Post-retirement benefits

Gates provides 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 June 30, 2018									Three months ended July 1, 2017
(dollars in millions)	Pensions			Other post-retirement benefits			Total			Pensions			Other post-retirement benefits			Total
Reported in operating income:
—Employer service cost	$	1.3		$	—		$	1.3		$	1.5		$	—		$	1.5
Reported outside of operating income:
—Interest cost	5.9			0.5			6.4			8.0			0.7			8.7
—Expected return on plan assets	(5.6		)	—			(5.6		)	(7.1		)	—			(7.1		)
—Amortization of net actuarial loss (gain)	0.1			(0.2		)	(0.1		)	0.1			(0.1		)	—
—Settlements	(0.1		)	—			(0.1		)	—			—			—
Net periodic benefit cost	$	1.6		$	0.3		$	1.9		$	2.5		$	0.6		$	3.1

Contributions	$	1.8		$	0.7		$	2.5		$	2.6		$	1.1		$	3.7



	Six months ended June 30, 2018									Six months ended July 1, 2017
(dollars in millions)	Pensions			Other post-retirement benefits			Total			Pensions			Other post-retirement benefits			Total
Reported in operating income:
—Employer service cost	$	2.7		$	—		$	2.7		$	2.8		$	—		$	2.8
Reported outside of operating income:
—Interest cost	11.9			1.1			13.0			15.8			1.4			17.2
—Expected return on plan assets	(11.4		)	—			(11.4		)	(14.1		)	—			(14.1		)
—Amortization of net actuarial loss (gain)	0.1			(0.4		)	(0.3		)	0.2			(0.1		)	0.1
—Settlements	0.3			—			0.3			—			—			—
Net periodic benefit cost	$	3.6		$	0.7		$	4.3		$	4.7		$	1.3		$	6.0

Contributions	$	4.0		$	2.0		$	6.0		$	4.4		$	2.4		$	6.8

The components of the above net periodic benefit cost for pensions and other post-retirement benefits that are reported outside of operating income are all included in the other (income) expense line in the condensed consolidated statement of operations.

For 2018 as a whole, Gates expects to contribute approximately $5.5 million to its defined benefit pension plans and approximately $6.1 million to its other post-retirement benefit plans.