11. Pension Plans and Defined Contribution Plan

Pension Plans

As of December 31, 2013, the Company has pension plans covering approximately 2,800 of its active associates. Non-contributory plans covering non-union associates provide pension benefits that are based on years of credited service and a percentage of annual compensation. Non-contributory plans covering union members generally provide benefits of stated amounts based on years of service. The Company funds the plans in accordance with all applicable laws and regulations. The Company uses December 31 as its measurement date to determine its pension obligations.

Change in Projected Benefit Obligation

The following table sets forth the plans’ changes in Projected Benefit Obligation for the years ended December 31, 2013 and 2012 (in thousands):


	2013			2012
Benefit obligation at beginning of year	$	196,521		$	171,022
Service cost—benefit earned during the period		1,479			962
Interest cost on projected benefit obligation		8,379			8,417
Union plan amendments		—			309
Actuarial (gain) loss		(16,373	)		19,432
Benefits paid		(6,937	)		(3,622	)

Benefit obligation at end of year	$	183,069		$	196,520

The accumulated benefit obligation for the plan as of December 31, 2013 and 2012 totaled $183.1 million and $196.5 million, respectively.

Plan Assets and Investment Policies and Strategies

The following table sets forth the change in the plans’ assets for the years ended December 31, 2013 and 2012 (in thousands):


	2013			2012
Fair value of plan assets at beginning of year	$	145,563		$	120,295
Actual return on plan assets		10,624			15,883
Company contributions		13,000			13,007
Benefits paid		(6,937	)		(3,622	)

Fair value of plan assets at end of year	$	162,250		$	145,563

The Company’s pension plan investment allocations, as a percentage of the fair value of total plan assets, as of December 31, 2013 and 2012, by asset category are as follows:


Asset Category	2013			2012
Cash		1.2	%		1.1	%
Equity securities		29.2	%		69.4	%
Fixed income		42.5	%		17.7	%
Real assets		16.6	%		11.8	%
Hedge funds		10.5	%		—

Total		100.0	%		100.0	%

The investment policies and strategies for the Company’s pension plan assets are established with the goals of generating above-average investment returns over time, while containing risks within acceptable levels and providing adequate liquidity for the payment of plan obligations. The Company recognizes that there typically are tradeoffs among these objectives, and strives to minimize risk associated with a given expected return.

The Company’s defined benefit plan assets are measured at fair value on a recurring basis and are invested primarily in a diversified mix of fixed income investments and equity securities. The Company establishes target ranges for investment allocation and sets specific allocations. The target allocations for the General Plan assets are 50.0% fixed income, 23.0% equity securities, 17.0% real assets, and 10.0% hedge funds. The target allocations for the Union Plan assets are 20.0% fixed income, 50.0% equity securities, 20.0% real assets and 10.0% hedge funds. Equity securities include investments in large cap and small cap corporations located in the U.S. and a mix of both international and emerging market corporations. Fixed Income securities include investment grade bonds and U.S. treasuries. Other types of investments include commodity futures, Real Estate Investment Trusts (REITs) and hedge funds.

The accounting guidance on fair value measurements specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques (Level 1, 2 and 3). See Note 19 for a discussion of the fair value hierarchy.

Fair values for equity and fixed income securities are primarily based on valuations for identical instruments in active markets.

The fair values of the Company’s pension plan assets at December 31, 2013 and 2012 by asset category are as follows:

Fair Value Measurements at

December 31, 2013 (in thousands)


Asset Category			Total		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash			$	1,888	$	1,888
Equity Securities
U.S. Large Cap	^(a	⁾		17,380		17,380
International Large Core	^(b	⁾		7,650		7,650
International Large Value	^(j	⁾		7,598		7,598
Emerging Markets	^(c	⁾		8,502		8,502
U.S. Small Value Fund	^(d	⁾		5,058		5,058
U.S. Small Growth Fund	^(e	⁾		1,211		1,211
Fixed Income
U.S. Fixed Income	^(g	⁾		69,070		69,070
Real Assets
Domestic Real Estate	^(f	⁾		11,638		11,638
Commodities	^(h	⁾		15,246		15,246
Hedge Funds
Hedge Funds	⁽ⁱ	⁾		17,009			$	17,009

Total			$	162,250	$	145,241	$	17,009	$	—

Fair Value Measurements at

December 31, 2012 (in thousands)


Asset Category			Total		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash			$	1,537	$	1,537
Equity Securities
U.S. Large Cap	^(a	⁾		41,669		41,669
International Large Core	^(b	⁾		33,673		33,673
Emerging Markets	^(c	⁾		11,314		11,314
U.S. Small Value Fund	^(k	⁾		7,255			$	7,255
U.S. Small Growth Fund	^(e	⁾		7,182		7,182
Fixed Income
U.S. Fixed Income	^(g	⁾		25,720		25,720
Real Assets
Domestic Real Estate	^(f	⁾		5,954		5,954
Commodities	^(h	⁾		11,259		11,259

Total			$	145,563	$	138,308	$	7,255	$	—

(a)	A separately managed, diversified portfolio consisting of publically traded large cap stocks. The portfolio is predominately comprised of U.S. companies but may also hold international company stock.

(b)	A daily valued mutual fund investment. The fund invests in publically traded companies domiciled outside the U.S. and includes companies located in emerging market countries.

(c)	A daily valued mutual fund investment. The fund invests in publically traded companies domiciled in emerging market countries.

(d)	A daily valued mutual fund investment. The fund invests in publically traded, small capitalization companies that are considered value in style. The majority of holdings are domiciled in the U.S. though the fund may hold international stocks.

(e)	A daily valued mutual fund investment. The fund invests in publically traded, small capitalization companies that are considered growth in style. The majority of holdings are domiciled in the U.S. though the fund may hold international stocks.

(f)	A daily valued mutual fund investment. The fund invests in publically traded Real Estate Investment Trusts. This is an index mutual fund that tracks the Morgan Stanley REIT Index. The fund normally invests at least 98% of assets that are included in the Morgan Stanley REIT Index.

(g)	A separately managed fixed income portfolio utilized to match the duration of the Plan’s liabilities. This liability driven investment portfolio is comprised of Treasury securities including STRIPS and zero coupon bonds as well as high quality corporate bonds.

(h)	A daily valued mutual fund investment. This fund combines a commodities position, typically through swap agreements, with a portfolio of inflation indexed bonds and other fixed income securities. The commodities position is constructed to track the performance of the Dow Jones UBS Commodity Index.

(i)

A separately managed fund of hedge funds. This fund seeks attractive risk-adjusted returns through investments in a well-diversified group of managers that employ a variety of unique investment strategies. It targets low volatility and low correlation to traditional asset classes. This fund may allocate its assets among a select group of non-traditional portfolio managers that invest or trade in a wide range of securities and other instruments, including, but not limited to: equities and fixed income securities, currencies, commodities, futures contracts, options and other derivative instruments.

(j)	A daily valued open-ended mutual fund. This fund invests in common stocks of companies domiciled in countries outside of the U.S.

(k)	A daily valued commingled fund investment. The fund invests in publically traded, small capitalization companies that are considered value in style. The majority of holdings are domiciled in the U.S. though the fund may hold international stocks. The fund allows for monthly liquidity.

Plan Funded Status

The following table sets forth the plans’ funded status as of December 31, 2013 and 2012 (in thousands):


	2013			2012
Funded status of the plan	$	(20,820	)	$	(50,957	)
Unrecognized prior service cost		1,613			1,804
Unrecognized net actuarial loss		53,158			74,557

Net amount recognized	$	33,951		$	25,404

Amounts Recognized in Consolidated Balance Sheets


	2013			2012
Accrued benefit liability	$	(20,820	)	$	(50,957	)
Accumulated other comprehensive income		54,771			76,361

Net amount recognized	$	33,951		$	25,404

Components of Net Periodic Benefit Cost

Net periodic pension cost for the years ended December 31, 2013, 2012 and 2011 for pension and supplemental benefit plans includes the following components (in thousands):


	2013			2012			2011
Service cost—benefit earned during the period	$	1,479		$	962		$	769
Interest cost on projected benefit obligation		8,379			8,417			8,482
Expected return on plan assets		(11,338	)		(10,005	)		(9,715	)
Amortization of prior service cost		192			176			135
Amortization of actuarial loss		5,741			6,194			1,940

Net periodic pension cost	$	4,453		$	5,744		$	1,611

The estimated net actuarial loss and prior service cost that will be amortized from accumulated other comprehensive loss into the net periodic benefit cost during 2014 are approximately $3.8 million and $0.2 million, respectively.

Assumptions Used

The following tables summarize the Company’s actuarial assumptions for discount rates, expected long-term rates of return on plan assets, and rates of increase in compensation for the years ended December 31, 2013, 2012 and 2011:


	2013			2012			2011
Pension plan assumptions:
Assumed discount rate, general		4.95	%		4.30	%		5.00	%
Assumed discount rate, union		5.10	%		4.45	%		5.00	%
Expected long-term rate of return on plan assets, general		7.30	%		7.75	%		7.75	%
Expected long-term rate of return on plan assets, union		7.75	%		7.75	%		7.75	%

To select the appropriate actuarial assumptions, management relied on current market conditions, historical information and consultation with and input from the Company’s outside actuaries. The expected long-term rate of return on plan assets assumption is based on historical returns and the future expectation of returns for each asset category, as well as the target asset allocation of the asset portfolio. There was no rate of compensation increase in each of the past three fiscal years.

Contributions

On December 11, 2013 the Company’s Board of Directors approved a $2.0 million cash contribution to the Company’s Union pension plan which was funded in January 2014. Additional fundings, if any, for 2014 have not yet been determined.

Estimated Future Benefit Payments

The estimated future benefit payments under the Company’s pension plans are as follows (in thousands):


	Amounts
2014	$	6,189
2015		6,959
2016		7,822
2017		8,312
2018		8,315
2019-2023		53,095

Defined Contribution Plan

The Company has a defined contribution plan. Salaried associates and non-union hourly paid associates are eligible to participate after completing six consecutive months of employment. The plan permits associates to have contributions made as 401(k) salary deferrals on their behalf, or as voluntary after-tax contributions, and provides for Company contributions, or contributions matching associates’ salary deferral contributions, at the discretion of the Board of Directors. Company contributions to match associates’ contributions were approximately $5.3 million, $5.3 million and $5.1 million in 2013, 2012 and 2011, respectively.