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Pensions and Other Postretirement Benefits
 12 Months Ended
Dec. 31, 2015
Compensation and Retirement Disclosure [Abstract]  
Pension and Other Postretirement Benefits
Pension and Other Postretirement Benefits
The funded status of our U.S. qualified and nonqualified defined benefit pension plans, our United Kingdom, Ireland, Belgium, and Norway defined benefit pension plans, plus our U.S. other postretirement healthcare and life insurance benefit plans for continuing operations, together with the associated balances and net periodic benefit cost recognized in our consolidated financial statements as of December 31, are shown in the tables below.
We are required to recognize in our consolidated balance sheets the overfunded and underfunded status of our defined benefit postretirement plans. The overfunded or underfunded status is defined as the difference between the fair value of plan assets and the projected benefit obligation. We are also required to recognize as a component of other comprehensive income the actuarial gains and losses and the prior service costs and credits that arise during the period.
The following table summarizes the weighted-average assumptions used to determine the benefit obligations at December 31 for the U.S. Plans:
 
 
Pensions and Other Benefits
(in Millions, except for percentages)
 
December 31,
Following are the weighted average assumptions used to determine the benefit obligations at December 31:
 
2015
 
2014
Discount rate qualified
 
4.50
%
 
4.15
%
Discount rate nonqualified plan
 
3.72
%
 
4.15
%
Discount rate other benefits
 
3.97
%
 
4.15
%
Rate of compensation increase
 
3.60
%
 
3.60
%


The following table summarizes the components of our defined benefit postretirement plans and reflect a measurement date of December 31:
 
Pensions
 
Other Benefits (1)
 
December 31,
(in Millions)

2015
 
2014
 
2015
 
2014
Change in projected benefit obligation
 
 
 
 
 
 
 
Projected benefit obligation at January 1
$
1,569.0

 
$
1,315.2

 
$
26.4

 
$
23.5

Service cost
13.0

 
17.3

 
—

 
0.1

Interest cost
61.0

 
62.3

 
0.9

 
1.0

Actuarial loss (gain)
(81.7
)
 
261.3

 
(2.5
)
 
1.0

Amendments
1.5

 
3.3

 
(2.0
)
 
3.4

Foreign currency exchange rate changes
(8.9
)
 
(12.0
)
 
—

 
—

Plan participants’ contributions
—

 
—

 
2.1

 
6.1

Settlements
(16.3
)
 
(8.5
)
 
—

 
—

Transfer of liabilities from continuing to discontinued operations
—

 
—

 
(1.0
)
 
—

Curtailments
(5.4
)
 
—

 
—

 
—

Benefits paid
(79.7
)
 
(69.9
)
 
(3.9
)
 
(8.7
)
Projected benefit obligation at December 31
$
1,452.5

 
$
1,569.0

 
$
20.0

 
$
26.4

Change in plan assets
 
 
 
 
 
 
 
Fair value of plan assets at January 1
$
1,344.9

 
$
1,285.4

 
$
—

 
$
—

Actual return on plan assets
(40.5
)
 
83.2

 
—

 
—

Foreign currency exchange rate changes
(8.2
)
 
(11.1
)
 
—

 
—

Company contributions
76.9

 
65.8

 
1.8

 
2.6

Plan participants’ contributions
—

 
—

 
2.1

 
6.1

Settlements
(22.4
)
 
(8.5
)
 
—

 
—

Benefits paid
(79.7
)
 
(69.9
)
 
(3.9
)
 
(8.7
)
Fair value of plan assets at December 31
$
1,271.0

 
$
1,344.9

 
$
—

 
$
—

Funded Status
 
 
 
 
 
 
 
U.S. plans with assets
$
(135.3
)
 
$
(167.6
)
 
$
—

 
$
—

U.S. plans without assets
(37.5
)
 
(40.2
)
 
(20.0
)
 
(26.4
)
Non-U.S. plans with assets
(4.8
)
 
(7.4
)
 
—

 
—

All other plans
(3.9
)
 
(8.9
)
 
—

 
—

Net funded status of the plan (liability)
$
(181.5
)
 
$
(224.1
)
 
$
(20.0
)
 
$
(26.4
)
Amount recognized in the consolidated balance sheets:
 
 
 
 
 
 
 
Pension other asset (2)
$
—

 
$
0.7

 
$
—

 
$
—

Accrued benefit liability (3)
(181.5
)
 
(224.8
)
 
(20.0
)
 
(26.4
)
Total
$
(181.5
)
 
$
(224.1
)
 
$
(20.0
)
 
$
(26.4
)
____________________
(1)
Refer to Note 9 for information on our discontinued postretirement benefit plans.
(2)
Included in “Other assets” on the consolidated balance sheets.
(3)
Recorded as "Accrued pension and other postretirement benefits, current and long-term" on the consolidated balance sheets.
(4)
In 2015, the Society of Actuaries released an updated mortality table projection scale for measurement of retirement program obligations. Adoption of this new projection scale has decreased the U.S. defined benefit obligations by approximately $24 million at December 31, 2015.



 
Pensions
 
Other Benefits (1)
 
December 31,
(in Millions)
2015
 
2014
 
2015
 
2014
The amounts in accumulated other comprehensive income (loss) that have not yet been recognized as components of net periodic benefit cost are as follows:
 
 
 
 
 
 
 
Prior service (cost) credit
$
(3.6
)
 
$
(7.7
)
 
$
(0.6
)
 
$
(3.3
)
Net actuarial (loss) gain
(495.5
)
 
(512.9
)
 
10.4

 
10.4

Accumulated other comprehensive income (loss) – pretax
$
(499.1
)
 
$
(520.6
)
 
$
9.8

 
$
7.1

Accumulated other comprehensive income (loss) – net of tax
$
(314.0
)
 
$
(329.5
)
 
$
6.1

 
$
4.4

____________________
(1)
Refer to Note 9 for information on our discontinued postretirement benefit plans.
The accumulated benefit obligation for all pension plans was $1,404.9 million and $1,495.0 million at December 31, 2015 and 2014, respectively.
(in Millions)
December 31,
Information for pension plans with projected benefit obligation in excess of plan assets
2015
 
2014
Projected benefit obligations
$
1,458.5

 
$
1,544.7

Accumulated benefit obligations
1,414.2

 
1,475.6

Fair value of plan assets
1,277.0

 
1,319.9


(in Millions)
December 31,
Information for pension plans with accumulated benefit obligation in excess of plan assets
2015
 
2014
Projected benefit obligations
$
1,441.4

 
$
1,544.8

Accumulated benefit obligations
1,399.4

 
1,475.6

Fair value of plan assets
1,261.2

 
1,319.9


Other changes in plan assets and benefit obligations for continuing operations recognized in other comprehensive loss (income) are as follows:
 
Pensions
 
Other Benefits (1)
 
Year ended December 31
(in Millions)
2015
 
2014
 
2015
 
2014
Current year net actuarial loss (gain)
$
58.8

 
$
262.1

 
$
(2.5
)
 
$
0.9

Current year prior service cost (credit)
1.5

 
3.3

 
(2.1
)
 
3.4

Amortization of net actuarial (loss) gain
(54.7
)
 
(30.5
)
 
1.2

 
1.6

Amortization of prior service (cost) credit
(0.8
)
 
(1.9
)
 
(0.1
)
 
(0.1
)
Recognition of prior service cost due to curtailment
(4.8
)
 
—

 
(0.5
)
 
—

Transfer of actuarial (loss) gain from continuing to discontinued operations
—

 
—

 
1.3

 
—

Curtailment (loss)
(5.4
)
 
—

 
—

 
—

Settlement (loss)
(8.9
)
 
(4.2
)
 
—

 
—

Foreign currency exchange rate changes on the above line items
(7.2
)
 
(3.6
)
 
—

 
—

Total recognized in other comprehensive (income) loss, before taxes
$
(21.5
)
 
$
225.2

 
$
(2.7
)
 
$
5.8

Total recognized in other comprehensive (income) loss, after taxes
$
(15.4
)
 
$
145.1

 
$
(1.7
)
 
$
3.6

____________________
(1)
Refer to Note 9 for information on our discontinued postretirement benefit plans.
The estimated net actuarial loss and prior service cost for our pension plans that will be amortized from accumulated other comprehensive income (loss) into our net annual benefit cost (income) during 2016 are $41.2 million and $0.7 million, respectively. The estimated net actuarial gain and prior service cost for our other benefits that will be amortized from accumulated other comprehensive income (loss) into net annual benefit cost (income) during 2016 will be $(1.0) million and $0.1 million.

The following table summarizes the weighted-average assumptions used for and the components of net annual benefit cost (income):
 
 
Year Ended December 31,
 
Pensions
 
Other Benefits (1)
(in Millions, except for percentages)
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Discount rate
4.15
%
 
4.95
%
 
4.15
%
 
4.15
%
 
4.95
%
 
4.15
%
Expected return on plan assets
7.25
%
 
7.75
%
 
7.75
%
 
—

 
—

 
—

Rate of compensation increase
3.60
%
 
3.60
%
 
3.40
%
 
—

 
—

 
—

Components of net annual benefit cost (in millions):
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
13.0

 
$
17.3

 
$
22.0

 
$
—

 
$
0.1

 
$
0.1

Interest cost
61.0

 
62.3

 
57.7

 
0.9

 
1.0

 
1.0

Expected return on plan assets
(88.9
)
 
(86.3
)
 
(78.0
)
 
—

 
—

 
—

Amortization of prior service cost
0.8

 
1.9

 
2.1

 
0.1

 
0.2

 
—

Amortization of net actuarial and other (gain) loss
54.6

 
30.5

 
51.9

 
(1.2
)
 
(1.6
)
 
(1.9
)
Recognized (gain) loss due to curtailments (2)
4.8

 
—

 
—

 
0.5

 
—

 
—

Recognized (gain) loss due to settlement
8.9

 
4.2

 
7.4

 
—

 
—

 
—

Net annual benefit cost
$
54.2

 
$
29.9

 
$
63.1

 
$
0.3

 
$
(0.3
)
 
$
(0.8
)

___________________
(1)
Refer to Note 9 for information on our discontinued postretirement benefit plans.
(2)
The Curtailment loss is associated with the disposal of our FMC Alkali Chemicals division and was recorded to discontinued operations within the consolidated statements of income (loss).

Our U.S. qualified defined benefit pension plan (“U.S. Plan”) holds the majority of our pension plan assets. The expected long-term rate of return on these plan assets was 7.25 percent for December 31, 2015 and 7.75 percent for the years ended December 31, 2014 and 2013. In developing the assumption for the long-term rate of return on assets for our U.S. Plan, we take into consideration the technical analysis performed by our outside actuaries, including historical market returns, information on the assumption for long-term real returns by asset class, inflation assumptions and expectations for standard deviation related to these best estimates. We also consider the historical performance of our own plan’s trust, which has earned a compound annual rate of return of approximately 8.7 percent over the last 20 years (which is in excess of comparable market indices for the same period) and other factors. Given an actively managed investment portfolio, the expected annual rates of return by asset class for our portfolio, assuming an estimated inflation rate of approximately 2.0 percent, is between 8.6 percent and 10.5 percent for equities, and between 5.5 percent and 8.3 percent for fixed-income investments, which generates a total expected portfolio return that is in line with our assumption for the rate of return on assets. The target asset allocation for 2015, by asset category, is 80 percent to 90 percent equity securities, 10 percent to 20 percent fixed income investments and zero to five percent cash and other short-term investments.
Our U.S. qualified pension plan’s investment strategy consists of a total return investment management approach using a portfolio mix of equities and fixed income investments to maximize the long-term return of plan assets for an appropriate level of risk. The goal of this strategy is to minimize plan expenses by matching asset growth to the plan’s liabilities over the long run. Furthermore, equity investments are weighted towards value equities and diversified across U.S. and non-U.S. stocks. Derivatives and hedging instruments may be used effectively to manage and balance risks associated with the plan’s investments. Investment performance and related risks are measured and monitored on an ongoing basis through annual liability measurements, periodic asset and liability studies, and quarterly investment portfolio reviews.
The following tables present our fair value hierarchy for our major categories of pension plan assets by asset class. See Note 17 for the definition of fair value and the descriptions of Level 1, 2 and 3 in the fair value hierarchy. 
(in Millions)
12/31/2015

 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash and short-term investments
$
62.4

 
$
62.4

 
$
—

 
$
—

Equity securities:
 
 
 
 
 
 
 
Common stock
742.1

 
742.1

 
—

 
—

Preferred stock
0.3

 
0.3

 
—

 
—

Mutual funds and other investments (1)
277.8

 
187.9

 
89.9

 
—

Fixed income investments:
 
 
 
 
 
 
 
Investment contracts
174.0

 
—

 
174.0

 
—

Mutual funds
9.8

 
9.8

 
—

 
—

Corporate debt instruments
1.2

 
1.2

 
—

 
—

Government debt
2.5

 
2.5

 
—

 
—

Other investments
 
 
 
 
 
 
 
Real estate/property
0.8

 
—

 
—

 
0.8

Other
0.1

 
—

 
—

 
0.1

Total assets
$
1,271.0

 
$
1,006.2

 
$
263.9

 
$
0.9

(in Millions)
12/31/2014
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash and short-term investments
$
54.1

 
$
54.1

 
$
—

 
$
—

Equity securities:
 
 
 
 
 
 
 
Common stock
799.8

 
799.8

 
—

 
—

Preferred stock
3.0

 
3.0

 
—

 
—

Mutual funds and other investments (1)
286.9

 
198.3

 
88.6

 
—

Fixed income investments:
 
 
 
 
 
 
 
Investment contracts
185.5

 
—

 
184.8

 
0.7

Mutual funds
9.9

 
9.9

 
—

 
—

Corporate debt instruments
0.9

 
0.9

 
—

 
—

Government debt
3.9

 
3.9

 
—

 
—

Other investments
 
 
 
 
 
 
 
Real estate/property
0.8

 
—

 
—

 
0.8

Other
0.1

 
—

 
—

 
0.1

Total assets
$
1,344.9

 
$
1,069.9

 
$
273.4

 
$
1.6

____________________
(1)
As of December 31, 2015 and 2014 we have $89.9 million and $88.6 million, respectively, of investments in certain funds where the net asset value reported by the underlying funds approximates the fair value. These investments are redeemable with the fund at net asset value under the original terms of the partnership agreements and/or subscription agreements and operations of the underlying funds. However, it is possible that these redemption rights may be restricted or eliminated by the funds in the future in accordance with the underlying fund agreements. Due to the nature of the investments held by the funds, changes in market conditions and the economic environment may significantly impact the net asset value of the funds and, consequently, the fair value of the interests in the funds. Furthermore, changes to the liquidity provisions of the funds may significantly impact the fair value of the interest in the funds.

The change in the value of plan assets using significant unobservable inputs (Level 3) for all periods presented was not material.

We made the following contributions to our pension and other postretirement benefit plans:
 
  
Year Ended December 31,
(in Millions)
2015
 
2014
U.S. qualified pension plan
$
65.0

 
$
50.0

U.S. nonqualified pension plan
7.8

 
10.8

Non-U.S. plans
4.1

 
4.9

Other postretirement benefits, net of participant contributions
1.8

 
2.6

Total
$
78.7

 
$
68.3


We expect our voluntary cash contributions to our U.S. qualified pension plan to be $35 million in 2016.
The following table reflects the estimated future benefit payments for our pension and other postretirement benefit plans. These estimates take into consideration expected future service, as appropriate:
 
Estimated Net Future Benefit Payments (in Millions)
(in Millions)
Pension Benefits
Other Benefits
2016
$84.6
2.0

2017
86.8
1.9

2018
86.4
1.8

2019
87.8
1.8

2020
88.9
1.7

2021-2025
$451.1
7.3


Assumed health care cost trend rates have an effect on the other postretirement benefit obligations and net periodic other postretirement benefit costs reported for the health care portion of the other postretirement plan. A one-percentage point change in the assumed health care cost trend rates would be immaterial to our net periodic other postretirement benefit costs for the year ended December 31, 2015, and our other postretirement benefit obligation at December 31, 2015.
FMC Corporation Savings and Investment Plan. The FMC Corporation Savings and Investment Plan is a qualified salary-reduction plan under Section 401(k) of the Internal Revenue Code in which substantially all of our U.S. employees may participate by contributing a portion of their compensation. For eligible employees participating in the Plan, except for those employees covered by certain collective bargaining agreements, the Company makes matching contributions of 80 percent of the portion of those contributions up to five percent of the employee’s compensation. Eligible employees participating in the Plan that do not participate in the U.S. qualified pension plan are entitled to receive an employer contribution of five percent of the employee’s eligible compensation. Charges against income for all contributions were $8.9 million in 2015, $11.4 million in 2014, and $11.8 million in 2013.