Annual report pursuant to Section 13 and 15(d)

Employee Benefit Plans

v2.4.0.6
Employee Benefit Plans
12 Months Ended
Mar. 31, 2013
Employee Benefit Plans [Abstract]  
Employee Benefit Plans

Note 11 — Employee Benefit Plans:

Retirement Plans

The Company has a qualified defined benefit plan covering U.S. employees hired prior to January 1, 2003, which is non-contributory. Benefits are based on the employee’s years of service and average earnings for the five highest consecutive calendar years of compensation in the ten-year period preceding retirement. The Company’s funding policy for the plan is to contribute the amount required by the Employee Retirement Income Security Act of 1974, as amended.

The components of pension cost are:

 

                         
    Year ended March 31,  
    2013     2012     2011  

Service cost during the period

  $ 544     $ 459     $ 384  

Interest cost on projected benefit obligation

    1,427       1,421       1,340  

Expected return on assets

    (2,738     (2,713     (2,499

Amortization of:

                       

Unrecognized prior service cost

    4       4       4  

Actuarial loss

    1,011       517       421  
   

 

 

   

 

 

   

 

 

 

Net pension cost (benefit)

  $ 248     $ (312   $ (350
   

 

 

   

 

 

   

 

 

 

 

The weighted average actuarial assumptions used to determine net pension cost are:

 

                         
    Year ended March 31,  
    2013     2012     2011  

Discount rate

    4.76     5.63     6.07

Rate of increase in compensation levels

    3.50     3.50     3.50

Long-term rate of return on plan assets

    8.50     8.50     8.50

The expected long-term rate of return is based on the mix of investments that comprise plan assets and external forecasts of future long-term investment returns, historical returns, correlations and market volatilities.

The Company does not expect to make any contributions to the plan during fiscal 2014.

Changes in the Company’s benefit obligation, plan assets and funded status for the pension plan are presented below:

 

                 
    Year ended March 31,  
        2013             2012      

Change in the benefit obligation

               

Projected benefit obligation at beginning of year

  $ 30,430     $ 25,688  

Service cost

    439       354  

Interest cost

    1,427       1,421  

Actuarial loss

    1,561       3,889  

Benefit payments

    (1,579     (922
   

 

 

   

 

 

 

Projected benefit obligation at end of year

  $ 32,278     $ 30,430  
   

 

 

   

 

 

 

The weighted average actuarial assumptions used to determine the benefit obligation are:

 

                 
    March 31,  
    2013     2012  

Discount rate

    4.28     4.76

Rate of increase in compensation levels

    3.00     3.50
     

Change in fair value of plan assets

Fair value of plan assets at beginning of year

  $ 32,668     $ 32,368  

Actual return on plan assets

    3,538       1,222  

Benefit and administrative expense payments

    (1,579     (922
   

 

 

   

 

 

 

Fair value of plan assets at end of year

  $ 34,627     $ 32,668  
   

 

 

   

 

 

 

Funded status

               

Funded status at end of year

  $ 2,349     $ 2,238  
   

 

 

   

 

 

 

Amount recognized in the Consolidated Balance Sheets

  $ 2,349     $ 2,238  
   

 

 

   

 

 

 

The projected benefit obligation is the actuarial present value of benefits attributable to employee service rendered to date, including the effects of estimated future pay increases. The accumulated benefit obligation reflects the actuarial present value of benefits attributable to employee service rendered to date, but does not include the effects of estimated future pay increases. The accumulated benefit obligation as of March 31, 2013 and 2012 was $27,809 and $25,507, respectively. At March 31, 2013 and 2012, the pension plan was fully funded on an accumulated benefit obligation basis.

 

Amounts recognized in accumulated other comprehensive loss, net of income tax, consist of:

 

                 
    March 31,  
    2013     2012  

Net actuarial losses

  $ 8,278     $ 8,508  

Prior service cost

    5       7  
   

 

 

   

 

 

 
    $ 8,283     $ 8,515  
   

 

 

   

 

 

 

The increase in accumulated other comprehensive loss (income), net of income tax, consists of:

 

                 
    March 31,  
    2013     2012  

Net actuarial loss arising during the year

  $ 424     $ 3,434  

Amortization of actuarial loss

    (653     (334

Amortization of prior service cost

    (3     (3
   

 

 

   

 

 

 
    $ (232   $ 3,097  
   

 

 

   

 

 

 

The estimated net actuarial loss and prior service cost for the pension plan that will be amortized from accumulated other comprehensive loss into net pension cost in fiscal 2014 are $1,002 and $4, respectively.

The following benefit payments, which reflect future service, are expected to be paid:

 

         

2014

  $ 1,184  

2015

    1,244  

2016

    1,230  

2017

    1,331  

2018

    1,416  

2019-2023

    8,030  
   

 

 

 

Total

  $ 14,435  
   

 

 

 

The weighted average asset allocation of the plan assets by asset category is as follows:

 

                         
    Target
Allocation
    March 31,  
    2013     2012  

Asset Category

                       

Equity securities

    50-70     68     67

Debt securities

    20-50     32     33

Other, including cash

    0-10        
           

 

 

   

 

 

 
              100     100
           

 

 

   

 

 

 

The investment strategy of the plan is to generate a consistent total investment return sufficient to pay present and future plan benefits to retirees, while minimizing the long-term cost to the Company. Target allocations for asset categories are used to earn a reasonable rate of return, provide required liquidity and minimize the risk of large losses. Targets are adjusted when considered necessary to reflect trends and developments within the overall investment environment.

 

The fair values of the Company’s pension plan assets at March 31, 2013 and 2012, by asset category, are as follows:

 

                                 
          Fair Value Measurements Using  

Asset Category

  At
March 31,  2013
    Quoted prices in
active markets for
identical assets
(Level 1)
    Significant other
observable inputs
(Level 2)
    Significant
unobservable inputs
(Level 3)
 

Cash

  $ 108     $ 108     $     $  

Equity securities:

                               

U.S. companies

    19,209       19,209              

International companies

    4,284       4,284              

Fixed income:

                               

Corporate bond funds

                               

Intermediate-term

    8,953       8,953              

Short-term

    2,073       2,073              
   

 

 

   

 

 

   

 

 

   

 

 

 
    $ 34,627     $ 34,627     $     $  
   

 

 

   

 

 

   

 

 

   

 

 

 

 

                                 
          Fair Value Measurements Using  

Asset Category

  At
March 31,  2012
    Quoted prices in
active markets for
identical assets
(Level 1)
    Significant other
observable inputs
(Level 2)
    Significant
unobservable inputs
(Level 3)
 

Cash

  $ 80     $ 80     $     $  

Equity securities:

                               

U.S. companies

    18,021       18,021              

International companies

    3,951       3,951              

Fixed income:

                               

Corporate bond funds

                               

Intermediate-term

    8,577       8,577              

Short-term

    2,039       2,039              
   

 

 

   

 

 

   

 

 

   

 

 

 
    $ 32,668     $ 32,668     $     $  
   

 

 

   

 

 

   

 

 

   

 

 

 

The fair value of Level 1 pension assets are obtained by reference to the last quoted price of the respective security on the market which it trades. See Note 1 to the Consolidated Financial Statements.

On February 4, 2003, the Company closed the defined benefit plan to all employees hired on or after January 1, 2003. In place of the defined benefit plan, these employees participate in the Company’s domestic defined contribution plan. The Company contributes a fixed percentage of employee compensation to this plan on an annual basis for these employees. The Company contribution to the defined contribution plan for these employees in fiscal 2013, fiscal 2012 and fiscal 2011 was $204, $161 and $117, respectively.

The Company has a Supplemental Executive Retirement Plan (“SERP”) which provides retirement benefits associated with wages in excess of the legislated qualified plan maximums. Pension expense recorded in fiscal 2013, fiscal 2012, and fiscal 2011 related to this plan was $24, $21 and $15, respectively. At March 31, 2013 and 2012, the related liability was $254 and $256, respectively. The current portion of the related liability of $27 and $26 at March 31, 2013 and 2012, respectively, is included in the caption “Accrued Compensation” and the long-term portion is separately presented in the Consolidated Balance Sheets.

The Company has a domestic defined contribution plan (401k) covering substantially all employees. Prior to January 1, 2012, company contributions to the plan were determined by a formula based on profitability and were made at the discretion of the Compensation Committee of the Board of Directors. Effective January 1, 2012, company contributions were no longer based upon profitability. The Company provides matching contributions equal to 100 percent of the first 3% of an employee’s salary deferral and 50% of the next two percent of an employee’s salary deferral. Company contributions are immediately vested. Contributions were $753 in fiscal 2013, $457 in fiscal 2012 and $242 in fiscal 2011.

Other Postretirement Benefits

In addition to providing pension benefits, the Company has a plan in the U.S. that provides health care benefits for eligible retirees and eligible survivors of retirees. The Company’s share of the medical premium cost has been capped at $4 for family coverage and $2 for single coverage for early retirees, and $1 for both family and single coverage for regular retirees.

On February 4, 2003, the Company terminated postretirement health care benefits for its U.S. employees. Benefits payable to retirees of record on April 1, 2003 remained unchanged.

The components of postretirement benefit income are:

 

                         
    Year ended March 31,  
    2013     2012     2011  

Interest cost on accumulated benefit obligation

  $ 39     $ 45     $ 50  

Amortization of prior service benefit

    (166     (166     (166

Amortization of actuarial loss

    44       37       34  
   

 

 

   

 

 

   

 

 

 

Net postretirement benefit income

  $ (83   $ (84   $ (82
   

 

 

   

 

 

   

 

 

 

The weighted average discount rate used to develop the net postretirement benefit cost were 3.96%, 4.69% and 5.15% in fiscal 2013, fiscal 2012 and fiscal 2011, respectively.

Changes in the Company’s benefit obligation, plan assets and funded status for the plan are as follows:

 

                 
    Year ended March 31,  
        2013             2012      

Change in the benefit obligation

               

Projected benefit obligation at beginning of year

  $ 999     $ 999  

Interest cost

    39       45  

Actuarial gain

    95       66  

Benefit payments

    (103     (111
   

 

 

   

 

 

 

Projected benefit obligation at end of year

  $ 1,030     $ 999  
   

 

 

   

 

 

 

The weighted average actuarial assumptions used to develop the accrued postretirement benefit obligation were:

 

                 
    March 31,  
    2013     2012  

Discount rate

    3.26     3.96

Medical care cost trend rate

    8.00     8.00

 

The medical care cost trend rate used in the actuarial computation ultimately reduces to 5% in 2019 and subsequent years. This was accomplished using .5% decrements for the years ended March 31, 2013 through 2019.

 

                 
    Year ended March 31,  
        2013             2012      

Change in fair value of plan assets

               

Fair value of plan assets at beginning of year

  $     $  

Employer contribution

    103       111  

Benefit payments

    (103     (111
   

 

 

   

 

 

 

Fair value of plan assets at end of year

  $     $  
   

 

 

   

 

 

 

Funded status

               

Funded status at end of year

  $ (1,030   $ (999
   

 

 

   

 

 

 

Amount recognized in the Consolidated Balance Sheets

  $ (1,030   $ (999
   

 

 

   

 

 

 

The current portion of the accrued postretirement benefit obligation of $107 and $104, at March 31, 2013 and 2012, respectively, is included in the caption “Accrued Compensation” and the long-term portion is separately presented in the Consolidated Balance Sheets.

Amounts recognized in accumulated other comprehensive loss (income), net of income tax, consist of:

 

                 
    March 31,  
    2013     2012  

Net actuarial loss

  $ 336     $ 303  

Prior service cost

    (176     (283
   

 

 

   

 

 

 
    $ 160     $ 20  
   

 

 

   

 

 

 

The decrease in accumulated other comprehensive (income) loss, net of income tax, consists of:

 

                 
    March 31,  
    2013     2012  

Net actuarial loss arising during the year

  $ 61     $ 43  

Amortization of actuarial loss

    (28     (24

Amortization of prior service cost

    107       107  
   

 

 

   

 

 

 
    $ 140     $ 126  
   

 

 

   

 

 

 

The estimated net actuarial loss and prior service cost for the other postretirement benefit plan that will be amortized from accumulated other comprehensive loss (income) into net postretirement benefit income in fiscal 2014 are $44 and $(166), respectively.

The following benefit payments are expected to be paid during the fiscal years ending March 31:

 

         

2014

  $ 107  

2015

    102  

2016

    96  

2017

    91  

2018

    86  

2019-2023

    352  
   

 

 

 

Total

  $ 834  
   

 

 

 

 

Assumed medical care cost trend rates could have a significant effect on the amounts reported for the postretirement benefit plan. However, due to the caps imposed on the Company’s share of the premium costs, a one percentage point change in assumed medical care cost trend rates would not have a significant effect on the total service and interest cost components or the postretirement benefit obligation.

Employee Stock Ownership Plan

The Company has a noncontributory Employee Stock Ownership Plan (“ESOP”) that covers substantially all employees in the U.S. There were 279 and 292 shares in the ESOP at March 31, 2013 and 2012, respectively. There were no Company contributions to the ESOP in fiscal 2013, fiscal 2012 or fiscal 2011. Dividends paid on allocated shares accumulate for the benefit of the employees who participate in the ESOP.