Employee Benefit Plans

12 Months Ended

Dec. 31, 2011

Employee Benefit Plans

Employee Benefit Plans

Note 13—Employee Benefit Plans

Defined Benefit Plans

        Substantially all of the Company's employees in Switzerland, France and Japan, as well as certain employees in Germany, are covered by Company-sponsored defined benefit pension plans. Retirement benefits are generally earned based on years of service and compensation during active employment. Eligibility is generally determined in accordance with local statutory requirements however, the level of benefits and terms of vesting varies among plans.

Net Periodic Pension Cost

        The components of net periodic pension costs for the years ended December 31, are as follows (in millions):

	2011			2010			2009
Components of net periodic benefit costs:
Service cost	$	5.5		$	3.9		$	4.2
Interest cost		4.9			4.4			5.3
Expected return on plan assets		(4.1	)		(3.4	)		(3.5	)
Amortization of prior service costs		1.3			0.6			1.0
Net periodic benefit costs	$	7.6		$	5.5		$	7.0

        The Company measures its benefit obligation and the fair value of plan assets as of December 31st each year. The changes in benefit obligations and plan assets under the defined benefit pension plans, accumulated benefit obligation and funded status of the plans were as follows at December 31, (in millions):

	2011			2010
Change in benefit obligation:
Benefit obligation at beginning of year	$	151.7		$	124.9
Service cost		5.5			3.9
Interest cost		4.9			4.4
Plan participant contributions		3.4			2.7
Benefits paid		(3.3	)		(4.2	)
Actuarial loss (gain)		(7.7	)		11.1
Impact of foreign currency exchange rates		(1.0	)		8.9
Benefit obligation at end of year		153.5			151.7
Change in plan assets:
Fair value of plan assets at beginning of year		111.3			95.7
Actuarial return on plan assets		(2.1	)		1.8
Plan participation and employer contributions		7.6			7.4
Benefits paid		(3.3	)		(4.2	)
Impact of foreign currency exchange rates		(0.6	)		10.6
Fair value of plan assets at end of year		112.9			111.3
Net funded status	$	(40.6	)	$	(40.4	)

        The accumulated benefit obligation for the defined benefit pension plans is $145.5 million and $144.8 million at December 31, 2011 and 2010, respectively. All defined benefit pension plans have an accumulated benefit obligation and projected benefit obligation in excess of plan assets at December 31, 2011 and 2010.

        The following amounts were recognized in the accompanying consolidated balance sheets for the Company's defined benefit plans at December 31, (in millions):

	2011			2010
Current liabilities	$	(1.4	)	$	(1.0	)
Non-current liabilities		(39.2	)		(39.4	)
Net benefit obligation	$	(40.6	)	$	(40.4	)

        The following pre-tax amounts were recognized in accumulated other comprehensive income for the Company's defined benefit plans at December 31, (in millions):

	2011			2010
Reconciliation of amounts recognized in the statement of financial position:
Initial net obligation	$	—		$	—
Prior service cost (credit)		—			—
Net gain (loss)		(22.2	)		(25.8	)
Accumulated other comprehensive income (loss)		(22.2	)		(25.8	)
Accumulated contributions in excess of net periodic benefit cost		(18.4	)		(14.6	)
Net amount recognized	$	(40.6	)	$	(40.4	)

        The range of assumptions used for defined benefit pension plans reflects the different economic environments within the various countries. The range of assumptions used to determine the projected benefit obligations for the years ended December 31, are as follows:

	2011	2010	2009
Discount rate	1.1%-5.5%	1.2%-5.6%	2.0%-5.9%
Expected return on plan assets	3.4%-4.0%	3.5%-4.3%	3.5%-4.3%
Expected rate of compensation increase	1.0%-3.8%	1.0%-3.0%	1.0%-3.0%

        To determine the expected long-term rate of return on pension plan assets, the Company considers the current and expected asset allocations, as well as historical and expected returns on various asset categories of plan assets. For the principal pension plans, the Company applies the expected rate of return to a market-related value of assets, which stabilizes variability in assets to which the expected return is applied.

Asset Allocations by Asset Category

        The fair value of the Company's pension plan assets at December 31, 2011, by asset category and by level in the fair value hierarchy, is as follows (in millions):

	Total		Quoted Prices in Active Markets Available (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Plan Assets:
Cash and cash equivalents	$	8.3	$	8.3	$	—	$	—
Debt securities:
Foreign corporations		12.5		—		12.5		—
Foreign governments		36.9		—		36.9		—
		49.4		—		49.4		—
Equity Securities:
Foreign corporations		28.6		28.6		—		—
U.S. corporations		6.0		6.0		—		—
		34.6		34.6		—		—
Real estate		13.9		—		13.9		—
Mortgage and other asset-backed securities		6.7		—		6.7		—
Total plan assets	$	112.9	$	42.9	$	70.0	$	—

        The Managing Directors of the subsidiaries are responsible for setting the policy that serves as the framework for allocating plan assets. The policy defines an investment strategy, including the asset allocation ranges, which is designed to ensure that the benefit obligations of the plans can be met when they are due. The investment strategy also is targeted at optimizing the return on investment within the risk constraints of the plans. The Managing Directors appoint the plan fiduciaries, who oversee the investment allocation process, which includes selecting investment managers, setting long-term strategic targets and monitoring asset allocations. The target allocations are 40% bonds, including cash, 35% equity investments and 25% real estate and mortgages. Target allocation ranges are guidelines, not limitations, and occasionally plan fiduciaries will approve allocations above or below a target range based on a number of factors, including market conditions.

Estimated Future Benefit Payments

        The estimated future benefit payments are based on the same assumptions used to measure the Company's benefit obligation at December 31, 2011. The following benefit payments reflect future employee service as appropriate (in millions):

2012	$	2.6
2013		3.0
2014		3.9
2015		4.1
2016		4.9
2017-2021		29.9

Other Benefit Plans

        The Company sponsors various defined contribution plans that cover certain domestic and international employees. The Company may make contributions to these plans at its discretion. The Company contributed $3.7 million, $2.5 million and $2.7 million to such plans in the years ended December 31, 2011, 2010 and 2009, respectively.