Pension and Other Postretirement Benefits Disclosure [Text Block] | 17. Employee Benefit Plans Retirement Plans The Company has defined benefit pension plans covering certain current and former employees both inside and outside of the U.S. The Company’s pension plan for U.S. salaried employees was frozen as of December 31, 2007, and participants in the plan ceased accruing future benefits. The Company’s pension plan for U.S. hourly employees was frozen for substantially all participants as of July 31, 2013, and replaced with a defined contribution benefit plan. Based on changes to the plan, the Company recorded a reduction in U.S. non-cash pension plan expense in 2014 of $2.6 million as compared to 2013, which was partially offset by increased expenses associated with the implementation of the defined contribution benefit program. During fiscal 2015, the Society of Actuaries released new mortality tables that reflect increased life expectancy over the previous tables. The company incorporated these new tables into its most recent measurement of its U.S. pension obligations which resulted in an increase in the Company’s projected benefit obligation as of June 30, 2015. Net periodic benefit cost for U.S. and non-U.S. plans included the following components (in thousands): U.S. Plans Foreign Plans Year Ended June 30, Year Ended June 30, 2015 2014 2013 2015 2014 2013 Service Cost $ 211 $ 233 $ 702 $ 44 $ 46 $ 40 Interest Cost 10,476 11,241 10,941 1,618 1,723 1,667 Expected return on plan assets (13,954 ) (13,513 ) (14,790 ) (1,474 ) (1,532 ) (1,339 ) Recognized net actuarial loss 3,945 3,941 7,577 750 819 901 Amortization of prior service cost (benefit) 54 57 98 (53 ) (60 ) (57 ) Amortization of transition Obligation (asset) - - 2 - - - Curtailment 244 - 52 - - - Net periodic benefit cost (benefit) $ 976 $ 1,959 $ 4,582 $ 885 $ 996 $ 1,212 The following table sets forth the funded status and amounts recognized as of June 30, 2015 and 2014 for our U.S. and foreign defined benefit pension plans (in thousands): U.S. Plans Foreign Plans Year Ended June 30, Year Ended June 30, 2015 2014 2015 2014 Change in benefit obligation Benefit obligation at beginning of year $ 240,426 $ 227,874 $ 44,278 $ 37,897 Service cost 211 233 44 46 Interest cost 10,476 11,241 1,618 1,723 Actuarial loss (gain) 16,570 16,317 3,996 2,161 Benefits paid (15,468 ) (15,239 ) (1,455 ) (1,662 ) Foreign currency exchange rate - - (4,800 ) 4,113 Projected benefit obligation at end of year $ 252,215 $ 240,426 $ 43,681 $ 44,278 Change in plan assets Fair value of plan assets at beginning of year $ 216,043 $ 200,174 $ 37,487 $ 30,889 Actual return on plan assets 3,900 30,956 3,410 3,034 Employer contribution 235 152 1,336 1,375 Benefits paid (15,468 ) (15,239 ) (1,455 ) (1,662 ) Foreign currency exchange rate - - (3,412 ) 3,851 Fair value of plan assets at end of year $ 204,710 $ 216,043 $ 37,366 $ 37,487 Funded Status $ (47,505 ) $ (24,383 ) $ (6,315 ) $ (6,791 ) Amounts recognized in the consolidated balance sheets consists of: Prepaid Benefit Cost $ - $ - $ 107 $ 1,167 Current liabilities (199 ) (199 ) (314 ) (327 ) Non-current liabilities (47,306 ) (24,184 ) (6,109 ) (7,631 ) Net amount recognized $ (47,505 ) $ (24,383 ) $ (6,316 ) $ (6,791 ) Unrecognized net actuarial loss 114,715 92,036 10,655 10,506 Unrecognized prior service cost 14 312 (130 ) (220 ) Accumulated other comprehensive income, pre-tax $ 114,729 $ 92,348 $ 10,525 $ 10,286 The accumulated benefit obligation for all defined benefit pension plans was $295.0 million and $283.7 million at June 30, 2015 and 2014, respectively. The estimated actuarial net loss and prior service benefit for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $4.9 million and less than $0.1 million, respectively. Plan Assets and Assumptions The fair values of the Company’s pension plan assets at June 30, 2015 and 2014 by asset category, as classified in the three levels of inputs described in Note 1 under the caption Fair Value of Financial Instruments June 30, 2015 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 4,051 $ 451 $ 3,600 $ - Common and preferred stocks 101,725 17,716 84,009 - U.S. Government securities 14,469 - 14,469 - Corporate bonds and other fixed income securities 112,297 6,238 106,059 - Other 9,534 - 9,534 - $ 242,076 $ 24,405 $ 217,671 $ - June 30, 2014 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 3,078 $ 287 $ 2,791 $ - Common and preferred stocks 107,498 16,754 90,744 - U.S. Government securities 13,334 - 13,334 - Corporate bonds and other fixed income securities 118,131 7,297 110,834 - Other 11,488 - 11,488 - $ 253,529 $ 24,338 $ 229,191 $ - Asset allocation at June 30, 2015 and 2014 and target asset allocations for 2015 are as follows: U.S. Plans Foreign Plans Year Ended June 30, Year Ended June 30, Asset Category 2015 2014 2015 2014 Equity securities 33 % 32 % 24 % 26 % Debt securities 31 % 28 % 75 % 73 % Global balanced securities 26 % 28 % 0 % 0 % Other 10 % 12 % 1 % 1 % Total 100 % 100 % 100 % 100 % 2015 Asset Category – Target U.S. U.K. Equity securities 32 % 25 % Debt and market neutral securities 33 % 75 % Global balanced securities 25 % 0 % Other 10 % 0 % Total 100 % 100 % Our investment policy for the U.S. pension plans targets a range of exposure to the various asset classes. Standex rebalances the portfolio periodically when the allocation is not within the desired range of exposure. The plan seeks to provide returns in excess of the various benchmarks. The benchmarks include the following indices: S&P 500; Citigroup PMI EPAC; Citigroup World Government Bond and Barclays Aggregate Bond. A third party investment consultant tracks the plan’s portfolio relative to the benchmarks and provides quarterly investment reviews which consist of a performance and risk assessment on all investment managers and on the portfolio. Certain managers within the plan use, or have authorization to use, derivative financial instruments for hedging purposes, the creation of market exposures and management of country and asset allocation exposure. Currency speculation derivatives are strictly prohibited. Year Ended June 30 2015 2014 2013 Plan assumptions - obligation Discount rate 2.30 - 4.70% 2.90 - 4.50% 3.50 - 5.10% Rate of compensation increase 3.80% 3.80% 3.50 - 3.90% Plan assumptions - cost Discount rate 2.90 - 4.50% 3.50 - 5.10% 4.00 - 4.60% Expected return on assets 4.20 - 7.25% 4.60 - 7.25% 4.80 - 7.80% Rate of compensation increase 3.80% 3.90% 3.40 - 3.50% Included in the above are the following assumptions relating to the obligations for defined benefit pension plans in the United States at June 30, 2015; a discount rate of 4.7% and expected return on assets of 7.25%. The U.S. defined benefit pension plans represent the majority of our pension obligations. The expected return on plan assets assumption is based on our expectation of the long-term average rate of return on assets in the pension funds and is reflective of the current and projected asset mix of the funds. The discount rate reflects the current rate at which pension liabilities could be effectively settled at the end of the year. The discount rate is determined by matching our expected benefit payments from a stream of AA- or higher bonds available in the marketplace, adjusted to eliminate the effects of call provisions. Expected benefit payments for the next five years are as follows: 2016, $16.9 million; 2017, $17.1 million; 2018, $17.1 million; 2019, $17.3 million; 2020, $17.5 million and thereafter, $89.4 million. The Company expects to make $1.5 million of contributions to its pension plans in 2016. The Company operates a defined benefit plan in Germany which is unfunded. Multi-Employer Pension Plans We contribute to a number of multiemployer defined benefit plans under the terms of collective bargaining agreements that cover our union-represented employees. These plans generally provide for retirement, death and/or termination benefits for eligible employees within the applicable collective bargaining units, based on specific eligibility/participation requirements, vesting periods and benefit formulas. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects: ● Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. ● If a participating employer stops contributing to the multiemployer plan, the unfunded obligations of the plan may be borne by the remaining participating employers. ● If we choose to stop participating in some of our multiemployer plans, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. However, cessation of participation in a multiemployer plan and subsequent payment of any withdrawal liability is subject to the collective bargaining process. The following table outlines the Company’s participation in multiemployer pension plans for the periods ended June 30, 2015, 2014, and 2013, and sets forth the yearly contributions into each plan. The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three-digit plan number. The most recent Pension Protection Act zone status available in 2015 and 2014 relates to the plans’ two most recent fiscal year-ends. The zone status is based on information that we received from the plans’ administrators and is certified by each plan’s actuary. Among other factors, plans certified in the red zone are generally less than 65% funded, plans certified in the orange zone are both less than 80% funded and have an accumulated funding deficiency or are expected to have a deficiency in any of the next six plan years, plans certified in the yellow zone are less than 80% funded, and plans certified in the green zone are at least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates whether a financial improvement plan (“FIP”) for yellow/orange zone plans, or a rehabilitation plan (“RP”) for red zone plans, is either pending or has been implemented. For all plans, the Company’s contributions do not exceed 5% of the total contributions to the plan in the most recent year. Pension Protection Act Zone Status Contributions Pension Fund EIN/Plan Number 2015 2014 FIP/RP Status 2015 2014 2013 Surcharge Imposed? Expiration Date of Collective Bargaining Agreement New England Teamsters and Trucking Industry Pension Fund 04-6372430-001 Red Red Yes/ Implemented $ 437 $ 541 $ 427 No 4/15/2018 IAM National Pension Fund, National Pension Plan 51-6031295-002 Green Green No 633 659 623 No 10/4/2016 - 5/31/2018 $ 1,070 $ 1,200 $ 1,050 Retirement Savings Plans The Company has two primary employee savings plans, one for salaried employees and one for hourly employees. Substantially all of our full-time domestic employees are covered by these savings plans. Under the provisions of the plans, employees may contribute a portion of their compensation within certain limitations. The Company, at the discretion of the Board of Directors, may make contributions on behalf of our employees under the plans. Company contributions were $3.8 million, $4.0 million, and $4.1 million for the years ended June 30, 2015, 2014, and 2013, respectively. At June 30, 2015, the salaried plan holds approximately 96,000 shares of Company common stock, representing approximately 9% of the holdings of the plan. Postretirement Benefits Other Than Pensions The Company sponsors an unfunded postretirement medical plan covering certain full-time employees who retire and have attained the requisite age and years of service. Retired employees are required to contribute toward the cost of coverage according to various established rules. The accumulated benefit obligation of the post-retirement medical plan was less than $0.2 million at both June 30, 2015 and June 30, 2014. The plan holds no assets as the Company makes contributions as benefits are due. Contributions for each of the last two fiscal years were less than $0.1 million. The assumed weighted average discount rate was 4.70% and 4.50% as of June 30, 2015 and 2014, respectively. A 1% increase in the assumed health care cost trend rate does not impact either the accumulated benefit obligation or the net postretirement cost, as the employer contribution for each participant is a fixed amount. Effective January 1, 2013, the Company terminated its life insurance benefit provided to certain current and future retirees, resulting in a curtailment and settlement of the plan’s obligations. The Company recorded a $2.3 million benefit from the settlement and curtailment as a component of selling general and administrative expenses during the third quarter of 2013. The following table sets forth the postretirement benefit cost reflected in the consolidated income statement sheet at year end (in thousands): Components of Net Periodic Benefit Cost (in thousands) Year Ended June 30, 2015 2014 2013 Service Cost $ - $ - $ 13 Interest Cost 7 9 49 Recognized net actuarial gain (1 ) (7 ) (24 ) Curtailment - - 51 Plan Settlement - - (2,329 ) Amortization of transition obligation - - 112 Net periodic benefit cost $ 6 $ 2 $ (2,128 ) |