Note 10 – 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 (benefit) are:

 

 

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

 

 

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 2018.

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

 

 

 

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

 

 

During fiscal 2017 and fiscal 2016, the pension plan released liabilities for vested benefits of certain participants through the purchase of nonparticipating annuity contracts with a third party insurance company.  As a result of these transactions, in fiscal 2017 and fiscal 2016, the projected benefit obligation decreased $1,118 and $1,710, respectively, and plan assets decreased $1,246 and $1,798, respectively.  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, 2017 and 2016 was $30,678 and $32,270, respectively.  At March 31, 2017 and 2016, 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:

 

 

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

 

 

The estimated net actuarial loss for the pension plan that will be amortized from accumulated other comprehensive loss into net pension cost in fiscal 2018 is $1,013.

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

 

 

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

 

 

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, 2017 and 2016, by asset category, are as follows:

 

 

 

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 2017, fiscal 2016 and fiscal 2015 was $286, $315 and $294, 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 2017, fiscal 2016, and fiscal 2015 related to this plan was $128, $76 and $70, respectively.  At March 31, 2017 and 2016, the related liability was $493 and $391, respectively.  The current portion of the related liability of $26 at each of March 31, 2017 and 2016 is included in the caption "Accrued Compensation" and the long-term portion is included in "Accrued Pension Liability" in the Consolidated Balance Sheets.

The Company has a domestic defined contribution plan (401k) covering substantially all employees.  The Company provides matching contributions equal to 100% of the first 3% of an employee's salary deferral and 50% of the next 2% percent of an employee’s salary deferral.  Company contributions are immediately vested.  Contributions were $873 in fiscal 2017, $866 in fiscal 2016 and $940 in fiscal 2015.

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 expense (income) are:

 

 

The weighted average discount rates used to develop the net postretirement benefit cost were 3.16%, 3.11% and 3.59% in fiscal 2017, fiscal 2016 and fiscal 2015, respectively.

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

 

 

 

 

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

 

 

The medical care cost trend rate used in the actuarial computation ultimately reduces to 5% in 2023 and subsequent years.  This was accomplished using 0.5% decrements for the years ended March 31, 2017 through 2023.

The current portion of the accrued postretirement benefit obligation of $83 and $88, at March 31, 2017 and 2016, 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, net of income tax, consist of:

 

 

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

 

 

The estimated net actuarial loss for the other postretirement benefit plan that will be amortized from accumulated other comprehensive loss into net postretirement benefit income in fiscal 2018 is $37. 

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

 

 

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

On January 3, 2017, the Company transferred the Company stock and accumulated dividends in its noncontributory Employee Stock Ownership Plan ("ESOP") to its domestic defined contribution plan (401K) and subsequently terminated the ESOP.  At March 31, 2016 there were 202 shares in the ESOP.  There were no Company contributions to the ESOP in fiscal 2017, fiscal 2016 or fiscal 2015.  Dividends paid on allocated shares accumulate for the benefit of the employees who participate in the ESOP.

Self-Insured Medical Plan

Effective January 1, 2014, the Company commenced self-funding the medical insurance coverage provided to its U.S. based employees.  The Company has obtained a stop loss insurance policy in an effort to limit its exposure to claims.  The Company has specific stop loss coverage per employee for claims incurred during the year exceeding $100 per employee with annual maximum aggregate stop loss coverage per employee of $1,000.  The Company also has total plan annual maximum aggregate stop loss coverage of $2,479.  The liability of $174 and $176 on March 31, 2017 and 2016, respectively, related to the self-insured medical plan is primarily based upon claim history and is included in the caption "Accrued Compensation" in the Consolidated Balance Sheets.