Pension and Postretirement Benefit Costs

3 Months Ended

Mar. 31, 2021

Retirement Benefits [Abstract]

Pension and Postretirement Benefit Costs

Pension and Postretirement Benefit Costs

The components of net periodic pension and postretirement benefit costs, excluding the service cost for benefits earned, are included in “Net periodic benefit (credit) costs, excluding service cost” in the unaudited condensed consolidated statements of operations.

Net periodic pension benefit included the following components:

	Three Months Ended March 31,
	2021		2020
	(Dollars in millions)
Interest cost on projected benefit obligation	$	5.1	$	7.0
Expected return on plan assets	(5.7)		(7.4)
Net periodic pension benefit	$	(0.6)	$	(0.4)

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. Funding decisions also consider certain funded status thresholds defined by the Pension Protection Act of 2006 (generally 80%). As of March 31, 2021, the Company’s qualified plans were expected to be at or above the Pension Protection Act thresholds. Minimum funding standards are legislated by the Employee Retirement Income Security Act of 1974 and are modified by pension funding stabilization provisions included in the Moving Ahead for Progress in the 21st Century Act of 2012, the Highway and Transportation Funding Act of 2014, the Bipartisan Budget Act of 2015 and the American Rescue Plan Act of 2021. The Company is not required to make any contributions to its qualified pension plans in 2021 based on minimum funding requirements and does not expect to make any discretionary contributions in 2021.

Net periodic postretirement benefit (benefit) cost included the following components:

	Three Months Ended March 31,
	2021		2020
	(Dollars in millions)
Service cost for benefits earned	$	0.2	$	1.1
Interest cost on accumulated postretirement benefit obligation	2.9		5.5
Expected return on plan assets	(0.2)		(0.4)
Amortization of prior service credit	(11.0)		(2.2)
Net periodic postretirement benefit (benefit) cost	$	(8.1)	$	4.0

In September 2020, the Company announced changes to its postretirement health care benefit plans for non-represented employees and retirees which reduced its accumulated postretirement benefit obligation, as further described in Note 15. “Postretirement Health Care and Life Insurance Benefits” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The reduction in liability was recorded with an offsetting balance in “Accumulated other comprehensive income” and is being amortized to earnings.

The Company has established two Voluntary Employees Beneficiary Association (VEBA) trusts to pre-fund a portion of benefits for non-represented and represented retirees. The Company does not expect to make any discretionary contributions to either of the VEBA trusts in 2021 and plans to utilize VEBA assets to make benefit payments.