Annual report pursuant to section 13 and 15(d)

Employee Benefits Plans

Employee Benefits Plans
12 Months Ended
Sep. 30, 2013
Employee Benefits Plans [Abstract]  
Employee Benefit Plans

Note 14. Employee Benefits Plans


Management Security Plan


The management security plan ("MSP") is a nonqualified, noncontributory defined supplemental deferred retirement benefit plan for a select group of management personnel. The MSP plan provides a fixed supplemental retirement benefit for 180 months certain. The MSP is frozen; no new participants are being added and no benefit increases are being granted. The MSP benefit expense and the projected management security plan benefit obligation are determined using assumptions as of the end of the year. The weighted-average discount rate used to compute the obligation was 4.2% and 4.5% in 2013 and 2012, respectively. During fiscal year 2012, the Company changed its approach in determining the discount rate from the Pension Benefit Guaranty Corp rate which was used during fiscal year 2011, to the Moody's Corporate Bond Curve (Moody's). Management believes that the Moody's rate is a more appropriate estimate of the settlement of the pension benefits. The effect of this change was not significant to net income and earnings per share.


Actuarial gains or losses are recognized when incurred, therefore; the end of year benefit obligation is the same as the accrued benefit costs recognized in the consolidated balance sheet.


The amount of MSP benefit expense charged to costs and expenses was as follows:


(in thousands)   Fiscal Year Ended September 30,
    2013   2012   2011
Service cost     221       251       233  
Interest cost     368       178       181  
Recognized actuarial loss adjustment     -       2       66  
Total     589       431       480  


The following provides a roll-forward of the MSP benefit obligation.


(in thousands)   2013   2012
Change in projected benefit obligation:                
Benefit obligation at beginning of year   $ 4,098     $ 3,970  
Service cost     221       251  
Interest cost     368       178  
Recognized actuarial loss adjustment     -       2  
Benefits paid     (316 )     (303 )
Benefit obligation at end of year   $ 4,371     $ 4,098  
Funded status at end of year   $ (4,371 )   $ (4,098 )


The MSP is unfunded and benefits are paid as they become due. The estimated future benefit payments under the plan for each of the five succeeding years are approximately $342,000, $346,000, $351,000, $367,000 and $348,000 and for the five-year period thereafter an aggregate of $1,199,000.


The Company has established a "Rabbi Trust" to provide for the funding of accrued benefits under the MSP. According to the terms of the Rabbi Trust, funding is voluntary until a change of control of the Company as defined in the Management Security Plan Trust Agreement occurs. Upon a change of control, funding is triggered. As of September 30, 2013, the Rabbi Trust had no assets, and no change of control had occurred.


Profit Sharing and 401(k)


The Company maintains a 401(k) employee savings plan for eligible employees, which provides for a 4% matching contribution on employee payroll deferrals. The Company's matching funds vest to the employee immediately, pursuant to a safe harbor election effective in October 2012. The Company's contribution to the plan was approximately $157,000, $81,000 and $59,000 for the fiscal years 2013, 2012 and 2011, respectively.


The Profit Sharing Plan ("Plan") is fully funded by contributions from the Company. Contributions to the Plan are discretionary and determined annually by the Company's Board of Directors. Contributions to employee accounts are based on the participant's compensation. The Company's contribution to the Profit Sharing Plan was $210,000, $245,000 and $162,000 for the years ended September 30, 2013, 2012 and 2011, respectively.