SUNation Energy, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Employee Retirement Benefits

Employee Retirement Benefits

12 Months Ended

Dec. 31, 2011

Employee Retirement Benefits [Abstract]

NOTE 6 - EMPLOYEE RETIREMENT BENEFITS

The Company has an Employee Savings Plan (401(k)) and matches a percentage of employee contributions up to six percent of compensation. Contributions to the plan in 2011, 2010 and 2009 were $479,000, $456,000, and $420,000, respectively.

The Company's U.K.-based subsidiary Austin Taylor maintains defined benefit pension plans that cover approximately seven active employees. The Company does not provide any other post-retirement benefits to its employees. The following table summarizes the balance sheet impact, including benefit obligations, assets and funded status of Austin Taylor's pension plans at December 31, 2011 and 2010:


	2011			2010

Change in benefit obligation:
Benefit obligation at the beginning of the year	$	4,919,000		$	4,623,000
Service cost		36,000			46,000
Interest cost		239,000			257,000
Participant contributions		15,000			19,000
Augmentations		46,000			—
Actuarial (gains)/losses		62,000			254,000
Benefits paid		(162,000	)		(147,000	)
Foreign currency gains		(5,000	)		(133,000	)

Benefit obligation at the end of the year		5,150,000			4,919,000


Change in plan assets:
Fair value of plan assets at beginning of year		5,269,000			5,023,000
Actual return on plan assets		892,000			464,000
Employer contributions		48,000			54,000
Participant contributions		15,000			19,000
Benefits paid		(162,000	)		(147,000	)
Foreign currency losses		(6,000	)		(144,000	)

Fair value of plan assets at end of year		6,056,000			5,269,000



Funded status at end of year – net asset /(liability)	$	906,000		$	350,000


Weighted average assumptions used to determine net periodic pension costs:
Discount rate	4.7	%	5.5	%
Expected return on assets	4.2	%	5.1	%

The plans are funded through UK government gilts and an insurance contract both recorded in the financial statements at fair value. The related amounts for each of these investments were $3,193,000 and $2,864,000 as of December 31, 2011 and were determined to be level 2 and level 3 investments, respectively. Level 2 investments are valued based on observable inputs such as quoted prices for similar instruments and quoted prices in markets that are not active. Level 3 investments are valued based on significant unobservable inputs.

The Company does not expect any plan assets to be returned to the Company during the twelve months subsequent to December 31, 2011.

The Company expects to make contributions of $48,000 to the plan in 2012.

The Company estimates its future pension benefit payments will be as follows:


2012	$	351,000
2013		280,000
2014		471,000
2015		252,000
2016		227,000
2017 thru 2021		2,043,000

Components of the Company's net periodic pension costs are:


	2011			2010			2009

Service cost	$	36,000		$	46,000		$	37,000
Interest cost		240,000			258,000			261,000
Expected return on assets		(267,000	)		(244,000	)		(226,000	)
Amortization of prior service cost		46,000			—			—

Net periodic pension cost	$	55,000		$	60,000		$	72,000

- Definition

The entire disclosure for postemployment benefits, which may include supplemental unemployment benefits, obligations recognized for all types of benefits provided to former or inactive employees, their beneficiaries, and covered dependents after employment but before retirement. Disclosure may also include discussion that an obligation for postemployment benefits is not accrued in accordance with regulation only because the amount cannot be reasonably estimated.

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