NOTE 12 – RETIREMENT AND POSTRETIREMENT BENEFIT PLANS

Prior to January 1, 2016, the Corporation sponsored a discretionary profit-sharing plan with a contributory 401(k) provision covering most of its United States employees. Under this arrangement, the Corporation made separate discretionary profit sharing and 401(k) matching contributions annually, after fiscal year-end, depending on its financial results.

Effective January 1, 2016, the existing profit sharing and 401(k) retirement savings plan was replaced with a safe harbor 401(k) arrangement. Pursuant to the new arrangement, the matching contributions became non-discretionary, were increased, and are now made throughout the year, rather than on an annual basis. The increased matching contributions effectively replace the Corporation’s discretionary profit sharing contributions, which were discontinued for fiscal years ending after February 29, 2016. The combined expense attributable to the profit sharing and employer matching 401(k) contributions in 2016, 2015 and 2014 were $14,200, $13,755 and $14,219, 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 $2,293, $2,558 and $2,124 for 2016, 2015 and 2014, 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 $595, $586 and $582 in 2016, 2015 and 2014, 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 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. The Corporation contributed $4,516 and $3,518 to the plan in 2016 and 2015, respectively. No contributions were made to the plan in 2014. The Gibson Retirement Plan was underfunded at February 29, 2016 and February 28, 2015.

The Corporation also has an unfunded nonqualified defined benefit pension plan (the “Supplemental Executive Retirement Plan” or “SERP”) covering certain management employees. 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 in 2014 as a reduction of actuarial losses within accumulated other comprehensive income and 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 was 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. In accordance with the SERP’s vesting provisions, certain active participants became fully vested in their SERP benefit as a result of the Merger. This accelerated vesting increased the SERP’s benefit obligation by $2,613 and was recognized as an actuarial loss within accumulated other comprehensive income in 2014. 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 $319, $354 and $378 for 2016, 2015 and 2014, 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 Plan
	2016			2015			2016			2015
Change in benefit obligation:
Benefit obligation at beginning of year	$	192,793		$	184,786		$	63,142		$	66,632
Service cost		710			683			335			368
Interest cost		6,186			7,249			2,028			2,545
Participant contributions		10			16			3,042			3,282
Retiree drug subsidy payments		—			—			467			590
Plan amendments		—			580			—			—
Actuarial (gain) loss		(4,427	)		14,137			(5,594	)		(4,387	)
Benefit payments		(11,299	)		(11,431	)		(5,448	)		(5,888	)
Currency exchange rate changes		(1,868	)		(3,227	)		—			—

Benefit obligation at end of year		182,105			192,793			57,972			63,142
Change in plan assets:
Fair value of plan assets at beginning of year		108,293			104,894			45,600			48,757
Actual return on plan assets		(2,646	)		12,188			(129	)		2,313
Employer contributions		6,547			5,612			(3,042	)		(3,282	)
Participant contributions		10			16			3,042			3,282
Benefit payments		(11,299	)		(11,431	)		(5,261	)		(5,470	)
Currency exchange rate changes		(1,686	)		(2,986	)		—			—

Fair value of plan assets at end of year		99,219			108,293			40,210			45,600

Funded status at end of year	$	(82,886	)	$	(84,500	)	$	(17,762	)	$	(17,542	)

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


	Defined Benefit Pension Plans						Postretirement Benefits Plan
	2016			2015			2016			2015
Accrued compensation and benefits	$	(2,647	)	$	(2,639	)	$	—		$	—
Other liabilities		(80,239	)		(81,861	)		(17,762	)		(17,542	)

Net amount recognized	$	(82,886	)	$	(84,500	)	$	(17,762	)	$	(17,542	)

Amounts recognized in accumulated other comprehensive (income) loss:
Net actuarial loss (gain)	$	69,217		$	68,372		$	(20,472	)	$	(19,396	)
Net prior service cost (credit)		—			—			(3,473	)		(4,173	)
Net transition obligation		10			16			—			—

Accumulated other comprehensive loss (income)	$	69,227		$	68,388		$	(23,945	)	$	(23,569	)

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 $3,474 and $4, respectively. Unrecognized actuarial gains and losses in excess of 10% of the greater of the benefit obligation or plan assets are amortized over the average remaining future service period of active participants or the life expectancy of inactive participants, as appropriate.

For the postretirement benefits 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 ($1,470) and ($700), respectively. The unrecognized net gain in excess of 10% of the greater of the benefit obligation or plan assets is amortized over the average future service period of active participants expected to receive benefits. Prior service credits are amortized straight-line beginning at the date of each plan amendment over the average future service period of the affected plan participants expected to receive benefits.

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


	Defined Benefit Pension Plans						Postretirement Benefits Plan
	2016			2015			2016			2015
Weighted average discount rate used to determine:
Benefit obligations at measurement date
U.S.		3.50-3.75	%		3.25-3.50	%		3.75	%		3.50	%
International		3.70	%		3.40	%		N/A			N/A
Net periodic benefit cost
U.S.		3.25-3.50	%		4.00-4.25	%		3.50	%		4.25	%
International		3.40	%		4.05	%		N/A			N/A
Expected long-term return on plan assets:
U.S.		6.75	%		6.75	%		6.50	%		6.50	%
International		4.50	%		5.25	%		N/A			N/A
Rate of compensation increase:
U.S.		N/A			N/A			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			7.50	%		8.00	%
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 2016 and 2015, 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 2016 and 2015, 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.


	2016			2015
Effect of a 1% increase in health care cost trend rate on:
Service cost plus interest cost	$	67		$	82
Accumulated postretirement benefit obligation		2,046			2,083
Effect of a 1% decrease in health care cost trend rate on:
Service cost plus interest cost		(67	)		(72	)
Accumulated postretirement benefit obligation		(1,788	)		(1,798	)

The following table presents selected defined benefit pension plan information:


	2016		2015
For all defined benefit pension plans:
Accumulated benefit obligation	$	182,099	$	192,774
For defined benefit pension plans that are not fully funded:
Projected benefit obligation		182,050		169,803
Accumulated benefit obligation		182,044		169,803
Fair value of plan assets		99,164		85,052

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


	2016			2015			2014
Components of net periodic benefit cost:
Service cost	$	710		$	683		$	1,115
Interest cost		6,186			7,249			7,065
Expected return on plan assets		(6,581	)		(6,522	)		(6,267	)
Amortization of transition obligation		4			5			6
Amortization of prior service cost		—			580			190
Amortization of actuarial loss		3,402			2,827			3,485
Recognition of prior service cost upon curtailment		—			—			1,746

Net periodic benefit cost		3,721			4,822			7,340
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Actuarial loss		4,749			8,610			941
Prior service cost		—			580			414
Amortization of prior service cost		—			(580	)		(190	)
Amortization of actuarial loss		(3,402	)		(2,827	)		(3,485	)
Amortization of transition obligation		(4	)		(5	)		(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		1,343			5,778			(8,623	)

Total recognized in net periodic benefit cost and other comprehensive income	$	5,064		$	10,600		$	(1,283	)

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


	2016			2015			2014
Components of net periodic benefit cost:
Service cost	$	335		$	368		$	431
Interest cost		2,028			2,545			2,397
Expected return on plan assets		(2,687	)		(2,882	)		(3,067	)
Amortization of prior service credit		(699	)		(1,304	)		(1,303	)
Amortization of actuarial gain		(1,702	)		(1,435	)		(1,043	)

Net periodic benefit cost		(2,725	)		(2,708	)		(2,585	)
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Actuarial gain		(2,777	)		(3,818	)		(1,659	)
Amortization of actuarial gain		1,702			1,435			1,043
Amortization of prior service credit		699			1,304			1,303

Total recognized in other comprehensive income		(376	)		(1,079	)		687

Total recognized in net periodic benefit cost and other comprehensive income	$	(3,101	)	$	(3,787	)	$	(1,898	)

At February 29, 2016 and February 28, 2015, the assets of the plans are held in trust and allocated as follows:


	Defined Benefit Pension Plans						Postretirement Benefits Plan
	2016			2015			2016			2015			Target Allocation
Equity securities:
U.S.		48	%		50	%		26	%		27	%		15% - 30	%
International		36	%		34	%		N/A			N/A			N/A
Debt securities:
U.S.		51	%		49	%		70	%		71	%		65% - 85	%
International		64	%		65	%		N/A			N/A			N/A
Cash and cash equivalents:
U.S.		1	%		1	%		4	%		2	%		0% - 15	%
International		—			1	%		N/A			N/A			N/A

As of February 29, 2016, 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, respectively.

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 29, 2016:


	Fair value at February 29, 2016		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
U.S. plans:
Short-term investments	$	707	$	—	$	707
Equity securities (collective funds)		38,595		—		38,595
Fixed-income funds		40,542		—		40,542
International plans:
Short-term investments		55		—		55
Equity securities (collective funds)		6,931		—		6,931
Fixed-income funds		12,389		—		12,389

Total	$	99,219	$	—	$	99,219

The following table summarizes the fair value of the defined benefit pension plan assets at February 28, 2015:


	Fair value at February 28, 2015		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
U.S. plans:
Short-term investments	$	709	$	—	$	709
Equity securities (collective funds)		42,473		—		42,473
Fixed-income funds		41,870		—		41,870
International plans:
Short-term investments		157		—		157
Equity securities (collective funds)		8,012		—		8,012
Fixed-income funds		15,072		—		15,072

Total	$	108,293	$	—	$	108,293

The following table summarizes the fair value of the postretirement benefit plan assets at February 29, 2016:


	Fair value at February 29, 2016		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Short-term investments	$	1,706	$	219	$	1,487
Equity securities		10,324		10,324		—
Fixed income securities		28,180		—		28,180

Total	$	40,210	$	10,543	$	29,667

The following table summarizes the fair value of the postretirement benefit plan assets at February 28, 2015:


	Fair value at February 28, 2015		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Short-term investments	$	1,192	$	—	$	1,192
Equity securities		12,133		12,133		—
Fixed income securities		32,275		—		32,275

Total	$	45,600	$	12,133	$	33,467

Short-term investments: Short-term investments primarily include money market funds and cash. Investments in 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. Investments in exchange traded mutual funds are valued at the closing price reported on the active market on which such funds are traded and are therefore classified as Level 1.

Fixed-income funds and securities: Investments in fixed-income funds and fixed income securities 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 investments 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, investments in this category are classified as Level 2.

The Corporation expects to contribute approximately $4,900 in 2017 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 $2,550 to the Supplemental Executive Retirement Plan in 2017, which represents the total expected benefit payments 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 Plan
	Defined Benefit Pension Plans		Excluding Effect of Medicare Part D Subsidy		Including Effect of Medicare Part D Subsidy
2017	$	11,246	$	3,623	$	3,187
2018		11,381		3,649		3,169
2019		11,421		3,679		3,157
2020		11,362		3,701		3,132
2021		11,432		3,688		3,544
2022 – 2026		57,003		18,458		17,768