Note 17. Retirement benefits

Woodward provides various benefits to eligible members of the Company, including contributions to various defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits and postretirement life insurance benefits. Eligibility requirements and benefit levels vary depending on employee location.

Defined contribution plans

Most of the Company’s U.S. employees are eligible to participate in the U.S. defined contribution plan. The U.S. defined contribution plan allows employees to defer part of their annual income for income tax purposes into their personal 401(k) accounts. The Company makes contributions to eligible employee accounts, which are also deferred for employee personal income tax purposes. Certain foreign employees are also eligible to participate in foreign plans.

Most U.S. employees with at least two years of service receive an annual contribution of Woodward stock, equal to 5% of their eligible prior year wages, to their personal Woodward Retirement Savings Plan accounts. In the second quarter of fiscal 2013 and 2012, Woodward fulfilled the annual Woodward stock contribution using shares held in treasury stock by issuing 250 shares of common stock for a total value of $9,780 and 209 shares of common stock for a total value of $9,335, respectively.

The amount of expense associated with defined contribution plans was as follows:



	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Company costs	$	5,404	$	4,866	$	14,777	$	13,848

Defined benefit plans

Woodward has defined benefit plans that provide pension benefits for certain retired employees in the United States, the United Kingdom, Japan, and Switzerland. Woodward also provides other postretirement benefits to its employees including postretirement medical benefits and life insurance benefits. Postretirement medical benefits are provided to certain current and retired employees and their covered dependants and beneficiaries in the United States and the United Kingdom. Life insurance benefits are provided to certain retirees in the United States under frozen plans, which are no longer available to current employees. A September 30 measurement date is utilized to value plan assets and obligations for all of Woodward’s defined benefit pension and other postretirement benefit plans.

In connection with the acquisition of the Duarte Business, Woodward did not assume the Seller’s postretirement benefit obligations under the Duarte Business’ defined benefit pension plan as they existed at the time of closing of the transaction. Under the terms of the Asset Purchase Agreement, Woodward established a new defined benefit pension plan for the Duarte Business employees who were beneficiaries of the Seller’s defined benefit pension plan (the “Duarte Pension Plan”). During the third quarter of fiscal 2013, Woodward and the Duarte Union agreed that, effective as of the close of business on July 31, 2013, the Duarte Pension Plan will be amended to cease all future benefit accruals to current participants in the plan. In addition, the Duarte Pension Plan will be frozen to new entrants as of July 31, 2013. The Duarte Pension Plan had expenses of $167 and Woodward made $50 of contributions to the plan during the third quarter of fiscal 2013.

U.S. GAAP requires that, for obligations outstanding as of September 30, 2012, the funded status reported in interim periods shall be the same asset or liability recognized in the previous year end statement of financial position adjusted for (a) subsequent accruals of net periodic benefit cost that exclude the amortization of amounts previously recognized in other comprehensive income (for example, subsequent accruals of service cost, interest cost, and return on plan assets) and (b) contributions to a funded plan or benefit payments.

The components of the net periodic retirement pension costs recognized are as follows:



	Three-Months Ended June 30,
	United States				Other Countries				Total
	2013		2012		2013		2012		2013		2012
Service cost	$	1,273	$	883	$	254	$	282	$	1,527	$	1,165
Interest cost		1,393		1,454		518		571		1,911		2,025
Expected return on plan assets		(2,046)		(1,752)		(639)		(646)		(2,685)		(2,398)
Amortization of:
Net actuarial (gain) loss		344		131		113		167		457		298
Prior service cost (benefit)		19		19		(2)		(3)		17		16
Net periodic retirement pension (benefit) cost	$	983	$	735	$	244	$	371	$	1,227	$	1,106
Contributions paid	$	1,550	$	150	$	439	$	457	$	1,989	$	607



	Nine-Months Ended June 30,
	United States				Other Countries				Total
	2013		2012		2013		2012		2013		2012
Service cost	$	3,487	$	2,648	$	797	$	854	$	4,284	$	3,502
Interest cost		4,177		4,362		1,591		1,709		5,768		6,071
Expected return on plan assets		(6,136)		(5,256)		(1,966)		(1,936)		(8,102)		(7,192)
Amortization of:
Net actuarial (gain) loss		1,031		393		352		499		1,383		892
Prior service cost (benefit)		56		56		(6)		(7)		50		49
Net periodic retirement pension (benefit) cost	$	2,615	$	2,203	$	768	$	1,119	$	3,383	$	3,322
Contributions paid	$	4,550	$	450	$	2,696	$	2,789	$	7,246	$	3,239

The components of the net periodic other postretirement benefit costs recognized are as follows:



	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Service cost	$	18	$	17	$	54	$	52
Interest cost		311		449		933		1,348
Amortization of:
Net actuarial (gain) loss		(17)		22		(51)		68
Prior service cost (benefit)		(40)		(137)		(119)		(412)
Net periodic other postretirement (benefit) cost	$	272	$	351	$	817	$	1,056
Contributions paid	$	490	$	673	$	1,833	$	1,966

The amount of cash contributions made to these plans in any year is dependent upon a number of factors, including minimum funding requirements in the jurisdictions in which Woodward operates and arrangements made with trustees of certain foreign plans. As a result, the actual funding in fiscal 2013 may differ from the current estimate. Woodward estimates its remaining cash contributions in fiscal 2013, including those associated the Duarte Pension Plan, will be as follows:



Retirement pension benefits:
United States	$	1,500
United Kingdom		510
Japan		-
Switzerland		184
Other postretirement benefits		2,179

Multi-employer defined benefit plans

Woodward operates two multi-employer plans for certain employees in the Netherlands and Japan. The amounts of contributions associated with the multi-employer plans were as follows:



	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Company contributions	$	188	$	191	$	599	$	592