Annual report pursuant to Section 13 and 15(d)

Employee Retirement Benefits

v2.4.0.6
Employee Retirement Benefits
 12 Months Ended
Dec. 31, 2012
Employee Benefit Plans [Abstract]  
Employment Retirement Benefits

NOTE 7 - 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 2012,  2011 and 2010 were $471,000, $479,000, and $456,000, 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, 2012 and 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

 

2011

Change in benefit obligation:

 

 

 

 

 

 

Benefit obligation at the beginning of the year

 

$         

5,150,000 

 

$
4,919,000 

Service cost

 

 
275,000 

 

 
36,000 

Interest cost

 

 
244,000 

 

 
240,000 

Participant contributions

 

 
0 

 

 
15,000 

Augmentations

 

 
0 

 

 
45,000 

Actuarial (gains)/losses

 

 
325,000 

 

 
62,000 

Benefits paid

 

 
(552,000)

 

 
(162,000)

Foreign currency gains

 

 
233,000 

 

 
(5,000)

Benefit obligation at the end of the year

 

 
5,675,000 

 

 
5,150,000 

 

 

 

 

 

 

 

Change in plan assets:

 

 

 

 

 

 

Fair value of plan assets at beginning of year

 

 
6,056,000 

 

 
5,269,000 

Actual return on plan assets

 

 
(289,000)

 

 
892,000 

Employer contributions

 

 
58,000 

 

 
48,000 

Participant contributions

 

 
0 

 

 
15,000 

Benefits paid

 

 
(552,000)

 

 
(162,000)

Foreign currency losses

 

 
274,000 

 

 
(6,000)

Fair value of plan assets at end of year

 

 
5,547,000 

 

 
6,056,000 

 

 

 

 

 

 

 

Funded status at end of year – net asset /(liability)

 

$
(128,000)

 

$
906,000 

 

 

Weighted average assumptions used to determine net periodic pension costs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 
4.3% 

 

 
4.7% 

Expected return on assets

 

 
5.1% 

 

 
4.2% 

 

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 $3,517,000 and $2,030,000 as of December 31, 2012 and were determined to be level 2 and level 3 investments, respectively. 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, 2012.

 

The Company expects to make contributions of $50,000 to the plan in 2013.    

 

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

 

 

 

 

 

 

 

2013

$
462,000 

2014

 
494,000 

2015

 
262,000 

2016

 
234,000 

2017

 
489,000 

2018 thru 2022

 
1,998,000 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

 

2011

 

 

2010

Service cost

 

$
275,000 

 

$
36,000 

 

$
46,000 

Interest cost

 

 
244,000 

 

 
240,000 

 

 
258,000 

Expected return on assets

 

 
(262,000)

 

 
(267,000)

 

 
(244,000)

Amortization of prior service cost

 

 

 -

 

 
46,000 

 

 

 

Net periodic pension cost

 

$
257,000 

 

$
55,000 

 

$
60,000