Retirement Benefits

Pension Benefits

As of the last measurement date at November 30, 2013, the Company’s total defined benefit pension plan assets, total projected benefit obligations, and unfunded pension obligation for the tax-qualified pension plans were approximately $1,258.4 million, $1,538.6 million, and $261.7 million, respectively. The discount rate to value the pension benefits as of November 30, 2013 was 4.54%.

The Company does not expect to make any significant cash contributions to its U.S. government contractor business segment, Aerojet Rocketdyne, tax-qualified defined benefit pension plan until fiscal 2015, which are recoverable through the Company’s U.S. government contracts. Additionally, the Company does not expect to make any significant cash contributions to the GenCorp tax-qualified defined benefit pension plan until fiscal 2018 or later, which are not recoverable through the Company’s U.S. government contracts. The Company estimates that approximately 91% of its unfunded pension obligation as of November 30, 2013 is related to Aerojet Rocketdyne which will be recoverable through its U.S. government contracts.

On July 6, 2012, the Moving Ahead for Progress in the 21st Century Act (“MAP-21”) was signed into law by the U.S. government. MAP-21, in part, provides temporary relief for employers who sponsor defined benefit pension plans related to funding contributions under the Employee Retirement Income Security Act of 1974. Specifically, MAP-21 implemented a 25-year average interest rate corridor around the 24-month interest rate used for purposes of determining minimum funding obligations. This relief deferred minimum required pension funding. On August 8, 2014, the Highway and Transportation Funding Act was signed into law, which enacts the pension provision that delays the widening of the interest corridor under MAP-21. This law is expected to increase the interest rates for the plan year beginning December 1, 2013 and decrease the minimum funding requirement for Pension Protection Act ("PPA").

The PPA requires underfunded pension plans to improve their funding ratios based on the funded status of the plan as of specified measurement dates through contributions or application of prepayment credits. As of the last measurement date at November 30, 2013, the Company has accumulated $30.6 million in prepayment credits as a result of advanced funding.

The funded status of the pension plans may be adversely affected by the investment experience of the plans’ assets, by any changes in U.S. law and by changes in the statutory interest rates used by tax-qualified pension plans in the U.S. to calculate funding requirements. Accordingly, if the performance of the Company’s plans’ assets does not meet assumptions, if there are changes to the Internal Revenue Service regulations or other applicable law or if other actuarial assumptions are modified, future contributions to the underfunded pension plans could be higher than the Company expects.

Medical and Life Insurance Benefits

The Company provides medical and life insurance benefits to certain eligible retired employees, with varied coverage by employee group. Generally, employees hired after January 1, 1997 are not eligible for retiree medical and life insurance benefits. The medical benefit plan provides for cost sharing between the Company and its retirees in the form of retiree contributions, deductibles, and coinsurance. Medical and life insurance benefit obligations are unfunded. Medical and life insurance benefit cash payments for eligible retired Aerojet Rocketdyne and GenCorp employees are recoverable under the Company’s U.S. government contracts.

Components of retirement benefit expense (income) are:



	Pension Benefits						Postretirement Medical and Life Insurance Benefits
	Three months ended August 31,
	2014			2013			2014			2013
	(In millions)
Service cost	$	2.2		$	1.7		$	0.1		$	—
Interest cost on benefit obligation	16.8			15.3			0.6			0.6
Assumed return on plan assets	(23.3		)	(24.1		)	—			—
Amortization of prior service credits	—			—			(0.2		)	(0.2		)
Recognized net actuarial losses (gains)	13.5			23.7			(0.8		)	(0.5		)
Retirement benefit expense (income)	$	9.2		$	16.6		$	(0.3	)	$	(0.1	)



	Pension Benefits						Postretirement Medical and Life Insurance Benefits
	Nine months ended August 31,
	2014			2013			2014			2013
	(In millions)
Service cost	$	6.6		$	4.4		$	0.1		$	0.1
Interest cost on benefit obligation	50.3			45.7			1.9			1.8
Assumed return on plan assets	(69.7		)	(72.3		)	—			—
Amortization of prior service credits	—			—			(0.6		)	(0.6		)
Recognized net actuarial losses (gains)	40.4			71.0			(2.3		)	(1.6		)
Retirement benefit expense (income)	$	27.6		$	48.8		$	(0.9	)	$	(0.3	)