Pension and Postretirement Benefit Plans

12 Months Ended

Jun. 30, 2011

Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]

Pension and Postretirement Benefit Plans [Text Block]

Pension and Postretirement Benefit Plans

Savings and Investment Plan

Meredith maintains a 401(k) Savings and Investment Plan that permits eligible employees to contribute funds on a pretax basis. The plan allows employee contributions of up to 50 percent of eligible compensation subject to the maximum allowed under federal tax provisions. The Company matches 100 percent of the first 3 percent and 50 percent of the next 2 percent of employee contributions.

The 401(k) Savings and Investment Plan allows employees to choose among various investment options, including the Company's common stock, for both their contributions and the Company's matching contribution. Company contribution expense under this plan totaled $8.1 million in fiscal 2011, $13.5 million in fiscal 2010, and $8.1 million in fiscal 2009. Fiscal 2010 contribution expense included $5.4 million that was a special one-time contribution authorized by the Company's Board of Directors based on the Company achieving certain operating profit targets in fiscal 2010.

Pension and Postretirement Plans

Meredith has noncontributory pension plans covering substantially all employees. These plans include qualified (funded) plans as well as nonqualified (unfunded) plans. These plans provide participating employees with retirement benefits in accordance with benefit provision formulas. The nonqualified plans provide retirement benefits only to certain highly compensated employees. The Company also sponsors defined healthcare and life insurance plans that provide benefits to eligible retirees.

Obligations and Funded Status

The following tables present changes in, and components of, the Company's net assets/liabilities for pension and other postretirement benefits:

	Pension						Postretirement
June 30,	2011			2010				2011			2010
(In thousands)
Change in benefit obligation
Benefit obligation, beginning of year	$	116,949		$	104,009			$	15,934		$	14,819
Service cost	9,647			8,568				476			422
Interest cost	5,297			5,777				792			907
Participant contributions	—			—				844			839
Plan amendments	472			—				—			—
Actuarial loss	1,976			6,543				(858		)	1,325
Benefits paid (including lump sums)	(8,652		)	(7,948		)		(1,917		)	(2,378		)
Benefit obligation, end of year	$	125,689		$	116,949			$	15,271		$	15,934
Change in plan assets
Fair value of plan assets, beginning of year	$	113,576		$	95,401			$	—		$	—
Actual return on plan assets	25,553			15,475				—			—
Employer contributions	526			10,648				1,073			1,539
Participant contributions	—			—				844			839
Benefits paid (including lump sums)	(8,652		)	(7,948		)		(1,917		)	(2,378		)
Fair value of plan assets, end of year	$	131,003		$	113,576			$	—		$	—
Over (under) funded status, end of year	$	5,314		$	(3,373	)		$	(15,271	)	$	(15,934	)

Benefits paid directly from Meredith assets are included in both employer contributions and benefits paid.

Fair value measurements for pension assets as of June 30, 2011, follow:

June 30, 2011	Total Fair Value		Quoted Prices (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
(In thousands)
Investments in registered investment companies	$	130,254		$	73,296		$	56,958		$	—
Pooled separate accounts	749			—			749			—
Total assets at fair value	$	131,003		$	73,296		$	57,707		$	—

Refer to Note 15 for a discussion of the three levels in the hierarchy of fair values.

The following amounts are recognized in the Consolidated Balance Sheets:

	Pension						Postretirement
June 30,	2011			2010				2011			2010
(In thousands)
Other assets
Prepaid benefit cost	$	23,128		$	12,515			$	—		$	—
Accrued expenses-compensation and benefits
Accrued benefit liability	(892		)	(1,026		)		(1,060		)	(1,160		)
Other noncurrent liabilities
Accrued benefit liability	(16,922		)	(14,862		)		(14,211		)	(14,774		)
Net amount recognized, end of year	$	5,314		$	(3,373	)		$	(15,271	)	$	(15,934	)

The accumulated benefit obligation for all defined benefit pension plans was $112.7 million and $104.1 million at June 30, 2011 and June 30, 2010, respectively.

The following table provides information about pension plans with projected benefit obligations in excess of plan assets:

June 30,	2011		2010
(In thousands)
Projected benefit obligation	$	17,924	$	15,961
Fair value of plan assets	110		74

The following table provides information about pension plans with accumulated benefit obligations in excess of plan assets:

June 30,	2011		2010
(In thousands)
Accumulated benefit obligation	$	14,036	$	12,605
Fair value of plan assets	110		74

Costs

The components of net periodic benefit costs recognized in the Consolidated Statements of Earnings (Loss) were as follows:

	Pension									Postretirement
Years ended June 30,	2011			2010			2009				2011			2010			2009
(In thousands)
Components of net periodic benefit costs
Service cost	$	9,647		$	8,568		$	8,632			$	476		$	422		$	461
Interest cost	5,297			5,777			5,721				792			907			980
Expected return on plan assets	(8,688		)	(8,152		)	(9,324		)		—			—			—
Prior service cost amortization	373			853			839				(734		)	(736		)	(736		)
Actuarial loss amortization	4,665			4,926			533				—			—			—
Settlement charge	—			(94		)	93				—			—			—
Net periodic benefit costs	$	11,294		$	11,878		$	6,494			$	534		$	593		$	705

Amounts recognized in the accumulated other comprehensive loss component of shareholders' equity for Company-sponsored plans were as follows:

June 30, 2011	Pension		Postretirement				Total
(In thousands)
Unrecognized net actuarial losses, net of taxes	$	16,235		$	439		$	16,674
Unrecognized prior service credit (costs), net of taxes	845			(1,761		)	(916		)
Total	$	17,080		$	(1,322	)	$	15,758

During fiscal 2012, the Company expects to recognize as part of its net periodic benefit costs approximately $1.6 million of net actuarial losses, $0.4 million of prior-service costs for the pension plans, and $0.5 million of prior service credit for the postretirement plan that are included, net of taxes, in the accumulated other comprehensive loss component of shareholders' equity at June 30, 2011.

Assumptions

Benefit obligations were determined using the following weighted average assumptions:

	Pension				Postretirement
June 30,	2011		2010			2011		2010
Weighted average assumptions
Discount rate	4.65	%	4.50	%		5.25	%	5.00	%
Rate of compensation increase - year one	4.50	%	4.50	%		4.50	%	4.50	%
Rate of compensation increase - subsequent years	4.50	%	4.50	%		4.50	%	4.50	%
Rate of increase in health care cost levels
Initial level	NA		NA			8.50	%	9.00	%
Ultimate level	NA		NA			5.00	%	5.00	%
Years to ultimate level	NA		NA			7 yrs		8 yrs
NA-Not applicable

Net periodic benefit costs were determined using the following weighted average assumptions:

	Pension						Postretirement
Years ended June 30,	2011		2010		2009			2011		2010		2009
Weighted average assumptions
Discount rate	4.50	%	5.75	%	5.80	%		5.00	%	6.20	%	6.25	%
Expected return on plan assets	8.25	%	8.25	%	8.25	%		NA		NA		NA
Rate of compensation increase - year one	4.50	%	0.00	%	4.50	%		4.50	%	0.00	%	4.50	%
Rate of compensation increase - subsequent years	4.50	%	4.50	%	4.50	%		4.50	%	4.50	%	4.50	%
Rate of increase in health care cost levels
Initial level	NA		NA		NA			9.00	%	7.50	%	8.00	%
Ultimate level	NA		NA		NA			5.00	%	5.00	%	5.00	%
Years to ultimate level	NA		NA		NA			8 yrs		5 yrs		6 yrs
NA-Not applicable

The Nonbargaining Plan fiscal 2010 pension cost was remeasured on January 1, 2010, to reflect a $9.5 million contribution made to the trust on December 30, 2009. Meredith changed the discount rate assumption to 5.25 percent for the remeasurement.

The expected return on plan assets assumption was determined, with the assistance of the Company's investment consultants, based on a variety of factors. These factors include but are not limited to the plans' asset allocations, review of historical capital market performance, historical plan performance, current market factors such as inflation and interest rates, and a forecast of expected future asset returns. The Company reviews this long-term assumption on a periodic basis.

Assumed rates of increase in healthcare cost have a significant effect on the amounts reported for the healthcare plans. A change of one percentage point in the assumed healthcare cost trend rates would have the following effects:

	One Percentage Point Increase		One Percentage Point Decrease
(In thousands)
Effect on service and interest cost components for fiscal 2011	$	61	$	(50	)
Effect on postretirement benefit obligation as of June 30, 2011	626		(526		)

Plan Assets

The targeted and weighted average asset allocations by asset category for investments held by the Company's pension plans are as follows:

	2011 Allocation				2010 Allocation
June 30,	Target		Actual		Target		Actual
Domestic equity securities	35	%	34	%	45	%	42	%
Fixed income investments	30	%	31	%	30	%	34	%
International equity securities	25	%	25	%	15	%	14	%
Global equity securities	10	%	10	%	10	%	10	%
Fair value of plan assets	100	%	100	%	100	%	100	%

Meredith's investment policy seeks to maximize investment returns while balancing the Company's tolerance for risk. The plan fiduciaries oversee the investment allocation process, which includes selecting investment managers, setting long-term strategic targets, and monitoring asset allocations. Target allocation ranges are guidelines, not limitations, and plan fiduciaries may occasionally approve allocations above or below a target range or elect to rebalance the portfolio within the targeted range. The investment portfolio contains a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across domestic and international stocks and between growth and value stocks and small and large capitalizations. The primary investment strategy currently employed is a dynamic target allocation method that periodically rebalances among various investment categories depending on the current funded position. This program is designed to actively move from return seeking investments (such as equities) toward liability-hedging investments (such as long duration fixed income) as funding levels improve. The reverse effect occurs when funding levels decrease.

Equity securities did not include any Meredith Corporation common or Class B stock at June 30, 2011 or June 30, 2010.

Cash Flows

Although we do not have a minimum funding requirement for the pension plans in fiscal 2012, the Company is currently determining what voluntary pension plan contributions, if any, will be made in fiscal 2012. Actual contributions will be dependent upon investment returns, changes in pension obligations, and other economic and regulatory factors. Meredith expects to contribute $1.1 million to its postretirement plan in fiscal 2012.

The following benefit payments, which reflect expected future service as appropriate, are expected to be paid:

Years ending June 30,	Pension Benefits			Postretirement Benefits
(In thousands)
2012		$	12,625		$	1,060
2013		19,101			1,069
2014		14,479			1,102
2015		13,615			1,062
2016		13,160			1,130
2017-2021		76,095			6,203

Other

The Company maintains collateral assignment split-dollar life insurance arrangements on certain key officers and retirees. The net periodic pension cost for fiscal 2011, 2010, and 2009 was $189,000, $172,000 and $177,000, respectively, and the accrued liability at June 30, 2011 and June 30, 2010, was $3.2 million and $3.2 million, respectively.