Post-retirement benefits

Gates operates defined benefit pension plans in certain of the countries in which it operates, in particular, in the U.S. and U.K. All of the defined benefit pension plans are closed to new entrants. In addition to the funded defined benefit pension plans, Gates has unfunded defined benefit obligations to certain current and former employees.

Gates also provides other post-retirement benefits, principally health and life insurance coverage, on an unfunded basis to certain of its employees in the U.S. and Canada.

Net periodic benefit cost

The components of the net periodic benefit cost for pensions and other post-retirement benefits were as follows:



	Three months ended March 31, 2018									Three months ended April 1, 2017
(dollars in millions)	Pensions			Other post-retirement benefits			Total			Pensions			Other post-retirement benefits		Total
Reported in operating income:
—Employer service cost	$	1.4		$	—		$	1.4		$	1.3		$	—	$	1.3
Reported outside of operating income:
—Interest cost	6.0			0.6			6.6			7.8			0.7		8.5
—Expected return on plan assets	(5.8		)	—			(5.8		)	(7.0		)	—		(7.0		)
—Amortization of net actuarial (gain) loss	—			(0.2		)	(0.2		)	0.1			—		0.1
—Settlements	0.4			—			0.4			—			—		—
Net periodic benefit cost	$	2.0		$	0.4		$	2.4		$	2.2		$	0.7	$	2.9

Contributions

During the three months ended March 31, 2018, Gates contributed $2.2 million, compared with $1.8 million for the three months ended April 1, 2017, to its defined benefit pension plans and $1.3 million, compared with $1.3 million for the three months ended April 1, 2017, to its other post-retirement benefit plans. For 2018 as a whole, Gates expects to contribute approximately $6.3 million to its defined benefit pension plans and approximately $6.1 million to its other post-retirement benefit plans.

Amounts reclassified from accumulated other comprehensive income

During the three months ended March 31, 2018, $0.2 million of actuarial gains, compared with $0.1 million actuarial losses during the three months ended April 1, 2017, were reclassified from other comprehensive income to the selling, general and administrative expenses line item in the condensed consolidated statements of operations.

Settlements

In September 2017, Gates completed an annuity purchase for most of the retirees in its largest U.S. defined benefit pension plan. The $154.0 million purchase price, funded from plan assets, settled $155.1 million of the pension benefit obligation. The net post-retirement benefit obligation has therefore reduced by $1.1 million. In connection with this transaction, a settlement gain of $3.9 million was recognized as part of the net periodic benefit cost.