Enerpac Tool Group Corp. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Employee Benefit Plans (Tables)

Employee Benefit Plans (Tables)

12 Months Ended

Aug. 31, 2012

Weighted Average Assumption used to Determine Benefit Obligations and 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:


	2012			2011			2010
Assumptions for benefit obligations:
Discount rate		3.90	%		5.00	%		4.60	%
Assumptions for net periodic benefit cost:
Discount rate		5.00	%		4.60	%		5.60	%
Expected return on plan assets		7.90	%		8.00	%		8.25	%

Defined Benefit Pension Plans

Changes in Projected Benefit Obligations, Fair Value of Plan Assets

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 August 31 measurement date (in thousands):


	2012			2011
Reconciliation of benefit obligations:
Benefit obligation at beginning of year	$	44,430		$	46,967
Interest cost		2,162			2,108
Actuarial (gain) loss		6,855			(2,311	)
Benefits paid		(2,577	)		(2,334	)

Benefit obligation at end of year	$	50,870		$	44,430

Reconciliation of plan assets:
Fair value of plan assets at beginning of year	$	32,412		$	25,429
Actual return on plan assets		2,911			2,890
Company contributions		949			6,427
Benefits paid from plan assets		(2,577	)		(2,334	)

Fair value of plan assets at end of year		33,695			32,412

Funded status of the plans (underfunded)	$	(17,175	)	$	(12,018	)

Net Periodic Benefit Costs

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


	Year ended August 31,
	2012			2011			2010
Interest cost	$	2,162		$	2,108		$	2,306
Expected return on assets		(2,471	)		(2,221	)		(2,568	)
Amortization of actuarial loss		675			669			310

Net benefit cost	$	366		$	556		$	48

U.S. Pension Plan Investment Allocations by Asset Category

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):


	U.S. Pension Plans
	Year Ended August 31,
	2012		%			2011		%
Cash and cash equivalents	$	250		0.7	%	$	5,703		17.6	%

Fixed income securities:
Government bonds		310		0.9	%		554		1.7	%
Corporate bonds		7,489		22.2	%		6,677		20.6	%
Mutual funds		2,678		8.0	%		—		—
Short term funds		—		0.0	%		107		0.3	%

		10,477		31.1	%		7,338		22.6	%
Equity securities:
Mutual funds		22,968		68.2	%		—		—
U.S. companies		—		0.0	%		14,560		44.9	%
International companies		—		0.0	%		4,811		14.8	%

		22,968		68.2	%		19,371		59.8	%

Total Plan Assets	$	33,695		100.0	%	$	32,412		100.0	%

Non US defined benefit pension plans

Changes in Projected Benefit Obligations, Fair Value of Plan Assets

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, 2012 and 2011 is summarized as follows (in thousands):


	2012			2011
Benefit obligation	$	10,711		$	9,035
Fair value of plan assets		7,440			7,333

Funded status of plans (underfunded)	$	(3,271	)	$	(1,702	)