Graham Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Employee Benefit Plans (Tables)

Employee Benefit Plans (Tables)

12 Months Ended

Mar. 31, 2014

Summary of Weighted Average Asset Allocation of Plan Assets by Asset Category

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


	Target Allocation			March 31,
	Target Allocation			2014			2013
Asset Category
Equity securities		50-70	%		66	%		68	%
Debt securities		20-50	%		34	%		32	%
Other, including cash		0-10	%		—	%		—	%

					100	%		100	%

Pension Plans, Defined Benefit [Member]

Components of Postretirement Benefit Income and Pension Cost

The components of pension cost are:


	Year ended March 31,
	2014			2013			2012
Service cost during the period	$	576		$	544		$	459
Interest cost on projected benefit obligation		1,359			1,427			1,421
Expected return on assets		(2,728	)		(2,738	)		(2,713	)
Amortization of:
Unrecognized prior service cost		4			4			4
Actuarial loss		1,002			1,011			517

Net pension cost (benefit)	$	213		$	248		$	(312	)

Weighted Average Actuarial Assumptions Used to Determine and Develop Net Pension Cost

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


	Year ended March 31,
	2014			2013			2012
Discount rate		4.28	%		4.76	%		5.63	%
Rate of increase in compensation levels		3.00	%		3.50	%		3.50	%
Long-term rate of return on plan assets		8.00	%		8.50	%		8.50	%

Changes in Company's Benefit Obligation, Plan Assets and Funded Status for Plan

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


	Year ended March 31,
	2014			2013
Change in the benefit obligation
Projected benefit obligation at beginning of year	$	32,278		$	30,430
Service cost		472			439
Interest cost		1,359			1,427
Actuarial (gain) loss		(226	)		1,561
Benefit payments		(1,094	)		(1,579	)

Projected benefit obligation at end of year	$	32,789		$	32,278

Weighted Average Actuarial Assumptions Used to Determine and Develop Net Pension Cost

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


	March 31,
	2014			2013
Discount rate		4.46	%		4.28	%
Rate of increase in compensation levels		3.00	%		3.00	%

Change in fair value of plan assets
Fair value of plan assets at beginning of year	$	34,627		$	32,668
Actual return on plan assets		5,015			3,538
Benefit and administrative expense payments		(1,094	)		(1,579	)

Fair value of plan assets at end of year	$	38,548		$	34,627

Funded status
Funded status at end of year	$	5,759		$	2,349

Amount recognized in the Consolidated Balance Sheets	$	5,759		$	2,349

Summary of Amounts Recognized in Accumulated Other Comprehensive Loss (Income), Net of Income Tax

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


	March 31,
	2014		2013
Net actuarial loss	$	5,939	$	8,278
Prior service cost		2		5

	$	5,941	$	8,283

Summary of Increase/Decrease in Accumulated Other Comprehensive Loss (Income), Net of Income Tax

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


	March 31,
	2014			2013
Net actuarial (gain) loss arising during the year	$	(1,692	)	$	424
Amortization of actuarial loss		(647	)		(653	)
Amortization of prior service cost		(3	)		(3	)

	$	(2,342	)	$	(232	)

Summary of Benefit Payments, Which Reflect Future Service, are Expected to be Paid

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


2015	$	1,260
2016		1,253
2017		1,359
2018		1,447
2019		1,477
2020-2024		8,711

Total	$	15,507

Summary of Weighted Average Asset Allocation of Plan Assets by Asset Category

The fair values of the Company’s pension plan assets at March 31, 2014 and 2013, by asset category, are as follows:


			Fair Value Measurements Using
Asset Category	At March 31, 2014		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Cash	$	122	$	122	$	—	$	—
Equity securities:
U.S. companies		20,396		20,396		—		—
International companies		4,905		4,905		—		—
Fixed income:
Corporate bond funds
Intermediate-term		10,507		10,507		—		—
Short-term		2,618		2,618		—		—

	$	38,548	$	38,548	$	—	$	—


			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	$	—	$	—

Other Postretirement Benefit Plans [Member]

Components of Postretirement Benefit Income and Pension Cost

The components of postretirement benefit income are:


	Year ended March 31,
	2014			2013			2012
Interest cost on accumulated benefit obligation	$	33		$	39		$	45
Amortization of prior service benefit		(166	)		(166	)		(166	)
Amortization of actuarial loss		46			44			37

Net postretirement benefit income	$	(87	)	$	(83	)	$	(84	)

Changes in Company's Benefit Obligation, Plan Assets and Funded Status for Plan

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


	Year ended March 31,
	2014			2013
Change in the benefit obligation
Projected benefit obligation at beginning of year	$	1,030		$	999
Interest cost		33			39
Actuarial (gain) loss		(16	)		95
Benefit payments		(96	)		(103	)

Projected benefit obligation at end of year	$	951		$	1,030

Weighted Average Actuarial Assumptions Used to Determine and Develop Net Pension Cost

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


	March 31,
	2014			2013
Discount rate		3.59	%		3.26	%
Medical care cost trend rate		8.00	%		8.00	%

Summary of Amounts Recognized in Accumulated Other Comprehensive Loss (Income), Net of Income Tax

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


	March 31,
	2014			2013
Net actuarial loss	$	295		$	336
Prior service cost		(68	)		(176	)

	$	227		$	160

Summary of Increase/Decrease in Accumulated Other Comprehensive Loss (Income), Net of Income Tax

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


	March 31,
	2014			2013
Net actuarial (gain) loss arising during the year	$	(10	)	$	61
Amortization of actuarial loss		(30	)		(28	)
Amortization of prior service cost		107			107

	$	67		$	140

Summary of Benefit Payments, Which Reflect Future Service, are Expected to be Paid

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


2015	$	98
2016		93
2017		88
2018		82
2019		77
2020-2024		309

Total	$	747

Change in Fair Value of Plan Assets


	Year ended March 31,
	2014			2013
Change in fair value of plan assets
Fair value of plan assets at beginning of year	$	—		$	—
Employer contribution		96			103
Benefit payments		(96	)		(103	)

Fair value of plan assets at end of year	$	—		$	—

Funded status
Funded status at end of year	$	(951	)	$	(1,030	)

Amount recognized in the Consolidated Balance Sheets	$	(951	)	$	(1,030	)