Annual report pursuant to section 13 and 15(d)

Employee Benefits Plans

v2.4.0.6
Employee Benefits Plans
 12 Months Ended
Sep. 30, 2012
Employee Benefits Plans [Abstract]  
Employee Benefits Plans

Note 14. Employee Benefits Plans

 

Management Security Plan

 

The management security plan ("MSP") is a nonqualified, noncontributory defined supplemental deferred retirement benefit plan for a select group of management personnel. The MSP plan provides a fixed supplemental retirement benefit for 180 months certain. The MSP is frozen and no new participants are being added. The MSP benefit expense and the projected management security plan benefit obligation are determined using assumptions as of the end of the year. The weighted-average discount rate used to compute the obligation was 4.5% in 2012 and 2011. During fiscal year 2012, the Company changed its approach in determining the discount rate from the Pension Benefit Guaranty Corp rate which was used during fiscal year 2011, to the Moody's Corporate Bond Curve (Moody's) used in fiscal year 2012. Management believes that Moody's provides a more appropriate discount rate in estimating the pension benefits. The effect of this change was not significant to net income and earnings per share.

 

Actuarial gains or losses are recognized when incurred, therefore; the end of year benefit obligation is the same as the accrued benefit costs recognized in the consolidated balance sheet.

 

The amount of MSP benefit expense charged to costs and expenses was as follows:

 

             

In thousands(dollars in thousands)

 

  

2012

 

  

2011

 

  

2010

 
Service cost   $ 251     $ 233     $ 265  
Interest cost     178       181       186  
Recognized actuarial loss (gain)     -       -       -  
Recognized actuarial loss adjustment     2       66       102  
                         
Total   $ 431     $ 480     $ 553  
                         

 

The following provides a reconciliation of the MSP benefit obligation.

 

         

In thousands(dollars in thousands)

 

  

2012

 

  

2011

 
Change in projected benefit obligation                
Benefit obligation at beginning of year   $ 3,970     $ 3,792  
Service cost     251       233  
Interest cost     178       181  
Recognized actuarial loss (gain)     -       -  
Recognized actuarial loss adjustment     2       66  
Benefits paid     (303 )     (302 )
                 
Benefit obligation at end of year   $ 4,098     $ 3,970  
                 
Funded status at end of year   $ (4,098 )   $ (3,970 )
                 
                 

 

The MSP is unfunded and benefits are paid as they become due. The estimated future benefit payments under the plan for each of the five succeeding years are approximately $303,000, $342,000, $346,000, $351,000 and $367,000 and for the five-year period thereafter an aggregate of $1,303,000.

Profit Sharing and 401(k)

The Company maintains a 401(k) employee savings plan for eligible employees, which provides for a 2% matching contribution on employee payroll deferrals. Vesting of the Company's matching contributions begins after two (2) years of service with the Company at which time an employee becomes 20% vested. Employees become fully vested after six years of employment. The Company's contribution to the plan was approximately $82,000, $59,000 and $61,000 for the fiscal years 2012, 2011 and 2010, respectively.

The Profit Sharing Plan ("Plan") is fully funded by contributions from the Company. Contributions to the Plan are discretionary and determined annually by the Company's Board of Directors. Contributions to employee accounts are based on the participant's compensation. The Company's contribution to the Profit Sharing Plan was $252,000 and $162,000 for the years ended September 30, 2012 and 2011, respectively. No contributions to the Profit Sharing Plan were made in fiscal 2010.