Pension Plan

12 Months Ended

Dec. 31, 2014

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, 2014 and 2013.  On April 30, 2009, the compensation increments were frozen, and accordingly, no additional benefits are being accrued under the plan.  For 2014 and 2013, the accrued benefit obligation of the plan exceeded the fair value of plan assets, due primarily to the plan’s investment performance and updates to actuarial longevity tables.  The Company’s obligations under its pension plan exceeded plan assets by $6.7 million at December 31, 2014.

Assumed mortality rates of plan participants are a critical estimate in measuring the expected payments a participant will receive over their lifetime and the amount of liability and expense we recognize.  On October 27, 2014, the Society of Actuaries ("SOA") published updated mortality tables and an updated mortality improvement scale, which both reflect improved longevity.  In determining the appropriate mortality assumptions as of December 31, 2014, we considered the SOA’s updated mortality tables to develop assumptions aligned with our expectation of future improvement rates.  The change to the mortality rate assumptions resulted in an increase in the 2014 year-end pension obligation of approximately $1.5 million.

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, 2014 and 2013, the Company’s pension plan weighted average asset allocations by asset category are as follows:

	2014	2013
Equity and index funds	69.9%	57.7%
Fixed income funds	30.1	42.3
Total pension plan assets	100.0%	100.0%

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 values of these assets are determined using a three-tier fair value hierarchy.  Based on this hierarchy, the Company determined the fair value of its mutual stock funds using quoted market prices, a Level 1 or an observable input.  The Company does not have any Level 2 pension assets, in which such valuation would be based on observable inputs and quoted prices in markets that are not active, or 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, 2014:

In thousands	Level 1		Level 2		Level 3		Total
Equity and index funds	$	5,551	$	-	$	-	$	5,551
Fixed income funds		2,395		-		-		2,395
Fair Value, Pension plan assets, Total	$	7,946	$	-	$	-	$	7,946

The funded status of the plan as of December 31, 2014 and 2013 is as follows:

In thousands	2014		2013
Change in benefit obligation:
Projected benefit obligation at beginning of year	$	11,883	$	12,450
Interest cost		562		495
Actuarial loss (gain)		2,764		(567)
Benefits paid		(530)		(495)
Projected benefit obligation at end of year		14,679		11,883
Change in plan assets:
Fair value of plan assets at beginning of year		7,077		6,019
Actual return on plan assets		441		884
Company contributions		958		669
Benefits paid		(530)		(495)
Fair value of plan assets at end of year		7,946		7,077
Funded status (underfunded)	$	(6,733)	$	(4,806)
Amounts recognized in other accumulated comprehensive loss:
Net actuarial loss	$	7,449	$	4,886
Weighted average assumptions as of December 31:
Discount rate:
Components of cost		4.00%		4.80%
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 2015, the Company expects to amortize $562,000 of actuarial losses to pension expense. The accumulated benefit obligation at December 31, 2014 and 2013 was $14.7 million and $11.9 million, respectively. The minimum required contribution in 2015 is expected to be $1.4 million, which is included in Accrued liabilities in the Consolidated Balance Sheets. The long-term pension liability is $5.3 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 pension 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. In 2014, the Company made $958,000 of contributions to the plan. At this time, the Company is expecting to make its required contributions in 2015 of $1.4 million and has already made $229,000 of such 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:

2015	2016	2017	2018	2019
$1,442	$775	$578	$303	$226

The following table presents the components of the net periodic pension cost for the two years ended December 31, 2014 and 2013:

In thousands	2014		2013
Interest cost	$	562	$	495
Expected return on plan assets		(598)		(498)
Amortization of net actuarial loss		358		523
Net periodic pension cost	$	322	$	520

The following table presents the change in unrecognized pension costs recorded in other comprehensive loss as of December 31, 2014 and 2013:

In thousands	2014		2013
Balance at beginning of year	$	4,886	$	6,361
Net actuarial loss (gain)		2,921		(952)
Recognized loss		(358)		(523)
Balance at end of year	$	7,449	$	4,886

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.