PENSION AND POSTRETIREMENT PLANS

6 Months Ended

Jun. 30, 2019

PENSION AND POSTRETIREMENT PLANS

PENSION AND POSTRETIREMENT PLANS

14. PENSION AND POSTRETIREMENT PLANS

The Company has a non-contributory qualified defined benefit pension plan covering the majority of its U.S. employees. The Company also has U.S. non-contributory non-qualified defined benefit plans, which provide for benefits to employees in excess of limits permitted under its U.S. pension plans. Various international subsidiaries also have defined benefit pension plans. The Company provides postretirement health care benefits to certain U.S. employees and retirees.

The components of net periodic pension and postretirement health care benefit costs for the second quarter ended June 30 are as follows:

	U.S.				International				U.S. Postretirement
	Pension				Pension				Health Care
(millions)	2019		2018		2019		2018		2019		2018
Service cost		$18.2		$18.6		$7.5		$8.5		$0.3		$0.9
Interest cost on benefit obligation		22.3		20.8		7.9		7.4		1.4		1.5
Expected return on plan assets		(37.4)		(40.5)		(15.2)		(16.4)		(0.1)		(0.1)
Recognition of net actuarial (gain) loss		5.9		9.8		4.2		4.4		(1.0)		(0.5)
Amortization of prior service
cost (benefit)		(2.9)		(1.7)		(0.2)		(0.2)		(5.8)		(4.1)
Total expense (benefit)		$6.1		$7.0		$4.2		$3.7		$(5.2)		$(2.3)

The components of net periodic pension and postretirement health care benefit costs for the six months ended June 30 are as follows:

	U.S.				International				U.S. Postretirement
	Pension				Pension				Health Care
(millions)	2019		2018		2019		2018		2019		2018
Service cost		$36.4		$37.2		$15.2		$17.0		$0.7		$1.8
Interest cost on benefit obligation		44.5		41.6		15.8		14.9		2.8		3.0
Expected return on plan assets		(74.8)		(81.0)		(30.4)		(32.7)		(0.2)		(0.2)
Recognition of net actuarial (gain) loss		11.8		19.6		8.2		8.8		(2.0)		(1.0)
Amortization of prior service
cost (benefit)		(5.7)		(3.4)		(0.5)		(0.4)		(11.6)		(8.2)
Total expense (benefit)		$12.2		$14.0		$8.3		$7.6		$(10.3)		$(4.6)

Service cost is included with employee compensation cost in cost of sales and selling, general and administrative expenses in the Consolidated Statement of Income while all other components are included in other (income) expense in the Consolidated Statement of Income.

As of June 30, 2019, the Company is in compliance with all funding requirements of its U.S. pension and postretirement health care plans. During the first six months of 2019, the Company made contributions of $2 million to its U.S. non-contributory non-qualified defined benefit plans and estimates it will contribute approximately an additional $4 million to such plans during the remainder of 2019. In addition, the Company expects to make an $120 million voluntary contribution in 2019 to its non-contributory qualified U.S. pension plan.

During the first six months of 2019, the Company made contributions of $23 million to its international pension benefit plans and estimates it will contribute approximately an additional $19 million to such plans during the remainder of 2019.

During the first six months of 2019, the Company made contributions of $6 million to its U.S. postretirement health care benefit plans and estimates it will contribute approximately an additional $5 million to such plans during the remainder of 2019.