PENSIONS AND OTHER EMPLOYEE BENEFITS

12 Months Ended

Dec. 31, 2011

PENSIONS AND OTHER EMPLOYEE BENEFITS

12. PENSIONS AND OTHER EMPLOYEE BENEFITS

Defined Benefit Plan

Until June 1, 2004, substantially all Old and New Globalstar employees and retirees who participated and/or met the vesting criteria for the plan were participants in the Retirement Plan of Space Systems/Loral (the "Loral Plan"), a defined benefit pension plan. The accrual of benefits in the Old Globalstar segment of the Loral Plan was curtailed, or frozen, by the administrator of the Loral Plan as of October 23, 2003. Prior to October 23, 2003, benefits for the Loral Plan were generally based upon contributions, length of service with the Company and age of the participant. On June 1, 2004, the assets and frozen pension obligations of the Globalstar Segment of the Loral Plan were transferred into a new Globalstar Retirement Plan (the "Globalstar Plan"). The Globalstar Plan remains frozen and participants are not currently accruing benefits beyond those accrued as of October 23, 2003. Globalstar's funding policy is to fund the Globalstar Plan in accordance with the Internal Revenue Code and regulations.

Defined Benefit Pension Obligation and Funded Status

Below is a reconciliation of projected benefit obligation, plan assets, and the funded status of the Company’s defined benefit plan (in thousands):

	Year Ended December 31,
	2011			2010
Change in projected benefit obligation:
Projected benefit obligation, beginning of year	$	15,275		$	14,434
Service cost		51			78
Interest cost		776			789
Actuarial loss		2,559			762
Benefits paid		(849	)		(788	)
Projected benefit obligation, end of year	$	17,812		$	15,275
Change in fair value of plan assets:
Fair value of plan assets, beginning of year	$	10,548		$	9,935
Return on plan assets		(131	)		1,116
Employer contributions		837			285
Benefits paid		(849	)		(788	)
Fair value of plan assets, end of year	$	10,405		$	10,548
Funded status, end of year- net liability	$	(7,407	)	$	(4,727	)

Net Benefit Cost and Amounts Recognized

Components of the net periodic benefit cost of the Company’s contributory defined benefit pension plan were as follows (in thousands):

	Year Ended December 31,
	2011			2010			2009
Net periodic benefit cost:
Service cost	$	51		$	78		$	50
Interest cost		776			789			755
Expected return on plan assets		(791	)		(723	)		(634	)
Amortization of unrecognized net actuarial loss		291			285			296
Total net periodic benefit cost	$	327		$	429		$	467

Amounts recognized in balance sheet were as follows (in thousands):

	December 31,
	2011			2010
Amounts recognized:
Funded status recognized in other non-current liabilities	$	(7,407	)	$	(4,727	)
Net actuarial loss recognized in accumulated other comprehensive loss		8,047			4,857
Net amount recognized in retained deficit	$	640		$	130

Assumptions

The weighted-average assumptions used to determine the benefit obligation and net periodic benefit cost were as follows:

	For the Year Ended December 31,
	2011			2010			2009
Benefit obligation assumptions:
Discount rate		4.00	%		5.25	%		5.60	%
Rate of compensation increase		N/A			N/A			N/A
Net periodic benefit cost assumptions:
Discount rate		5.25	%		5.60	%		5.75	%
Expected rate of return on plan assets		7.50	%		7.50	%		7.50	%
Rate of compensation increase		N/A			N/A			N/A

 The assumptions, investment policies and strategies for the Globalstar Plan are determined by the Globalstar Plan Committee. The Globalstar Plan Committee is responsible for ensuring the investments of the plans are managed in a prudent and effective manner. Amounts related to the pension plan are derived from actuarial and other assumptions, including discount rates, mortality, expected rate of return, compensation increases, participant data and termination. The Company reviews assumptions on an annual basis and make adjustments as considered necessary. The actuarial loss recognized during 2011 was primarily due to the change in discount rate from 5.25% to 4.00%.

The expected long-term rate of return on pension plan assets is selected by taking into account the expected duration of the projected benefit obligation for the plans, the asset mix of the plan and the fact that the plan assets are actively managed to mitigate risk.

Plan Assets and Investment Policies and Strategies

The plan assets are invested in various mutual funds which have quoted prices. The plan has a target allocation. On a weighted-average basis, target allocations for equity securities range from 50% to 60%, for debt securities 25% to 50% and for other investments 0% to 15%. The defined benefit pension plan asset allocation as of the measurement date presented as a percentage of total plan assets were as follows:

	December 31,
	2011			2010
Equity securities		57	%		58	%
Debt securities		31			29
Other investments		12			13
Total		100	%		100	%

The fair values of the Company’s pension plan assets as of December 31, 2011 and 2010 by asset category were as follows (in thousands):

	December 31, 2011
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
United States equity securities (a)	$	4,816	$	—	$	4,816	$	—
International equity securities (a)		1,106		—		1,106		—
Fixed income securities (a)		3,277		—		3,277		—
Other (b)		1,206		—		—		1,206
Total	$	10,405	$	—	$	9,199	$	1,206

	December 31, 2010
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
United States equity securities (a)	$	4,946	$	—	$	4,946	$	—
International equity securities (a)		1,189		—		1,189		—
Fixed income securities (a)		3,005		—		3,005		—
Other (b)		1,408		—		—		1,408
Total	$	10,548	$	—	$	9,140	$	1,408

(a)	Equity and income securities were previously classified as Level 1 have been reclassified at December 31, 2011 to Level 2.
(b)	Other pension assets were previously classified as Level 2 have been reclassified at December 31, 2011 to Level 3. These assets are valued at net asset value held at year end.

 Accumulated Benefit Obligation

The accumulated benefit obligation of the defined benefit pension plan recognized in accumulated other comprehensive losswas $8.0 million and $4.9 million at December 31, 2011 and 2010, respectively.

Benefits Payments and Contributions

The benefit payments to retirees over the next ten years are expected to be paid as follows (in thousands):

2012	$	868
2013		898
2014		913
2015		903
2016		902
2017 – 2022		4,697

For 2011 and 2010, the Company contributed $0.8 million and $0.3 million, respectively, to the Globalstar Plan.

401(k) Plan

The Company has a defined contribution employee savings plan, or “401(k),” which provides that the Company may match the contributions of participating employees up to a designated level. Under this plan, the matching contributions were approximately $0.3 million, $0.5 million, and $0.4 million for 2011, 2010, and 2009, respectively. Due to an effort to reduce operating costs, the Company no longer matched employee contributions beginning in the fourth quarter of 2011.