Note 12 - Benefit Plans

12 Months Ended

Dec. 31, 2011

Pension and Other Postretirement Benefits Disclosure [Text Block]

12. Benefit Plans

The company has a company-sponsored defined benefit pension plan covering certain of its North American employees. The amount of the retirement benefit is based on years of service and final average pay. The plan also provides post-retirement medical benefits to retirees and their spouses if the retiree has reached age 62 and has provided at least ten years of service prior to retirement. Such benefits generally cease once the retiree attains age 65. The company also has company-sponsored defined benefit pension plans covering employees in the U.K., Germany, Japan, Taiwan and the Netherlands. The amount of the retirement benefits provided under the plans is based on years of service and final average pay.

On March 26, 2009, the company amended its U.S.-based Amended and Restated Littelfuse, Inc. Retirement Plan (the "Pension Plan"), freezing benefit accruals effective April 1, 2009. The amendment provides that participants in the Pension Plan will not receive credit, other than for vesting purposes, for eligible earnings paid or for any months of service worked after the effective date. All accrued benefits under the Pension Plan as of the effective date will remain intact, and service credits for vesting and retirement eligibility will continue in accordance with the terms of the Pension Plan. As a result of the formal decision to freeze the Pension Plan benefit accruals, the company re-measured its Pension Plan assets and obligations at April 1, 2009, which resulted in a decrease of the Pension Plan obligation of $10.5 million, with a corresponding adjustment to other comprehensive income (loss), net of income taxes, on that date.

Liabilities resulting from the plan that covers employees in the Netherlands are settled annually through the purchase of insurance contracts. Separate from the foreign pension data presented below, net periodic expense for the plan covering the Netherlands employees was $0.0 million, $0.0 million, and $0.2 million in 2011, 2010, and 2009, respectively.

During the fourth quarter of 2010, the company elected to fully fund its German pension liability for approximately $10.2 million in cash. The German pension plan was frozen in 2009.

The company’s contributions are made in amounts sufficient to satisfy legal requirements. The company is not expected to be required to make a minimum funding contribution in accordance with the Employee Retirement Income Securities Act of 1974 (“ERISA”) for fiscal year 2012.

Total pension expense (income) was $0.5 million, ($0.3) million and $1.3 million in 2011, 2010 and 2009, respectively. The increase in pension expense in 2011 resulted from required service and interest costs exceeding net earnings from plan assets for the year. The decrease in pension expense resulting in income in 2010 resulted from net earnings from plan assets that exceeded the required service and interest cost for the year.

Benefit plan related information is as follows:

	2011									2010
(In thousands)	U.S.			Foreign			Total			U.S.			Foreign			Total
Change in benefit obligation:
Benefit obligation at beginning of year	$	91,264		$	12,627		$	103,891		$	58,774		$	12,670		$	71,444
Service cost		560			429			989			500			266			766
Interest cost		5,110			632			5,742			3,927			591			4,518
Acquisition		—			—			—			25,230			—			25,230
Curtailment (gain) loss		—			(19	)		(19	)		—			8			8
Net actuarial gain		2,723			614			3,337			7,124			726			7,850
Benefits paid from the trust		(5,274	)		(37	)		(5,311	)		(4,291	)		(99	)		(4,390	)
Benefits paid directly by company		—			(874	)		(874	)		—			(855	)		(855	)
Effect of exchange rate movements		—			(179	)		(179	)		—			(680	)		(680	)
Benefit obligation at end of year	$	94,383		$	13,193		$	107,576		$	91,264		$	12,627		$	103,891
Change in plan assets at fair value:
Fair value of plan assets at beginning of year	$	87,522		$	11,158		$	98,680		$	52,645		$	974		$	53,619
Actual return on plan assets		(1,047	)		431			(616	)		7,938			16			7,954
Employer contributions		—			—			—			6,000			10,186			16,186
Business acquisition		—			—			—			25,230			—			25,230
Benefits paid		(5,274	)		(37	)		(5,311	)		(4,291	)		(99	)		(4,390	)
Effect of exchange rate movements		—			(274	)		(274	)		—			81			81
Fair value of plan assets at end of year		81,201			11,278			92,479			87,522			11,158			98,680
Net amount recognized/unfunded status	$	(13,182	)	$	(1,915	)	$	(15,097	)	$	(3,742	)	$	(1,469	)	$	(5,211	)
Amounts recognized in the Consolidated Balance Sheet consist of:
Prepaid benefit cost	$	—		$	195		$	195		$	—		$	353		$	353
Accrued benefit liability		(13,182	)		(2,110	)		(15,292	)		(3,742	)		(1,822	)		(5,564	)
Net liability recognized	$	(13,182	)	$	(1,915	)	$	(15,097	)	$	(3,742	)	$	(1,469	)	$	(5,211	)
Accumulated other comprehensive loss	$	19,728		$	1,036		$	20,764		$	10,188		$	405		$	10,593

Amounts recognized in accumulated other comprehensive income (loss), pre-tax consist of:

	2011								2010
(In thousands)	U.S.		Foreign			Total			U.S.		Foreign			Total
Net actuarial loss (gain)	$	19,728	$	1,051		$	20,779		$	10,188	$	423		$	10,611
Prior service (cost) credit		—		(15	)		(15	)		—		(18	)		(18	)
Net amount recognized / occurring, pre-tax	$	19,728	$	1,036		$	20,764		$	10,188	$	405		$	10,593

The estimated net actuarial loss (gain) which will be amortized from accumulated other comprehensive income (loss) into benefit cost in 2012 is less than $0.1 million.

	U.S.									Foreign
(In thousands)	2011			2010			2009			2011			2010			2009
Components of net periodic benefit cost:
Service cost	$	560		$	500		$	866		$	429		$	266		$	323
Interest cost		5,110			3,927			4,076			632			591			735
Expected return on plan assets		(6,518	)		(5,018	)		(4,343	)		(507	)		(15	)		(72	)
Amortization of prior service cost (credit)		—			—			2			(1	)		(1	)		(12	)
Amortization of losses/(gains)		748			—			—			25			(3	)		13
Total cost of the plan for the year		(100	)		(591	)		601			578			838			987
Expected plan participants’ contributions		—			—			—			—			—			—
Net periodic benefit cost		(100	)		(591	)		601			578			838			987
Settlement loss (curtailment gain)		—			—			74			11			27			(345	)
Total (income) expense for the year	$	(100	)	$	(591	)	$	675		$	589		$	865		$	642

Weighted average assumptions used to determine net periodic benefit cost for the years 2011, 2010 and 2009 are as follows:

	U.S.									Foreign
	2011			2010			2009			2011			2010			2009
Discount rate		5.9%/5.4	%**		7.0	%		6.4/7.5	%*		5.3	%		5.6	%		6.6	%
Expected return on plan assets		8.5%/7.5	%***		8.5	%		8.5	%		4.5	%		1.5	%		3.6	%
Compensation increase rate		—			—			4.5	%		5.3	%		4.8	%		4.0	%
Measurement dates	12/31/11			12/31/10			12/31/09			12/31/11			12/31/10			12/31/09

* Denotes discount rate of 6.4% used through April 1, 2009, with an interest rate of 7.5% used thereafter.

**5.9% used for the Littelfuse, Inc. Plan, and 5.4% used for the Cole Hersee plan.

*** 8.5% used for the Littelfuse, inc. Plan, and 7.5% used for the Cole Hersee plan.

The accumulated benefit obligation for the U.S. defined benefits plans was $94.4 million and $66.0 million at December 31, 2011 and January 1, 2011, respectively. The accumulated benefit obligation for the foreign plan was $1.2 million and $0.9 million at December 31, 2011 and January 1, 2011, respectively.

Weighted average assumptions used to determine benefit obligations at year-end 2011, 2010 and 2009 are as follows:

	U.S.									Foreign
	2011			2010			2009			2011			2010			2009
Discount rate		5.4	%		5.9/5.4	%*		7.0	%		5.5	%		5.3	%		5.6	%
Compensation increase rate		—			—			—			5.6	%		5.3	%		4.8	%
Measurement dates	12/31/11			12/31/10			12/31/09			12/31/11			12/31/10			12/31/09

*5.9% used for the Littelfuse, Inc. plan and 5.4% used for the Cole Hersee plan.

Expected benefit payments to be paid to participants for the fiscal year ending are as follows (in thousands):

Year	U.S.		Foreign
2012	$	4,999	$	1,288
2013		5,087		1,039
2014		5,260		847
2015		5,377		869
2016		5,536		945

Defined Benefit Plan Assets

Based upon analysis of the target asset allocation and historical returns by type of investment, the company has assumed that the expected long-term rate of return will be 8.5% on the Littelfuse, Inc. domestic plan assets, 7.5% on the Cole Hersee domestic plan assets and 4.5% on foreign plan assets. Assets are invested to maximize long-term return taking into consideration timing of settlement of the retirement liabilities and liquidity needs for benefits payments. Pension plan assets were invested as follows, and were not materially different from the target asset allocation:

	U.S. Asset Allocation						Foreign Asset Allocation
	2011			2010			2011			2010
Equity securities		71	%		70	%		3	%		3	%
Debt securities		28	%		29	%		95	%		2	%
Cash		1	%		1	%		2	%		95	%
		100	%		100	%		100	%		100	%

The following table presents the company’s  U.S and German pension plan assets measured at fair value by classification within the fair value hierarchy as of  January 1, 2011 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equities:
U.S. large-cap core funds	$	—	$	32,555	$	—	$	32,555
U.S. mid-cap core funds		—		11,347		—		11,347
U.S. small-cap core funds		—		4,077		—		4,077
International funds		—		9,719		—		9,719
Fixed income:
Investment grade corporate bond funds		—		24,834		—		24,834
High yield corporate bond funds		—		8,401		—		8,401
Other		—		871		—		871
Cash and equivalents		675		—		—		675
Total pension plan assets	$	675	$	91,804	$	—	$	92,479

Defined Contribution Plans

The company also maintains a 401(k) savings plan covering substantially all U.S. employees. The company matches 100% of the employee’s annual contributions for the first 4% of the employee’s gross wages. Employees are immediately vested in their contributions plus actual earnings thereon, as well as the company contributions. Company matching contributions amounted to $1.3 million, $1.1 million and $0.4 million in each of the years 2011, 2010 and 2009, respectively.

On January 1, 2010, the company adopted a non-qualified Supplemental Retirement and Savings Plan. The company will provide additional retirement benefits for certain management employees and named executive officers by allowing participants to contribute up to 90% of their annual compensation with matching contributions of 4% and 5% of the participant’s annual compensation in excess of the IRS compensation limits.

The company previously provided additional retirement benefits for certain key executives through its unfunded defined contribution Supplemental Executive Retirement Plan (“SERP”). The company amended the SERP during 2009 to freeze contributions and set the annual interest rate credited to the accounts until distributed at the five-year Treasury constant maturity rate. The charge to expense for the SERP plan amounted to $0.1 million, $0.1 million and $0.3 million in each of the years 2011, 2010 and 2009, respectively.