Pension and Postretirement Benefit Costs

Net periodic pension cost included the following components:



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
	(Dollars in millions)
Service cost for benefits earned	$	0.6		$	0.6		$	1.6		$	1.7
Interest cost on projected benefit obligation	11.3			10.6			34.0			31.7
Expected return on plan assets	(13.6		)	(14.9		)	(40.7		)	(44.6		)
Amortization of prior service cost and net actuarial loss	7.9			16.6			23.6			49.9
Net periodic pension cost	$	6.2		$	12.9		$	18.5		$	38.7

Annual contributions to the qualified plans are made in accordance with minimum funding standards and the Company's agreement with the Pension Benefit Guaranty Corporation (PBGC). Funding decisions also consider certain funded status thresholds defined by the Pension Protection Act of 2006 (generally 80%). The Company currently expects its qualified plans to be at or above the Pension Protection Act thresholds and will therefore avoid benefit restrictions and at-risk penalties for 2014. During the three and nine months ended September 30, 2014, the Company contributed $1.5 million and $3.9 million, respectively, to its qualified and non-qualified pension plans. On August 8, 2014, the Highway and Transportation Funding Act of 2014 (HATFA) was signed into law, which extends pension funding stabilization provisions that were part of the Moving Ahead for Progress in the 21st Century Act of 2012 (MAP-21) passed on July 6, 2012. Under HATFA, the pension funding stabilization provisions temporarily increased the interest rates used to determine pension liabilities for purposes of minimum funding requirements through 2017. Similar to MAP-21, HATFA is not expected to change the Company's total required cash contributions over the long term, but is expected to reduce the Company's required cash contributions through 2017 if current interest rate levels persist. Based upon revised minimum funding requirements in accordance with HATFA, the Company expects to contribute $1.0 million to its qualified plans for the remainder of 2014. Accordingly, the Company’s 2014 contribution requirements for its qualified plans and benefit payments for its non-qualified plans are estimated to be approximately $5.0 million, a reduction from previous 2014 estimates of $13.0 million.

Net periodic postretirement benefit cost included the following components:



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014		2013			2014		2013
	(Dollars in millions)
Service cost for benefits earned	$	3.1	$	4.0		$	9.2	$	11.8
Interest cost on accumulated postretirement benefit obligation	9.1		10.5			27.3		31.4
Amortization of prior service cost and net actuarial loss	3.9		5.6			11.8		16.8
Special termination benefits	—		(0.6		)	—		0.9
Net periodic postretirement benefit cost	$	16.1	$	19.5		$	48.3	$	60.9

During the nine months ended September 30, 2014, the Company increased its accumulated postretirement benefit obligation (included in “Accrued postretirement benefit costs”) by $27.6 million, with an offsetting pre-tax prior service cost adjustment recorded directly to “Accumulated other comprehensive loss.” The adjustment was a result of a plan change effective April 1, 2014 for certain plan participants' benefits no longer funded through a Medicare Advantage Program. The plan change will not affect participant benefits, although it is expected to increase future employer contributions, including an additional $2.0 million of Company contributions for the year ending December 31, 2014.