Employee Benefit Plans

12 Months Ended

Dec. 31, 2013

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Employee Benefit Plans

15. Employee Benefit Plans

The Company offers defined contribution retirement plans which cover the majority of its U.S. employees, as well as employees in certain other countries. The Company’s expense relating to defined contribution plans was $30,792, $29,760, and $25,169 for the years ended December 31, 2013, 2012, and 2011, respectively.

The Company sponsors qualified defined benefit pension plans covering certain employees of the Company and its subsidiaries. The plans’ benefits are generally based on years of service and employee compensation.  The Company also provides to certain management employees, through non-qualified plans, supplemental retirement benefits in excess of qualified plan limits imposed by federal tax law.

In July 2013, the Company announced that, after December 31, 2013, the U.S. qualified and non-qualified defined benefit plans will be closed to new employees. All pension-eligible employees as of December 31, 2013 will continue to earn a pension benefit through December 31, 2023 as long as they remain employed by an operating company participating in the plan. The Company also announced that effective, January 1, 2024, the plan would be frozen to any future benefit accruals. Consequently, the net funded status of the U.S. qualified defined benefit plan increased $124,848 in 2013 relative to the prior year due to a reduction in expected future obligations and increased returns on plan assets.

The Company also maintains post retirement benefit plans which cover approximately 1,188 participants, approximately 1,160 of whom are eligible for medical benefits.  These plans are effectively closed to new entrants. The post-retirement benefit obligation amounts at December 31, 2013 and 2012 include amounts totaling $2,941 and $3,173, respectively, that are recorded in discontinued operations.  The supplemental and post retirement benefit plans are supported by the general assets of the Company.

Obligations and Funded Status

The following tables summarize the balance sheet impact, including the benefit obligations, assets, and funded status associated with the Company's significant defined benefit and other postretirement plans at December 31, 2013 and 2012.

	Qualified Defined Benefits												Non-Qualified Supplemental Benefits						Post-Retirement Benefits
	U.S. Plan						Non-U.S. Plans
	2013			2012			2013			2012			2013			2012			2013			2012
Change in benefit obligation:
Benefit obligation at beginning of year	$	603,905		$	526,760		$	284,798		$	185,010		$	180,408		$	169,903		$	14,571		$	15,353
Benefits earned during the year	17,123			14,406			6,043			5,712			5,634			5,304			234			248
Interest cost	24,801			25,136			9,081			10,044			6,741			7,916			523			593
Plan participants' contributions	—			—			1,583			2,134			—			—			448			632
Benefits paid	(35,266		)	(38,297		)	(11,237		)	(7,065		)	(20,686		)	(19,434		)	(1,163		)	(1,531		)
Actuarial (gain) loss	(76,605		)	75,900			6,501			25,552			(34,831		)	9,579			(618		)	1,326
Business acquisitions	—			—			—			61,395			—			—			65			—
Amendments	1,913			—			—			—			3,004			7,140			—			—
Settlement and curtailment gains	(16,818		)	—			(3,036		)	(6,776		)	(7,228		)	—			—			(2,050		)
Currency translation and other	499			—			5,551			8,792			14			—			76			—
Benefit obligation at end of year	519,552			603,905			299,284			284,798			133,056			180,408			14,136			14,571
Change in plan assets:
Fair value of plan assets at beginning of year	554,648			515,191			181,416			121,807			—			—			—			—
Actual return on plan assets	66,761			59,754			17,356			16,023			—			—			—			—
Company contributions	9,000			18,000			11,359			10,243			20,686			19,434			715			2,949
Plan participants' contributions	—			—			1,583			2,134			—			—			448			632
Benefits paid	(35,266		)	(38,297		)	(11,237		)	(7,065		)	(20,686		)	(19,434		)	(1,163		)	(1,531		)
Business acquisitions	—			—			—			38,939			—			—			—			—
Settlements and curtailments	—			—			—			(6,776		)	—			—			—			(2,050		)
Currency translation	—			—			3,204			6,111			—			—			—			—
Fair value of plan assets at end of year	595,143			554,648			203,681			181,416			—			—			—			—
Funded status	$	75,591		$	(49,257	)	$	(95,603	)	$	(103,382	)	$	(133,056	)	$	(180,408	)	$	(14,136	)	$	(14,571	)
Amounts recognized in the balance sheets consist of:
Assets and Liabilities:
Other assets and deferred charges	$	75,591		$	—		$	2,976		$	2,749		$	—		$	—		$	—		$	—
Accrued compensation and employee benefits	—			—			(1,970		)	(3,190		)	(10,161		)	(19,701		)	(971		)	(953		)
Other liabilities (deferred compensation)	—			(49,257		)	(96,609		)	(102,941		)	(122,895		)	(160,707		)	(13,165		)	(13,618		)
Total Assets and Liabilities	$	75,591		$	(49,257	)	$	(95,603	)	$	(103,382	)	$	(133,056	)	$	(180,408	)	$	(14,136	)	$	(14,571	)
Accumulated Other Comprehensive Loss (Earnings):
Net actuarial losses (gains)	$	86,108		$	223,753		$	38,596		$	41,125		$	(12,520	)	$	22,296		$	799		$	996
Prior service cost (credit)	4,471			3,771			1,146			1,260			38,646			46,567			(1,024		)	(1,506		)
Net asset at transition, other	—			—			(48		)	3			—			—			—			—
Deferred taxes	(31,703		)	(79,634		)	(9,965		)	(10,761		)	(9,145		)	(24,103		)	20			119
Total Accumulated Other Comprehensive Loss (Earnings), net of tax	58,876			147,890			29,729			31,627			16,981			44,760			(205		)	(391		)
Net amount recognized at December 31,	$	134,467		$	98,633		$	(65,874	)	$	(71,755	)	$	(116,075	)	$	(135,648	)	$	(14,341	)	$	(14,962	)
Accumulated benefit obligations	$	482,181		$	541,394		$	280,763		$	264,736		$	93,153		$	138,593

The Company’s net unfunded status at December 31, 2013 includes an asset of $75,591 relating to the U.S. Dover Corporate Pension Plan and a net liability of $95,603 relating to the Company’s significant international plans, some in locations where it is not economically advantageous to pre-fund the plans due to local regulations. The majority of the international obligations relate to defined pension plans operated by the Company’s businesses in Germany, the United Kingdom, and Switzerland.

The accumulated benefit obligation for all defined benefit pension plans was $856,097 and $944,723 at December 31, 2013 and 2012, respectively.   Pension plans with accumulated benefit obligations in excess of plan assets consist of the following at December 31, 2013 and 2012:

	2013		2012
Projected benefit obligation (PBO)	$	369,289	$	425,080
Accumulated benefit obligation (ABO)	336,095		367,736
Fair value of plan assets	137,654		140,514

Net Periodic Benefit Cost

Components of the net periodic benefit cost were as follows: 

Defined Benefit Plans

	Qualified Defined Benefits																		Non-Qualified Supplemental Benefits
	U.S. Plan									Non-U.S. Plans
	2013			2012			2011			2013			2012			2011			2013			2012		2011
Service cost	$	17,123		$	14,406		$	14,167		$	6,043		$	5,712		$	3,278		$	5,634		$	5,304	$	4,064
Interest cost	24,801			25,136			27,237			9,081			10,044			9,019			6,741			7,916		7,841
Expected return on plan assets	(40,194		)	(38,978		)	(38,472		)	(9,608		)	(8,765		)	(8,148		)	—			—		—
Amortization of:
Prior service cost	1,026			1,048			1,304			114			117			122			8,110			7,425		7,266
Recognized actuarial loss	17,654			13,515			8,335			1,492			579			254			(16		)	138		—
Transition obligation	—			—			—			(14		)	(47		)	(44		)	—			—		—
Settlement & curtailment (gain) loss	187			—			1,180			697			1,449			2,030			(4,411		)	—		—
Other	501			—			123			5			—			—			13			—		—
Total net periodic benefit cost	$	21,098		$	15,127		$	13,874		$	7,810		$	9,089		$	6,511		$	16,071		$	20,783	$	19,171

Post-Retirement Benefits

	2013			2012			2011
Service cost	$	234		$	248		$	206
Interest cost	523			593			723
Amortization of:
Prior service credit	(416		)	(416		)	(409		)
Recognized actuarial gain	134			(19		)	(241		)
Settlement & curtailment gain	—			(1,493		)	(137		)
Other	77			—			256
Total net periodic benefit cost	$	552		$	(1,087	)	$	398

Amounts expected to be amortized from Accumulated Other Comprehensive Earnings (Loss) into net periodic benefit cost during 2014 are as follows:

	Qualified Defined Benefits				Non-Qualified Supplemental Benefits			Post-Retirement Benefits
	U.S. Plan		Non-U.S. Plans
Amortization of:
Prior service cost (credit)	$	1,083	$	114	$	7,741		$	(409	)
Recognized actuarial loss (gain)	8,289		1,130		(574		)	56
Transition obligation	—		4		—			—
Total	$	9,372	$	1,248	$	7,167		$	(353	)

Assumptions

The Company determines actuarial assumptions on an annual basis.

The weighted-average assumptions used in determining the benefit obligations were as follows: 

	Qualified Defined Benefits								Non-Qualified Supplemental Benefits				Post-Retirement Benefits
	U.S. Plan				Non-U.S. Plans
	2013		2012		2013		2012		2013		2012		2013		2012
Discount rate	4.90	%	4.05	%	3.53	%	3.31	%	4.77	%	4.00	%	4.45	%	3.65	%
Average wage increase	4.00	%	4.00	%	2.86	%	2.74	%	4.50	%	4.50	%	na		na
Ultimate medical trend rate	na		na		na		na		na		na		5.00	%	5.00	%

The weighted average assumptions used in determining the net periodic cost were as follows:

	Qualified Defined Benefits												Non- Qualified Supplemental Benefits						Post-Retirement Benefits
	U.S. Plan						Non-U.S. Plans
	2013		2012		2011		2013		2012		2011		2013		2012		2011		2013		2012		2011
Discount rate	4.05	%	4.85	%	5.50	%	3.31	%	4.62	%	5.04	%	4.02	%	4.77	%	5.50	%	3.65	%	3.65	%	5.10	%
Average wage increase	4.00	%	4.00	%	4.50	%	2.74	%	3.14	%	3.73	%	4.50	%	4.50	%	4.50	%	na		na		na
Expected return on plan assets	7.75	%	7.75	%	7.75	%	5.32	%	5.90	%	6.45	%	na		na		na		na		na		na

The Company’s discount rate assumption is determined by developing a yield curve based on high quality corporate bonds with maturities matching the plans’ expected benefit payment streams. The plans’ expected cash flows are then discounted by the resulting year-by-year spot rates.

For post-retirement benefit measurement purposes, an 8.5% annual rate of increase in the per capita cost of covered benefits (i.e., health care cost trend rates) was assumed for 2014. The rate was assumed to decrease gradually to 5.0% by the year 2027 and remain at that level thereafter. The health care cost trend rate assumption can have an effect on the amounts reported. For example, increasing (decreasing) the assumed health care cost trend rates by one percentage point in each year would increase (decrease) the accumulated post-retirement benefit obligation as of December 31, 2013 by $381 and $(363), respectively, and would have a negligible impact on the net post-retirement benefit cost for 2013.

Plan Assets

The primary financial objective of the plans is to secure participant retirement benefits.  Accordingly, the key objective in the plans’ financial management is to promote stability and, to the extent appropriate, growth in the funded status.  Related and supporting financial objectives are established in conjunction with a review of current and projected plan financial requirements.

As it relates to the funded defined benefit pension plans, the Company’s funding policy is consistent with the funding requirements of the Employment Retirement Income Security Act (“ERISA”) and applicable international laws.  The Company is responsible for overseeing the management of the investments of the plans’ assets and otherwise ensuring that the plans’ investment programs are in compliance with ERISA, other relevant legislation, and related plan documents.  Where relevant, the Company has retained professional investment managers to manage the plans’ assets and implement the investment process. The investment managers, in implementing their investment processes, have the authority and responsibility to select appropriate investments in the asset classes specified by the terms of their applicable prospectus or investment manager agreements with the plans.

The assets of the plans are invested to achieve an appropriate return for the plans consistent with a prudent level of risk. The asset return objective is to achieve, as a minimum over time, the passively managed return earned by market index funds, weighted in the proportions outlined by the asset class exposures identified in the plans’ strategic allocation.  The expected return on assets assumption used for pension expense is developed through analysis of historical market returns, statistical analysis, current market conditions, and the past experience of plan asset investments. Overall, it is projected that the investment of plan assets within Dover’s U.S. defined benefit plan will achieve a 7.75% net return over time from the asset allocation strategy.

The Company’s actual and target weighted-average asset allocation for our U.S. Corporate Pension Plan was as follows:

	2013		2012		Current Target
Equity securities	64	%	57	%	58	%
Fixed income	29	%	36	%	35	%
Real estate and other	7	%	7	%	7	%
Total	100	%	100	%	100	%

While the non-U.S. investment policies are different for each country, the long-term objectives are generally the same as for the U.S. pension assets. The Company's non-U.S. plans were expected to achieve rates of return on invested assets of 5.32% in 2013, 5.90% in 2012, and 6.45% in 2011.

The fair values of both U.S. and non-U.S. pension plan assets by asset category within the ASC 820 hierarchy (as defined in Note 11. Financial Instruments) are as follows at December 31, 2013 and 2012:

	U.S. Plan
	December 31, 2013								December 31, 2012
	Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3		Total Fair Value
Asset category:
Common stocks:
U.S. companies	$	180,038	$	—	$	—	$	180,038	$	153,939	$	—	$	—	$	153,939
Non-U.S. companies	5,526		—		—		5,526		6,478		—		—		6,478
Fixed income investments:
Corporate bonds	—		53,924		—		53,924		—		59,293		—		59,293
Private placements	—		3,374		—		3,374		—		7,238		—		7,238
Government securities	25,035		87,107		—		112,142		19,888		112,716		—		132,604
Common stock funds:
Mutual funds	59,387		—		—		59,387		45,376		—		—		45,376
Collective trusts	—		138,236		—		138,236		—		109,002		—		109,002
Real estate funds (1)	—		33,749		—		33,749		—		29,401		—		29,401
Cash and equivalents	8,767		—		—		8,767		11,317		—		—		11,317
	$	278,753	$	316,390	$	—	$	595,143	$	236,998	$	317,650	$	—	$	554,648

(1) Previously, the Company classified the real estate funds held by the U.S. defined benefit plan as a Level 3 investment due to certain redemption restrictions; however, in 2013 the Company determined that the U.S. plan has the ability to redeem these investments in the near-term, which would allow for classification as a Level 2 investment. The prior year has been reclassified to conform to this presentation.      

	Non-U.S. Plans
	December 31, 2013								December 31, 2012
	Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3		Total Fair Value
Asset category:
Common stocks	$	35,010	$	—	$	—	$	35,010	$	31,268	$	—	$	—	$	31,268
Fixed income investments	—		75,574		—		75,574		—		57,049		—		57,049
Common stock funds	—		66,285		—		66,285		—		75,729		—		75,729
Real estate funds	—		—		14,937		14,937		—		—		10,116		10,116
Cash and equivalents	6,785		—		—		6,785		3,380		—		—		3,380
Other	—		5,090		—		5,090		—		2,418		1,456		3,874
	$	41,795	$	146,949	$	14,937	$	203,681	$	34,648	$	135,196	$	11,572	$	181,416

Common stocks represent investments in domestic and foreign equities which are publicly traded on active exchanges and are valued based on quoted market prices.

Fixed income investments include U.S. treasury bonds and notes, which are valued based on quoted market prices, as well as investments in other government and municipal securities and corporate bonds, which are valued based on yields currently available on comparable securities of issuers with similar credit ratings.

Common stock funds consist of mutual funds and collective trusts. Mutual funds are valued by obtaining quoted prices from nationally recognized securities exchanges. Collective trusts are valued using Net Asset Value (the “NAV”) as of the last business day of the year. The NAV is based on the underlying value of the assets owned by the fund minus its liabilities, and then divided by the number of shares outstanding. The value of the underlying assets is based on quoted prices in active markets.

The real estate funds are valued on an annual basis using third-party appraisals, with adjustments estimated on a quarterly basis using discounted cash flow models which consider such inputs as revenue and expense growth rates, terminal capitalization rates, and discount rates. The Company believes this is an appropriate methodology to obtain the fair value of these assets.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2012 and 2013 due to the following:

	Real estate funds			Other			Total
Balance at December 31, 2011	$	7,053		$	4,561		$	11,614
Actual return on plan assets:
Relating to assets sold during the period	—			(52		)	(52		)
Relating to assets still held at December 31, 2011	359			—			359
Business acquisitions	3,103			1,456			4,559
Purchases	—			—			—
Sales	(399		)	(4,509		)	(4,908		)
Balance at December 31, 2012	10,116			1,456			11,572
Actual return on plan assets:
Relating to assets sold during the period	—			—			—
Relating to assets still held at December 31, 2012	2,958			—			2,958
Business acquisitions	—			—			—
Purchases	1,863			—			1,863
Sales	—			(1,456		)	(1,456		)
Balance at December 31, 2013	$	14,937		$	—		$	14,937

 There were no significant transfers between Level 1 and Level 2 investments during 2013 or 2012.

Future Estimates

Benefit Payments

Estimated future benefit payments to retirees, which reflect expected future service, are as follows: 

	Qualified Defined Benefits				Non-Qualified Supplemental Benefits		Post-Retirement Benefits
	U.S. Plan		Non-U.S. Plans
2014	$	35,913	$	8,280	$	10,398	$	971
2015	36,139		8,429		7,485		987
2016	38,034		8,702		7,817		975
2017	39,106		9,111		7,656		1,002
2018	40,510		9,755		7,172		1,048
2019 - 2023	218,612		56,962		38,393		5,331

Contributions

In 2014, the Company expects to contribute approximately $8.9 million to its non-U.S. plans and none to its U.S. plans. Additionally, in 2014, the Company expects to fund benefit payments of approximately $10.4 million to plan participants of its unfunded, non-qualified, supplemental benefit plans.

Multiemployer Pension Plans

The Company, through its subsidiaries, participates in a few multiemployer pension plans covering approximately 100 employees working under U.S. collective bargaining agreements. None of these plans are considered individually significant to the Company.  Contributions to multiemployer plans totaled less than $2.0 million in each of the last three years.