Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2013 |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | Note D – Employee Benefit Plans |
Alternative Long-Term Incentive |
On January 3, 2012, Kforce granted to certain executive officers an ALTI as the result of certain performance criteria established in 2011 being met, which was to be initially measured over three tranches having periods of 12, 24, and 36 months. The terms of the grants specified that the ultimate annual payouts will be based on: (a) Kforce’s common stock price changes each year relative to its peer group, or (b) based upon the achievement of other market conditions contained in the terms of the award. |
As discussed within Note B “Discontinued Operations,” the Board approved the acceleration of all outstanding and unvested long-term incentives, including the ALTI, effective March 31, 2012. During the three and nine months ended September 30, 2012, Kforce recognized total compensation expense related to the ALTI of $0 and $9,805, respectively, which approximated the grant date fair value. There was no compensation expense related to the ALTI recognized during the three or nine months ended September 30, 2013. |
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Foreign Pension Plan |
Kforce maintains a foreign defined benefit pension plan for eligible employees of the Philippine branch of Global that is required by Philippine labor law. The plan defines retirement as those employees who have attained the age of 60 and have completed at least five years of credited service. Benefits payable under the plan equate to one-half month’s salary for each year of credited service. Benefits under the plan are paid out as a lump sum to eligible employees at retirement. |
The net periodic benefit cost recognized for the three and nine months ended September 30, 2013 and 2012 was based upon the actuarial valuation at the beginning of the respective fiscal year. The significant assumptions used by Kforce in the actuarial valuation include the discount rate, the estimated rate of future annual compensation increases and the estimated turnover rate. As of December 31, 2012 and 2011, the discount rate used to determine the actuarial present value of the projected benefit obligation and pension expense was 6.0% and 7.4%, respectively. The discount rate was determined based on long-term Philippine government securities yields commensurate with the expected payout of the benefit obligation. The estimated rate of future annual compensation increases as of both December 31, 2012 and 2011 was 3.0 % and 5.0%, respectively, and was based on historical compensation increases as well as future expectations. Kforce applies a turnover rate to the specific age of each group of employees, which ranges from 20 to 64 years of age. For the three and nine months ended September 30, 2013, net periodic benefit cost was $53 and $164, respectively. For the three and nine months ended September 30, 2012, net periodic benefit cost was $86 and $276, respectively. |
As of September 30, 2013 and December 31, 2012, the projected benefit obligation associated with our foreign defined benefit pension plan was $1,260 and $1,187, respectively, which is classified in other long-term liabilities. There is no requirement for Kforce to fund the Foreign Pension Plan and, as a result, no contributions were made to the Foreign Pension Plan during the nine months ended September 30, 2013. Kforce does not currently anticipate funding the Foreign Pension Plan during the year ending December 31, 2013. |
Supplemental Executive Retirement Plan |
Kforce maintains a Supplemental Executive Retirement Plan (the “SERP”) for the benefit of certain executive officers. The primary goals of the SERP are to create an additional wealth accumulation opportunity, restore lost qualified pension benefits due to government limitations and retain our covered executive officers. The SERP is a non-qualified benefit plan and does not include elective deferrals of covered executive officers’ compensation. |
Normal retirement age under the SERP is defined as age 65; however, certain conditions allow for early retirement as early as age 55 or upon a change in control. Vesting under the plan is defined as 100% upon a participant’s attainment of age 55 and 10 years of service and 0% prior to a participant’s attainment of age 55 and 10 years of service. Full vesting also occurs if a participant with five years or more of service is involuntarily terminated by Kforce without cause or upon death, disability or a change in control. The SERP is funded entirely by Kforce, and benefits are taxable to the covered executive officer upon receipt and deductible by Kforce when paid. Benefits payable under the SERP upon the occurrence of a qualifying distribution event, as defined, are targeted at 45% of the covered executive officers’ average salary and bonus, as defined, from the three years in which the executive officer earned the highest salary and bonus during the last 10 years of employment, which is subject to adjustment for retirement prior to the normal retirement age and the participant’s vesting percentage. The benefits under the SERP are reduced for a participant that has not reached age 62 with 10 years of service or age 55 with 25 years of service with a percentage reduction up to the normal retirement age. |
Benefits under the SERP are normally paid based on the lump sum present value but may be paid over the life of the covered executive or 10-year annuity, as elected by the covered executive officer upon commencement of participation in the SERP. None of the benefits earned pursuant to the SERP are attributable to services provided prior to the effective date of the plan. For purposes of the measurement of the benefit obligation, Kforce has assumed that all participants will elect to take the lump sum present value option. |
The following represents the components of net periodic benefit cost for the three and nine months ended September 30: |
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| | Three Months | | | Nine Months | |
Ended September 30, | Ended September 30, |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | |
Service cost | | $ | 544 | | | $ | 522 | | | $ | 1,634 | | | $ | 1,565 | |
Interest cost | | | 118 | | | | 140 | | | | 352 | | | | 420 | |
Amortization of actuarial loss | | | 29 | | | | 41 | | | | 87 | | | | 123 | |
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Net periodic benefit cost | | $ | 691 | | | $ | 703 | | | $ | 2,073 | | | $ | 2,108 | |
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The net periodic benefit cost recognized for the three and nine months ended September 30, 2013 was based upon the actuarial valuation at the beginning of the year, which utilized the assumptions noted in our Annual Report on Form 10-K for the year ended December 31, 2012. There is no requirement for Kforce to fund the SERP and, as a result, no contributions were made to the SERP during the nine months ended September 30, 2013. Kforce does not currently anticipate funding the SERP during the year ending December 31, 2013. |
The Firm previously announced the retirement of a participant in the SERP. The Firm anticipates making a lump-sum payment to the participant on or about December 1, 2013 due to the participant’s separation from service on June 1, 2013. Accordingly, the current portion of the present value of the projected benefit obligation of $10,682 as of September 30, 2013 and December 31, 2012, is recorded in other current liabilities in the accompanying unaudited condensed consolidated balance sheets. The long-term portion of the present value of the projected benefit obligation as of September 30, 2013 and December 31, 2012 is $10,963 and $8,976, respectively, and is recorded in other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets. During the nine months ended September 30, 2013, there have been no payments made under the SERP. |
Supplemental Executive Retirement Health Plan |
Kforce maintains a Supplemental Executive Retirement Health Plan (“SERHP”) to provide postretirement health and welfare benefits to certain executives. The vesting and eligibility requirements mirror that of the SERP, and no advance funding is required by Kforce or the participants. Consistent with the SERP, none of the benefits earned are attributable to services provided prior to the effective date of the plan. |
The following represents the components of net periodic postretirement benefit cost for the three and nine months ended September 30: |
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| | Three Months | | | Nine Months | |
Ended September 30, | Ended September 30, |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | |
Service cost | | $ | 173 | | | $ | 229 | | | $ | 518 | | | $ | 689 | |
Interest cost | | | 33 | | | | 38 | | | | 100 | | | | 113 | |
Amortization of actuarial loss | | | 26 | | | | 68 | | | | 77 | | | | 204 | |
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Net periodic benefit cost | | $ | 232 | | | $ | 335 | | | $ | 695 | | | $ | 1,006 | |
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The net periodic post-retirement benefit cost recognized for the three and nine months ended September 30, 2013 was based upon the actuarial valuation at the beginning of the year, which utilized the assumptions noted in our Annual Report on Form 10-K for the year ended December 31, 2012. |
The long-term portion of the accumulated postretirement benefit obligation as of September 30, 2013 and December 31, 2012 is $4,172 and $3,554, respectively, and is recorded in other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets. During the nine months ending September 30, 2013, there have been no payments made under the SERHP. |