Pension And Postretirement Benefits

12 Months Ended

Dec. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Pension And Postretirement Benefits

Pension and Postretirement Benefits

In the United States, the Company sponsors a defined benefit pension plan that covers approximately 21% of all U.S. employees. In the fourth quarter of 2012, the Company announced that pension eligible employees will no longer earn future benefits in the domestic defined benefit pension plan effective January 1, 2013. The benefits are based on years of service and compensation on a final average pay basis, except for certain hourly employees where benefits are fixed per year of service. This plan is funded with a trustee in respect of past and current service. Charges to expense are based upon costs computed by an independent actuary. Contributions are intended to provide for future benefits earned to date. A number of the Company’s non-U.S. subsidiaries sponsor defined benefit pension plans that cover approximately 11% of all non-U.S. employees. The benefits are typically based upon years of service and compensation. These plans are funded with trustees in respect of past and current service.

Non-union employees hired after December 31, 2005 are no longer eligible for participation in the ELDEC Corporation (“ELDEC”) and Interpoint Corporation (“Interpoint”) money purchase plan. Qualifying employees receive an additional 2% Company contribution to their 401(K) plan accounts. Certain of the Company’s non-U.S. defined benefit pension plans were also amended whereby eligibility for new participants will cease.

Postretirement health care and life insurance benefits are provided for certain employees hired before January 1, 1990, who meet minimum age and service requirements. The Company does not pre-fund these benefits and has the right to modify or terminate the plan.

A summary of benefit obligations, fair value of plan assets and funded status is as follows:

	Pension Benefits						Postretirement Benefits
(in thousands) December 31,	2014			2013			2014			2013
Change in benefit obligation:
Beginning of year	$	934,349		$	906,264		$	10,967		$	12,620
Service cost	4,923			6,383			85			90
Interest cost	40,935			36,845			385			372
Plan participants’ contributions	739			1,291			—			—
Amendments	—			264			34			—
Actuarial (gain) loss	192,715			(24,402		)	(1,802		)	(864		)
Settlement	—			—			—			—
Benefits paid	(41,704		)	(36,788		)	(1,044		)	(1,226		)
Foreign currency exchange impact	(38,136		)	7,509			(33		)	(25		)
Acquisition/divestitures/curtailment	—			37,681			—			—
Adjustment for expenses/tax contained in service cost	(652		)	(698		)	—			—
Benefit obligation at end of year	$	1,093,169		$	934,349		$	8,592		$	10,967
Change in plan assets:
Fair value of plan assets at beginning of year	$	870,692		$	735,580
Actual return on plan assets	54,669			108,016
Foreign currency exchange impact	(33,232		)	4,235
Employer contributions	24,467			14,703
Administrative expenses paid	(1,041		)	(1,218		)
Acquisitions	—			44,873
Plan participants’ contributions	739			1,291
Settlement	—			—
Benefits paid	(41,704		)	(36,788		)
Fair value of plan assets at end of year	$	874,590		$	870,692		$	—		$	—
Funded status	$	(218,579	)	$	(63,657	)	$	(8,592	)	$	(10,967	)

Amounts recognized in the Consolidated Balance Sheets consist of:

	Pension Benefits						Postretirement Benefits
(in thousands) December 31,	2014			2013			2014			2013
Other assets	$	53,088		$	78,688		$	—		$	—
Current liabilities	(1,041		)	(1,024		)	(965		)	(1,155		)
Accrued pension and postretirement benefits	(270,626		)	(141,321		)	(7,627		)	(9,812		)
Funded status	$	(218,579	)	$	(63,657	)	$	(8,592	)	$	(10,967	)

Amounts recognized in accumulated other comprehensive loss (income) consist of:

	Pension Benefits				Postretirement Benefits
(in thousands) December 31,	2014		2013		2014			2013
Net actuarial loss (gain)	$	363,546	$	177,177	$	(3,145	)	$	(1,531	)
Prior service cost (credit)	855		973		(626		)	(891		)
Transition asset	—		—		—			—
	$	364,401	$	178,150	$	(3,771	)	$	(2,422	)

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the U.S. and Non-U.S. plans, are as follows:

	Pension Obligations/Assets
	U.S.				Non-U.S.				Total
(in millions) December 31,	2014		2013		2014		2013		2014		2013
Projected benefit obligation	$	581.8	$	470.8	$	511.4	$	463.5	$	1,093.2	$	934.3
Accumulated benefit obligation	581.8		470.8		496.7		450.8		1,078.5		921.6
Fair value of plan assets	414.2		409.1		460.4		462.0		874.6		871.1

Information for pension plans with an accumulated benefit obligation in excess of plan assets is as follows:

	Pension Benefits
(in thousands) December 31,	2014		2013
Projected benefit obligation	$	910,309	$	729,759
Accumulated benefit obligation	896,357		717,549
Fair value of plan assets	638,778		587,426

Components of Net Periodic Benefit Cost are as follows:

	Pension Benefits									Postretirement Benefits
(in thousands) December 31,	2014			2013			2012			2014			2013			2012
Net Periodic Benefit Cost:
Service cost	$	4,923		$	6,383		$	13,503		$	85		$	90		$	108
Interest cost	40,935			36,845			37,653			385			372			498
Expected return on plan assets	(62,575		)	(52,225		)	(51,437		)	—			—			—
Amortization of prior service cost	119			23			402			(231		)	(236		)	(236		)
Amortization of net loss (gain)	5,067			13,861			19,403			(199		)	(46		)	(139		)
Recognized curtailment loss	—			(288		)	460			—			—			—
Settlement costs	—			—			(125		)	—			—
Special termination benefits	—			—			—			—			—			—
Net periodic benefit cost	$	(11,531	)	$	4,599		$	19,859		$	40		$	180		$	231

The estimated net loss and prior service cost for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $12.4 million and $0.1 million, respectively. The estimated net gain and prior service cost for the postretirement plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $0.6 million and $0.2 million, respectively.

The weighted average assumptions used to determine benefit obligations are as follows:

	Pension Benefits						Postretirement Benefits
December 31,	2014		2013		2012		2014		2013		2012
U.S. Plans:
Discount rate	4.10	%	4.90	%	4.20	%	3.90	%	3.90	%	3.20	%
Rate of compensation increase	N/A		3.50	%	3.50	%
Non-U.S. Plans:
Discount rate	3.01	%	4.05	%	3.93	%
Rate of compensation increase	2.40	%	2.56	%	3.14	%

The weighted-average assumptions used to determine net periodic benefit cost are as follows:

	Pension Benefits						Postretirement Benefits
December 31,	2014		2013		2012		2014		2013		2012
U.S. Plans:
Discount rate	4.90	%	4.20	%	5.00	%	3.30	%	3.20	%	4.25	%
Expected rate of return on plan assets	7.75	%	7.75	%	8.25	%
Rate of compensation increase	N/A		3.50	%	3.50	%
Non-U.S. Plans:
Discount rate	4.05	%	3.93	%	4.56	%
Expected rate of return on plan assets	7.01	%	7.01	%	7.00	%
Rate of compensation increase	2.56	%	3.14	%	3.89	%

The long term expected rate of return on plan assets assumptions were determined by the Company with input from independent investment consultants and plan actuaries, utilizing asset pricing models and considering historical returns. The discount rates used by the Company for valuing pension liabilities are based on a review of high quality corporate bond yields with maturities approximating the remaining life of the projected benefit obligations.

In the U.S. Plan, the 7.75% expected rate of return on assets assumption for 2014 reflected a long-term asset allocation target comprised of an asset allocation range of 25%-75% equity securities, 15%-35% fixed income securities, 10%-35% alternative assets, and 0%-10% cash. As of December 31, 2014, the actual asset allocation for the U.S. plan was 61% equity securities, 14% fixed income securities, 22% alternative assets, and 3% cash and cash equivalents.

For the non-U.S. Plans, the 7.01% expected rate of return on assets assumption for 2014 reflected a weighted average of the long-term asset allocation targets for our various international plans. As of December 31, 2014, the actual weighted average asset allocation for the non-U.S. plans was 42% equity securities, 39% fixed income securities, 17% alternative assets/other, and 2% cash and cash equivalents.

The assumed health care cost trend rates are as follows:

December 31,	2014		2013
Health care cost trend rate assumed for next year	6.50	%	7.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.75	%	4.75	%
Year that the rate reaches the ultimate trend rate	2019		2019

Assumed health care cost trend rates have a significant effect on the amounts reported for the Company’s health care plans.

A one-percentage-point change in assumed health care cost trend rates would have the following effects:

(in thousands)	One Percentage Point Increase	One Percentage Point (Decrease)
Effect on total of service and interest cost components	27.6	(25.2	)
Effect on postretirement benefit obligation	388.0	(360.5	)

Plan Assets

The Company’s pension plan target allocations and weighted-average asset allocations by asset category are as follows:

		Actual Allocation
Asset Category December 31,	Target Allocation	2014		2013
Equity securities	35%-75%	51	%	55	%
Fixed income securities	20%-50%	27	%	28	%
Alternative assets/Other	0%-20%	20	%	14	%
Money market	0%-10%	2	%	3	%

The Company’s pension investment committees and trustees, as applicable, exercise reasonable care, skill and caution in making investment decisions. Independent investment consultants are retained to assist in executing the plans’ investment strategies. A number of factors are evaluated in determining if an investment strategy will be implemented in the Company’s pension trusts. These factors include, but are not limited to, investment style, investment risk, investment manager performance

and costs.

The primary investment objective of the Company’s various pension trusts is to maximize the value of plan assets, focusing on capital preservation, current income and long-term growth of capital and income. The plans’ assets are typically invested in a broad range of equity securities, fixed income securities, alternative assets and cash instruments. The Company’s investment strategies across its pension plans worldwide results in a global target asset allocation range of 35%-75% equity securities, 20%-50% fixed income securities, 0%-20% alternative assets, and 0%-10% money market, as noted in the table above.

Equity securities include investments in large-cap, mid-cap, and small-cap companies located in both developed countries and emerging markets around the world. Fixed income securities include government bonds of various countries, corporate bonds that are primarily investment-grade, and mortgage-backed securities. Alternative assets include investments in hedge funds with a wide variety of strategies.

The Company periodically reviews investment managers and their performance in relation to the plans’ investment objectives. The Company expects its pension trust investments to meet or exceed their predetermined benchmark indices, net of fees. Generally, however, the Company realizes that investment strategies should be given a full market cycle, normally over a three to five year time period, to achieve stated objectives.

Equity securities include Crane Co. common stock, which represents 4% and 5% of plan assets at December 31, 2014 and 2013, respectively.

The fair value of the Company’s pension plan assets at December 31, 2014, by asset category are as follows:

(in thousands)	Active Markets for Identical Assets Level 1		Other Observable Inputs Level 2		Unobservable Inputs Level 3		Total Fair Value
Cash and Money Markets	$	18,796	$	—	$	—	$	18,796
Common Stocks
Actively Managed U.S. Equities	145,067		—		—		145,067
Fixed Income Bonds and Notes	—		46,065		—		46,065
Commingled and Mutual Funds
U.S. Equity Funds	—		100,782		—		100,782
Non-U.S. Equity Funds	—		202,609		—		202,609
U.S. Fixed Income, Government and Corporate	—		11,498		—		11,498
U.S. Tactical Allocation Balanced Fund	—		15,972		—		15,972
Non-U.S. Fixed Income, Government and Corporate	—		177,548		—		177,548
International Balanced Funds	—		10,127		—		10,127
Alternative Investments
Hedge Funds	—		90,307		—		90,307
International Property Funds	—		53,442		—		53,442
Commodities Funds	—		1,406		—		1,406
Annuity Contract	—		971		—		971
Total Fair Value	$	163,863	$	710,727	$	—	$	874,590

For the year ended December 31, 2014, there were no significant transfers between levels.

The fair value of the Company’s pension plan assets at December 31, 2013, by asset category are as follows:

(in thousands)	Active Markets for Identical Assets Level 1		Other Observable Inputs Level 2		Unobservable Inputs Level 3		Total Fair Value
Cash and Money Markets	$	19,425	$	—	$	—	$	19,425
Common Stocks
Actively Managed U.S. Equities	142,595		—		—		142,595
Fixed Income Bonds and Notes	—		26,449		—		26,449
Commingled and Mutual Funds
U.S. Equity Funds	—		103,606		—		103,606
Non-U.S. Equity Funds	—		220,794		—		220,794
U.S. Fixed Income, Government and Corporate	—		32,720		—		32,720
U.S. Tactical Allocation Balanced Fund	—		15,845		—		15,845
Non-U.S. Fixed Income, Government and Corporate	—		141,407		—		141,407
International Balanced Funds	—		54,724		—		54,724
Alternative Investments
Hedge Funds	—		72,053		—		72,053
International Property Funds	—		38,449		—		38,449
Commodities Funds	—		1,639		—		1,639
Annuity Contract	—		986		—		986
Total Fair Value	$	162,020	$	708,672	$	—	$	870,692

For the year ended December 31, 2013, there were no significant transfers between levels.

The following table sets forth a summary of pension plan assets valued using Net Asset Value (NAV) or its equivalent as of December 31, 2014:

( dollars in thousands)	Fair Value*		Redemption Frequency	Unfunded Commitment	Other Redemption Restrictions	Redemption Notice Period
Archstone Offshore Fund, Ltd(a)	$	36,313	12 Months	None	None	90 days written
Evanston Capital Management(a)	$	30,911	12 Months	None	None	60 days written
Strategic Value Fund(b)	$	7,692	12 Months	None	None	90 days written
U.S. Equity Funds(c)	$	100,782	immediate	None	None	None
Non-U.S. Equity Funds(d)	$	202,609	immediate	None	None	None
Non-U.S. Fixed Income, Government and Corporate(e)	$	177,548	immediate	None	None	None
International Property Funds(f)	$	53,442	immediate	None	None	None
International Balanced Funds(g)	$	10,127	immediate	None	None	None
U.S. Government and Corporate Fixed Income(h)	$	11,498	immediate	None	None	None
U.S. Tactical Allocation Balanced Fund(i)	$	15,972	immediate	None	None	None
Commodities & Metals Fund (j)	$	1,406	immediate	None	None	None
Non-US Tactical/Alternative Fund (k)	$	15,391	immediate	None	None	None

* The fair values of the investments have been estimated using the net asset value of the investment

(a) These funds are alternative assets which seeks to outperform equities while maintaining a lower risk profile than equities.

(b) This fund is an alternative investment that invests in distressed debt instruments seeking price appreciation.

(c) These funds invest in U.S. equity securities and seeks to meet or exceed relative benchmarks.

(d) These funds invest in equity securities outside the U.S. and seek to meet or exceed relative benchmarks.

(e) These funds invest in Corporate and Governments fixed income securities outside the U.S. and seek to meet or exceed relative benchmarks.

(f) These funds invest in real property outside the U.S.

(g) These funds invest in a pre defined mix of non-U.S. equity and non-U.S. fixed income securities and seek to meet or exceed the performance of a passive/local benchmark of similar mixes.

(h) These funds invest in U.S. fixed income securities, corporate, government and agency, and seek to outperform the Barclays Capital Aggregate Index.

(i) These funds invest in a blend of equities, fixed income, cash and property in the U.S. and seek to outperform a similarly weighted index.

(j) These funds invest in various commodities and precious metals

(k) These funds invest in traditional and alternative strategies and seek to add diversification while adding returns greater than equity in a non-correlated approach

The following table sets forth a summary of pension plan assets valued using Net Asset Value (NAV) or its equivalent as of December 31, 2013:

( dollars in thousands)	Fair Value*		Redemption Frequency	Unfunded Commitment	Other Redemption Restrictions	Redemption Notice Period
Archstone Offshore Fund, Ltd(a)	$	35,590	12 Months	None	None	90 days written
Evanston Capital Management(a)	$	29,032	12 Months	None	None	60 days written
Strategic Value Fund(b)	$	7,430	12 Months	None	None	90 days written
U.S. Equity Funds(c)	$	103,606	immediate	None	None	None
Non-U.S. Equity Funds(d)	$	220,794	immediate	None	None	None
Non-U.S. Fixed Income, Government and Corporate(e)	$	141,407	immediate	None	None	None
International Property Funds(f)	$	38,449	immediate	None	None	None
International Balanced Funds(g)	$	54,724	immediate	None	None	None
U.S. Government and Corporate Fixed Income(h)	$	32,720	immediate	None	None	None
U.S. Tactical Allocation Balanced Fund(i)	$	15,845	immediate	None	None	None
Commodities & Metals Fund (j)	$	1,639	immediate	None	None	None

* The fair values of the investments have been estimated using the net asset value of the investment

(a) These funds are alternative assets which seeks to outperform equities while maintaining a lower risk profile than equities.

(b) This fund is an alternative investment that invests in distressed debt instruments seeking price appreciation.

(c) These funds invest in U.S. equity securities and seeks to meet or exceed relative benchmarks.

(d) These funds invest in equity securities outside the U.S. and seek to meet or exceed relative benchmarks.

(e) These funds invest in Corporate and Governments fixed income securities outside the U.S. and seek to meet or exceed relative benchmarks.

(f) These funds invest in real property outside the U.S.

(g) These funds invest in a pre defined mix of non-U.S. equity and non-U.S. fixed income securities and seek to meet or exceed the performance of a passive/local benchmark of similar mixes.

(h) These funds invest in U.S. fixed income securities, corporate, government and agency, and seek to outperform the Barclays Capital Aggregate Index.

(i) These funds invest in a blend of equities, fixed income, cash and property in the U.S. and seek to outperform a similarly weighted index.

(j) These funds invest in various commodities and precious metals

Cash Flows  

The Company expects, based on current actuarial calculations, to contribute cash of approximately $17 million to its defined benefit pension plans and $1 million to its other postretirement benefit plan in 2015. Cash contributions in subsequent years will depend on a number of factors including the investment performance of plan assets.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

Estimated future payments (in thousands)	Pension Benefits		Postretirement Benefits
2015	$	41,493	$	981
2016	42,346		947
2017	43,225		971
2018	45,752		961
2019	46,598		914
2020-2024	264,989		3,297
Total payments	$	484,403	$	8,071

The Company’s subsidiaries ELDEC and Interpoint have a money purchase plan to provide retirement benefits for all eligible employees. The annual contribution in 2014 was 3% of each eligible participant’s gross compensation. The contributions were $1.1 million in 2014, $2.2 million in 2013 and $2.2 million in 2012.

The Company and its subsidiaries sponsor savings and investment plans that are available to eligible employees of the Company and its subsidiaries. The Company made contributions to the plans of $6.9 million in 2014, $6.7 million in 2013 and $6.4 million in 2012.

In addition to participant deferral contributions and Company matching contributions on those deferrals, the Company provides a 3% non-matching contribution to eligible participants. The Company made non-matching contributions to these plans of $3.5 million in 2014, $3.3 million in 2013 and $3.3 million in 2012.