PENSION AND OTHER POST-EMPLOYMENT BENEFITS

The Company has two domestic defined benefit pension plans and two plans providing for other post-employment 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 all of these plans.

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 post-employment medical plan, effective May 1, 2015. The amendments eliminated the accrual of future benefits for all participants in the defined benefit pension plans and closed entry to new retirees into the post-employment 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.

During 2017, the Company did not make any contributions to the union or nonunion pension plans. During 2016, the Company contributed $9.0 million and $43.0 million in discretionary contributions to the union and nonunion pension plans, respectively.

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
	2017			2016			2017			2016
Change in projected benefit obligation:
Projected benefit obligation at beginning of the period	$	280,193		$	273,809		$	5,736		$	6,294
Service cost	700			1,870			—			—
Interest cost	9,455			9,662			173			196
Plan amendments	—			—			(1,317		)	(998		)
Participant contributions	—			—			206			206
Actuarial (gain) loss	27,925			7,207			(284		)	1,076
Benefits paid	(19,586		)	(11,943		)	(708		)	(1,038		)
(Gain) related to settlement	(472		)	—			—			—
Administrative expenses paid	(2,649		)	(412		)	—			—
Projected benefit obligation at end of the period	$	295,566		$	280,193		$	3,806		$	5,736
Accumulated benefit obligation at end of the period	$	295,566		$	280,193		$	—		$	—
Change in plan assets:
Fair value of plan assets at beginning of the period	$	263,027		$	210,556		$	—		$	—
Actual return on plan assets	33,103			11,662			—			—
Employer contributions	—			53,164			502			832
Participant contributions	—			—			206			206
Actual expenses paid	(2,649		)	(412		)	—			—
Benefits paid	(19,586		)	(11,943		)	(708		)	(1,038		)
Fair value of plan assets at the end of period	$	273,895		$	263,027		$	—		$	—
Funded status	$	(21,671	)	$	(17,166	)	$	(3,806	)	$	(5,736	)

Assumptions used in computing the benefit obligation as of December 31, 2017 and 2016 were as follows:



	Pension Benefits				Other Benefits
	2017		2016		2017	2016
Discount rate	3.70 - 3.77%		4.16 - 4.25%		2.48 - 3.66%	2.35 - 4.20%
Expected return on plan assets	7.10	%	7.10	%	N/A	N/A
Rate of compensation increase	N/A		N/A		N/A	N/A

The following table presents the fair value of the Company's pension plan investments as of December 31, 2017 and 2016 (in thousands):



	Level 1		Level 2		Level 3		Total
Equity Securities
U.S. equity securities	$	—	$	75,944	$	—	$	75,944
Non-U.S. equity securities	—		37,042		—		37,042
Debt Securities
Fixed income funds and cash investment funds	123,867		37,042		—		160,909
December 31, 2017	$	123,867	$	150,028	$	—	$	273,895

Equity Securities
U.S. equity securities	$	103,649	$	—	$	—	$	103,649
Non-U.S. equity securities	36,936		—		—		36,936
Debt Securities
Fixed income funds and cash investment funds	122,442		—		—		122,442
December 31, 2016	$	263,027	$	—	$	—	$	263,027

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

The following table sets forth the consolidated balance sheets presentation for components relating to the Company's pension and OPEB plans (in thousands):



	Pension Benefits						Other Benefits
	2017			2016			2017			2016
Amounts recognized in the consolidated balance sheets consist of:
Current liabilities	$	—		$	—		$	(231	)	$	(612	)
Noncurrent liabilities	(21,671		)	(17,166		)	(3,575		)	(5,124		)
Net amount recognized	$	(21,671	)	$	(17,166	)	$	(3,806	)	$	(5,736	)
Amounts recognized in accumulated other comprehensive income (loss) before taxes:
Net actuarial loss (gain)	$	60,256		$	50,327		$	1,015		$	1,302
Prior service cost (credit)	—			—			(3,310		)	(3,477		)
Net amount recognized	$	60,256		$	50,327		$	(2,295	)	$	(2,175	)

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



	Pension Benefits						Other Benefits
	2017			2016			2017			2016
Net actuarial loss (gain)	$	12,794		$	10,326		$	(227	)	$	581
Prior service (credit)	—			—			(1,400		)	(998		)
Amortization of:
Prior service credit	—			—			1,485			1,120
Actuarial (loss) gain	(704		)	(492		)	(3		)	248
Loss recognized related to settlement	(2,162		)	—			—			—
Total recognized in OCI	$	9,928		$	9,834		$	(145	)	$	951

The net actuarial losses of $12.8 million and $10.3 million for the pension plans in 2017 and 2016, respectively, were mainly due to decreases in discount rates over the course of both 2017 and 2016.

The following table sets forth the estimated net actuarial loss and prior service credit for the Company's pension and OPEB plans included in accumulated other comprehensive income and expected to be recognized in net periodic pension cost during the fiscal year ended December 31, 2018 (in thousands):



	Pension Benefits			Other Benefits
	2018			2018
Prior service credit	—			730
Actuarial (loss) gain	(1,465		)	71
Total recognized in OCI	$	(1,465	)	$	801

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



	Pension Benefits									Other Benefits
	2017			2016			2015			2017			2016			2015
Service cost	$	700		$	1,870		$	7,457		$	—		$	—		$	5
Interest cost	9,455			9,662			12,350			173			196			289
Expected return on plan assets	(18,444		)	(14,782		)	(14,455		)	—			—			—
Amortization of prior service cost (credit)	—			—			—			(1,485		)	(1,120		)	(852		)
Recognized actuarial loss (gain)	704			492			6,311			3			(248		)	(144		)
Settlement and curtailment related expense ⁽¹⁾	2,162			—			—			—			—			—
Net periodic benefit (income) cost	$	(5,423	)	$	(2,758	)	$	11,663		$	(1,309	)	$	(1,172	)	$	(702	)

_______________________________________________________________________________

(1) The pension settlement charge was related to cash payments from lump sum elections made by employees affected by the restructuring activities in the second quarter of 2017.

Assumptions used to determine net periodic benefit cost for the years ended December 31, 2017, 2016, and 2015 were as follows:



	Pension Benefits						Other Benefits
	2017		2016		2015		2017	2016	2015
Discount rate	3.80 - 4.25%		4.55 - 4.65%		4.18 - 4.54%		2.35 - 4.20%	2.30 - 4.51%	1.69 - 4.20%
Expected return on plan assets	7.10	%	7.10	%	7.10	%	N/A	N/A	N/A
Rate of compensation increase	N/A		N/A		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 OPEB plans as of December 31, 2017, as well as the assumed rate for 2018 the following rates were assumed to affect the per capita costs of the following covered benefits:



	Benefit obligation				Net periodic benefit cost
	2017		2025 and thereafter		2017		2023 - 2024
Healthcare	5.60 - 7.20%		4.50	%	5.80 - 6.20%		4.50	%
Prescription drug	10.10	%	4.50	%	11.10	%	4.50	%

The effect on benefit obligation of increasing/decreasing the healthcare cost trend rate and aggregate service and interest cost components by 1% is shown as follows for 2017 (in thousands):



	Accumulated Post-employment Benefit Obligation		Aggregate service and interest cost components
Increase	$	9	$	1
Decrease	8		1

The Company's pension plans' weighted-average asset allocations as of December 31, 2017 and 2016, by asset category were as follows:



	Plan Assets at December 31,
	2017		2016
Asset Category:
Temporary investment funds	1	%	1	%
Equity investment funds	41	%	53	%
Fixed income funds	58	%	46	%
Total	100	%	100	%

The Company's pension plans' investment policy includes an asset mix based on the Company's risk posture. The investment policy follows a glide path approach that shifts a higher portfolio weighting to fixed income as the funded status increases. The investment policy states a target allocation based on the plans’ funded status of approximately 46% equity funds and 54% fixed income funds. Inclusion of the fixed income assets is to hedge risk associated with the plans’ liabilities along with providing potential growth through income. These assets 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 broadly diversified domestic equity, international equity, fixed income (return seeking), alternative investments, commodities, and real estate assets. The purpose of these assets is to provide the opportunity for capital appreciation, income, and the ability to diversify investments. A mix of mutual funds, ETF’s, and separate accounts are used as the plans' investment vehicles with clearly stated investment objectives and guidelines, as well as offer competitive long-term results.

The Company expects to contribute $0.2 million to its OPEB plans in 2018. Currently, no contributions are expected in 2018 for the Company's pension plans. Estimated future benefit payments under the pension and OPEB plans are as follows (in thousands):



	Pension Benefits		Other Benefits
2018	$	18,944	$	231
2019	19,012		235
2020	19,416		234
2021	19,460		241
2022	19,468		240
2023 - 2027	89,456		1,243

The Company also sponsors 401K retirement savings plans for all U.S. associates. 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 $5.5 million for 2017, $9.8 million for 2016 and $5.6 million for 2015. 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 2017, 2016, and 2015 was $1.0 million, $1.0 million, and $1.0 million, respectively.