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 covered eligible U.S. nonunion employees while the other pension plan and OPEB plan covered 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 in 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.

During 2018, the Company contributed $7.9 million in discretionary contributions to the union pension plan and did not contribute to the nonunion pension plan. 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
	2018			2017			2018			2017
Change in projected benefit obligation:
Projected benefit obligation at beginning of the period	$	295,566		$	280,193		$	3,806		$	5,736
Expected administrative expenses	940			700			—			—
Interest cost	10,160			9,455			120			173
Plan amendments	—			—			—			(1,317		)
Participant contributions	—			—			209			206
Actuarial (gain) loss	(26,385		)	27,925			(43		)	(284		)
Benefits paid	(7,095		)	(7,617		)	(490		)	(708		)
Benefits paid related to settlement	(29,480		)	(11,969		)	—			—
Loss (gain) related to settlement	893			(472		)	—			—
Administrative expenses paid	(984		)	(2,649		)	—			—
Projected benefit obligation at end of the period	$	243,615		$	295,566		$	3,602		$	3,806
Accumulated benefit obligation at end of the period	$	243,615		$	295,566		$	—		$	—
Change in plan assets:
Fair value of plan assets at beginning of the period	$	273,895		$	263,027		$	—		$	—
Actual return on plan assets	(10,306		)	33,103			—			—
Employer contributions	7,900			—			281			502
Participant contributions	—			—			209			206
Actual expenses paid	(984		)	(2,649		)	—			—
Benefits paid	(7,095		)	(7,617		)	(490		)	(708		)
Benefits paid related to settlement	(29,480		)	(11,969		)	—			—
Fair value of plan assets at the end of period	$	233,930		$	273,895		$	—		$	—
Funded status	$	(9,685	)	$	(21,671	)	$	(3,602	)	$	(3,806	)

The actuarial loss in 2017 was mainly due to approximately a 50 basis point drop in discount rates used to value the projected benefit obligation. The actuarial gain in 2018 was mainly driven by approximately a 70 basis point increase in the discount rates, which lowered the value of the projected benefit obligation. Additionally, each year the plans experienced other sources of gains and losses due to other changes in assumptions and demographic data. Also during 2018, benefits paid related to settlement increased from 2017 due to settling the liability for certain beneficiaries. Also in 2018, the Company contributed $7.9 million to the union plan ($0 in 2017). No employer contributions were made to the nonunion plan in 2017 or 2018.

Assumptions used in computing the benefit obligation as of December 31, 2018 and 2017 were as follows:



	Pension Benefits			Other Benefits
	2018	2017		2018	2017
Discount rate	4.37% - 4.46%	3.70 - 3.77%		3.30% - 4.32%	2.48 - 3.66%
Expected return on plan assets	4.60% - 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, 2018 and 2017 (in thousands):



	Level 1		Level 2		Level 3		Total
Equity Securities
U.S. equity securities	$	—	$	54,484	$	—	$	54,484
Non-U.S. equity securities	—		28,036		—		28,036
Debt Securities
Fixed income funds and cash investment funds	121,663		29,747		—		151,410
December 31, 2018	$	121,663	$	112,267	$	—	$	233,930

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

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 (2)						Other Benefits (2)
	2018			2017			2018			2017
Amounts recognized in the consolidated balance sheets consist of:
Noncurrent assets	$	4,245		$	—		$	—		$	—
Current liabilities	—			—			(301		)	(231		)
Noncurrent liabilities	(13,930		)	(21,671		)	(3,301		)	(3,575		)
Net amount recognized	$	(9,685	)	$	(21,671	)	$	(3,602	)	$	(3,806	)
Amounts recognized in accumulated other comprehensive income (loss) before taxes:
Net actuarial loss	$	55,923		$	60,256		$	1,043		$	1,015
Prior service (credit)	—			—			(2,580		)	(3,310		)
Net amount recognized	$	55,923		$	60,256		$	(1,537	)	$	(2,295	)

At December 31, 2018, the union pension plan had a fair value of plan assets of $50.6 million and both a projected benefit obligation (PBO) and accumulated benefit obligation (ABO) of $46.4 million, leading to an excess of the fair value of plan assets over the PBO/ABO of $4.2 million. Also at December 31, 2018, the nonunion pension plan had both a PBO and ABO of $197.2 million a fair value of plan assets of $183.3 million, leading to an excess of PBO/ABO over the fair value of plan assets of $13.9 million.

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



	Pension Benefits						Other Benefits
	2018			2017			2018			2017
Net actuarial loss (gain)	$	2,390		$	12,794		$	(43	)	$	(227	)
Prior service (credit)	—			—			—			(1,400		)
Amortization of:
Prior service credit	—			—			730			1,485
Actuarial (loss) gain	(988		)	(704		)	71			(3		)
Loss recognized related to settlement	(5,735		)	(2,162		)	—			—
Total recognized in OCI	$	(4,333	)	$	9,928		$	758		$	(145	)

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



	Pension Benefits									Other Benefits
	2018			2017			2016			2018			2017			2016
Expected administrative expenses	$	940		$	700		$	1,870		$	—		$	—		$	—
Interest cost	10,160			9,455			9,662			120			173			196
Expected return on plan assets	(17,574		)	(18,444		)	(14,782		)	—			—			—
Amortization of prior service cost (credit)	—			—			—			(730		)	(1,485		)	(1,120		)
Recognized actuarial loss (gain)	988			704			492			(71		)	3			(248		)
Settlement related expense ⁽¹⁾	5,735			2,162			—			—			—			—
Net periodic benefit cost (income)	$	249		$	(5,423	)	$	(2,758	)	$	(681	)	$	(1,309	)	$	(1,172	)

_______________________________________________________________________________

(1) The pension settlement charge for 2018 related to the purchase of annuities for certain plan retirees as well as cash payments for lump sum elections. The pension settlement charge for 2017 related to 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, 2018, 2017, and 2016 were as follows:



	Pension Benefits						Other Benefits
	2018		2017		2016		2018	2017	2016
Discount rate	3.70 - 3.77%		3.80 - 4.25%		4.55 - 4.65%		2.48 - 3.66%	2.35 - 4.20%	2.30 - 4.51%
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		N/A		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, 2018, 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
	2018		2027 and thereafter		2018		2025 and thereafter
Healthcare	6.50	%	4.50	%	5.60% - 7.20%		4.50	%
Prescription drug	9.00	%	4.50	%	10.10	%	4.50	%

The Company's pension plans' weighted-average asset allocations as of December 31, 2018 and 2017, by asset category were as follows:



	Plan Assets at December 31,
	2018		2017
Asset Category:
Temporary investment funds	3	%	1	%
Equity investment funds	35	%	41	%
Fixed income funds	62	%	58	%
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 35% equity funds and 65% 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 $0.3 million to its OPEB plans in 2019. Currently, no contributions are expected in 2019 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
2019	$	16,919	$	301
2020	17,246		254
2021	17,330		263
2022	17,366		262
2023	17,031		263
2024 - 2027	79,360		1,235

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 $3.9 million for 2018, $5.5 million for 2017 and $9.8 million for 2016. Employees of the Canadian, Belgium, Denmark and United Kingdom operations also participate in defined contribution pension plans sponsored by the Company. The Company's expense related to these plans for 2018, 2017, and 2016 was $1.7 million, $1.0 million, and $1.0 million, respectively.