Note 11.    Employee Benefit Plans

Defined Benefit Pension Plans

The Company has several defined benefit pension plans which cover certain existing and former employees of domestic businesses it acquired, that were entitled to those benefits prior to acquisition, or existing and former employees of foreign businesses. Most of the U.S. defined benefit pension plans are frozen, and as a result, the majority of the plan participants no longer earn additional benefits. The following table provides detail of changes in the projected benefit obligations, the fair value of plan assets and the funded status of the Company's U.S. defined benefit pension plans as of the Company's August 31 measurement date (in thousands):

The following table provides detail on the Company's net periodic benefit costs (in thousands):

At August 31, 2011 and 2010, $12.0 million and $14.3 million, respectively, of pension plan actuarial gains and losses, which have not yet been recognized in net periodic benefit cost, were included in Accumulated Other Comprehensive Loss, net of income taxes. During fiscal 2012, $0.4 million of these actuarial gains and losses are expected to be recognized in net periodic benefit cost.

Weighted-average assumptions used to determine benefit obligations as of August 31 and weighted-average assumptions used to determine net periodic benefit cost for the years ended August 31 are as follows:

The Company employs a total return on investment approach for its pension plan assets whereby a mix of equities and fixed income investments are used to maximize the long-term return for plan assets, at a prudent level of risk. The investment portfolio contains a diversified blend of equity and fixed income investments. Within the equity allocation, a blend of growth and value investments are maintained in a variety of market capitalizations and diversified between U.S. and non-U.S. stocks. The Company's targeted asset allocation as a percentage of total market value is 60% to 80% equity securities and the remainder fixed income securities and cash. Cash balances are maintained at levels adequate to meet near-term plan expenses and benefit payments. Investment risk is measured and monitored on an ongoing basis.

At August 31, 2011, Company's overall expected long-term rate of return for assets in U.S. pension plans was 7.9%. The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The target return is based on historical returns adjusted to reflect the current view of the long-term investment market.

The fair value of all U.S. pension plan assets are determined based on quoted market prices and therefore all plan assets are determined based on Level 1 inputs, except for fixed income securities which are valued based on Level 2 inputs, as defined in Note 9, "Fair Value Measurements." The U.S. pension plan investment allocations by asset category (in thousands):

Projected benefit payments from plan assets to participants in the Company's U.S. pension plans are approximately $2.6 million per year for fiscal 2012 through 2016 and $14.3 million in aggregate for fiscal 2017 through 2021. During fiscal 2012, the Company anticipates contributing $0.9 million to U.S. pension plans.

Non-U.S. Defined Benefit Pension Plans

The Company has several Non-U.S. defined benefit pension plans which cover certain existing and former employees of businesses outside the U.S. Most of the Non-U.S. defined benefit pension plans continue to earn additional benefits. The funded status of these plans at August 31, 2011 and 2010 is summarized as follows (in thousands):

Net periodic benefit cost for these Non-U.S. plans was $0.4 million, $0.3 million and $0.4 million in fiscal 2011, 2010 and 2009, respectively. The weighted average discount rate utilized for determining the benefit obligation at August 31, 2011 and 2010 was 5.5% and 4.3%, respectively. The plan assets of these non-U.S. pension plans consist primarily of participating units in common stock and bond funds. The Company's overall expected long-term rate of return on these investments is 4.5%. During fiscal 2012, the Company anticipates contributing $0.4 million to non-U.S. pension plans.

Other Post-Retirement Health Benefit Plans

The Company provides other post-retirement health benefits ("OPEB") to certain existing and former employees of domestic businesses it acquired, that were entitled to those benefits prior to acquisition. These unfunded plans had a benefit obligation of $3.3 million and $3.7 million at August 31, 2011 and 2010, respectively. These obligations are determined utilizing assumptions consistent with those used for U.S. pension plans and a health care cost trend rate of 8%, trending downward to 5% by the year 2018, and remaining level thereafter. Net periodic benefit costs (credit) for the other post-retirement benefits were $(0.2) million for each of the three years ended August 31, 2011, 2010, and 2009. Benefit payments from the plan are funded through participant contributions and Company contributions which are projected to be $0.3 million in fiscal 2012.

Defined Contribution Benefit Plans

The Company maintains a 401(k) Plan for substantially all full time U.S. employees (the "401(k) Plan"). Under plan provisions, the Company issues new shares of Class A Common Stock for its contributions and allocates such shares to accounts set aside for each employee's retirement. Employees generally may contribute up to 50% of their compensation to individual accounts within the 401(k) Plan. While contributions vary, the Company generally makes core contributions to employee accounts equal to 3% of each employee's eligible annual cash compensation, subject to IRS limitations. In addition, the Company matches approximately 25% of each employee's contribution up to 6% of the employee's eligible compensation. Expense recognized related to the 401(k) plan totaled approximately $5.6 million, $2.7 million and $1.4 million for the years ended August 31, 2011, 2010 and 2009, respectively. The increase in expense for the year ended August 31, 2011 is the result of the full reinstatement of the core contribution, which had been temporarily suspended for fiscal 2009 and the first half of fiscal 2010 (due to adverse economic conditions).

Deferred Compensation Plan

The Company maintains a deferred compensation plan to allow eligible U.S. employees to defer receipt of current cash compensation in order to provide future savings benefits. Eligibility is limited to employees that earn compensation that exceeds certain pre-defined levels. Participants have the option to invest their deferrals in a fixed income investment, in Company Common Stock, or a combination of the two. The fixed income portion of the plan is currently unfunded, and therefore all compensation deferred under the plan is held by the Company and commingled with its general assets. Liabilities of $15.6 million and $13.0 million are included in "Other Current Liabilities" and "Other Long-term Liabilities" on the consolidated balance sheets at August 31, 2011 and 2010, respectively, to reflect the unfunded portion of the deferred compensation liability. The Company recorded expense of $1.2 million, $1.0 million and $0.9 million for the years ended August 31, 2011, 2010 and 2009, respectively, related to interest on participant deferrals in the fixed income investment option. Company Common Stock to fund the plan is held in a rabbi trust, accounted for in a manner similar to treasury stock and is recorded at cost in "Stock held in trust" within shareholders' equity with the corresponding deferred compensation liability also recorded within shareholders' equity. Since no investment diversification is permitted within the trust, changes in fair value of Actuant common stock are not recognized. The shares held in the trust are included in both the basic and diluted earnings per share calculations. The cost of the shares held in the trust was $1.0 million at both August 31, 2011 and 2010.

Long Term Incentive Plan

The Company adopted a long term incentive plan in July 2006 to provide certain executive officers with an opportunity to receive a lump sum cash incentive payment based on the attainment of a $50 per share Actuant Common Stock price appreciation target over an 8 year period. The Company recorded expense (income) of $0.1 million, $0.4 million and $(2.6) million for the years ended August 31, 2011, 2010 and 2009, respectively, pursuant to this plan. A related liability of $1.0 million and $0.9 million is included in "Other Long-term Liabilities" on the consolidated balance sheets at August 31, 2011 and 2010, respectively. As of August 31, 2011 the minimum and maximum payments available under the plan, depending on the attainment of the $50 per share stock price appreciation target, are $0 and $16.6 million, respectively.