Pension Plan

12 Months Ended

Dec. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

16.  Pension Plan

All eligible salaried employees of Trans-Lux Corporation and certain of its subsidiaries are covered by a non-contributory defined benefit pension plan.  Pension benefits vest after five years of service and are based on years of service and final average salary. The Company’s general funding policy is to contribute at least the required minimum amounts sufficient to satisfy regulatory funding standards, but not more than the maximum tax-deductible amount.  As of December 31, 2003, the benefit service under the pension plan had been frozen and, accordingly, there is no service cost for each of the two years ended December 31, 2013 and 2012. On April 30, 2009, the compensation increments were frozen, and accordingly, no additional benefits are being accrued under the plan.  For 2013 and 2012, the accrued benefit obligation of the plan exceeded the fair value of plan assets, due primarily to the plan’s investment performance.  The Company’s obligations under its pension plan exceeded plan assets by $4.8 million at December 31, 2013.

The Company employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk.  The intent of this strategy is to minimize plan expenses by outperforming plan liabilities over the long run.  Risk tolerance is established through careful consideration of plan liabilities, plan funded status and corporate financial condition.  The portfolio contains a diversified blend of equity and fixed income investments.  Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews.

At December 31, 2013 and 2012, the Company’s pension plan weighted average asset allocations by asset category are as follows:

	2013	2012
Guaranteed investment contracts	22.90%	31.80%
Mutual stock funds	19.4	17.2
Equity and index funds	57.7	51
Total pension plan assets	100.00%	100.00%

The pension plan asset information included below is presented at fair value.  ASC 820 establishes a framework for measuring fair value and required disclosures about assets and liabilities measured at fair value. The fair value of these assets is determined using a three-tier fair value hierarchy.  Based on this hierarchy, the Company determined the fair value of its money market funds and mutual stock funds using quoted market prices, a Level 1 or an observable input, the guaranteed investment contracts and equity and index funds, a Level 2 based on observable inputs and quoted prices in markets that are not active.  The Company does not have any Level 3 pension assets, in which such valuation would be based on unobservable measurements and management’s estimates.

The following table presents the pension plan assets by level within the fair value hierarchy as of December 31, 2013:

In thousands		Level 1		Level 2		Level 3		Total
Guaranteed investment contracts	$	-	$	1,620	$	-	$	1,620
Mutual stock funds		1,371		-		-		1,371
Equity and index funds		-		4,086		-		4,086
Fair Value, Pension plan assets, Total	$	1,371	$	5,706	$	-	$	7,077

The funded status of the plan as of December 31, 2013 and 2012 is as follows:

In thousands		2013		2012
Change in benefit obligation:
Projected benefit obligation at beginning of year	$	12,450	$	11,276
Interest cost		495		520
Actuarial (gain) loss		(567)		1,086
Benefits paid		(495)		(433)
Projected benefit obligation at end of year		11,883		12,449
Change in plan assets:
Fair value of plan assets at beginning of year		6,019		5,361
Actual return on plan assets		884		532
Company contributions		669		559
Benefits paid		(495)		(433)
Fair value of plan assets at end of year		7,077		6,019
Funded status (underfunded)	$	(4,806)	$	(6,430)
Amounts recognized in other accumulated comprehensive loss:
Net actuarial loss	$	4,886	$	6,361
Weighted average assumptions as of December 31:
Discount rate:
Components of cost		4.80%		4.08%
Benefit obligations		4.80%		4.80%
Expected return on plan assets		8.00%		8.00%
Rate of compensation increase		N/A		N/A

The Company determines the long-term rate of return for plan assets by studying historical markets and the long-term relationships between equity securities and fixed income securities, with the widely-accepted capital market principal that assets with higher volatility generate higher returns over the long run.  The 8.0% expected long-term rate of return on plan assets is determined based on long-term historical performance of plan assets, current asset allocation and projected long-term rates of return.

In 2014, the Company expects to amortize $378,000 of actuarial losses to pension expense. The accumulated benefit obligation at December 31, 2013 and 2012 was $11.9 million and $12.4 million, respectively. The minimum required contribution for 2014 is expected to be $1.4 million, which is included in Accrued liabilities in the Consolidated Balance Sheets. The long-term pension liability is $3.4 million and is included in Deferred pension liability and other in the Consolidated Balance Sheets. In March 2010, 2011 and 2013, the Company submitted to the Internal Revenue Service requests for waivers of the minimum funding standard for its defined benefit plan for the 2009, 2010 and 2012 plan years. The waiver requests were submitted as a result of the economic climate and the business hardship that the Company was experiencing. The waivers for the 2009, 2010 and 2012 plan years were approved and granted subject to certain conditions and have deferred payment of $285,000, $559,000 and $871,000 of the minimum funding standard for the 2009, 2010 and 2012 plan years, respectively. If the Company does not fulfill the conditions of the waivers, the Pension Benefit Guaranty Corporation and the Internal Revenue Service have various enforcement remedies that can be implemented to protect the participant’s benefits, such as termination of the plan or a requirement that the Company make the unpaid contributions. At this time, the Company is expecting to make its required contributions for 2014 and has already made $218,000 of contributions; however there is no assurance that the Company will be able to make any or all such remaining payments. The Pension Benefit Guaranty Corporation has placed a lien on the Company’s assets in respect of amounts owed under the plan.

The following estimated benefit payments are expected to be paid by the Company’s pension plan in the next 10 years:

In thousands	2014	2015	2016	2017	2018	2019 - 2023
	$503	$670	$745	$593	$676	$4,182

The following table presents the components of the net periodic pension cost for the two years ended December 31, 2013 and 2012:

In thousands		2013		2012
Interest cost	$	495	$	520
Expected return on plan assets		(498)		(438)
Amortization of net actuarial loss		523		484
Net periodic pension cost	$	520	$	566

The following table presents the change in unrecognized pension costs recorded in other comprehensive loss as of December 31, 2013 and 2012:

In thousands		2013		2012
Balance at beginning of year	$	6,361	$	5,852
Net actuarial (gain) loss		(952)		993
Recognized loss		(523)		(484)
Balance at end of year	$	4,886	$	6,361

In addition, the Company provided unfunded supplemental retirement benefits for the retired, former Chief Executive Officer.  During 2009 the Company accrued $0.5 million for such benefits, which has not yet been paid.  The Company does not offer any post-retirement benefits other than the pension and supplemental retirement benefits described herein.