EMPLOYEE BENEFIT PLANS

In connection with the spin-off of the Performance Fibers business, Rayonier entered into an Employee Matters Agreement with Rayonier Advanced Materials, see Note 2 — Discontinued Operations, which provides that employees of Rayonier Advanced Materials will no longer participate in benefit plans sponsored or maintained by Rayonier. Upon separation, the Rayonier Pension Plans transferred assets and obligations to the Rayonier Advanced Materials Pension Plans resulting in a net decrease in sponsored pension plan obligations of $99 million after a revaluation of plan obligations using a 4.0 percent discount rate versus 4.6 percent at December 31, 2013. In addition, $78 million of other comprehensive losses were transferred to Rayonier Advanced Materials Pension Plans after revaluation, net of taxes of $45 million. In the third quarter of 2014, the Company made adjustments to the assets and obligations transferred to the Rayonier Advanced Materials Pension Plans as the pension and postretirement plans segregation was finalized. The effect of these period adjustments has been reflected in equity for the period ended September 30, 2014.

The Company has one qualified non-contributory defined benefit pension plan covering a portion of its employees and an unfunded plan that provides benefits in excess of amounts allowable under current tax law in the qualified plan. Currently, the qualified plan is closed to new participants. Employee benefit plan liabilities are calculated using actuarial estimates and management assumptions. These estimates are based on historical information, along with certain assumptions about future events. Changes in assumptions, as well as changes in actual experience, could cause the estimates to change.

The net pension and postretirement benefit costs that have been recorded are shown in the following tables:



	Pension						Postretirement
	Three Months Ended September 30,						Three Months Ended September 30,
	2014			2013			2014		2013
Components of Net Periodic Benefit Cost
Service cost	$	378		$	2,011		$	3	$	330
Interest cost	786			3,953			18		231
Expected return on plan assets	(1,135		)	(5,966		)	—		—
Amortization of prior service cost	3			322			—		6
Amortization of losses	601			4,792			3		98
Net periodic benefit cost (a)	$	633		$	5,112		$	24	$	665



	Pension						Postretirement
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Components of Net Periodic Benefit Cost
Service cost	$	3,545		$	6,441		$	328		$	828
Interest cost	9,921			12,740			423			711
Expected return on plan assets	(14,123		)	(19,356		)	—			—
Amortization of prior service cost	572			1,032			8			19
Amortization of losses	5,942			15,308			248			533
Amortization of negative plan amendment	—			—			(267		)	—
Net periodic benefit cost (b)	$	5,857		$	16,165		$	740		$	2,091


(a)	Net periodic benefit cost for the three months ended September 30, 2013 includes $3.7 million recorded in “Income from discontinued operations, net” on the Consolidated Statements of Income and Comprehensive Income.


(b)	Net periodic benefit cost for the nine months ended September 30, 2014 and September 30, 2013 includes $4.0 million and $11.2 million, respectively, recorded in “Income from discontinued operations, net” on the Consolidated Statements of Income and Comprehensive Income.

In 2014, the Company has no mandatory pension contribution requirement.