Note 17 – Retirement Benefits

Plan Descriptions

Retirement savings plan

We provide a Retirement Savings Plan (the “Savings Plan”) for certain employees in the United States. Under the Savings Plan, and subject to certain limitations: (i) employees may contribute up to 50 percent of their pretax compensation; (ii) each business unit will make a safe harbor non-elective contribution in an amount equal to three percent of a participant’s pre-tax compensation; and (iii) each business unit may also make a matching contribution of 50 percent of an employee’s tax-deferred compensation, up to the first six percent of a participant’s pre-tax compensation. Matching contributions vest at a rate of 25 percent for each year of service with the employer, beginning with the second year of service.

Pension benefits

We provide defined pension benefits to certain eligible employees. The measurement date used for determining pension benefits is the last day of our fiscal year, June 30^th. We have certain business units in Europe and Asia that maintain defined benefit pension plans for many of our current and former employees. The coverage provided and the extent to which the retirees’ share in the cost of the program vary by business unit. Generally, plan benefits are based on age, years of service and average compensation during the final years of service. In the United States, we have a Supplemental Executive Retirement Plan (the “SERP”) that provides retirement, death and termination benefits, as defined in the SERP, to certain key executives designated by our Board of Directors. The majority of our defined benefit plans do not have contractual or statutory provisions which specify minimum funding requirements. We are in compliance with all existing contractual obligations and statutory provisions.

The SERP is an unfunded plan for tax purposes and under the Employee Retirement Income Security Act of 1974 all obligations arising under the SERP are payable from our general assets. To assist in the funding of the benefits under the SERP, we maintain assets in an irrevocable trust whereby the use of these assets is restricted to funding our future benefit obligations under the SERP. These assets are not plan assets of the SERP, therefore, in the event of bankruptcy, the assets become unrestricted and the SERP would become a general creditor of our company. The assets and liabilities, and earnings and expenses, of the irrevocable trust are consolidated in our condensed consolidated financial statements. As of March 31, 2015 and June 30, 2014, there were $97.9 million and $97.4 million, respectively, of total assets included in the irrevocable trust of which $6.1 million and $58.1 million, respectively, consisted of Cash and cash equivalents, $39.8 million and $39.3 million, respectively, consisted of the cash surrender value of life insurance policies and $52.0 million and zero, respectively, consisted of equity and fixed income mutual funds, which are classified as available-for-sale securities.

 

The following table presents the components of net periodic benefit cost for the three and nine months ended March 31, 2015 and 2014:

 

		Three Months Ended March 31,								Nine Months Ended March 31,
		2015				2014				2015				2014
Service cost		$	908			$	632			$	2,935			$	1,876
Interest cost			1,591				1,806				4,975				5,389
Expected return on plan assets			(60	)			(66	)			(189	)			(192	)
Amortization of prior service cost			243				251				730				751
Amortization of net loss			918				764				2,847				2,278
Settlement/Curtailment			(845	)			0				(454	)			0
Net periodic benefit cost		$	2,755			$	3,387			$	10,844			$	10,102

During the three months ended March 31, 2015 and 2014, we made contributions of $2.0 million and $2.9 million, respectively, to the defined benefit pension plans which were paid to participants. During the nine months ended March 31, 2015 and 2014, we made contributions of $7.0 million and $7.8 million, respectively, to the defined benefit pension plans which were paid to participants. We expect to make approximately $2.7 million in contributions for the remainder of the fiscal year ending June 30, 2015.