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, 2015

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			2015			2014
Asset Category
Equity securities		50-70	%		66	%		66	%
Debt securities		20-50	%		34	%		34	%
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,
	2015			2014			2013
Service cost during the period	$	546		$	576		$	544
Interest cost on projected benefit obligation		1,434			1,359			1,427
Expected return on assets		(3,033	)		(2,728	)		(2,738	)
Amortization of:
Unrecognized prior service cost		4			4			4
Actuarial loss		580			1,002			1,011

Net pension (benefit) cost	$	(469	)	$	213		$	248

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,
	2015			2014			2013
Discount rate		4.46	%		4.28	%		4.76	%
Rate of increase in compensation levels		3.00	%		3.00	%		3.50	%
Long-term rate of return on plan assets		8.00	%		8.00	%		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,
	2015			2014
Change in the benefit obligation
Projected benefit obligation at beginning of year	$	32,789		$	32,278
Service cost		442			472
Interest cost		1,434			1,359
Actuarial loss (gain)		5,573			(226	)
Benefit payments		(1,186	)		(1,094	)

Projected benefit obligation at end of year	$	39,052		$	32,789

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,
	2015			2014
Discount rate		3.74	%		4.46	%
Rate of increase in compensation levels		3.00	%		3.00	%

Change in Fair Value of Plan Assets


	March 31,
	2015			2014
Change in fair value of plan assets
Fair value of plan assets at beginning of year	$	38,548		$	34,627
Employer contribution		55			—
Actual return on plan assets		2,967			5,015
Benefit and administrative expense payments		(1,186	)		(1,094	)

Fair value of plan assets at end of year	$	40,384		$	38,548

Schedule of Funded Status


	March 31,
	2015		2014
Funded status
Funded status at end of year	$	1,332	$	5,759

Amount recognized in the Consolidated Balance Sheets	$	1,332	$	5,759

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,
	2015		2014
Net actuarial loss	$	9,141	$	5,939
Prior service cost		—		2

	$	9,141	$	5,941

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

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


	March 31,
	2015			2014
Net actuarial loss (gain) arising during the year	$	3,578		$	(1,692	)
Amortization of actuarial loss		(375	)		(647	)
Amortization of prior service cost		(3	)		(3	)

	$	3,200		$	(2,342	)

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:


2016	$	1,263
2017		1,370
2018		1,467
2019		1,495
2020		1,635
2021-2025		9,128

Total	$	16,358

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, 2015 and 2014, by asset category, are as follows:


			Fair Value Measurements Using
Asset Category	At March 31, 2015		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Cash	$	126	$	126	$	—	$	—
Equity securities:
U.S. companies		21,586		21,586		—		—
International companies		4,854		4,854		—		—
Fixed income:
Corporate bond funds
Intermediate-term		11,109		11,109		—		—
Short-term		2,709		2,709		—		—

	$	40,384	$	40,384	$	—	$	—


			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	$	—	$	—

Other Postretirement Benefit Plans [Member]

Components of Postretirement Benefit Income and Pension Cost

The components of postretirement benefit income are:


	Year ended March 31,
	2015			2014			2013
Interest cost on accumulated benefit obligation	$	31		$	33		$	39
Amortization of prior service benefit		(106	)		(166	)		(166	)
Amortization of actuarial loss		35			46			44

Net postretirement benefit income	$	(40	)	$	(87	)	$	(83	)

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,
	2015			2014
Change in the benefit obligation
Projected benefit obligation at beginning of year	$	951		$	1,030
Interest cost		31			33
Actuarial loss (gain)		75			(16	)
Benefit payments		(89	)		(96	)

Projected benefit obligation at end of year	$	968		$	951

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,
	2015			2014
Discount rate		3.11	%		3.59	%
Medical care cost trend rate		8.00	%		8.00	%

Change in Fair Value of Plan Assets


	Year ended March 31,
	2015			2014
Change in fair value of plan assets
Fair value of plan assets at beginning of year	$	—		$	—
Employer contribution		89			96
Benefit payments		(89	)		(96	)

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

Schedule of Funded Status


	Year ended March 31,
	2015			2014
Funded status
Funded status at end of year	$	(968	)	$	(951	)


Amount recognized in the Consolidated Balance Sheets	$	(968	)	$	(951	)

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,
	2015		2014
Net actuarial loss	$	321	$	295
Prior service cost		—		(68	)

	$	321	$	227

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

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


	March 31,
	2015			2014
Net actuarial loss (gain) arising during the year	$	48		$	(10	)
Amortization of actuarial loss		(23	)		(30	)
Amortization of prior service cost		69			107

	$	94		$	67

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:


2016	$	92
2017		89
2018		86
2019		82
2020		78
2021-2025		331

Total	$	758