XML 56 R25.htm IDEA: XBRL DOCUMENT v2.4.0.8
Post-retirement Life Insurance Benefit
6 Months Ended
Jun. 30, 2013
Compensation And Retirement Disclosure [Abstract]  
Post-retirement Life Insurance Benefit

Note 17 — Post-retirement Life Insurance Benefit

In 1995, the Company established a post-retirement life insurance benefit equal to three times the employees’ salary at retirement for all employees employed with the Company at July 1, 1995. Employees hired by the Company after July 1, 1995, received a post-retirement life insurance benefit equal to $50,000 at retirement, which decreases by $5,000 annually to a minimum benefit of $5,000 by the time the recipient reaches age 75. In June of 2012, the Company amended the post-retirement life insurance benefit for all active employees, regardless of hire date, to a benefit of $50,000 at retirement, then decreasing by $5,000 a year to $5,000 at age 75. Because the product offered is term life insurance, the Company is exposed to increasing costs in future years.

The Company is evaluating various options to reduce or settle its obligation for benefits, to the current retiree group only. One option under consideration is a plan offered by an insurance company, as to this current retiree group, whereby the Company would enter into an agreement with the insurance company to transfer all risk and obligation for the benefits payable as to the current retiree group in exchange for a one-time fixed payment by the Company.

 

The agreement would require a one-time payment to the insurance company, estimated to be approximately $4.1 million. There would be no further cost to the Company as to the current retirees, after this payment. The Company would recognize a settlement charge, net of tax, of approximately $1.6 million in the period in which it occurs.