16. Employee Benefit Plans

Defined Benefit Pension and Other Postretirement Benefit Plans

The Company provides funded and unfunded non-contributory defined benefit pension plans covering certain of its salaried and hourly employees. Benefits are generally based on the employee's age and compensation. The Company funds the plans in an amount not less than the minimum statutory funding requirements or more than the maximum amount that can be deducted for U.S. federal income tax purposes.

The Company also currently provides certain postretirement medical and life insurance coverage for eligible employees. Generally, covered employees who terminate employment after meeting eligibility requirements are eligible for postretirement coverage for themselves and their dependents. The salaried employee postretirement benefit plans are contributory, with retiree contributions adjusted annually, and contain other cost-sharing features such as deductibles and coinsurance. The Company's current funding policy is to fund the cost of all postretirement benefits as they are paid.

Employees acquired with the ICG acquisition were brought over in their existing plan. Subsequently, the terms of the plan were amended to change vesting periods, coverage caps, and eligible ages, resulting in a reduction of the benefit obligation of $55.5 million.

During 2009, the Company notified participants of the retiree medical plan of a plan change increasing the retirees' responsibility for medical costs. This change resulted in a remeasurement of the postretirement benefit obligation, which included a decrease in the discount rate from 6.85% to 5.68%. The remeasurement resulted in a decrease in the liability of $21.0 million, with a corresponding increase to other comprehensive income, and will result in future reductions in costs under the plan.

Obligations and Funded Status. Summaries of the changes in the benefit obligations, plan assets and funded status of the plans are as follows:


	Pension Benefits		Other Postretirement Benefits
	2011	2010	2011	2010
	(In thousands)
CHANGE IN BENEFIT OBLIGATIONS
Benefit obligations at January 1	$ 297,707	$ 280,693	$ 39,633	$ 46,445
Service cost	16,490	15,870	3,917	1,509
Interest cost	16,253	15,822	3,279	2,083
Plan amendments	(3,235)	(92)	(55,542)	—
Benefits paid	(18,848)	(15,924)	(1,669)	(1,845)
Acquisition of ICG	—	—	48,441	—
Other-primarily actuarial loss (gain)	25,584	1,338	7,070	(8,559)
Benefit obligations at December 31	$ 333,951	$ 297,707	$ 45,129	$ 39,633
CHANGE IN PLAN ASSETS
Value of plan assets at January 1	$ 247,713	$ 211,899	$ —	$ —
Actual return on plan assets	9,443	34,401	—	—
Employer contributions	46,766	17,337	1,669	1,845
Benefits paid	(18,848)	(15,924)	(1,669)	(1,845)
Value of plan assets at December 31	$ 285,074	$ 247,713	$ —	$ —
Accrued benefit cost	$ (48,877)	$ (49,994)	$ (45,129)	$ (39,633)
ITEMS NOT YET RECOGNIZED AS A COMPONENT OF NET PERIODIC BENEFIT COST
Prior service credit (cost)	$ 1,736	$ (1,310)	$ 62,920	$ 9,742
Accumulated gain (loss)	(68,302)	(39,099)	1,795	11,965
	$ (66,566)	$ (40,409)	$ 64,715	$ 21,707
BALANCE SHEET AMOUNTS
Current liability	$ (633)	$ (840)	$ (2,820)	$ (1,840)
Noncurrent liability	$ (48,244)	$ (49,154)	$ (42,309)	$ (37,793)
	$ (48,877)	$ (49,994)	$ (45,129)	$ (39,633)

Pension Benefits

The accumulated benefit obligation for all pension plans was $314.7 million and $280.4 million at December 31, 2011 and 2010, respectively. The accumulated benefit obligation differs from the benefit obligation in that it includes no assumption about future compensation levels.

The benefit obligation and the accumulated benefit obligation for the Company's unfunded pension plan were $8.2 million and $7.1 million, respectively, at December 31, 2011.

The prior service credit and net loss that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2012 are $0.1 million and $14.3 million, respectively.

Other Postretirement Benefits

The prior service credit and net gain that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2012 is $12.0 million and $0.4 million, respectively.

Components of Net Periodic Benefit Cost. The following table details the components of pension and other postretirement benefit costs.


	Pension Benefits			Other Postretirement Benefits
Year Ended December 31,	2011	2010	2009	2011	2010	2009
	(In thousands)
Service cost	$ 16,490	$ 15,870	$ 13,444	$ 3,917	$ 1,509	$ 2,954
Interest cost	16,253	15,822	15,946	3,279	2,083	3,667
Expected return on plan assets*	(21,812)	(19,392)	(17,719)	—	—	—
Amortization of prior service cost (credit)	(189)	173	193	(2,364)	(2,364)	2,161
Amortization of other actuarial losses (gains)	8,748	7,130	3,967	(3,100)	(2,918)	(2,897)
Curtailments	—	—	585	—	—	—
Net benefit cost	$ 19,490	$ 19,603	$ 16,416	$ 1,732	$ (1,690)	$ 5,885

____________

*	The Company does not fund its other postretirement benefit obligations.

The differences generated from changes in assumed discount rates and returns on plan assets are amortized into earnings over a five-year period.

Assumptions. The following table provides the assumptions used to determine the actuarial present value of projected benefit obligations at December 31.


	Pension Benefits		Other Postretirement Benefits
	2011	2010	2011	2010
Weighted average assumptions:
Discount rate	4.91%	5.71%	4.52%	5.23%
Rate of compensation increase	3.39%	3.39%	N/A	N/A

The following table provides the assumptions used to determine net periodic benefit cost for years ended December 31.


	Pension Benefits			Other Postretirement Benefits
	2011	2010	2009	2011	2010	2009
Weighted average assumptions:
Discount rate	5.71%	5.97%	6.85%	5.23%	5.67%	6.85%/5.68%
Rate of compensation increase	3.39%	3.39%	3.39%	N/A	N/A	N/A
Expected return on plan assets	8.50%	8.50%	8.50%	N/A	N/A	N/A

The Company establishes the expected long-term rate of return at the beginning of each fiscal year based upon historical returns and projected returns on the underlying mix of invested assets. The Company utilizes modern portfolio theory modeling techniques in the development of its return assumptions. This technique projects rates of return that can be generated through various asset allocations that lie within the risk tolerance set forth by members of the Company's pension committee (the "Pension Committee"). The risk assessment provides a link between a pension's risk capacity, management's willingness to accept investment risk and the asset allocation process, which ultimately leads to the return generated by the invested assets.

The health care cost trend rate assumed for 2012 is 7.7% and is expected to reach an ultimate trend rate of 4.5% by 2028. A one-percentage-point increase in the health care cost trend rate would have increased the postretirement benefit obligation at December 31, 2011 by $0.5 million. A one-percentage-point decrease in the health care cost trend rate would have decreased the postretirement benefit obligation at December 31, 2011 by $0.4 million. The effect of these changes would have had an insignificant impact on the net periodic postretirement benefit costs.

Plan Assets

The Pension Committee is responsible for overseeing the investment of pension plan assets. The Pension Committee is responsible for determining and monitoring appropriate asset allocations and for selecting or replacing investment managers, trustees and custodians. The pension plan's current investment targets are 65% equity, 30% fixed income securities and 5% cash. The Pension Committee reviews the actual asset allocation in light of these targets on a periodic basis and rebalances among investments as necessary. The Pension Committee evaluates the performance of investment managers as compared to the performance of specified benchmarks and peers and monitors the investment managers to ensure adherence to their stated investment style and to the plan's investment guidelines.

The Company's pension plan assets at December 31, 2011 and 2010, respectively, are categorized below according to the fair value hierarchy as defined in Note 13, "Fair Values of Financial Instruments":


	Total		Level 1				Level 2		Level 3
	2011	2010		2011	2010	2011		2010		2011	2010
	(In thousands)
Equity securities:(A)
U.S. small-cap	$11,178	$10,647		$11,178	$10,647	$ —		$ —		$ —	$ —
U.S. mid-cap	50,264	46,851		23,474	21,163	26,790		25,688		—	—
U.S. large-cap	91,561	77,632		44,820	38,397	46,741		39,235		—	—
Non-U.S.	22,509	24,995		—	—	22,509		24,995		—	—
Fixed income securities:
U.S. government securities(B)	13,454	3,053		12,738	2,492	716		561		—	—
Non-U.S. government securities(C)	2,968	3,469		—	—	2,968		3,469		—	—
U.S. government asset and mortgage backed securities(D)	800	1,073		—	—	800		1,073		—	—
Corporate fixed income(E)	14,004	13,737		—	—	14,004		13,737		—	—
State and local government securities(F)	18,416	13,679		—	—	18,416		13,679		—	—
Other fixed income(G)	51,470	45,628		—	—	51,470		45,628		—	—
Short-term investments(H)	8,029	6,110		—	—	8,029		6,110		—	—
Other investments(I)	421	839		—	—	421		839		—	—
Total	$285,074	$247,713		$92,210	$72,699	$192,864		$175,014		$ —	$ —

____________

(A)	Equity securities includes investments in 1) common stock, 2) preferred stock and 3) mutual funds. Investments in common and preferred stocks are valued using quoted market prices multiplied by the number of shares owned. Investments in mutual funds are valued at the net asset value per share multiplied by the number of shares held as of the measurement date and are traded on listed exchanges.

(B)	U.S. government securities includes agency and treasury debt. These investments are valued using dealer quotes in an active market.

(C)	Non-U.S. government securities includes debt securities issued by foreign governments and are valued utilizing a price spread basis valuation technique with observable sources from investment dealers and research vendors.

(D)	U.S. government asset and mortgage backed securities includes government-backed mortgage funds which are valued utilizing an income approach that includes various valuation techniques and sources such as discounted cash flows models, benchmark yields and securities, reported trades, issuer trades and/or other applicable data.

(E)	Corporate fixed income is primarily comprised of corporate bonds and certain corporate asset-backed securities that are denominated in the U.S. dollar and are investment-grade securities. These investments are valued using dealer quotes.

(F)	State and local government securities include different U.S. state and local municipal bonds and asset backed securities, these investments are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes, benchmark yields and securities, reported trades, issuer trades and/or other applicable data.

(G)	Other fixed income investments are actively managed fixed income vehicles that are valued at the net asset value per share multiplied by the number of shares held as of the measurement date.

(H)	Short-term investments include governmental agency funds, government repurchase agreements, commingled funds, and pooled funds and mutual funds. Governmental agency funds are valued utilizing an option adjusted spread valuation technique and sources such as interest rate generation processes, benchmark yields and broker quotes. Investments in governmental repurchase agreements, commingled funds and pooled funds and mutual funds are valued at the net asset value per share multiplied by the number of shares held as of the measurement date.

(I)	Other investments includes cash, forward contracts, derivative instruments, credit default swaps, interest rate swaps and mutual funds. Investments in interest rate swaps are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and non-active markets, benchmark yields and securities, reported trades, issuer trades and/or other applicable data. Forward contracts and derivative instruments are valued at their exchange listed price or broker quote in an active market. The mutual funds are valued at the net asset value per share multiplied by the number of shares held as of the measurement date and are traded on listed exchanges.

Cash Flows. In order to achieve a desired funded status, the Company expects to make contributions of $24.5 million to the pension plans in 2012.

The following represents expected future benefit payments, which reflect expected future service, as appropriate:

	Pension Benefits	Other Postretirement Benefits
	(In thousands)
2012	$ 17,898	$ 3,411
2013	20,854	3,787
2014	22,803	4,060
2015	22,492	4,406
2016	26,185	4,694
Years 2017-2021	164,788	25,122
	$ 275,020	$ 45,480

Other Plans

The Company sponsors savings plans which were established to assist eligible employees provide for their future retirement needs. The Company's expense, representing its contributions to the plans, was $25.9 million, $18.1 million and $15.9 million for the years ended December 31, 2011, 2010 and 2009, respectively.