Pension Liabilities

12 Months Ended

Dec. 31, 2013

Pension Liabilities [Abstract]

Pension Liabilities

Note 18 – Pension Liabilities

Supplemental Executive Retirement Plan

In March 1, 2007, the Board of Directors of Reading International, Inc. (“Reading”) approved a Supplemental Executive Retirement Plan (“SERP”) pursuant to which Reading has agreed to provide James J. Cotter, its Chief Executive Officer and Chairman of the Board of Directors, supplemental retirement benefits effective March 1, 2007.  Under the SERP, Mr. Cotter will receive a monthly payment of the greater of (i) 40% of the average monthly earnings over the highest consecutive 36-month period of earnings prior to Mr. Cotter’s separation from service with Reading or (ii) $25,000 per month for the remainder of his life, with a guarantee of 180 monthly payments following his separation from service with Reading or following his death.  The beneficiaries under the SERP may be designated by Mr. Cotter or by his beneficiary following his or his beneficiary’s death.  The benefits under the SERP are fully vested as of March 1, 2007.

The SERP initially will be unfunded, but Reading may choose to establish one or more grantor trusts from which to pay the SERP benefits.  As such, the SERP benefits are unsecured, general obligations of Reading.  The SERP is administered by the Compensation Committee of the Board of Directors of Reading.  In accordance with FASB ASC 715-30-05 – Defined Benefit Pension Plans (“ASC 715-30-05”), the initial pension benefit obligation of $2.7 million was included in our other liabilities with a corresponding amount of unrecognized prior service cost included in accumulated other comprehensive income on March 1, 2007.  The initial benefit obligation was based on a discount rate of 5.75% and a compensation increase rate of 3.5%.  The $2.7 million is being amortized as a prior service cost over the estimated service period of 10 years combined with an annual interest cost.  For the years ended December 31, 2013,  2012, and 2011, we recognized $202,000,  $149,000, and $195,000, respectively, of interest cost and $304,000 of amortized prior service cost per year.  For the years ended December 31, 2013 and 2012, we recognized $356,000 and $0 of amortized net gains.  The balance of the other liability for this pension plan was $7.4 million and $5.9 million at December 31, 2013 and 2012, respectively, and the accumulated unrecognized prior service costs included in other comprehensive income balance was $3.8 and $3.2 million at December 31, 2013 and 2012, respectively.  The December 31, 2013 and 2012 values of the SERP are based on a discount rate of 4.25% and 3.40%, respectively, and an annual compensation growth rate of 7.50% and 3.50%, respectively. 

The change in the SERP pension benefit obligation and the funded status for the year ending December 31, 2013 and 2012 are as follows (dollars in thousands):

		For the year ending
Change in Benefit Obligation		December 31, 2013
Benefit obligation at January 1, 2013	$	5,944
Interest cost		202
Actuarial gain		1,252
Benefit obligation at December 31, 2013		7,398
Funded status at December 31, 2013	$	(7,398)
		For the year ending
Change in Benefit Obligation		December 31, 2012
Benefit obligation at January 1, 2012	$	3,511
Interest cost		149
Actuarial gain		2,284
Benefit obligation at December 31, 2012		5,944
Funded status at December 31, 2012	$	(5,944)

Amount recognized in balance sheet consists of (dollars in thousands):

		At December 31, 2013		At December 31, 2012
Current liabilities	$	15	$	14
Noncurrent liabilities		7,383		5,930

Items not yet recognized as a component of net periodic pension cost consist of (dollars in thousands):

		At December 31, 2013		At December 31, 2012
Unamortized actuarial loss	$	3,166	$	2,269
Prior service costs		627		931
Accumulated other comprehensive loss		3,793		3,200

The components of the net periodic benefit cost and other amounts recognized in other comprehensive income are as follows (dollars in thousands):

Net periodic benefit cost		For the year ending December 31, 2013		For the year ending December 31, 2012
Interest cost	$	202	$	149
Amortization of prior service costs		304		304
Amortization of net gain		356		--
Net periodic benefit cost	$	862	$	453
Other changes in plan assets and benefit obligations recognized in other comprehensive income
Net loss	$	1,253	$	2,284
Amortization of prior service cost		(304)		(304)
Amortization of net loss		(356)		--
Total recognized in other comprehensive income	$	593	$	1,980
Total recognized in net periodic benefit cost and other comprehensive income	$	1,455	$	2,433

The estimated net loss and prior service cost for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year will be $356,000 and $304,000, respectively.

The following weighted average assumptions were used to determine the plan benefit obligations at December 31, 2013 and 2012:

	2013	2012
Discount rate	4.25%	3.40%
Rate of compensation increase	7.50%	3.50%

The following weighted-average assumptions were used to determine net periodic benefit cost for the year ended December 31, 2013 and 2012:

	2013	2012
Discount rate	3.40%	4.25%
Expected long-term return on plan assets	0.00%	0.00%
Rate of compensation increase	3.50%	3.50%

Other Pension Liabilities

In addition to the aforementioned SERP, we have defined contribution pension plans for selected current and former executives of our corporation resulting in a pension liability of $1.1 million and $1.0 million at December 31, 2013 and 2012, respectively.  These pensions accrued $95,000 and $204,000 of pension expense for the years ended December 31, 2013 and 2012, respectively. 

The benefit payments for all of our pensions, which reflect expected future service, as appropriate, are expected to be paid over the following periods (dollars in thousands):

		Pension Payments
2014	$	14
2015		32
2016		50
2017		633
2018		607
Thereafter		7,191
Total pension payments	$	8,527