Pension Plans

6 Months Ended

Jun. 30, 2012

Pension Plans

Pension Plans

NOTE 6 — Pension Plans

We maintain a non-contributory tax qualified defined benefit pension plan that has been frozen since July 2011.  All of our full time employees were eligible to participate in the qualified plan.  Benefits provided by our qualified pension plan were based on years of service and employees’ remuneration over their employment period.  Pension costs are funded in accordance with the provisions of the Internal Revenue Code.  We also maintain a non-qualified, non-contributory defined benefit pension plan for certain employees that has been frozen since July 2011.  This excess plan provided benefits that would otherwise be provided under the qualified pension plan but for maximum benefit and compensation limits applicable under federal tax law.  The cost associated with the excess plan is determined using the same actuarial methods and assumptions as those used for our qualified pension plan.

On June 15, 2011, we decided to freeze participation and benefit accruals under our pension plans, primarily to reduce some of the impact on earnings and volatility in cash flows that can accompany the maintenance of a defined benefit plan.  The freeze was effective July 31, 2011.  Compensation earned by employees up to July 31, 2011 is used for purposes of calculating benefits under our pension plan with no future benefit accruals after this date.  Participants as of July 31, 2011 continue to earn vesting credit with respect to their frozen accrued benefits as they continue to work.

For the first six months of 2011, we assumed a long-term rate of return on plan assets of 8.5%.  For the first six months of 2012, we lowered the long-term rate of return on plan assets to 8.0%.

The components of net periodic pension cost are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Service cost	$	—		$	58,000		$	—		$	134,000
Interest cost	113,000			122,000			227,000			250,000
Expected return on plan assets	(127,000		)	(119,000		)	(254,000		)	(253,000		)
Curtailment loss	—			45,000			—			45,000
Recognized net actuarial loss	20,000			45,000			40,000			84,000
Net amortization	—			4,000			—			10,000
	$	6,000		$	155,000		$	13,000		$	270,000

We expect to contribute approximately $200,000 to our pension plans in 2012, of which $45,000 and $101,000 was contributed during the three and six-month periods ended June 30, 2012.  We contributed $68,000 and $129,000 to our pension plans during the three and six-month periods ended June 30, 2011.