(14) Employee Benefit Plans

12 Months Ended

Dec. 31, 2012

Compensation and Retirement Disclosure [Abstract]

(14) Employee Benefit Plans

(14) Employee Benefit Plans

Defined Contribution Plan

Effective July 2002, the Company established a voluntary savings and defined contribution plan (the “Plan”) under Section 401(k) of the Internal Revenue Code. This Plan covers all U.S. employees meeting certain eligibility requirements and allows participants to contribute a portion of their annual compensation. Employees are 100% vested in their own contributions. For the years ended December 31, 2012, 2011 and 2010, the Company did not make any contributions to the Plan.

Effective July 1, 2007, the Company, in accordance with the labor pension system in Taiwan, contributes 6% of salaries to individual pension accounts managed by the Bureau of Labor Insurance. The Plan covers all Taiwan employees that elect the new pension system and all employees hired after July 1, 2005. For the years ended December 31, 2012, 2011 and 2010, the Company contributed $127,000, $127,000 and $148,000, respectively.

Defined Benefit Plan

The Company has a defined benefit plan covering employees in Taiwan. The Company accounts for its defined benefit plan in accordance with the authoritative guidance issued by the FASB on retirement benefits, which requires the Company to recognize the funded status of its defined benefit plan in the accompanying consolidated balance sheet, with the corresponding adjustment to accumulated other comprehensive income, net of tax.

At December 31, 2012 and 2011, $55,122 and $184,567, respectively, is included in accumulated other comprehensive income for amounts that have not yet been recognized in net periodic pension cost. These amounts include the following: unrecognized transition obligation of $35,279 and $39,359 at December 31, 2012 and 2011, respectively, and unrecognized actuarial losses of $19,843 and $145,208 at December 31, 2012 and 2011, respectively. During 2012, the total amount recorded in other comprehensive income related to the pension plan was $129,445 (net of tax), which consisted of an actuarial loss of $125,365 and the recognition of $4,080 of transition obligations recognized during 2012 as a component of net periodic pension cost. The transition obligation and actuarial loss included in accumulated other comprehensive loss and expected to be recognized in net periodic pension cost for the year ended December 31, 2012, is $5,813 and $5,346 respectively.

Pension information for the years ended December 31, 2012 and 2011, is as follows:

		2012	2011
Accumulated benefit obligation		$            160,279	$            185,673
Changes in projected benefit obligation:
	Projected benefit obligation at beginning of year	366,158	416,897
	Interest cost	7,571	8,207
	Actuarial (gain) loss	(126,282)	(45,170)
	Benefits paid	-	-
	Service cost	5,624	5,041
	Currency translation and other	16,689	(18,817)
	Projected benefit obligation at end of year	$            269,760	$            366,158
Changes in plan assets:
	Fair value of plan assets at beginning of year	$              92,651	$              83,591
	Actual return on plan assets	792	741
	Benefits paid	-	-
	Employer contributions	9,911	12,737
	Currency translation and other	4,860	(4,418)
	Fair value of plan assets at end of year	$            108,214	$              92,651
Funded status		$            161,546	$            273,507
Components of net periodic pension cost:
	Interest cost	$                7,571	$                8,207
	Expected return on plan assets	(1,916)	(1,646)
	Amortization of net loss	11,159	13,477
	Service cost	5,624	5,041
	Net periodic pension cost	$              22,438	$              25,079

The Company makes contributions to the plan so that minimum contribution requirements, as determined by government regulations, are met. Company contributions of approximately $10,000 are expected to be made during 2013. Benefit payments of approximately $224,000 are expected to be paid in 2016 through 2022.

The Company utilized the following assumptions in computing the benefit obligation at December 31, 2012 and 2011 as follows:

	Years ended December 31,
	2012	2011
Discount rate	1.75%	2.00%
Rate of increase in compensation levels	3.00%	3.30%
Expected long-term rate of return on plan assets	1.75%	2.00%