Pension and Postretirement Benefit Plans

12 Months Ended

Jun. 30, 2012

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 $8.4 million in fiscal 2012, $8.1 million in fiscal 2011, and $13.5 million in fiscal 2010. 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,	2012			2011			2012			2011
(In thousands)
Change in benefit obligation
Benefit obligation, beginning of year	$	125,689		$	116,949		$	15,271		$	15,934
Service cost	9,434			9,647			450			476
Interest cost	5,987			5,297			798			792
Participant contributions	—			—			795			844
Plan amendments	—			472			—			—
Actuarial loss	7,853			1,976			(805		)	(858		)
Benefits paid (including lump sums)	(11,676		)	(8,652		)	(1,534		)	(1,917		)
Benefit obligation, end of year	$	137,287		$	125,689		$	14,975		$	15,271
Change in plan assets
Fair value of plan assets, beginning of year	$	131,003		$	113,576		$	—		$	—
Actual return on plan assets	4,696			25,553			—			—
Employer contributions	545			526			739			1,073
Participant contributions	—			—			795			844
Benefits paid (including lump sums)	(11,676		)	(8,652		)	(1,534		)	(1,917		)
Fair value of plan assets, end of year	$	124,568		$	131,003		$	—		$	—
Over (under) funded status, end of year	$	(12,719	)	$	5,314		$	(14,975	)	$	(15,271	)

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, 2012, follow:

June 30, 2012	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	$	124,464		$	70,214		$	54,250		$	—
Pooled separate accounts	104			—			104			—
Total assets at fair value	$	124,568		$	70,214		$	54,354		$	—

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,	2012			2011				2012			2011
(In thousands)
Other assets
Prepaid benefit cost	$	11,562		$	23,128			$	—		$	—
Accrued expenses-compensation and benefits
Accrued benefit liability	(1,478		)	(892		)		(912		)	(1,060		)
Other noncurrent liabilities
Accrued benefit liability	(22,803		)	(16,922		)		(14,063		)	(14,211		)
Net amount recognized, end of year	$	(12,719	)	$	5,314			$	(14,975	)	$	(15,271	)

The accumulated benefit obligation for all defined benefit pension plans was $122.9 million and $112.7 million at June 30, 2012 and 2011, respectively.

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

June 30,	2012		2011
(In thousands)
Projected benefit obligation	$	24,334	$	17,924
Fair value of plan assets	52		110

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

June 30,	2012		2011
(In thousands)
Accumulated benefit obligation	$	19,508	$	14,036
Fair value of plan assets	52		110

Costs

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

	Pension									Postretirement
Years ended June 30,	2012			2011			2010				2012			2011			2010
(In thousands)
Components of net periodic benefit costs
Service cost	$	9,434		$	9,647		$	8,568			$	450		$	476		$	422
Interest cost	5,987			5,297			5,777				798			792			907
Expected return on plan assets	(10,014		)	(8,688		)	(8,152		)		—			—			—
Prior service cost amortization	368			373			853				(536		)	(734		)	(736		)
Actuarial loss amortization	1,605			4,665			4,926				—			—			—
Settlement charge	—			—			(94		)		—			—			—
Net periodic benefit costs	$	7,380		$	11,294		$	11,878			$	712		$	534		$	593

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

June 30, 2012	Pension		Postretirement				Total
(In thousands)
Unrecognized net actuarial losses, net of taxes	$	23,290		$	(52	)	$	23,238
Unrecognized prior service credit (costs), net of taxes	621			(1,434		)	(813		)
Total	$	23,911		$	(1,486	)	$	22,425

During fiscal 2013, the Company expects to recognize as part of its net periodic benefit costs approximately $3.2 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, 2012.

Assumptions

Benefit obligations were determined using the following weighted average assumptions:

	Pension				Postretirement
June 30,	2012		2011			2012		2011
Weighted average assumptions
Discount rate	3.50	%	4.65	%		4.10	%	5.25	%
Rate of compensation increase - year one	3.50	%	4.50	%		3.50	%	4.50	%
Rate of compensation increase - subsequent years	3.50	%	4.50	%		3.50	%	4.50	%
Rate of increase in health care cost levels
Initial level	NA		NA			8.00	%	8.50	%
Ultimate level	NA		NA			5.00	%	5.00	%
Years to ultimate level	NA		NA			6 years		7 years
NA-Not applicable

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

	Pension						Postretirement
Years ended June 30,	2012		2011		2010			2012		2011		2010
Weighted average assumptions
Discount rate	4.65	%	4.50	%	5.75	%		5.25	%	5.00	%	6.20	%
Expected return on plan assets	8.00	%	8.25	%	8.25	%		NA		NA		NA
Rate of compensation increase - year one	4.50	%	4.50	%	0.00	%		4.50	%	4.50	%	0.00	%
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			8.50	%	9.00	%	7.50	%
Ultimate level	NA		NA		NA			5.00	%	5.00	%	5.00	%
Years to ultimate level	NA		NA		NA			7 yrs		8 yrs		5 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 2012		$	68		$	(37	)
Effect on postretirement benefit obligation as of June 30, 2012		864			(712		)

Plan Assets

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

	2012 Allocation				2011 Allocation
June 30,	Target		Actual		Target		Actual
Domestic equity securities	35	%	34	%	35	%	34	%
Fixed income investments	30	%	32	%	30	%	31	%
International equity securities	25	%	24	%	25	%	25	%
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. This 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, 2012 or 2011.

Cash Flows

Although we do not have a minimum funding requirement for the pension plans in fiscal 2013, the Company is currently determining what voluntary pension plan contributions, if any, will be made in fiscal 2013. Actual contributions will be dependent upon investment returns, changes in pension obligations, and other economic and regulatory factors. Meredith expects to contribute $0.9 million to its postretirement plan in fiscal 2013.

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)
2013		$	14,010		$	912
2014		22,484			920
2015		14,228			884
2016		13,216			930
2017		15,241			974
2018-2022		80,668			5,062

Other

The Company maintains collateral assignment split-dollar life insurance arrangements on certain key officers and retirees. The net periodic pension cost for fiscal 2012, 2011, and 2010 was $224,000, $189,000, and $172,000, respectively, and the accrued liability at June 30, 2012 and 2011, was $3.6 million and $3.2 million, respectively.