Employee Benefit Plans

Defined Benefit Plans:

The following tables summarize changes in the benefit obligation, the plan assets and the funded status of our pension plans as well as the components of net periodic benefit costs, including key assumptions (in thousands). The measurement dates for plan assets and obligations were December 31, 2014 and 2013.



	December 31,
	2014			2013
Change in Projected Benefit Obligation:
Benefit obligation at beginning of year	$	38,072		$	42,530
Service cost	1,008			1,281
Interest cost	1,800			1,544
Actuarial loss (gain) ⁽¹⁾	11,020			(5,807		)
Benefit payments	(1,682		)	(1,476		)
Benefit obligation at end of year	$	50,218		$	38,072
Change in Plan Assets:
Fair value of plan assets at beginning of year	$	39,327		$	32,161
Actual return on plan assets	2,861			6,842
Employer contributions	2,100			1,800
Benefit payments	(1,682		)	(1,476		)
Fair value of plan assets at end of year	$	42,606		$	39,327
(Unfunded) funded status at end of year (included in accounts payable and accrued expenses in 2014 and other assets in 2013)	$	(7,612	)	$	1,255
Accumulated benefit obligation	$	50,104		$	37,885
Net loss recognized in accumulated other comprehensive loss	$	16,508		$	5,775

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(1)	The year over year change in actuarial loss is due primarily to the application of a new mortality rate table, a decrease in the discount rate and demographic changes.

The following is the required information for other changes in plan assets and benefit obligations recognized in other comprehensive loss (income) (in thousands):



	Year Ended December 31,
	2014			2013			2012
Net loss (gain)	$	11,118		$	(10,200	)	$	979
Amortization of net loss ⁽¹⁾	(385		)	(1,279		)	(1,569		)
Amortization of prior service cost	—			—			117
Total recognized in other comprehensive loss (income)	$	10,733		$	(11,479	)	$	(473	)
Total recognized in net periodic benefit costs and other comprehensive loss (income)	$	10,967		$	(9,824	)	$	1,622

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(1)	The estimated net loss that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $1.3 million.

The following is the required information for plans with an accumulated benefit obligation in excess of plan assets (in thousands):



	December 31,
	2014		2013
Projected benefit obligation	$	50,218	N/A
Accumulated benefit obligation	50,104		N/A
Fair value of plan assets	42,606		N/A

The components of net periodic benefit cost for the plans are as follows (in thousands):



	Year Ended December 31,
	2014			2013			2012
Service cost	$	1,008		$	1,281		$	1,314
Interest cost	1,800			1,544			1,578
Expected return on plan assets	(2,959		)	(2,449		)	(2,249		)
Prior service cost	—			—			(117		)
Recognized loss	385			1,279			1,569
Total	$	234		$	1,655		$	2,095

The assumptions used to develop periodic expense for the plans are shown below:



	Year Ended December 31,
	2014		2013		2012
Discount rate	4.70	%	3.87	%	4.19	%
Salary scale increases	3.50	%	3.50	%	3.50	%
Long-term rate of return on assets	7.50	%	7.50	%	8.00	%

The selection of the discount rate is made annually after comparison to yields based on high quality fixed-income investments. The salary scale is the composite rate which reflects anticipated inflation, merit increases, and promotions for the group of covered participants. The long-term rate of return is a composite rate for the trust. It is derived as the sum of the percentages invested in each principal asset class included in the portfolio multiplied by their respective expected rates of return. We considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This analysis resulted in the selection of 7.50% as the long-term rate of return assumption for 2014.

The assumptions used to develop the actuarial present value of the benefit obligations for the plans are shown below:



	Year Ended December 31,
	2014		2013		2012
Discount rate	3.83	%	4.70	%	3.87	%
Salary scale increases	3.50	%	3.50	%	3.50	%

The expected contribution to be paid for the Retirement Plan by us during 2015 is approximately $2.0 million. The expected benefit payments for the next 10 years for the Retirement Plan is as follows (in thousands):



2015	$	2,250
2016	2,193
2017	2,140
2018	1,998
2019	2,404
2020-2024	12,513

The participant data used in determining the liabilities and costs for the Retirement Plan was collected as of January 1, 2014, and no significant changes have occurred through December 31, 2014.

At December 31, 2014, our investment asset allocation compared to our benchmarking allocation model for our plan assets was as follows:



	Portfolio		Benchmark
Cash and Short-Term Investments	6	%	6	%
U.S. Stocks	60	%	61	%
International Stocks	13	%	11	%
U.S. Bonds	18	%	19	%
International Bonds	3	%	3	%
Total	100	%	100	%

The fair value of plan assets was determined based on publicly quoted market prices for identical assets, which are classified as Level 1 observable inputs. The allocation of the fair value of plan assets was as follows:



	December 31,
	2014		2013
Cash and Short-Term Investments	18	%	3	%
Large Company Funds	35	%	31	%
Mid Company Funds	6	%	8	%
Small Company Funds	6	%	8	%
International Funds	10	%	11	%
Fixed Income Funds	17	%	21	%
Growth Funds	8	%	18	%
Total	100	%	100	%

Concentrations of risk within our equity portfolio are investments classified within the following sectors: technology, financial services, consumer cyclical goods, healthcare and industrial, which represents approximately 17%, 16%, 15%, 15% and 12% of total equity investments, respectively.

Defined Contribution Plans:

Compensation expense related to our defined contribution plans was $3.2 million in 2014, $3.1 million in 2013 and $3.3 million in 2012.