Employee Benefit Plans

Pension Plans

Certain employees of the Company are covered by Company-sponsored qualified pension plans and a supplemental non-qualified, unfunded pension plan (collectively, the “pension plans”). These pension plans are defined benefit, noncontributory plans. Benefits paid to retirees are based upon age at retirement, years of credited service and average earnings. The Company uses a December 31 measurement date for the pension plans.

Effective as of December 31, 2016, the Company merged the assets and liabilities of the Company-sponsored qualified pension plans into a single, qualified pension plan. The merger did not affect the assets or liabilities of the pension plans.

The Company-sponsored pension plans are frozen for all employees except for employees represented by the United Steelworkers of America. The assets of the Company-sponsored qualified pension plan are maintained in a single trust account.

The Company’s funding policy is to satisfy the minimum funding requirements of the Employee Retirement Income Security Act of 1974, commonly called ERISA.

In conjunction with the restructuring activities in the second quarter of 2015, the Company recorded a pension curtailment charge of $2,923 and a pension settlement charge of $3,915 in the year ended December 31, 2015 related to the Company-sponsored defined benefit plans.

Components of net periodic pension plans (benefit) cost were as follows:



	2016			2015			2014
Service cost	$	377		$	549		$	453
Interest cost	5,182			6,938			6,885
Expected return on assets	(8,139		)	(9,395		)	(8,381		)
Amortization of prior service cost	200			244			282
Amortization of actuarial loss	1,832			4,018			1,717
Settlement charge	—			3,915			—
Curtailment charge	—			2,923			—
Net periodic pension plans (benefit) cost	$	(548	)	$	9,192		$	956

The expected amortization of pension prior service cost and actuarial loss for the next fiscal year are $199 and $947, respectively.

The status of the pension plans at December 31, 2016 and 2015 were as follows:



	2016			2015
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	162,941		$	193,322
Service cost	377			549
Interest cost	5,182			6,938
Settlement gain	—			(2,162		)
Curtailment loss	—			2,154
Benefit payments	(9,459		)	(25,383		)
Actuarial gain	(4,361		)	(12,477		)
Projected benefit obligation at end of year	$	154,680		$	162,941
Change in plan assets:
Fair value of plan assets at beginning of year	$	154,506		$	183,671
Actual return (loss) on assets	12,253			(4,140		)
Employer contributions	414			358
Benefit payments	(9,459		)	(25,383		)
Fair value of plan assets at end of year	$	157,714		$	154,506
Funded status – net asset (liability)	$	3,034		$	(8,435	)
Amounts recognized in the consolidated balance sheets consist of:
Prepaid pension cost	$	8,501		$	8,422
Accrued liabilities	(367		)	(362		)
Pension benefit obligations	(5,100		)	(16,495		)
Net amount recognized	$	3,034		$	(8,435	)
Pre-tax components of accumulated other comprehensive loss:
Unrecognized actuarial loss	$	(25,665	)	$	(35,972	)
Unrecognized prior service cost	(517		)	(717		)
Total	$	(26,182	)	$	(36,689	)
Accumulated benefit obligation	$	154,044		$	162,290

For the plans with an accumulated benefit obligation in excess of plan assets, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets were $5,467, $5,467 and $0, respectively, at December 31, 2016 and $62,953, $62,302 and $46,096, respectively, at December 31, 2015. The decrease in the amounts at December 31, 2016 compared to the amounts at December 31, 2015 is attributable to the merger of the Company-sponsored qualified pension plans effective as of December 31, 2016.

The assumptions used to measure the projected benefit obligations for the Company’s defined benefit pension plans were as follows:



	2016	2015
Discount rate	3.70 - 3.83%	4.00%
Projected annual salary increases	0 - 3.00%	0 - 3.00%

The assumptions used to determine net periodic pension cost were as follows:



	2016	2015	2014
Discount rate	4.00%	3.50 - 3.75%	4.50%
Expected long-term rate of return on plan assets	5.25%	5.25%	5.25%
Projected annual salary increases	0 - 3.00%	0 - 3.00%	0 - 3.00%

During the fourth quarter of 2015, the Company changed the methodology used to estimate the service and interest cost components of net periodic pension cost and net periodic postretirement benefit cost for the Company’s pension and other postretirement benefit plans. Previously, the Company estimated such cost components utilizing a single weighted-average discount rate derived from the market-observed yield curves of high-quality fixed income securities used to measure the pension benefit obligation and accumulated postretirement benefit obligation. The new methodology utilizes a full yield curve approach in the estimation of these cost components by applying the specific spot rates along the yield curve to their underlying projected cash flows and provides a more precise measurement of service and interest costs by improving the correlation between projected cash flows and their corresponding spot rates. The change does not affect the measurement of the Company’s pension obligation or accumulated postretirement benefit obligation. The Company accounted for this change as a change in accounting estimate and it was applied prospectively starting in 2016. The adoption of the spot rate approach reduced the service cost and interest cost components of net periodic pension and postretirement benefit costs by $1,206 in 2016.

The Company’s expected long-term rate of return on plan assets is derived from reviews of asset allocation strategies and historical and anticipated future long-term performance of individual asset classes. The Company’s analysis gives consideration to historical returns and long-term, prospective rates of return.

The Company’s pension plan assets are allocated entirely to fixed income securities at December 31, 2016 and 2015.

The Company’s pension plans’ funds are managed in accordance with investment policies recommended by its investment advisor and approved by the Human Resources Committee of the Board of Directors. The overall target portfolio allocation is 100% fixed income securities. These funds’ conformance with style profiles and performance is monitored regularly by management, with the assistance of the Company’s investment advisor. Adjustments are typically made in the subsequent quarters when investment allocations deviate from the target range. The investment advisor provides quarterly reports to management and the Human Resources Committee of the Board of Directors.

In May 2015, the FASB issued ASU No. 2015-07, "Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)," which removes the requirement to include investments in the fair value hierarchy for which fair value is measured using the net asset value per share practical expedient under Accounting Standards Codification 820. The Company adopted ASU No. 2015-07 in 2016, and the presentation of the Company's pension plan assets by level within the fair value hierarchy, as of December 31, 2015, has been retrospectively adjusted.

The fair values of the Company’s pension plan assets fall within the following levels of the fair value hierarchy as of December 31, 2016:



	Level 1		Level 2		Level 3		Total
Fixed income securities ^(a)	$	16,427	$	142,486	$	—	$	158,913
Investments measured at net asset value ^(a)							5,455
Accounts payable – pending trades							(6,654		)
Total							$	157,714

^(a)Fixed income securities are comprised of corporate bonds (87%), government bonds (4%), government agency securities (2%) and other fixed income securities (7%).

The fair values of the Company’s pension plan assets fall within the following levels of the fair value hierarchy as of December 31, 2015:



	Level 1		Level 2		Level 3		Total
Fixed income securities ^(b)	$	16,028	$	134,514	$	—	$	150,542
Investments measured at net asset value ^(b)							3,429
Accounts receivable – pending trades							535
Total							$	154,506

^(b) Fixed income securities are comprised of corporate bonds (96%), government agency securities (2%) and other fixed income securities (2%).

The estimated future pension benefit payments are:



2017	$	9,078
2018	9,183
2019	9,235
2020	9,324
2021	9,522
2022 — 2026	47,219

The Company was party to a multi-employer pension plan in Ohio. In connection with the April 2015 restructuring plan, the Company stated its intention to withdraw from the Ohio multi-employer pension plan. The liability associated with the withdrawal from this plan was initially estimated by the Company to be $5,500 at December 31, 2015. Based on additional information obtained by the Company during the year ended December 31, 2016, the estimated withdrawal obligation was reduced by $1,973, resulting in an estimated liability to withdraw from the plan of $3,527 at December 31, 2016. The initial estimate of the withdrawal obligation and the subsequent reduction are included in restructuring expense (income) in the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2015 and 2016, respectively.

Postretirement Plan

The Company also provides declining value life insurance to its retirees and a maximum of three years of medical coverage to qualified individuals who retire between the ages of 62 and 65. The Company does not fund these benefits in advance, and uses a December 31 measurement date.

Components of net periodic postretirement plan benefit for 2016, 2015 and 2014 were as follows:



	2016			2015			2014
Service cost	$	71		$	83		$	56
Interest cost	65			79			76
Amortization of actuarial gain	(209		)	(197		)	(336		)
Net periodic postretirement plan benefit	$	(73	)	$	(35	)	$	(204	)

The expected amortization of actuarial gain for the next fiscal year is insignificant.

The status of the postretirement plan at December 31, 2016 and 2015 was as follows:



	2016			2015
Change in accumulated postretirement benefit obligations:
Accumulated postretirement benefit obligation at beginning of year	$	2,427		$	2,552
Service cost	71			83
Interest cost	65			79
Benefit payments	(240		)	(202		)
Actuarial gain	(759		)	(85		)
Accumulated postretirement benefit obligation at end of year	$	1,564		$	2,427
Funded status – net liability	$	(1,564	)	$	(2,427	)
Amounts recognized in the consolidated balance sheets consist of:
Accrued liabilities	$	(234	)	$	(246	)
Postretirement benefit obligations	(1,330		)	(2,181		)
Net amount recognized	$	(1,564	)	$	(2,427	)
Pre-tax components of accumulated other comprehensive loss:
Unrecognized actuarial gain	$	2,574		$	2,024
Total	$	2,574		$	2,024

The assumed health care cost trend rates for medical plans at December 31 were as follows:



	2016	2015	2014
Medical cost trend rate	6.00%	6.50%	7.00%
Ultimate medical cost trend rate	5.00%	5.00%	5.00%
Year ultimate medical cost trend rate will be reached	2019	2019	2019

A 1% increase in the health care cost trend rate assumptions would have increased the accumulated postretirement benefit obligation at December 31, 2016 by $47 with no significant impact on the annual periodic postretirement benefit cost. A 1% decrease in the health care cost trend rate assumptions would have decreased the accumulated postretirement benefit obligation at December 31, 2016 by $44 with no significant impact on the annual periodic postretirement benefit cost.

The weighted average discount rate used to determine the net periodic postretirement benefit costs and the accumulated postretirement benefit obligations were as follows:



	2016	2015	2014
Net periodic postretirement benefit costs	3.50%	3.25%	4.00%
Accumulated postretirement benefit obligations	3.61%	3.50%	3.25%

Retirement Savings Plans

The Company’s retirement savings plan for U.S. employees includes features under Section 401(k) of the Internal Revenue Code. The Company provides a 401(k) matching contribution of 100% of each dollar on eligible employee contributions up to the first 6% of the employee’s pre-tax compensation. Company contributions cliff vest after two years of employment.

The amounts expensed by the Company relating to its 401(k) plan and other international retirement plans were $2,725, $3,386 and $3,296 for the years ended December 31, 2016, 2015 and 2014, respectively.