DSUs outstanding as at June 1, 2011 were adjusted to reflect the difference in the fair market value as a result of the spinoff of Enerflex. The adjustment was determined based on the volume-weighted average trading prices for the five trading days prior to and subsequent to the effective date of the spinoff.
The liability for DSUs is recorded in accounts payable and accrued liabilities.
Employee Share Ownership Plan
The Company offers an Employee Share Ownership Plan (the "Plan") whereby employees who meet the eligibility criteria can purchase shares by way of payroll deductions. There is a Company match of up to $1,000 per employee per annum based on contributions by the Company of $1 for every $3 contributed by the employee. Company contributions vest to the employee immediately. Company contributions amounting to $0.9 million in 2012 (2011 - $1.1 million) were charged to selling and administrative expenses when paid. The Plan is administered by a third party.
19.EMPLOYEE FUTURE BENEFITS
The Company sponsors pension arrangements for substantially all of its employees, primarily through defined contribution plans in Canada and a 401(k) matched savings plan in the United States. Certain unionized employees do not participate in Company-sponsored plans, and contributions are made to these retirement programs in accordance with the respective collective bargaining agreements. In the case of defined contribution plans, regular contributions are made to the individual employee accounts, which are administered by a plan trustee in accordance with the plan document.
Approximately 130 employees are included in defined benefit plans.
a) Powell Plan - This is a legacy plan whose members were employees of Powell Equipment when it was acquired by Toromont in 2001. The plan is a contributory plan that provides pension benefits based on length of service and career average earnings. The last actuarial valuation of the plan was completed as at December 31, 2011. The next valuation is scheduled as at December 31, 2012.
b) Executive Plan - This is a non-contributory pension arrangement for certain senior executives that provides for a supplementary retirement payout in excess of amounts provided for under the registered plan. The most recent actuarial valuation of the plan was completed as at December 31, 2012. The next valuation is scheduled as at December 31, 2013.
c) Other plan assets and obligations - This provides for certain retirees and terminated vested employees of businesses previously acquired by the Company as well as for retired participants of the defined contribution plan that, in accordance with the plan provisions, have elected to receive a pension directly from the plan. The most recent actuarial valuation of the plan was completed as at January 1, 2011. The next valuation is scheduled as at January 1, 2014.
The changes in the fair value of assets and the pension obligations and the funded status of the defined benefit plans were as follows:
2012 2011----------------------------------------------------------------------------Accrued benefit obligations: Balance, beginning of year $ 79,373 $ 72,164 Service cost 1,209 998 Interest cost 3,392 3,614 Net actuarial loss 6,309 7,666 Benefits paid (6,983) (5,502) Voluntary contributions 433 433---------------------------------------------------------------------------- Balance, end of year 83,733 79,373----------------------------------------------------------------------------Plan assets: Fair value, beginning of year 53,212 52,313 Expected return on plan assets 3,742 3,640 Net actuarial gain (loss) 516 (1,990) Company contributions 5,961 4,306 Participant contributions 433 433 Benefits paid (6,983) (5,502) Other adjustments 12 12---------------------------------------------------------------------------- Fair value, end of year 56,893 53,212----------------------------------------------------------------------------Accrued pension liability $ 26,840 $ 26,161--------------------------------------------------------------------------------------------------------------------------------------------------------
