Pension and other Benefit Programs

12 Months Ended

Dec. 31, 2012

8. Pension and other Benefit Programs

The Company sponsors two 401(k) plans, which are available to the Company’s employees. Contributions are at the employee’s discretion, subject to maximum limits imposed by the IRS (generally, $17,000 for 2012 and $16,500 for 2011and 2010), and an additional contribution up to 10% of after-tax compensation, also subject to maximum limits imposed by the IRS. Total contributions in 2012, 2011, and 2010, including the Company’s match if any, were limited by IRS regulations to $50,000 per participant for 2012, and $49,000 per participant for 2011 and 2010.

The 401(k) Plan for Salaried Employees —In accordance with the terms of the plan, the Company matched the employee’s contributions up to the first $1,200 contributed by the employee. For employee contributions in excess of $1,200, the Company matched $0.25 for every $1.00 in pretax employee contributions up to the IRS maximum limits. The amounts of matching contributions by the Company were $0.3 million, $0.2 million, and $0.2 million, for the years ended December 31, 2012, 2011, and 2010, respectively.

401(k) Plan for Hourly Wage Employees and/or Employees Covered by Collective Bargaining Agreement —This is a limited contributory plan that was instituted in April 1995. In 2002, train and engine hourly employees became eligible for a Company matching contribution of $0.20 for every $1.00 of employee contributions up to $200 annually. In 2006, boilermakers, electricians, machinists, shop laborers, and signal and communication workers also became eligible for the same matching contributions. In 2009, the International Brotherhood of Electrical Workers (“IBEW”), carmen, agents, clerical workers, dispatchers, and foreman also became eligible for the same matching contributions. The amounts of matching contributions for the years ended December 31, 2012, 2011, and 2010 were immaterial.

Pension Plan —The Company adopted an unfunded defined benefit plan covering previous officers of the Company in 1998. The benefits are based on years of service and the employee’s compensation during the five years before retirement. The Company curtailed this plan in 1999, causing no additional benefits to accrue to covered officers. The following chart summarizes the benefit obligations and includes rate assumptions associated with the defined benefit plan for the years ended December 31, 2012, 2011, and 2010:

	Year Ended December 31, 2012			Year Ended December 31, 2011			Year Ended December 31, 2010
	(in thousands)
Balance obligation at beginning of period	$	3,651		$	3,740		$	3,933
Interest cost	159			180			204
Actuarial loss	272			149			61
Benefits paid	(416		)	(418		)	(458		)

Benefit obligation at end of period	$	3,666		$	3,651		$	3,740

Discount rate assumed	2.5		%	3.25		%	4.25		%

As of December 31, 2012 and 2011, the total accrued liability related to the benefit obligation was $3.7 million and $3.7 million, respectively. Of the total liability, $3.2 million and $3.2 million were classified in other long-term liabilities in the consolidated balance sheet as of December 31, 2012 and 2011, respectively. The remaining balance of $0.5 million and $0.5 million, for the years ended December 31, 2012 and 2011, respectively, was presented as other current liabilities in the consolidated balance sheet. As of December 31, 2012 and 2011, accumulated other comprehensive income (loss) included $1.1 million and $0.9 million, respectively, of unrealized losses related to the benefit plan. Assuming no change in participation, the Company expects to incur benefit payments of $0.2 million per year over the next five years.

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References

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+ Details

Florida East Coast Holdings Corp. 10-K