of the postretirement assets and obligations are shown below:

	2013			2012
	(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year	$	11,907		$	12,793
Service cost		75			67
Interest cost		342			437
Actuarial (gain) loss		(2,025	)		82
Benefits paid		(1,280	)		(1,472	)
End of year		9,019			11,907
Change in plan assets:
Fair value of plan assets:
Beginning of year		—			—
Company contributions		1,280			1,472
Benefits paid		(1,280	)		(1,472	)
End of year		—			—
Funded status	$	(9,019	)	$	(11,907	)

Amounts Recorded Within Statement of Financial Position

The following table provides amounts recorded within the account line items of financial position as of December 31:

	2013			2012
	(in thousands)
Accrued employees’ compensation and withholdings	$	(1,042	)	$	(1,322	)
Retirement plans liability		(7,977	)		(10,585	)
Funded status	$	(9,019	)	$	(11,907	)

Amounts Recognized in Accumulated Other Comprehensive Income

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

	2013			2012
	(in thousands)
Prior service credit	$	(2,829	)	$	(3,427	)
Total recognized in other comprehensive income before tax		(2,829	)		(3,427	)
Deferred taxes		(664	)		(445	)
Total recognized in other comprehensive income, net of tax	$	(3,493	)	$	(3,872	)

Net Periodic Pension and Postretirement Benefit Costs

For the years ended December 31, 2013, 2012 and 2011, Teradyne’s net periodic postretirement benefit (income) cost was comprised of the following:

	2013			2012			2011
	(in thousands)
Components of Net Periodic Postretirement Benefit (Income) Cost:
Service cost	$	75		$	67		$	59
Interest cost		342			437			539
Amortization of prior service cost		(598	)		(599	)		(598	)
Net actuarial (gain) loss		(2,025	)		83			981
Total net periodic postretirement benefit (income) cost		(2,206	)		(12	)		981
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Reversal of amortization items:
Prior service credit		598			599			598
Total recognized in other comprehensive income		598			599			598
Total recognized in net periodic postretirement benefit (income) cost and other comprehensive income	$	(1,608	)	$	587		$	1,579

Weighted Average Assumptions to Determine Net Periodic Pension Cost

Weighted Average Assumptions to Determine Net Periodic Postretirement Benefit Cost as of January 1

	2013			2012			2011
Discount rate		3.1	%		3.7	%		4.5	%
Initial Health Care Cost Trend Rate		8.5			9.0			8.5
Ultimate Health Care Cost Trend Rate		5.0			5.0			5.0
Year in which Ultimate Health Care Cost Trend Rate is reached		2020			2020			2018

Weighted Average Assumptions to Determine Pension Obligations

Weighted Average Assumptions to Determine Postretirement Benefit Obligation as of December 31

	2013			2012			2011
Discount rate		4.1	%		3.1	%		3.7	%
Initial Medical Trend		8.0			8.5			9.0
Ultimate Health Care Trend		5.0			5.0			5.0
Medical cost trend rate decrease to ultimate rate in year		2020			2020			2020

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

	Benefits Payments
	(in thousands)
2014	$	1,042
2015		981
2016		969
2017		853
2018		818
2019-2023		3,051

One Percentage Point Change in Assumed Health Care Cost Trend Rates for Year

A one percentage point change in the assumed health care cost trend rates for the year ended December 31, 2013, would have the following effects:

	1 Percentage Point Increase		1 Percentage Point Decrease
	(in thousands)
Effect on total service and interest cost components	$	13	$	(12	)
Effect on postretirement benefit obligations		244		(229	)