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PENSION PLANS

12 Months Ended

Dec. 31, 2011

Note 10 — PENSION PLANS

Total multiemployer plan, defined contribution, and defined benefit pension expense in 2011, 2010, and 2009 was $41.9 million, $44.8 million, and $29.1 million, respectively. The Company sponsors 401(k) savings plans (a defined contribution plan) for substantially all U.S. employees. The Company contributes $0.50 for every pre-tax $1.00 an employee contributes on the first two percent of eligible compensation plus $0.25 for every pre-tax $1.00 an employee contributes on the next six percent of eligible compensation for the plans that include a company match. Company contributions are invested in Company stock and are fully vested after three years of service. Total Company contributions for 2011, 2010, and 2009 were $8.8 million, $8.2 million, and $6.6 million, respectively.

Effective January 1, 2006, the Company’s U.S. defined benefit pension plans were amended for approximately two-thirds of the participant population. For those employees impacted, future pension benefits were replaced with the Bemis Investment Profit Sharing Plan (BIPSP), a defined contribution plan which is subject to achievement of certain financial performance goals of the Company. Total contribution expense for BIPSP and other defined contribution plans (including a multiemployer defined contribution plan ) was $11.8 million in 2011, $17.0 million in 2010, and $9.5 million in 2009. Defined benefit multiemployer plans cover employees at four different manufacturing locations and provide for contributions to union administered defined benefit pension plans. Amounts charged to pension cost and contributed to the multiemployer plans in 2011, 2010, and 2009 totaled $1.5 million, $1.3 million, and $0.8 million, respectively.

The Company’s defined benefit pension plans continue to cover a substantial number of U.S. employees, and the non-U.S. defined benefit plans cover select employees at various international locations. The benefits under the plans are based on years of service and salary levels. Certain plans covering hourly employees provide benefits of stated amounts for each year of service. In addition, the Company also sponsors an unfunded supplemental retirement plan to provide senior management with benefits in excess of limits under the federal tax law and increased benefits to reflect a service adjustment factor.

Net periodic pension cost for defined benefit plans included the following components for the years ended December 31, 2011, 2010, and 2009:

(in thousands)	2011			2010			2009
Service cost - benefits earned during the year	$	13,460		$	12,876		$	12,584
Interest cost on projected benefit obligation	35,267			34,484			33,776
Expected return on plan assets	(40,332		)	(39,863		)	(40,780		)
Settlement gain	(3,283		)	(6		)	(5		)
Curtailment gain	(2,200		)	—			—
Amortization of unrecognized transition obligation	248			236			247
Amortization of prior service cost	2,078			2,592			2,367
Recognized actuarial net loss	23,383			16,221			10,594
Net periodic pension cost	$	28,621		$	26,540		$	18,783

Changes in benefit obligations and plan assets, and a reconciliation of the funded status at December 31, 2011 and 2010, were as follows:

	U.S. Pension Plans						Non-U.S. Pension Plans
(in thousands)	2011			2010			2011			2010
Change in Benefit Obligation:
Benefit obligation at the beginning of the year	$	612,346		$	553,358		$	69,575		$	70,099
Service cost	10,484			10,066			2,976			2,811
Interest cost	31,409			30,992			3,859			3,492
Participant contributions	—			—			562			542
Plan amendments	512			315			—			—
Plan settlements	—			—			(3,634		)	(1,157		)
Plan curtailments	—			—			(2,987		)	—
Benefits paid	(26,974		)	(25,531		)	(3,492		)	(3,509		)
Actuarial loss	100,780			43,146			4,011			938
Transfer in	—			—			7,224			—
Foreign currency exchange rate changes	—			—			(1,931		)	(3,641		)
Benefit obligation at the end of the year	$	728,557		$	612,346		$	76,163		$	69,575

Accumulated benefit obligation at the end of the year	$	681,561		$	572,965		$	59,973		$	57,790

	U.S. Pension Plans						Non-U.S. Pension Plans
(in thousands)	2011			2010			2011			2010
Change in Plan Assets:
Fair value of plan assets at the beginning of the year	$	476,899		$	434,006		$	52,260		$	50,554
Actual return on plan assets	15,047			52,302			1,955			5,131
Employer contributions	16,426			16,122			3,294			3,063
Participant contributions	—			—			562			542
Plan settlements	—			—			—			(1,189		)
Acquisition	—			—			5,531			—
Benefits paid	(26,974		)	(25,531		)	(3,492		)	(3,509		)
Foreign currency exchange rate changes	—			—			(1,482		)	(2,332		)
Fair value of plan assets at the end of the year	$	481,398		$	476,899		$	58,628		$	52,260

Funded (unfunded) status at year end:	$	(247,159	)	$	(135,447	)	$	(17,535	)	$	(17,315	)

	U.S. Pension Plans						Non-U.S. Pension Plans
(in thousands)	2011			2010			2011			2010
Amount recognized in consolidated balance sheet consists of:
Prepaid benefit cost, non-current	$	—		$	—		$	158		$	117
Accrued benefit liability, current	(29,837		)	(1,863		)	(299		)	(314		)
Accrued benefit liability, non-current	(217,322		)	(133,584		)	(17,394		)	(17,118		)
Sub-total	(247,159		)	(135,447		)	(17,535		)	(17,315		)
Deferred tax asset	129,052			93,907			4,084			2,559
Accumulated other comprehensive loss (income)	217,992			155,792			6,899			4,245
Net amount recognized in consolidated balance sheet	$	99,885		$	114,252		$	(6,552	)	$	(10,511	)

Accumulated other comprehensive income related to pension benefit plans is as follows:

	U.S. Pension Plans						Non-U.S. Pension Plans
(in thousands)	2011			2010			2011			2010
Unrecognized net actuarial losses	$	341,284		$	242,441		$	8,594		$	4,033
Unrecognized net prior service costs	5,760			7,258			558			642
Unrecognized net transition costs	—			—			1,831			2,129
Tax benefit	(129,052		)	(93,907		)	(4,084		)	(2,559		)
Accumulated other comprehensive loss (income), end of year	$	217,992		$	155,792		$	6,899		$	4,245

Estimated amounts in accumulated other comprehensive income expected to be reclassified to net period cost during 2012 are as follows:

			Non-U.S.
(in thousands)	U.S. Pension Plans		Pension Plans
Net actuarial losses	$	28,249	$	230
Net prior service costs	1,466		66
Net transition costs	—		256
Total	$	29,715	$	552

The accumulated benefit obligation for all defined benefit pension plans was $741.5 million and $630.8 million at December 31, 2011, and 2010, respectively.

Presented below are the projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets and pension plans with accumulated benefit obligations in excess of plan assets as of December 31, 2011 and 2010.

	Projected Benefit Obligation								Accumulated Benefit Obligation
	Exceeds the Fair Value of Plan’s Assets								Exceeds the Fair Value of Plan’s Assets
	U.S. Plans				Non-U.S. Plans				U.S. Plans				Non-U.S. Plans
(in thousands)	2011		2010		2011		2010		2011		2010		2011		2010
Projected benefit obligation	$	728,557	$	612,346	$	76,163	$	67,064	$	728,557	$	612,346	$	34,777	$	36,704
Accumulated benefit obligation	681,561		572,965		59,973		55,279		681,561		572,965		25,328		26,681
Fair value of plan assets	481,398		476,899		58,628		49,632		481,398		476,899		21,177		19,884

The Company’s general funding policy is to make contributions as required by applicable regulations and when beneficial to the Company for tax purposes. The employer contributions for the years ended December 31, 2011 and 2010, were $19.7 million and $19.2 million, respectively. Total expected cash contributions for 2012 are $65.2 million which are expected to satisfy plan and regulatory funding requirements.

For each of the years ended December 31, 2011 and 2010, the U.S. pension plans represented approximately 89 percent of the Company’s total plan assets and approximately 90 percent of the Company’s total projected benefit obligation. Considering the significance of the U.S. pension plans in comparison with the Company’s total pension plans, the critical pension assumptions related to the U.S. pension plans and the non-U.S. pension plans are separately presented and discussed below.

The Company’s actuarial valuation date is December 31. The weighted-average discount rates and rates of increase in future compensation levels used in determining the actuarial present value of the projected benefit obligation for the years ended December 31 are as follows:

	U.S. Pension Plans				Non-U.S. Pension Plans
	2011		2010		2011		2010
Weighted-average discount rate	4.25	%	5.25	%	4.68	%	5.13	%
Rate of increase in future compensation levels	4.25	%	4.25	%	3.73	%	3.73	%

The weighted-average discount rates, expected returns on plan assets, and rates of increase in future compensation levels used to determine the net benefit cost for the years ended December 31 are as follows:

	U.S. Pension Plans						Non-U.S. Pension Plans
	2011		2010		2009		2011		2010		2009
Weighted-average discount rate	5.25	%	5.75	%	6.00	%	5.28	%	5.42	%	5.82	%
Expected return on plan assets	8.25	%	8.25	%	8.25	%	6.34	%	6.25	%	6.16	%
Rate of increase in future compensation levels	4.25	%	4.25	%	4.25	%	3.93	%	3.90	%	3.90	%

The Pension Investment Committee appointed by the Company’s Board of Directors is responsible for overseeing the investments of the pension plans. The overall investment strategy is to achieve a long-term rate of return that maintains an adequate funded ratio and minimizes the need for future contributions through diversification of asset types, investment strategies, and investment managers. A target asset allocation policy is used to balance investments in equity securities with investments in fixed income securities. The majority of pension plan assets relate to U.S. plans and employ a target asset allocation of 70 percent equity securities and 30 percent fixed income securities. Equity securities primarily include investments in diversified portfolios of domestic large cap and small cap companies. Fixed income securities include diversified investments across a broad spectrum of primarily investment-grade debt securities.

The pension plan assets measured at fair value at December 31, 2011 and December 31, 2010 follow:

	2011
	U.S. Pension Plans						Non-U.S. Pension Plans
	Quoted Prices						Quoted Prices
	In Active		Significant				In Active		Significant
	Markets for		Other		Significant		Markets for		Other		Significant
	Identical		Observable		Unobservable		Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Assets		Inputs		Inputs
(in thousands)	(Level 1)		(Level 2)		(Level 3)		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	1,609	$	10,192	$	—	$	—	$	—	$	—
Corporate debt securities	—		65,661		2,653		—		—		—
U.S. Government debt securities	18,362		40,736		—		—		—		—
State and municipal debt securities	—		12,955		—		—		—		—
Corporate common stock	265,075		19,575		—		—		—		—
Registered investment company funds (a)	23,779		—		—		35,481		—		—
Common trust funds (b)	—		20,801		—		—		4,091		—
General insurance account (c)	—		—		—		—		—		19,055
Balance at December 31, 2011	$	308,825	$	169,920	$	2,653	$	35,481	$	4,091	$	19,055

	2010
	U.S. Pension Plans *						Non-U.S. Pension Plans
	Quoted Prices						Quoted Prices
	In Active		Significant				In Active		Significant
	Markets for		Other		Significant		Markets for		Other		Significant
	Identical		Observable		Unobservable		Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Assets		Inputs		Inputs
(in thousands)	(Level 1)		(Level 2)		(Level 3)		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	3,239	$	11,796	$	—	$	—	$	—	$	—
Corporate debt securities	—		60,529		598		—		—		—
U.S. Government debt securities	—		48,989		1,037		—		—		—
State and municipal debt securities	—		12,801		—		—		—		—
Corporate common stock	294,886		—		—		—		—		—
Registered investment company funds (a)	29,092		—		—		29,748		—		—
Common trust funds (b)	—		19,489		—		—		4,278		—
General insurance account (c)	—		—		—		—		—		18,234
Balance at December 31, 2010	$	327,217	$	153,604	$	1,635	$	29,748	$	4,278	$	18,234

(a) This category includes mutual funds that are actively traded on public exchanges. The funds are invested in equity and debt securities that are actively traded on public exchanges.

(b) Common trust funds consist of shares in commingled funds that are not publicly traded. The funds are invested in equity and debt securities that are actively traded on public exchanges.

* The table presenting the fair value of plan assets as of December 31, 2010, does not include a liability related to the U.S. pension plans’ participation in a securities lending program. The securities lending program authorized the pension plan trustee to lend securities, which are assets of the pension plans, to approved borrowers. The trustee requires that borrowers, pursuant to a securities lending agreement, deliver collateral to secure each loan. Cash collateral received was invested in collateral funds comprised primarily of high quality, short-term investments. As of December 31, 2010, the value of the loans outstanding exceeded the value of the invested collateral by $5.6 million. At December 31, 2011, the Company was no longer participating in the securities lending program.

The reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) for the years ended December 31, 2011 and 2010 follows:

	U.S. Govt.			Corporate			General
	Debt			Debt			Insurance
(in thousands)	Securities			Securities			Account
Fair value of plan assets at December 31, 2009	$	7,981		$	2,767		$	19,728
Actual return on plan assets	31			28			1,033
Purchases, sales and settlements, net	—			(32		)	(1,097		)
Transfers into (out of) Level 3 *	(6,975		)	(2,165		)	—
Foreign currency exchange rate changes	—			—			(1,430		)
Fair value of plan assets at December 31, 2010	$	1,037		$	598		$	18,234
Actual return on plan assets	—			854			1,254
Purchases, sales and settlements, net	—			671			249
Transfers into (out of) Level 3 *	(1,037		)	530			—
Foreign currency exchange rate changes	—			—			(682		)
Fair value of plan assets at December 31, 2011	$	—		$	2,653		$	19,055

* Transfers into and out of Level 3 are due to availability of observable market data for the same or similar securities.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

(in thousands)	U.S. Pension Plans		Non-U.S. Pension Plans
2012	$	57,841	$	1,910
2013	31,660		4,062
2014	40,198		4,151
2015	36,928		3,526
2016	39,191		8,198
Years 2017-2021	204,720		17,063

As of January 1, 2012, the expected long-term annual rate of return on plan assets was assumed to be 8.00 percent, which is a reduction of 0.25 percent from the Company’s January 1, 2011 assumption. To develop the expected long-term rate of return on assets assumption, the Company considered historical returns and future expectations. Using historical long-term investment periods of 10, 15, 20, and 25 years ended December 31, 2011, the Company’s pension plan assets have earned annualized rates of return of 3.7 percent, 6.4 percent, 7.4 percent, and 8.2 percent, respectively. Using the Company’s 2012 target asset allocation for plan assets of 60 percent equity securities and 40 percent fixed income securities, the Company’s outside actuaries have used their independent economic model to calculate a range of expected long-term rates of return and, based on their results, the Company has determined these assumptions to be reasonable.

At the end of each year, the Company determines the discount rate to be used to calculate the present value of its U.S. pension plan liabilities. This discount rate is an estimate of the current interest rate at which pension liabilities could be effectively settled at the end of the year. In estimating this rate, the Company looks to rates of return on high quality, fixed income investments that receive one of the two highest ratings given by a recognized ratings agency. For the years ended December 31, 2011 and 2010, the Company determined this rate to be 4.25 percent and 5.25 percent, respectively. For non-U.S. pension plans, similar methodologies are followed in determining the appropriate expected rates of return on assets and discount rates to be used in the actuarial calculations in each individual country.