7. Employee Benefits

The components of the estimated net pension and other postretirement benefits plan income for the three and nine months ended September 30, 2014 and 2013 were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Pension (income) expense
Service cost	$	0.5		$	0.7		$	1.6		$	2.3
Interest cost		49.7			44.6			146.3			133.7
Expected return on plan assets		(65.9	)		(60.6	)		(195.1	)		(181.8	)
Amortization, net		7.8			12.4			24.1			37.6
Settlements		—			0.8			—			0.8
Net pension income	$	(7.9	)	$	(2.1	)	$	(23.1	)	$	(7.4	)
Other postretirement benefits plan (income) expense
Service cost	$	1.1		$	1.8		$	3.4		$	5.5
Interest cost		4.2			4.1			12.6			12.2
Expected return on plan assets		(2.9	)		(3.0	)		(9.1	)		(8.9	)
Amortization, net		(6.4	)		(4.9	)		(19.3	)		(14.8	)
Net other postretirement benefits plan income	$	(4.0	)	$	(2.0	)	$	(12.4	)	$	(6.0	)

As the majority of the Company’s pension plans have been frozen as of December 31, 2012, the Company continues to transition to a risk management approach for its U.S. pension plan assets. The overall investment objective of this approach is to further reduce the risk of significant decreases in the plan’s funded status by allocating a larger portion of the plan’s assets to investments expected to hedge the impact of interest rate risks on the plan’s obligations. Over time, the target asset allocation percentage for the pension plan is expected to decrease for equity and other securities and increase for fixed income investments. The assumed long-term rate of return for plan assets, which is determined annually, is likely to decrease as the asset allocation shifts over time.

In June 2014 the Company communicated to certain former employees the option to receive a lump-sum pension payment or annuity, with payments beginning in the fourth quarter of 2014. To the extent eligible individuals elect the option to receive a lump-sum pension payment or annuity, the Company’s pension obligations will be reduced. Payments to eligible participants who elect to participate in the offer will be funded from existing pension plan assets and will constitute a complete settlement of the Company’s pension liabilities with respect to these participants. The discount rates and actuarial assumptions used to calculate the payouts will be determined according to federal regulations. The reduction in the reported pension obligation is expected to be approximately $395 million to $415 million, compared to expected payout amounts of approximately $295 million to $310 million. The Company expects to record a non-cash settlement charge of approximately $105 million to $115 million in the fourth quarter in connection with the settlement payments. This charge will result from the recognition in earnings of a portion of the losses recorded in accumulated other comprehensive loss based on the proportion of the obligation settled. The actual amount of this charge will depend on the discount rate and asset values on the settlement date.

On August 8, 2014, the Highway and Transportation Funding Act (the “Act”) was signed into law. The Act includes certain pension-related provisions designed to lower the pension plan contributions that plan-sponsoring companies are required to make by delaying a scheduled phase-down of the existing formula for calculating required minimum contributions. The Company anticipates that provisions in the Act will significantly reduce the minimum required annual contributions related to its defined benefit pension plans in 2014. The Company expects to make cash contributions of approximately $39 million to its pension and other postretirement benefits plans for the full year 2014, of which $33.8 million were made during the nine months ended September 30, 2014. The Company estimates that it will make cash contributions totaling approximately $25 million to its pension and other postretirement benefits plans in 2015.