Employee Retirement Plans

Pension Plans

The Company sponsors various funded and unfunded pension plans for a portion of its full-time employees in the United States. Benefits are generally based upon years of service and compensation. These plans are funded in conformity with the applicable government regulations. The Company funds at least the minimum amount required for all qualified plans using actuarial cost methods and assumptions acceptable under government regulations.

The components of net pension income for the three and six months ended June 30, 2016 and 2015, were as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Interest cost	$	(5.2	)	$	(6.7	)	$	(10.3	)	$	(13.4	)
Expected return on plan assets	7.9			8.7			15.8			17.4
Net pension income	$	2.7		$	2.0		$	5.5		$	4.0

For 2015, the Company measured interest costs utilizing a single weighted-average discount rate derived from the yield curve used to measure the plan obligations. Beginning in the first quarter of 2016, the Company changed the approach used to measure interest costs for pension benefits and elected to measure interest costs by applying the specific spot rates along that yield curve to the plans' liability cash flows. The new method would also impact the calculation of service costs, but this is not applicable to the Company's pension plans due to their frozen status. The Company made this change to provide a more precise measurement of interest costs by aligning the timing of the plans' liability cash flows to the corresponding spot rates on the yield curve. This change did not affect the measurement of the plan obligations. The Company has reflected this as a change in accounting estimate, and accordingly, has accounted for it on a prospective basis.

The Company made the following contributions and benefit payments to its defined benefit pension plans during the six months ended June 30, 2016:



	Six Months Ended
	June 30, 2016
Contributions on qualified pension plans	$	0.3
Benefit payments on non-qualified pension plans	1.0
Total	$	1.3

On April 1, 2016, the Company provided the option to receive a lump-sum pension payment to a select group of terminated vested participants. Total lump sum payments of $63.3 million have been paid from January 1, 2016 to July 15, 2016, of which $56.4 million was paid in July 2016 under the lump-sum program. The Company will record a non-cash settlement charge of $6.5 million during the third quarter of 2016 in connection with the lump sum payments. The settlement charge will be classified as restructuring, impairment and transaction-related charges in the condensed consolidated statement of operations.

Multiemployer Pension Plans ("MEPPs")

The Company has withdrawn from all significant MEPPs and replaced these union sponsored "promise to pay in the future" defined benefit plans with a Company sponsored "pay as you go" defined contribution plan. The two MEPPs, the Graphic Communications International Union – Employer Retirement Fund ("GCIU") and the Graphic Communications Conference of the International Brotherhood of Teamsters National Pension Fund ("GCC"), are significantly underfunded, and will require the Company to pay a withdrawal liability to fund its pro rata share of the underfunding as of the plan year the full withdrawal was completed. As a result of the decision to withdraw, the Company accrued a $98.6 million estimated withdrawal liability based on information provided by each plan's trustee, as part of the purchase price allocation for World Color Press.

The Company has received notices of withdrawal and demand for payment letters for both the GCIU and GCC plans, which, in total are in excess of the $98.6 million in original reserves established by the Company for the withdrawals. The Company is currently in litigation with the MEPPs' trustees to determine the amount and duration of the withdrawal payments. Arbitration proceedings with the GCIU and GCC have been completed, both sides have appealed the arbitrator's ruling, and litigation in Federal court has commenced. The withdrawal liability reserved by the Company is within the range of the Company's estimated potential outcomes. The Company made monthly payments totaling $5.8 million and $6.2 million for the six months ended June 30, 2016 and 2015, respectively, as required by the Employee Retirement Income Security Act, although such payments do not waive the Company's rights to object to the withdrawal liabilities submitted by the GCIU and GCC plan administrators.

The Company has reserved $41.8 million as its estimate of the total MEPPs withdrawal liability as of June 30, 2016, of which $25.7 million is recorded in other long-term liabilities, $10.6 million is recorded in accrued liabilities and $5.5 million is recorded in unsecured notes to be issued in the condensed consolidated balance sheets. This estimate may increase or decrease depending on the final conclusion of the litigation with the MEPPs' trustees.