NOTE 12 – RETIREMENT AND POSTRETIREMENT BENEFIT PLANS

The Corporation has a discretionary profit-sharing plan with a contributory 401(k) provision covering most of its United States employees. Corporate contributions to the profit-sharing plan were $9,149, $7,536 and $9,401 for 2014, 2013 and 2012, respectively. In addition, the Corporation matches a portion of employee 401(k) contributions. The Corporation’s matching contributions were $5,070, $6,273 and $5,976 for 2014, 2013 and 2012, respectively.

The Corporation also has defined contribution plans that cover certain employees in the United Kingdom. Under these plans, the employees contribute to the plans and the Corporation matches a portion of the employee contributions. The Corporation’s matching contributions were $2,124, $1,970 and $2,012 for 2014, 2013 and 2012, respectively.

The Corporation also participates in a multiemployer pension plan covering certain domestic employees who are part of a collective bargaining agreement. Total pension expense for the multiemployer plan, representing contributions to the plan, was $582, $544 and $513 in 2014, 2013 and 2012, respectively.

The Corporation has nonqualified deferred compensation plans that previously enabled certain officers and directors with the opportunity to defer receipt of compensation and director fees, respectively, including compensation received in the form of the Corporation’s common shares. The Corporation generally funded these deferred compensation liabilities by making contributions to a rabbi trust. On December 8, 2011, the Corporation froze the deferred compensation plans. Accordingly, participants are no longer permitted to make new deferral elections, although deferral elections previously made will continue to be honored and amounts already deferred may be re-deferred in accordance with deferred compensation plans. In connection with the Merger, shares of the Corporation’s common stock held in the rabbi trust were redeemed for cash and reallocated to other participant-directed investment options within the trust. Additionally, the memorandum restricted stock units credited to certain participants’ accounts were converted to future cash-settled obligations. See Note 14 for further information.

In 2001, in connection with its acquisition of Gibson Greetings, Inc. (“Gibson”), the Corporation assumed the obligations and assets of Gibson’s defined benefit pension plan (the “Gibson Retirement Plan”) that covered substantially all Gibson employees who met certain eligibility requirements. Benefits earned under the Gibson Retirement Plan have been frozen and participants no longer accrue benefits after December 31, 2000. The Gibson Retirement Plan has a measurement date of February 28 or 29. No contributions were made to the plan in either 2014 or 2013. The Gibson Retirement Plan was underfunded at February 28, 2014 and 2013.

The Corporation also has an unfunded nonqualified defined benefit pension plan (the “Supplemental Executive Retirement Plan” or “SERP”) covering certain management employees. In accordance with the plan’s change of control provision, certain active participants became fully vested due to the Merger. This accelerated vesting resulted in an increase in the SERP’s benefit obligation of $2,613 and has been reflected as an actuarial loss within accumulated other comprehensive income as of the Merger Date. Effective December 31, 2013, the Corporation amended the SERP to freeze the accrued benefit for all active participants and closed the plan to new participants. As a result, the liabilities of the SERP were re-measured as of December 31, 2013, and a curtailment gain of $7,164 was recognized as a reduction of actuarial losses within accumulated other comprehensive income with a corresponding reduction in the SERP’s overall benefit obligation. In addition, a non-cash loss of $1,746 arising from the recognition of previously recorded prior service costs is included in net periodic benefit cost in 2014. The amendment did not affect the benefits of participants who retired or separated from the Corporation with a deferred vested benefit prior to December 31, 2013. The Supplemental Executive Retirement Plan has a measurement date of February 28 or 29.

The Corporation also has several defined benefit pension plans and one defined contribution plan at its Canadian subsidiary. These include a defined benefit pension plan covering most Canadian salaried employees, which was closed to new participants effective January 1, 2006, but eligible members continue to accrue benefits and an hourly plan in which benefits earned have been frozen and participants no longer accrue benefits after March 1, 2000. There are also two unfunded defined benefit plans, one that covers a supplemental executive retirement pension relating to an employment agreement and one that pays supplemental pensions to certain former hourly employees pursuant to a prior collective bargaining agreement. Effective January 1, 2006, a defined contribution plan was established and integrated with the defined benefit salaried plan. Under the defined contribution plan, the Corporation fully matches employee contributions which can range between 2% and 4% of eligible compensation. The Corporation’s matching contributions were $378, $359 and $414 for 2014, 2013 and 2012, respectively. All defined benefit plans have a measurement date of February 28 or 29.

The Corporation sponsors a defined benefit health care plan that provides postretirement medical benefits to full-time United States employees who meet certain age, service and other requirements. The plan is contributory, with retiree contributions adjusted periodically, and contains other cost-sharing features such as deductibles and coinsurance. The Corporation maintains a trust for the payment of retiree health care benefits. This trust is funded at the discretion of management. The plan has a measurement date of February 28 or 29.

The following table sets forth summarized information on the defined benefit pension plans and postretirement benefits plan:


	Defined Benefit Pension Plans						Postretirement Benefits
	2014			2013			2014			2013
Change in benefit obligation:
Benefit obligation at beginning of year	$	188,146		$	184,344		$	67,452		$	82,344
Service cost		1,115			1,369			431			684
Interest cost		7,065			7,394			2,397			2,841
Participant contributions		20			22			3,485			3,963
Retiree drug subsidy payments		—			—			796			822
Plan amendments		414			232			—			—
Actuarial loss (gain)		6,043			6,970			(1,470	)		(15,880	)
Change in control		2,613			—			—			—
Plan curtailment		(7,164	)		—			—			—
Benefit payments		(11,519	)		(11,035	)		(6,459	)		(7,322	)
Currency exchange rate changes		(1,947	)		(1,150	)		—			—

Benefit obligation at end of year		184,786			188,146			66,632			67,452

Change in plan assets:
Fair value of plan assets at beginning of year		104,521			106,341			51,794			57,563
Actual return on plan assets		11,386			7,774			3,255			1,319
Employer contributions		2,199			2,424			(3,485	)		(3,729	)
Participant contributions		20			22			3,485			3,963
Benefit payments		(11,519	)		(11,035	)		(6,292	)		(7,322	)
Currency exchange rate changes		(1,713	)		(1,005	)		—			—

Fair value of plan assets at end of year		104,894			104,521			48,757			51,794


Funded status at end of year	$	(79,892	)	$	(83,625	)	$	(17,875	)	$	(15,658	)

Amounts recognized on the Consolidated Statement of Financial Position consist of the following:


	Defined Benefit Pension Plans						Postretirement Benefits
	2014			2013			2014			2013
Accrued compensation and benefits	$	(2,624	)	$	(2,267	)	$	—		$	—
Other liabilities		(77,268	)		(81,358	)		(17,875	)		(15,658	)

Net amount recognized	$	(79,892	)	$	(83,625	)	$	(17,875	)	$	(15,658	)


Amounts recognized in accumulated other comprehensive (income) loss
Net actuarial loss (gain)	$	63,614		$	71,385		$	(17,013	)	$	(16,397	)
Net prior service cost (credit)		—			1,522			(5,477	)		(6,780	)
Net transition obligation		23			30			—			—

Accumulated other comprehensive loss (income)	$	63,637		$	72,937		$	(22,490	)	$	(23,177	)

For the defined benefit pension plans, the estimated net loss and transition obligation that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year are approximately $2,818 and $5, respectively. For the postretirement benefit plan, the estimated net gain and prior service credit that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are approximately ($935) and ($1,300), respectively.

The following table presents significant weighted-average assumptions to determine benefit obligations and net periodic benefit cost:


	Defined Benefit Pension Plans						Postretirement Benefits
	2014			2013			2014			2013
Weighted average discount rate used to determine:
Benefit obligations at measurement date
U.S.		4.00-4.25	%		3.75-4.00	%		4.25	%		3.75	%
International		4.05	%		3.90	%		N/A			N/A
Net periodic benefit cost
U.S.		3.75-4.50	%		4.00-4.25	%		3.75	%		4.00	%
International		3.90	%		4.45	%		N/A			N/A
Expected long-term return on plan assets:
U.S.		6.75	%		6.75	%		6.50	%		6.50	%
International		5.00	%		5.25	%		N/A			N/A
Rate of compensation increase:
U.S.		6.50	%		6.50	%		N/A			N/A
International		3.00	%		3.00	%		N/A			N/A
Health care cost trend rates:
For year following February 28 or 29		N/A			N/A			8.50	%		9.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		N/A			N/A			5.00	%		5.00	%
Year the rate reaches the ultimate trend rate		N/A			N/A			2021			2021

For 2014 and 2013, the net periodic pension cost for the defined benefit pension plans was based on long-term asset rates of return as noted above. In developing these expected long-term rate of return assumptions, consideration was given to expected returns based on the current investment policy, current mix of investments and historical return for the asset classes.

For 2014 and 2013, the Corporation assumed a long-term asset rate of return of 6.50% to calculate the expected return for the postretirement benefit plan. In developing the expected long-term rate of return assumption, consideration was given to various factors, including a review of asset class return expectations based on historical compounded returns for such asset classes.


	2014			2013
Effect of a 1% increase in health care cost trend rate on:
Service cost plus interest cost	$	80		$	140
Accumulated postretirement benefit obligation		2,462			2,304

Effect of a 1% decrease in health care cost trend rate on:
Service cost plus interest cost		(70	)		(122	)
Accumulated postretirement benefit obligation		(2,139	)		(2,011	)

The following table presents selected defined benefit pension plan information:


	2014		2013
For all defined benefit pension plans:
Accumulated benefit obligation	$	184,769	$	180,558

For defined benefit pension plans that are not fully funded:
Projected benefit obligation		184,527		187,855
Accumulated benefit obligation		184,510		180,267
Fair value of plan assets		104,635		104,230

A summary of the components of net periodic benefit cost for the defined benefit pension plans is as follows:


	2014			2013			2012
Components of net periodic benefit cost:
Service cost	$	1,115		$	1,369		$	1,106
Interest cost		7,065			7,394			8,353
Expected return on plan assets		(6,267	)		(6,473	)		(6,858	)
Amortization of transition obligation		6			7			6
Amortization of prior service cost		190			240			240
Amortization of actuarial loss		3,485			3,514			2,126
Recognition of prior service cost upon curtailment		1,746			—			—

Net periodic benefit cost		7,340			6,051			4,973
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Actuarial loss		941			5,657			14,996
Prior service cost		414			231			924
Amortization of prior service cost		(190	)		(240	)		(240	)
Amortization of actuarial loss		(3,485	)		(3,514	)		(2,126	)
Amortization of transition obligation		(6	)		(7	)		(6	)
Change in control		2,613			—			—
Curtailment gain		(7,164	)		—			—
Recognition of prior service cost upon curtailment		(1,746	)		—			—

Total recognized in other comprehensive income		(8,623	)		2,127			13,548

Total recognized in net periodic benefit cost and other comprehensive income	$	(1,283	)	$	8,178		$	18,521

A summary of the components of net periodic benefit cost for the postretirement benefit plan is as follows:


	2014			2013			2012
Components of net periodic benefit cost:
Service cost	$	431		$	684		$	726
Interest cost		2,397			2,841			3,929
Expected return on plan assets		(3,067	)		(3,430	)		(4,310	)
Amortization of prior service credit		(1,303	)		(2,075	)		(2,461	)
Amortization of actuarial gain		(1,043	)		(452	)		(766	)

Net periodic benefit cost		(2,585	)		(2,432	)		(2,882	)
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Actuarial gain		(1,659	)		(13,768	)		(5,115	)
Prior service credit added during the year		—			—			—
Amortization of actuarial gain		1,043			452			766
Amortization of prior service credit		1,303			2,075			2,461

Total recognized in other comprehensive income		687			(11,241	)		(1,888	)

Total recognized in net periodic benefit cost and other comprehensive income	$	(1,898	)	$	(13,673	)	$	(4,770	)

At February 28, 2014 and 2013, the assets of the plans are held in trust and allocated as follows:


	Defined Benefit Pension Plans						Postretirement Benefits
	2014			2013			2014			2013			Target Allocation
Equity securities:
U.S.		52	%		51	%		27	%		27	%		15% - 30	%
International		40	%		33	%		N/A			N/A			N/A
Debt securities:
U.S.		47	%		48	%		71	%		69	%		65% - 85	%
International		59	%		64	%		N/A			N/A			N/A
Cash and cash equivalents:
U.S.		1	%		1	%		2	%		4	%		0% - 15	%
International		1	%		3	%		N/A			N/A			N/A

As of February 28, 2014, the investment policy for the U.S. pension plans targets an approximately even distribution between equity securities and debt securities with a minimal level of cash maintained in order to meet obligations as they come due. The investment policy for the international pension plans targets an approximately 30/65/5 distribution between equity securities, debt securities and cash and cash equivalents.

The investment policy for the postretirement benefit plan targets a distribution among equity securities, debt securities and cash and cash equivalents as noted above. All investments are actively managed. This policy is subject to review and change.

The following table summarizes the fair value of the defined benefit pension plan assets at February 28, 2014:


	Fair value at February 28, 2014		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
U.S. plans:
Short-term investments	$	719	$	—	$	719
Equity securities (collective funds)		42,599		—		42,599
Fixed-income funds		38,154		—		38,154

International plans:
Short-term investments		259		—		259
Equity securities (collective funds)		9,470		—		9,470
Fixed-income funds		13,693		—		13,693

Total	$	104,894	$	—	$	104,894

The following table summarizes the fair value of the defined benefit pension plan assets at February 28, 2013:


	Fair value at February 28, 2013		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
U.S. plans:
Short-term investments	$	713	$	—	$	713
Equity securities (collective funds)		41,106		—		41,106
Fixed-income funds		38,223		—		38,223

International plans:
Short-term investments		651		—		651
Equity securities (collective funds)		8,193		—		8,193
Fixed-income funds		15,635		—		15,635

Total	$	104,521	$	—	$	104,521

The following table summarizes the fair value of the postretirement benefit plan assets at February 28, 2014:


	Fair value at February 28, 2014		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Short-term investments	$	1,312	$	—	$	1,312
Equity securities		12,968		12,968		—
Fixed-income funds		34,477		—		34,477

Total	$	48,757	$	12,968	$	35,789

The following table summarizes the fair value of the postretirement benefit plan assets at February 28, 2013:


	Fair value at February 28, 2013		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Short-term investments	$	1,706	$	—	$	1,706
Equity securities		14,195		14,195		—
Fixed-income funds		35,893		—		35,893

Total	$	51,794	$	14,195	$	37,599

Short-term investments: Short-term investments, which are primarily money market funds, are valued based on exit prices or net asset values. These investments are generally classified as Level 2 since the valuations use observable inputs.

Equity securities: The fair value of collective funds is valued at the closing net asset value or at the executed exchange trade prices. Pricing for these securities is typically provided by a recognized pricing service. Generally, these collective fund investments are classified as Level 2 because the valuations are based on observable inputs. Common stock and exchange traded mutual funds are valued at the closing price reported on the active market on which such securities are traded. These investments are classified as Level 1 because a quoted price in an active market is available.

Fixed-income funds: Fixed-income funds primarily consist of U.S. and foreign-issued corporate notes and bonds, convertible bonds, asset-backed securities, government agency obligations, government obligations, municipal bonds and interest-bearing commercial paper. The fair value of these securities is valued using evaluated prices provided by a recognized pricing service. Because the evaluated prices are based on observable inputs, such as dealer quotes, available trade information, spread, bids and offers, prepayment speeds, U.S. Treasury curves and interest rate movements, securities in this category are classified as Level 2.

The Corporation expects to contribute approximately $4,965 in 2015 to the Gibson Retirement Plan, which represents the legally required minimum contribution level. Any discretionary additional contributions the Corporation may make are not expected to exceed the deductible limits established by Internal Revenue Service (“IRS”) regulations.

Based on historic patterns and currently scheduled benefit payments, the Corporation expects to contribute approximately $2,497 to the Supplemental Executive Retirement Plan in 2015, which represents the expected benefit payment for that period. The plan is a nonqualified and unfunded plan, and annual contributions, which are equal to benefit payments, are made from the Corporation’s general funds.

The benefits expected to be paid out are as follows:


			Postretirement Benefits
	Defined Benefit Pension Plans		Excluding Effect of Medicare Part D Subsidy		Including Effect of Medicare Part D Subsidy
2015	$	11,531	$	4,517	$	3,878
2016		11,827		4,516		3,944
2017		11,817		4,515		4,368
2018		11,737		4,512		4,374
2019		11,482		4,494		4,350
2020 – 2024		57,320		21,856		21,202