Retirement Plans

We have various pension plans (“Pension Plans”), which we fund in accordance with their requirements and, where applicable, in amounts sufficient to satisfy the minimum funding requirements of applicable laws. The Pension Plans provide benefits based on years of service and compensation or at stated amounts for each year of service.

We formerly provided certain postretirement benefits other than pensions, primarily healthcare, to eligible retirees. Our postretirement benefit plans were funded as benefits were paid.

On April 1, 2012, we changed certain provisions of our pension and postretirement benefit plans affecting U.S. Pipe participants in these plans. These changes vested all accumulated pension benefits and then froze the plan such that no additional pension benefits would accumulate. Postretirement medical benefits ceased on December 31, 2012. Related to this cessation of benefits, we recorded a benefit of $7.4 million, which is included in income from discontinued operations in 2013. During 2012, we recorded a pension curtailment expense of $0.2 million and an other postretirement benefit plan curtailment gain of $2.4 million, which was included in loss from discontinued operations for 2012.

The measurement date for all Pension Plans and other postretirement benefit plans was September 30.

We were not required to make, and we did not make, any contributions to our U.S. pension plan in 2014. We currently estimate we will contribute approximately $1 million to our Pension Plans in 2015.

The components of net periodic benefit cost are presented below.



	2014			2013			2012
	(in millions)
Service cost	$	1.7		$	2.0		$	1.8
Interest cost	19.9			18.3			20.2
Expected return on plan assets	(23.8		)	(25.1		)	(24.0		)
Amortization of prior service cost	—			—			0.6
Amortization of net loss	3.5			9.0			6.0
Curtailment / special settlement loss	0.1			0.1			0.2
Costs allocated to discontinued operations	—			—			(1.1		)
Other	0.1			—			—
Net periodic benefit cost	$	1.5		$	4.3		$	3.7

Balance sheet information for Pension Plans with accumulated benefit obligations in excess of plan assets is presented below.



	September 30,
	2014		2013
	(in millions)
Projected benefit obligations	$	459.9	$	390.4
Accumulated benefit obligations	459.9		390.4
Fair value of plan assets	407.6		384.8

Balance sheet information for Pension Plans with accumulated benefit obligations less than plan assets is presented below.



	September 30,
	2014		2013
	(in millions)
Projected benefit obligations	$	1.6	$	9.2
Accumulated benefit obligations	1.6		9.1
Fair value of plan assets	2.9		10.4

Amounts recognized for our Pension Plans and other postretirement benefit plans are presented below.



	Pension Plans						Other Plans
	2014			2013			2013
	(in millions)
Projected benefit obligations:
Beginning of year	$	399.6		$	448.3		$	0.2
Service cost	1.7			2.0			—
Interest cost	19.9			18.3			—
Actuarial loss (gain)	67.3			(42.5		)	—
Benefits paid	(26.0		)	(26.0		)	(0.2		)
Currency translation	(0.8		)	(0.5		)	—
Decrease in obligation due to curtailment	(0.2		)	—			—
End of year	$	461.5		$	399.6		$	—
Accumulated benefit obligations at end of year	$	461.5		$	399.5		$	—
Plan assets:
Beginning of year	$	395.2		$	387.1		$	—
Actual return on plan assets	42.1			34.4			—
Employer contributions	0.1			0.2			0.2
Currency translation	(0.9		)	(0.5		)	—
Benefits paid	(26.0		)	(26.0		)	(0.2		)
End of year	$	410.5		$	395.2		$	—
Accrued benefit cost at end of year:
Unfunded status	$	(51.0	)	$	(4.4	)	$	—
Recognized on balance sheet:
Other noncurrent assets	$	1.3		$	1.3		$	—
Other noncurrent liabilities	(52.3		)	(5.7		)	—
	$	(51.0	)	$	(4.4	)	$	—
Recognized in accumulated other comprehensive loss, before tax:
Prior year service cost	$	0.1		$	0.2		$	—
Net actuarial loss	119.7			74.5			—
	$	119.8		$	74.7		$	—

Change in actuarial loss (gain) in 2014 is due to actual rates of return on plans assets being lower than projected and the adoption of new mortality tables issued by the Society of Actuaries due to the increasing lifespan of North Americans.

Our U.S. plan comprised 98% of the Pension Plans' obligations and 97% of the Pension Plans' assets at September 30, 2014.

Pension Plan activity in accumulated other comprehensive loss, before tax, in 2014 is presented below, in millions.



Balance at beginning of year	$	74.7
Actuarial gain	48.9
Prior year service loss amortization to net periodic cost	(3.5		)
Other	(0.3		)
Balance at end of year	$	119.8

Beginning in 2015, we will amortize amounts in accumulated other comprehensive loss representing unrecognized prior year service cost and unrecognized loss related to our U.S. pension plan over the weighted average life expectancy of the plan's inactive participants instead of the weighted average remaining service period for active participants, as we have done through 2014. We do not expect the effect of this change to be material to our consolidated financial statements. The components of accumulated other comprehensive loss related to pension that we expect to amortize into net periodic benefit cost in 2015 are presented below, in millions.



Amortization of unrecognized prior year service cost	$	—
Amortization of unrecognized loss	3.2
	$	3.2

The discount rates for determining the present value of pension obligations were selected using a “bond settlement” approach, which constructs a hypothetical bond portfolio that could be purchased such that the coupon payments and maturity values could be used to satisfy the projected benefit payments. The discount rate is the equivalent rate that results in the present value of the projected benefit payments equaling the market value of this bond portfolio. Only high quality (AA graded or higher), non-callable corporate bonds are included in this bond portfolio. We rely on the Pension Plans' actuaries to assist in the development of the discount rate model.

Separate discount rates were selected for different plans due to differences in the timing of projected benefit payments. The discount rate model for the plan covering participants in the United States reflected yields available on investments in the United States, while plans covering participants in Canada reflected yields available on investments in Canada. The discount rate for the other postretirement benefit plans was remeasured at April 1, 2012 to 5.00%.

Management's expected returns on plan assets and assumed healthcare cost trend rates were determined with the assistance of the Pension Plans' actuaries and investment consultants. Expected returns on plan assets were developed using forward looking returns over a time horizon of 10 to 15 years for major asset classes along with projected risk and historical correlations.

A summary of key assumptions for our pension and other postretirement benefit plans is below.



	Pension Plans						Other Plans
	2014		2013		2012		2013	2012
Weighted average used to determine benefit obligations:
Discount rate	4.49	%	5.16	%	4.21	%	n/a	4.22	%
Rate of compensation increases	3.50		3.50		3.50		n/a	n/a
Weighted average used to determine net periodic cost:
Discount rate	5.16	%	4.21	%	5.66	%	n/a	5.69	%
Expected return on plan assets	6.24		6.71		6.95		n/a	n/a
Rate of compensation increases	3.50		3.50		3.50		n/a	n/a

Assumed discount rates, expected return on plan assets and salary increases affect the amounts reported for the Pension Plans. The effects of a one-percentage-point change in the trend rate for these assumptions are below.



	1 Percentage point increase			1 Percentage point decrease
	(in millions)
Discount rate:
Effect on pension service and interest costs	$	(0.1	)	$	0.7
Effect on pension benefit obligations	(50.3		)	61.8
Effect on 2015 service and interest costs	(0.5		)	0.5
Expected return on plan assets:
Effect on 2015 service and interest costs	(4.0		)	4.0

We maintain a single trust to hold the assets of the U.S. pension plan. During 2013, the strategic asset allocation was adjusted to 40% equity investments from 60% equity investments. This trust's strategic asset allocations, tactical range at September 30, 2014 and actual asset allocations are presented below.



	Strategic asset allocation					Actual asset allocations at
						September 30,
			Tactical range			2014		2013		2012
Equity investments:
Large capitalization stocks	26	%
Small capitalization stocks	5
International stocks	9
	40		30	-	50%	40	%	40	%	59	%
Fixed income investments	60		50	-	70	59		59		39
Cash	—		0	-	5	1		1		2
	100	%				100	%	100	%	100	%

Assets of the Pension Plans are allocated to various investments to attain diversification and reasonable risk-adjusted returns while also managing the exposure to asset and liability volatility. These ranges are targets and deviations may occur from time to time due to market fluctuations. Portfolio assets are typically rebalanced to the allocation targets at least annually. The valuation methodologies used to measure the assets of the Pension Plans at fair value are:


•	Equity investments are valued at the closing price reported on the active market when reliable market quotations are readily available. When market quotations are not readily available, assets of the Pension Plans are valued by a method the trustees of the Pension Plans believe accurately reflects fair value;


•	Fixed income fund investments are valued using the closing price reported in the active market in which the investment is traded or based on yields currently available on comparable securities of issuers with similar credit ratings; and


•	Other investments are valued as determined by the trustees of the Pension Plans based on their net asset values and supported by the value of the underlying securities and by the unit prices of actual purchase and sale transactions occurring at or close to the financial statement date.

The assets of the Pension Plans by level within the fair value hierarchy are presented below.



	September 30, 2014
	Level 1		Level 2		Total
	(in millions)
Equity:
Large cap stocks:
Large cap growth funds	$	—	$	31.5	$	31.5
Large cap index funds	—		35.9		35.9
Large cap value funds	—		15.3		15.3
Small cap stocks:
Small cap growth funds	—		18.5		18.5
International stocks:
Mutual funds	45.9		—		45.9
International funds	—		15.4		15.4
Total equity	45.9		116.6		162.5
Fixed income	—		243.5		243.5
Cash and cash equivalents	4.5		—		4.5
	$	50.4	$	360.1	$	410.5



	September 30, 2013
	Level 1		Level 2		Total
	(in millions)
Equity:
Large cap stocks:
Large cap growth funds	$	—	$	31.7	$	31.7
Large cap index funds	—		26.1		26.1
Large cap value funds	—		16.3		16.3
Large cap growth mutual funds	16.1		—		16.1
Small cap stocks:
Small cap growth funds	—		23.5		23.5
International stocks:
Mutual funds	31.5		—		31.5
International funds	—		15.7		15.7
Total equity	47.6		113.3		160.9
Fixed income	—		229.8		229.8
Cash and cash equivalents	4.5		—		4.5
	$	52.1	$	343.1	$	395.2

Our estimated future pension benefit payments are presented below in millions.



2015	$	27.6
2016	26.8
2017	27.0
2018	27.3
2019	27.5
2020-2024	141.0

Defined Contribution Retirement Plans-Certain of our employees participate in defined contribution 401(k) plans or similar non-U.S plans. We make matching contributions as a function of employee contributions. Matching contributions were $5.6 million, $5.1 million and $4.7 million during 2014, 2013 and 2012, respectively.