Note 12 - Benefit Plans

12 Months Ended

Dec. 27, 2014

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

12. Benefit Plans

The company has a company-sponsored defined benefit pension plan, the Littelfuse Inc. Retirement 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 a temporary supplemental retirement income benefit to help retirees pay the cost of post-retirement medical coverage 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 plan was frozen in 2009. The company also has company-sponsored defined benefit pension plans covering employees in the U.K., Germany, Japan, Taiwan and the Philippines. The amount of the retirement benefits provided under the plans is based on years of service and final average pay.

During the fourth quarter of 2012, the company recorded $5.3 million in pension settlement and valuation charges. Approximately $5.1 million of these charges were classified in selling, general and administrative expenses and approximately $0.2 million were classified in cost of sales. During the fourth quarter of 2012, the company amended the Littelfuse Inc. Retirement Plan to allow participants who meet certain requirements to elect, during a limited window period, to receive their vested retirement benefits in a lump sum (or for certain participants annuity payments, on and after) December 1, 2012.

The $5.1 million settlement charge recorded in selling, general and administrative expenses related to the amended Littelfuse, Inc. Retirement Plan represents the total amount for eligible participants who elected to receive their benefits under the amendment. The $0.2 million charge recorded in cost of sales is related to the company’s Taiwan manufacturing facility that was closed in 2012.

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 2015.

Total pension expense was $0.3 million, $0.8 million and $5.4 million in 2014, 2013 and 2012, respectively. The decrease in pension expense in 2014 resulted from returns on assets exceeding interest and service costs. The decrease in pension expense in 2013 was related to the pension settlement charge that was recorded in 2012 as described above. The increase in pension expense in 2012 was the result of the pension settlement charge as described above.

Benefit plan related information is as follows:

	2014									2013
(In thousands)	U.S.			Foreign			Total			U.S.			Foreign			Total
Change in benefit obligation:
Benefit obligation at beginning of year	$	84,422		$	50,331		$	134,753		$	95,187		$	15,406		$	110,593
Service cost		600			925			1,525			600			744			1,344
Interest cost		3,884			2,060			5,944			3,565			1,376			4,941
Net actuarial loss (gain)		22,025			5,652			27,677			(9,854	)		1,111			(8,743	)
Benefits paid from the trust		(5,172	)		(2,525	)		(7,697	)		(5,076	)		(1,755	)		(6,831	)
Benefits paid directly by company		—			(155	)		(155	)		—			(112	)		(112	)
Acquisition		—			—			—			—			31,041			31,041
Effect of exchange rate movements		—			(3,548	)		(3,548	)		—			2,520			2,520
Benefit obligation at end of year	$	105,759		$	52,740		$	158,499		$	84,422		$	50,331		$	134,753
Change in plan assets at fair value:
Fair value of plan assets at beginning of year	$	83,748		$	42,477		$	126,225		$	77,949		$	10,952		$	88,901
Actual return on plan assets		10,416			5,141			15,557			5,875			(196	)		5,679
Employer contributions		5,000			5,596			10,596			5,000			4,109			9,109
Benefits paid		(5,173	)		(2,525	)		(7,698	)		(5,076	)		(1,756	)		(6,832	)
Acquisition		—			—			—			—			26,904			26,904
Effect of exchange rate movements		—			(3,096	)		(3,096	)		—			2,464			2,464
Fair value of plan assets at end of year		93,991			47,593			141,584			83,748			42,477			126,225
Net amount recognized/(unfunded status)	$	(11,768	)	$	(5,147	)	$	(16,915	)	$	(674	)	$	(7,854	)	$	(8,528	)
Amounts recognized in the Consolidated Balance Sheet consist of:
Current portion of accrued benefit liability	$	(11,768	)	$	—		$	(11,768	)	$	—		$	—		$	—
Accrued benefit liability		—			(5,147	)		(5,147	)		(674	)		(7,854	)		(8,528	)
Total liability recognized	$	(11,768	)	$	(5,147	)	$	(16,915	)	$	(674	)	$	(7,854	)	$	(8,528	)
Accumulated other comprehensive loss	$	34,801		$	7,671		$	42,472		$	18,095		$	5,594		$	23,689

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

	2014						2013
(In thousands)	U.S.		Foreign		Total		U.S.		Foreign		Total
Net actuarial loss	$	34,801	$	7,671	$	42,472	$	18,095	$	5,594	$	23,689
Prior service (cost)		—		—		—		—		—		—
Net amount recognized / occurring, pre-tax	$	34,801	$	7,671	$	42,472	$	18,095	$	5,594	$	23,689

The estimated net actuarial loss (gain) which will be amortized from accumulated other comprehensive income (loss) into benefit cost in 2015 is approximately $1.4 million.

	U.S.									Foreign
(In thousands)	2014			2013			2012			2014			2013			2012
Components of net periodic benefit cost:
Service cost	$	600		$	600		$	600		$	925		$	744		$	601
Interest cost		3,884			3,565			4,962			2,060			1,376			644
Expected return on plan assets		(5,646	)		(5,360	)		(6,620	)		(2,292	)		(1,207	)		(480	)
Amortization of prior service (credit)		—			—			—			—			—			(1	)
Amortization of losses (gains)		549			942			338			216			130			63
Total cost of the plan for the year		(613	)		(253	)		(720	)		909			1,043			827
Expected plan participants’ contributions		—			—			—			—			—			—
Net periodic benefit (credit) cost		(613	)		(253	)		(720	)		909			1,043			827
Settlement loss		—			—			5,098			—			—			188
Total (income) expense for the year	$	(613	)	$	(253	)	$	4,378		$	909		$	1,043		$	1,015

Weighted average assumptions used to determine net periodic benefit cost for the years 2014, 2013 and 2012 are as follows:

	U.S.									Foreign
	2014			2013			2012			2014			2013			2012
Discount rate		4.8	%		3.9	%		5.4	%		3.7	%		4.5	%		5.5	%
Expected return on plan assets		6.8	%		6.8	%		7.8	%		4.9	%		4.8	%		4.5	%
Compensation increase rate		—			—			—			3.8	%		3.6	%		5.6	%
Measurement dates	12/31/14			12/31/13			12/31/12			12/31/14			12/31/13			12/31/12

The accumulated benefit obligation for the U.S. defined benefit plan was $105.8 million and $84.4 million at December 27, 2014 and December 28, 2013, respectively. The accumulated benefit obligation for the foreign plans was $48.9 million and $46.2 million at December 27, 2014 and December 28, 2013, respectively.

Weighted average assumptions used to determine benefit obligations at year-end 2014, 2013 and 2012 are as follows:

	U.S.									Foreign
	2014			2013			2012			2014			2013			2012
Discount rate		3.9	%		4.8	%		3.9	%		3.7	%		4.5	%		4.2	%
Compensation increase rate		—			—			—			5.3	%		3.8	%		6.3	%
Measurement dates	12/31/14			12/31/13			12/31/12			12/31/14			12/31/13			12/31/12

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

Year	U.S.		Foreign
2015		109,883		2,215
2016		—		2,095
2017		—		2,155
2018		—		2,191
2019		—		2,232
2020-2024		—		12,153

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 6.8% on the Littelfuse, Inc. domestic plan assets and 4.9% 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
	2014			2013			2014			2013
Equity securities		0	%		53	%		30	%		33	%
Debt securities		91	%		46	%		68	%		61	%
Cash		9	%		1	%		2	%		6	%
		100	%		100	%		100	%		100	%

The following table presents the company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of December 27, 2014 (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:
Global Equity 50:50 Index Fund	$	—	$	13,168	$	—	$	13,168
Philippine Stock		1,069		—		—		1,069
Fixed income:
Long U.S. Credit Corp Index Fund		—		42,911		—		42,911
Long U.S. Govt Bond Index Fund		—		24,116		—		24,116
Intermediate U.S. Govt Bond Index Fund		—		18,884		—		18,884
Investment grade corporate bond funds		8,118		—		—		8,118
Over 15y Gilts Index Fund		—		3,814		—		3,814
Active Corp Bond – Over 10 Yr Fund		—		7,065		—		7,065
Over 5y Index-Linked Gilts Fund		—		11,352		—		11,352
Philippine Long Govt Securities		1,059		—		—		1,059
Philippine Long Corporate Bonds		781		—		—		781
Cash and equivalents		9,247		—		—		9,247
Total pension plan assets	$	20,274	$	121,310	$	—	$	141,584

The following table presents the company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of December 28, 2013 (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:
MSCI Emg Mkts Index Fund	$	—	$	4,679	$	—	$	4,679
MSCI World Index Fund		—		39,332		—		39,332
Global Equity Index Fund		—		12,859		—		12,859
Philippine Stock		918		—		—		918
Fixed income:
Long U.S. Credit Corp Index Fund		—		24,830		—		24,830
Long U.S. Govt Bond Index Fund		—		8,269		—		8,269
High yield corporate bond funds		—		5,792		—		5,792
Investment grade corporate bond funds		9,637		—		—		9,637
Over 15y Gilts Index Fund		—		5,626		—		5,626
Act Agg Long Dat 50:50 Fixed Int Fund		—		5,174		—		5,174
AAA Fixed Int Over 15 Year Fund		—		5,394		—		5,394
Other		237		—		—		237
Cash and equivalents		3,478		—		—		3,478
Total pension plan assets	$	14,270	$	111,955	$	—	$	126,225

Plan Termination

The company filed an Application for Determination for Terminating Plan during 2014 to terminate the U.S. defined benefit pension plan, the Littelfuse Inc. Retirement Plan, effective January 1, 2015. The current liability balance of $11.8 million at December 27, 2014, represents the projected cost to settle the plan’s liability in conjunction with the upcoming plan termination.

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 eligible compensation. Employees are immediately vested in their contributions plus actual earnings thereon, as well as the company contributions. Company matching contributions amounted to $2.1 million, $1.7 million and $1.5 million in each of the years 2014, 2013 and 2012, 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 $0.0 million, $0.0 million and $0.1 million in each of the years 2014, 2013 and 2012, respectively.