PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company has two domestic defined benefit pension plans and two plans providing for other postretirement benefits, including medical and life insurance coverage. One of the pension plans and one of the OPEB plans cover eligible U.S. nonunion employees while the other pension plan and OPEB plan cover eligible U.S. union employees. The Company uses a December 31 measurement date for both of these plans.

During 2014, the Company offered a one-time lump sum payment option to terminated vested participants in exchange for the right to receive future pension payments. As a result, the Company settled $30.2 million of benefit obligations and recorded a $6.1 million settlement charge during the year ended December 31, 2014.

During 2015, the Company approved amendments, effective December 31, 2015, to both the union and nonunion U.S. defined benefit pension plans. The Company also amended its remaining postretirement medical plan, effective May 1, 2015. The amendments eliminated the accrual of future benefits for all participants in the defined benefit pension plans and the postretirement medical plan. These amendments resulted in a curtailment gain of approximately $7.1 million. As the plans had unrealized losses in excess of the reduction of the projected benefit obligation at the date of amendment, the gain was recorded as a reduction of the projected benefit obligation and a corresponding reduction of unrealized losses within accumulated other comprehensive loss.

The following table sets forth a reconciliation of the related benefit obligation and plan assets related to the benefits provided by the Company (in thousands):



	Pension Benefits						Other Benefits
	2015			2014			2015			2014
Change in projected benefit obligation:
Projected benefit obligation at beginning of the period	$	296,416		$	261,714		$	9,804		$	10,063
Service cost	7,457			6,937			5			23
Interest cost	12,350			13,341			289			385
Plan amendments	—			—			(1,684		)	—
Participant contributions	—			—			281			326
Actuarial (gain) loss	(21,134		)	58,922			(1,182		)	(362		)
Benefits paid	(15,867		)	(36,476		)	(1,219		)	(1,324		)
Liability (gain) loss related to curtailment	(5,413		)	—			—			693
Liability (gain) related to settlement	—			(8,022		)	—			—
Projected benefit obligation at end of the period	$	273,809		$	296,416		$	6,294		$	9,804
Accumulated benefit obligation at end of the period	$	273,388		$	290,933		$	—		$	—
Change in plan assets:
Fair value of plan assets at beginning of the period	$	225,862		$	244,302		$	—		$	—
Actual return on plan assets	(50		)	18,036			—			—
Employer contributions	611			—			938			998
Participant contributions	—			—			281			326
Benefits paid	(15,867		)	(6,270		)	(1,219		)	(1,324		)
Benefits paid related to settlement	—			(30,206		)	—			—
Fair value of plan assets at the end of period	$	210,556		$	225,862		$	—		$	—
Funded status	$	(63,253	)	$	(70,554	)	$	(6,294	)	$	(9,804	)

Assumptions used in computing the benefit obligation as of December 31, 2015 and 2014 were as follows:



	Pension Benefits				Other Benefits
	2015		2014		2015	2014
Discount rate	4.55 - 4.65%		4.20 - 4.27%		2.30 - 4.51%	3.03 - 4.20%
Expected return on plan assets	7.10	%	7.10	%	N/A	N/A
Rate of compensation increase	2.50	%	2.50	%	N/A	N/A

The following table presents the fair value of the Company's pension plan investments as of December 31, 2015 and 2014 (in thousands):



	Level 1		Level 2		Level 3		Total
Equity Securities
U.S. equity securities	$	110,705	$	—	$	—	$	110,705
Non-U.S. equity securities	20,866		—		—		20,866
Debt Securities
Fixed income funds and cash investment funds	78,985		—		—		78,985
December 31, 2015	$	210,556	$	—	$	—	$	210,556

Equity Securities
U.S. equity securities	$	115,102	$	—	$	—	$	115,102
Non-U.S. equity securities	22,081		—		—		22,081
Debt Securities
Fixed income funds and cash investment funds	88,679		—		—		88,679
December 31, 2014	$	225,862	$	—	$	—	$	225,862

See Note 2 of the consolidated financial statements for the description of the levels of the fair value hierarchy.



	Pension Benefits						Other Benefits
	2015			2014			2015			2014
	(in thousands)
Amounts recognized in the consolidated balance sheets consist of:
Current liabilities	$	—		$	—		$	(818	)	$	(1,039	)
Noncurrent liabilities	(63,253		)	(70,554		)	(5,476		)	(8,765		)
Net amount recognized	$	(63,253	)	$	(70,554	)	$	(6,294	)	$	(9,804	)
Amounts recognized in accumulated other comprehensive income (loss) before taxes:
Net actuarial loss	$	40,493		$	58,780		$	474		$	1,018
Prior service cost (credit)	—			—			(3,600		)	(2,768		)
Net amount recognized	$	40,493		$	58,780		$	(3,126	)	$	(1,750	)

The following table sets forth other changes in the benefit obligation recognized in other comprehensive income for the Company's pension and other postretirement benefits plans (in thousands):



	Pension Benefits						Other Benefits
	2015			2014			2015			2014
Net actuarial loss (gain)	$	(6,629	)	$	48,606		$	(687	)	$	330
Prior service cost/(credit)	—			—			(1,684		)	—
Curtailment (gain)/loss	(5,413		)	—			—			—
Amortization of:
Prior service (credit) cost	—			(10		)	852			2,029
Actuarial (gain) loss	(6,311		)	(2,006		)	144			(534		)
Gain recognized related to settlement	—			(6,060		)	—			—
Gain recognized related to curtailment	—			—			—			(449		)
Total recognized in OCI	$	(18,353	)	$	40,530		$	(1,375	)	$	1,376

The net actuarial gain of $6.6 million in 2015 was mainly due to improved discount rates over the course of 2015 and the mortality improvement scale was updated to MP-2015, still using the RP- 2014 base table. The net actuarial loss of $48.6 million in 2014 was mainly due to lower discount rates as compared to 2013 and the change in the mortality tables from the RP-2000 mortality tables to the RP-2014 mortality tables.

The estimated net actuarial loss for the defined benefit pension plans included in accumulated other comprehensive income and expected to be recognized in net periodic pension cost during the fiscal year ended December 31, 2016 is $0.5 million.

The following table sets forth the components of the net periodic benefit cost for the Company's pension and other postretirement benefit plans (in thousands):



	Pension Benefits									Other Benefits
	2015			2014			2013			2015			2014			2013
Service cost	$	7,457		$	6,937		$	8,009		$	5		$	23		$	37
Interest cost	12,350			13,341			12,066			289			385			325
Expected return on plan assets	(14,455		)	(15,743		)	(13,912		)	—			—			—
Amortization of prior service cost (credit)	—			10			14			(852		)	(2,029		)	(3,378		)
Recognized actuarial loss	6,311			2,006			8,623			(144		)	534			767
Settlement and curtailment related expense	—			6,060			—			—			449			—
Net periodic benefit cost	$	11,663		$	12,611		$	14,800		$	(702	)	$	(638	)	$	(2,249	)

For the years ended December 31, 2015, 2014 and 2013, $6.5 million, $7.3 million and $9.0 million of pension expense was recorded in cost of sales and $5.2 million, $5.3 million and $5.8 million was recorded in selling, general, and administrative expenses, respectively.

Assumptions used to determine net periodic benefit cost for the years ended December 31, 2015, 2014, and 2013 were as follows:



	Pension Benefits						Other Benefits
	2015		2014		2013		2015	2014	2013
Discount rate	4.18 - 4.54%		5.10 - 5.18%		4.30 - 4.40%		1.69 - 4.20%	2.69 - 5.05%	2.25 - 4.25%
Expected return on plan assets	7.10	%	7.10	%	7.10	%	N/A	N/A	N/A
Rate of compensation increase	2.50	%	2.50	%	2.50	%	N/A	N/A	N/A

The expected long-term rate of return on assets is based on management's expectations of long-term average rates of return to be earned on the investment portfolio. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plan assets are invested.

For purposes of measuring the benefit obligation associated with the Company's other postretirement benefit plans as of December 31, 2015, as well as the assumed rate for 2016, an annual rate increase of 6.00% to 6.50% in the per capita cost of covered health care benefits was assumed and a 12.0% annual rate of increase in the per capita cost of covered prescription drug benefits was assumed. The rates were then assumed to decrease to an ultimate rate of 4.5% for 2022 and thereafter. For purposes of measuring the net periodic benefit cost for 2015 associated with the Company's other postretirement benefits plans, a 7.8% to 8.3% annual rate of increase in the per capita cost of covered medical benefits was assumed and a 7.00% annual rate of increase in the per capita cost of covered prescription drug benefits was assumed. The rate was then assumed to decrease to an ultimate rate of 5.0% for 2022 for both the medical plan and prescription drug plan and thereafter. Increasing the assumed health care cost trend rate by 1.0% would increase the benefit obligation as of December 31, 2015 by $137,000 and increase the aggregate of the service and interest cost components of net periodic benefit cost for 2015 by $7,000. Decreasing the assumed health care cost trend rate by 1.0% would decrease the benefit obligation as of December 31, 2015 by $130,000 and decrease the aggregate of the service and interest cost components of net periodic benefit cost for 2015 by $7,000.

The Company's pension plans' weighted-average asset allocations as of December 31, 2015 and 2014, by asset category were as follows:



	Plan Assets at December 31,
	2015		2014
Asset Category:
Temporary investment funds	1	%	4	%
Equity investment funds	63	%	61	%
Fixed income funds	36	%	35	%
Total	100	%	100	%

The Company's pension plans' investment policy includes an asset mix based on the Company's risk posture. The investment policy states a target allocation of 60% equity funds and 40% fixed income funds. Inclusion of the fixed income funds is to provide growth through income and these funds should primarily invest in fixed income instruments of the U.S. Treasury and government agencies and investment-grade corporate bonds. The equity fund investments can consist of a broadly diversified domestic equity fund, an actively managed domestic equity fund and an actively managed international equity fund. The purpose of these funds is to provide the opportunity for capital appreciation, income, and the ability to diversify investments outside the U.S. equity market. Mutual funds are used as the plans' investment vehicle since they have clearly stated investment objectives and guidelines, offer a high degree of investment flexibility, offer competitive long-term results, and are cost effective for small asset balances.

The Company expects to contribute $1.9 million to its pension plans and $0.8 million to its other postretirement benefit plans in 2016. Estimated future benefit payments under the pension and other postretirement plans are as follows (in thousands):



	Pension Benefits		Other Benefits
2016	$	15,906	$	817
2017	16,576		784
2018	16,626		683
2019	16,681		622
2020	17,938		556
2021 - 2025	89,655		2,058

The Company also sponsors 401K retirement savings plans for all U.S. associates who do not participate in the Company's pension plans. Under the 401K retirement savings plans, participants may defer a portion of their earnings up to the annual contribution limits established by the Internal Revenue Service. The Company's total expense under the 401K plans for U.S. employees was $5.6 million for 2015, $2.5 million for 2014 and $2.0 million for 2013. Employees of the Canadian, Belgium and United Kingdom operations also participate in defined contribution pension plans sponsored by the Company. The Company's expense related to these plans for 2015, 2014, and 2013 was $1.0 million, $1.2 million, and $1.2 million, respectively.