Pension Plans

6 Months Ended

Jun. 30, 2011

Pension Plans

Pension Plans

NOTE 5 — Pension Plans

We maintain a non-contributory, tax qualified defined benefit pension plan. All of our full time employees were eligible to participate in this qualified pension plan.  Benefits provided by our qualified pension plan were based on years of service and employees’ remuneration over their term of employment.  We also maintain a non-qualified, non-contributory defined benefit pension plan for certain employees.  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 volatility in earnings 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 shall be used for purposes of calculating benefits under our pension plan but there will be no future benefit accruals after this date.  Participants as of July 31, 2011 will continue to earn vesting credit with respect to their frozen accrued benefits as they continue to work.  We have accounted for the freeze of our pension plans as of June 30, 2011, which resulted in a curtailment gain of $13,000, reduced our liability for pension benefits by $2,036,000 and increased comprehensive earnings by $1,208,000 net of income taxes.

The components of net periodic pension cost are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Service cost	$	381,000		$	337,000		$	889,000		$	675,000
Interest cost	218,000			199,000			445,000			398,000
Expected return on plan assets	(198,000		)	(166,000		)	(419,000		)	(332,000		)
Curtailment gain	(13,000		)	—			(13,000		)	—
Recognized net actuarial loss	9,000			11,000			27,000			22,000
Amortization of prior service cost	2,000			3,000			4,000			5,000
	$	399,000		$	384,000		$	933,000		$	768,000

We contributed $496,000 and $799,000, and $150,000 and $700,000 to our pension plans during the three and six-month periods ended June 30, 2011 and 2010, respectively.  We expect to contribute approximately $2,400,000 to our pension plans in 2011.