NOTE 9 – PENSION AND OTHER POSTRETIREMENT BENEFITS:

U.S. Pension Benefits

Historically, the Corporation had one qualified domestic defined benefit pension plan (“legacy plan”). As part of the Åkers acquisition, the Corporation assumed the obligations for two additional U.S. plans (“Åkers plans”). Collectively, the plans cover substantially all of its U.S. employees. Effective June 1, 2016, the Åkers salary plan was amended to freeze benefit accruals and participation in the plan and replace benefit accruals with employer non-elective contributions equaling 3% of compensation. The plan change resulted in remeasurement of the liability, reducing the liability by approximately $1,181 as of December 31, 2016, and a curtailment gain of $887 for the year ended December 31, 2016. Additionally, effective July 1, 2015, the legacy plan was amended to freeze benefit accruals and participation in the plan for non-union hourly and salaried participants and, effective January 1, 2016, for employees of the Union Electric Steel Carnegie Steelworkers Location. Benefits under the legacy plan were replaced with employer contributions of a 3% non-elective base contribution and a matching contribution of up to 4% to the defined contribution plan. The plan changes resulted in a remeasurement of the plan liability, reducing the liability by approximately $10,306 as of December 31, 2015, and curtailment losses of $1,303 for the year ended December 31, 2015. Additionally, the legacy plan was amended in both of the years to permit lump sum distributions to deferred vested participants and deferred beneficiaries who were not previously offered a lump sum. Employer contributions to the defined contribution plans totaled $2,466 and $882 for 2016 and 2015, respectively, and are expected to approximate $2,810 in 2017.

The U.S. defined benefit pension plans are covered by the Employee Retirement Income Security Act of 1974 (“ERISA”); accordingly, the Corporation’s policy is to fund at least the minimum actuarially computed annual contribution required under ERISA. No minimum contributions were required for any of the three years for the legacy plan or, since the date of acquisition, for the Åkers plans. Additionally, no minimum contributions are required for any of the plans in 2017. Estimated benefit payments for subsequent years are $13,206 for 2017, $13,535 for 2018, $13,944 for 2019, $14,195 for 2020, $14,485 for 2021 and $73,814 for 2022 – 2026. The fair value of the plan assets as of December 31, 2016 and 2015 approximated $188,722 and $139,376, respectively, in comparison to accumulated benefit obligations of $235,299 and $173,243 for the same periods.

The Corporation also maintains nonqualified defined benefit pension plans for selected executives in addition to the benefits provided under the Corporation’s qualified defined benefit pension plan. The objectives of the nonqualified plans are to provide supplemental retirement benefits or restore benefits lost due to limitations set by the Internal Revenue Service. The assets of the nonqualified plans are held in a grantor tax trust known as a “Rabbi” trust and are subject to claims of the Corporation’s creditors, but otherwise must be used only for purposes of providing benefits under the plans. No contributions were made to the trust in 2014 – 2016 and none are expected in 2017. The fair market value of the trust at December 31, 2016 and 2015, which is included in other noncurrent assets, was $3,863 and $3,663, respectively. Changes in the fair market value of the trust are recorded as a component of other comprehensive income (loss). The plan is treated as a non-funded pension plan for financial reporting purposes. Accumulated benefit obligations approximated $6,639 and $5,676 at December 31, 2016 and 2015, respectively. Estimated benefit payments for subsequent years, which would represent employer contributions, are approximately $417 for 2017, $438 for 2018, $452 for 2019, $463 for 2020, $482 for 2020 and $2,548 for 2022-2026.

Employees at one location participate in a multi-employer plan, I.A.M. National Pension Fund, in lieu of the Corporation’s defined benefit pension plan. A multi-employer plan generally receives contributions from two or more unrelated employers pursuant to one or more collective bargaining agreements. The assets contributed by one employer may be used to fund the benefits provided to employees of other employers in the plan because the plan assets, once contributed, are not restricted to individual employers. The latest report of summary plan information (for the 2015 plan year) provided by I.A.M. National Pension Fund indicates:

•

More than 1,650 employer locations contribute to the plan

•

Approximately 100,000 active employees participate in the plan

•

Assets of approximately $11.6 billion and a funded status of approximately 101%.

Less than 100 of the Corporation’s employees participate in the plan and contributions are based on a rate per hour. The Corporation’s contributions to the plan equaled $237, $236 and $233 in 2016, 2015 and 2014, respectively, and represent less than five percent of total contributions to the plan by all contributing employers. Contributions are expected to approximate $259 in 2017.

Foreign Pension Benefits

Employees of UES-UK participate in a defined benefit pension plan that was curtailed effective December 31, 2004 and replaced with a defined contribution pension plan. The UES-UK plans are non-U.S. plans and therefore are not covered by ERISA. Instead, the Trustees and UES-UK have agreed to a recovery plan that estimates the amount of employer contributions at £1,123 annually through October 2021, based on U.K. regulations, necessary to eliminate the funding deficit of the plan with such estimates subject to change based on the future investment performance of the plan’s assets. The U.S. dollar equivalent of employer contributions to the defined benefit pension plan approximated $1,522, $1,715 and $1,849 in 2016, 2015 and 2014, respectively. The fair value of the plan’s assets as of December 31, 2016 and 2015 approximated $48,055 (£38,955) and $49,628 (£33,528), respectively, in comparison to accumulated benefit obligations of $61,277 (£49,673) and $63,750 (£43,069) for the same periods. Estimated benefit payments for subsequent years for the UES-UK plan are $1,249 for 2017, $1,752 for 2018, $2,042 for 2019, $1,906 for 2020, $1,883 for 2021 and $11,679 for 2022-2026. Contributions to the defined contribution pension plan approximated $252, $382 and $407 in 2016, 2015 and 2014, respectively, and are expected to approximate $276 in 2017.

As part of the Åkers acquisition, the Corporation assumed the obligations of two foreign defined benefit pension plans. The plans are unfunded and not significant (projected benefit obligations approximate $5,633 at December 31, 2016). Estimated benefit payments for subsequent years, for both plans combined, are $189 for 2017, $224 for 2018, $274 for 2019, $274 for 2020, $306 for 2021 and $1,333 for 2022-2026.

Other Postretirement Benefits

The Corporation has historically provided postretirement health care benefits principally to the bargaining groups of one subsidiary (“legacy OPEB plan”). The legacy OPEB plan covers participants and their spouses and/or dependents who retire under the existing pension plan on other than a deferred vested basis and at the time of retirement have also rendered 15 or more years of continuous service irrespective of age. During 2015, the plan was amended to provide monthly reimbursement for a 5-year period, which reduced the plan liability by approximately $4,437. Retiree life insurance continues to be provided to substantially all retirees.

The Corporation also provides health care and life insurance benefits to former employees of certain discontinued operations. This obligation had been estimated and provided for at the time of disposal.

As part of the Åkers acquisition, the Corporation assumed the obligations for two additional postretirement benefit plans (“Åkers OPEB plans”). The Åkers OPEB plans cover retiree medical and life insurance benefits. In August 2016, the Corporation modified the Åkers OPEB plans effective January 1, 2017 whereby retiree health benefits for certain groups of pre-Medicare eligible employees will be replaced with a monthly stipend. The plan changes resulted in a reduction in prior service costs decreasing plan liabilities by approximately $4,762, which will be amortized against other postretirement benefit costs over the expected remaining service periods of approximately 7.5 and 12 years, versus recognized immediately.

The Corporation’s postretirement health care and life insurance plans are not funded or subject to any minimum regulatory funding requirements. Estimated benefit payments for subsequent years, which would represent employer contributions, for the legacy and Åkers OPEB plans are approximately $1,289 for 2017, $1,331 for 2018, $1,358 for 2019, $1,455 for 2020, $1,279 for 2021 and $5,825 for 2022-2026.

Reconciliations

The following provides a reconciliation of projected benefit obligations (“PBO”), plan assets, the funded status of the plans and the amounts recognized in the consolidated balance sheets for the Corporation’s defined benefit plans calculated using a measurement date as of the end of the respective years.


	U.S. Pension Benefits^(a)						Foreign Pension Benefits						Other Postretirement Benefits
		2016			2015			2016			2015			2016			2015
Change in projected benefit obligations:
PBO at January 1	$	181,803		$	205,399		$	63,750		$	70,523		$	8,117		$	13,739
Åkers acquisition – PBO at March 3		68,081			0			5,393			0			17,467			0
Service cost		1,714			2,743			314			0			504			384
Interest cost		9,977			7,990			2,250			2,394			722			474
Plan amendments		0			447			0			0			(4,762	)		(4,437	)
Plan settlements^(b)		(2,739	)		(5,494	)		0			0			0			0
Plan curtailments		(1,181	)		(10,306	)		0			0			0			0
Foreign currency exchange rate changes		0			0			(11,477	)		(3,413	)		0			0
Actuarial (gain) loss		(160	)		(9,880	)		8,869			(4,005	)		(1,598	)		(1,433	)
Participant contributions		0			0			0			0			80			79
Benefits paid from plan assets		(12,679	)		(8,772	)		(2,189	)		(1,749	)		0			0
Benefits paid by the Corporation		(376	)		(324	)		0			0			(1,471	)		(689	)
PBO at December 31	$	244,440		$	181,803		$	66,910		$	63,750		$	19,059		$	8,117
Change in plan assets:
Fair value of plan assets at January 1	$	139,376		$	157,048		$	49,628		$	50,533		$	0		$	0
Åkers acquisition – fair value of plan assets at March 3		50,108			0			0			0			0			0
Actual return on plan assets		14,656			(3,406	)		7,859			1,701			0			0
Foreign currency exchange rate changes		0			0			(8,930	)		(2,572	)		0			0
Corporate contributions		376			324			1,687			1,715			1,391			610
Participant contributions		0			0			0			0			80			79
Plan settlements^(b)		(2,739	)		(5,494	)		0			0			0			0
Gross benefits paid		(13,055	)		(9,096	)		(2,189	)		(1,749	)		(1,471	)		(689	)
Fair value of plan assets at December 31	$	188,722		$	139,376		$	48,055		$	49,628		$	0		$	0
Funded status of the plans:
Fair value of plan assets	$	188,722		$	139,376		$	48,055		$	49,628		$	0		$	0
Less benefit obligations		244,440			181,803			66,910			63,750			19,059			8,117
Funded status at December 31	$	(55,718	)	$	(42,427	)	$	(18,855	)	$	(14,122	)	$	(19,059	)	$	(8,117	)

(a)

Includes the nonqualified defined benefit pension plan.

(b)

Represents lump sum payments.


	U.S. Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
		2016			2015			2016			2015			2016			2015
Recognized in the balance sheets:
Employee benefit obligations:
Accrued payrolls and employee benefits^(a)	$	(409	)	$	(352	)	$	0		$	0		$	(1,276	)	$	(612	)
Employee benefit obligations^(b)		(55,309	)		(42,075	)		(18,855	)		(14,122	)		(17,783	)		(7,505	)
	$	(55,718	)	$	(42,427	)	$	(18,855	)	$	(14,122	)	$	(19,059	)	$	(8,117	)
Accumulated other comprehensive loss:^(c)
Net actuarial loss	$	48,153		$	53,163		$	25,547		$	27,594		$	936		$	2,570
Prior service cost		209			237			0			0			(15,581	)		(12,097	)
	$	48,362		$	53,400		$	25,547		$	27,594		$	(14,645	)	$	(9,527	)

(a)

Recorded as a current liability in the consolidated balance sheet.

(b)

Recorded as a noncurrent liability in the consolidated balance sheet.

(c)

Amounts are pre-tax.

Amounts included in accumulated other comprehensive loss as of December 31, 2016 expected to be recognized in net periodic pension and other postretirement costs in 2017 include:


	U.S. Pension Benefits		Foreign Pension Benefits		Other Postretirement Benefits
Net actuarial loss	$	1,212	$	790	$	67
Prior service cost (credit)		52		0		(1,620)
	$	1,264	$	790	$	(1,553)

Investment Policies and Strategies

The investment policies and strategies are determined and monitored by the Board of Directors for the U.S. pension plans and by the Trustees (as appointed by UES-UK and the employees of UES-UK) for the UES-UK pension plan, each of whom employ their own investment managers to manage the plan’s assets in accordance with the policy guidelines. The foreign pension plans of Åkers are unfunded. Pension assets are invested with the objective of maximizing long-term returns while minimizing material losses to meet future benefit obligations as they become due. Investments in equity securities are primarily in common stocks of publicly-traded U.S. and international companies across a broad spectrum of industry sectors. Investments in fixed-income securities are principally A-rated or better bonds with maturities of less than ten years, preferred stocks and convertible bonds. The Corporation believes there are no significant concentrations of risk associated with the Plans’ assets.

Attempts to minimize risk include allowing temporary changes to the allocation mix in response to market conditions, diversifying investments among asset categories (e.g., equity securities, fixed-income securities, alternative investments, cash and cash equivalents) and within these asset categories (e.g., economic sector, industry, geographic distribution, size) and consulting with independent financial and legal counsels to assure that the investments and their expected returns and risks are consistent with the goals of the Board of Directors or Trustees.

With respect to the U.S. pension plans, the following investments are prohibited unless otherwise approved by the Board of Directors: stock of the Corporation, futures and options except for hedging purposes, unregistered or restricted stock, warrants, margin trading, short-selling, real estate excluding public or real estate partnerships, and commodities including art, jewelry and gold. The foreign pension plan invests in specific funds. Any investments other than those specifically identified would be considered prohibited.

The following summarizes target asset allocations (within +/-5% considered acceptable) and major asset categories. Certain investments are classified differently for target asset allocation purposes and external reporting purposes. In addition, for the legacy plan, the Corporation changed investment managers in December 2016; accordingly, there is temporarily a higher amount in cash and cash equivalents.


	U.S. Pension Benefits									Foreign Pension Benefits
	Target Allocation			Percentage of Plan Assets						Target Allocation			Percentage of Plan Assets
	Dec. 31, 2016			2016			2015			Dec. 31, 2016			2016			2015
Equity Securities		65	%		47	%		58	%		44	%		48	%		46	%
Fixed-Income Securities		15	%		21	%		19	%		35	%		34	%		33	%
Alternative Investments		15	%		8	%		13	%		21	%		18	%		21	%
Other (primarily cash and cash equivalents)		5	%		24	%		10	%		0	%		0	%		0	%

Fair Value Measurement of Plan Assets

Equity securities and mutual funds are actively traded on exchanges and price quotes for these investments are readily available. Similarly, corporate debt and preferred securities consist of fixed-income securities of U.S. and U.K. corporations and price quotes for these investments are readily available. Common collective trust and commingled funds are not traded publicly, but the underlying assets (such as stocks and bonds) held in these funds are traded on active markets and the prices for the underlying assets are readily observable. For securities not actively traded, the fair value may be based on third-party appraisals, discounted cash flow analysis, benchmark yields and inputs that are currently observable in markets for similar securities.

Investment Strategies

The significant investment strategies of the various funds are summarized below.


Fund	Investment Strategy	Primary Investment Objective
Temporary Investment Funds	Invests primarily in a diversified portfolio of investment grade money market instruments.	Achieve a market level of current income while maintaining stability of principal and liquidity.
Various Equity Funds	Each fund maintains a diversified holding in common stock of applicable companies (e.g., common stock of small capitalization companies if a small-cap fund, common stock of medium capitalization companies if a mid-cap fund, common stock of foreign corporations if an international fund, etc.).	Outperform the fund’s related index.
Various Fixed Income Funds	Invests primarily in a diversified portfolio of fixed-income securities of varying maturities or in commingled funds which invest in a diversified portfolio of fixed-income securities of varying maturities.	For the U.S. Plans – to outperform either the Barclays Capital U.S. Aggregate Index or US Corporate High Yield Index, as applicable, over a prescribed period. For the Foreign Plans – to outperform the applicable FTSE index over a prescribed period.
Alternative Investments – Managed Funds	Invests in equities and equity-like asset classes and strategies (such as public equities, venture capital, private equity, real estate, natural resources and hedged strategies) and fixed-income securities.	Generate a minimum annual inflation adjusted return of 5% and outperform a traditional 70/30 equities/bond portfolio.
Alternative Investments – Hedge and Absolute Return Funds	Invests in a diversified portfolio of alternative investment styles and strategies.	Generate long-term capital appreciation while maintaining a low correlation with the traditional global financial markets.

Categories of Plan Assets

Asset categories based on the nature and risks of the U.S. Pension Benefit Plans’ assets as of December 31, 2016 are summarized below.


	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity Securities:
U.S.
Bank & financial services	$	631	$	0	$	0	$	631
Capital goods		75		0		0		75
Chemicals		20		0		0		20
Commercial services		16		0		0		16
Electronics		67		0		0		67
Health care		201		0		0		201
Mutual funds		72,571		0		0		72,571
Oil & gas		87		0		0		87
Retail		101		0		0		101
Technology		188		0		0		188
Transportation		18		0		0		18
Wholesale distribution		16		0		0		16
Other (represents 8 business sectors)		211		0		0		211
International
Chemicals		7		0		0		7
Technology		6		0		0		6
Total Equity Securities		74,215		0		0		74,215
Fixed Income Securities:
Mutual funds		36,601		0		0		36,601
Total Fixed Income Securities		36,601		0		0		36,601
Alternative Investments:
Managed funds^(a)		0		0		33,830		33,830
Total Alternative Investments		0		0		33,830		33,830
Other:
Money market mutual funds		27,902		0		0		27,902
Commingled funds		0		154		0		154
Other^(b)		16,020		0		0		16,020
Total Other		43,922		154		0		44,076
	$	154,738	$	154	$	33,830	$	188,722

(a)

Includes approximately 45.9% in equity and equity-like asset securities, 44.5% in alternative investments (real assets, commodities and resources, absolute return funds) and 7.4% in fixed income securities and 2.2% in other, primarily cash and cash equivalents.

(b)

Includes accrued receivables and pending broker settlements.

Asset categories based on the nature and risks of the U.S. Pension Benefit Plan’s assets as of December 31, 2015 are summarized below.


	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity Securities:
U.S.
Capital goods	$	1,531	$	0	$	0	$	1,531
Chemicals		1,811		0		0		1,811
Commercial property		906		0		0		906
Commercial services		925		0		0		925
Common collective trust funds		0		31,291		0		31,291
Electronics		785		0		0		785
Food processing		2,856		0		0		2,856
Health care		1,815		0		0		1,815
Limited partnerships – public equity		4,173		0		0		4,173
Manufacturing		1,536		0		0		1,536
Oil & gas		1,499		0		0		1,499
Retail		706		0		0		706
Technology		1,674		0		0		1,674
Transportation		484		0		0		484
Wholesale distribution		789		0		0		789
Other (represents 13 business sectors)		5,695		0		0		5,695

International
Bank & financial services		1,525		0		0		1,525
Common collective trust funds		0		3,078		0		3,078
Engineering & construction		729		0		0		729
Oil & gas		807		0		0		807
Real estate		937		0		0		937
Technology		265		0		0		265
Other (represents 9 business sectors)		2,391		0		0		2,391
Total Equity Securities		33,839		34,369		0		68,208
Fixed-Income Securities:
Commingled funds		0		14,697		0		14,697
Preferred (represents 5 business sectors)		6,689		0		0		6,689
Other (represents 4 business sectors)		0		1,280		0		1,280
Total Fixed-Income Securities		6,689		15,977		0		22,666
Alternative Investments:
Managed funds^(a)		0		0		32,210		32,210
Hedge and absolute return funds		0		0		4,967		4,967
Total Alternative Investments		0		0		37,177		37,177
Other:
Mutual funds		1,836		0		0		1,836
Commingled funds		0		1,005		0		1,005
Other^(b)		8,484		0		0		8,484
Total Other		10,320		1,005		0		11,325
	$	50,848	$	51,351	$	37,177	$	139,376

(a)

Includes approximately 38% in equity and equity-like asset securities, 43% in alternative investments (real assets, commodities and resources, absolute return funds) and 19% in fixed income securities and cash and cash equivalents.

(b)

Includes accrued receivables and pending broker settlements.

Asset categories based on the nature and risks of the Foreign Pension Benefit Plan’s assets as of December 31, 2016 are summarized below.


	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity Securities:
Commingled Funds (U.K.)	$	0	$	3,716	$	0	$	3,716
Commingled Funds (International)		0		19,146		0		19,146
Total Equity Securities		0		22,862		0		22,862
Fixed-Income Securities:
Commingled Funds (U.K.)		0		16,426		0		16,426
Alternative Investments:
Hedge and Absolute Return Funds		0		0		8,593		8,593
Cash and cash equivalents		174		0		0		174
	$	174	$	39,288	$	8,593	$	48,055

Asset categories based on the nature and risks of the Foreign Pension Benefit Plan’s assets as of December 31, 2015 are summarized below.


	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity Securities:
Commingled Funds (U.K.)	$	0	$	3,697	$	0	$	3,697
Commingled Funds (International)		0		18,930		0		18,930
Total Equity Securities		0		22,627		0		22,627
Fixed-Income Securities:
Commingled Funds (U.K.)		0		16,298		0		16,298
Alternative Investments:
Hedge and Absolute Return Funds		0		0		10,571		10,571
Cash and cash equivalents		132		0		0		132
	$	132	$	38,925	$	10,571	$	49,628

The table below sets forth a summary of changes in the fair value of the Level 3 plan assets for U.S. and foreign pension plans for the year ended December 31, 2016.


	Alternative Investments
	U.S. Pension Benefits						Foreign Pension Benefits
Fair value as of January 1, 2016	$	4,967		$	32,210		$	10,571
Contributions		0			0			0
Withdrawals		(4,967	)		0			0
Realized gains (losses)		0			1,857			0
Change in net unrealized (losses) gains		0			(237	)		(280	)
Other, primarily impact from changes in foreign currency exchange rates		0			0			(1,698	)
Fair value as of December 31, 2016	$	0		$	33,830		$	8,593

The table below sets forth a summary of changes in the fair value of the Level 3 plan assets for U.S. and foreign pension plans for the year ended December 31, 2015.


	Alternative Investments
	U.S. Pension Benefits					Foreign Pension Benefits
Fair value as of January 1, 2015	$	8,592		$	33,602	$	10,799
Contributions		5,900			0		0
Withdrawals		(9,843	)		(2,424)		0
Realized gains (losses)		2,334			(19)		0
Change in net unrealized (losses) gains		(2,016	)		1,051		320
Other, primarily impact from changes in foreign currency exchange rates		0			0		(548	)
Fair value as of December 31, 2015	$	4,967		$	32,210	$	10,571

Net Periodic Pension and Other Postretirement Benefit Costs

The actual return on the fair value of plan assets is included in determining the funded status of the plans. In determining net periodic pension costs, the expected long-term rate of return on the market-related value of plan assets is used. Differences between the actual return on plan assets and the expected long-term rate of return on plan assets are classified as part of unrecognized actuarial gains or losses and are recorded as a component of accumulated other comprehensive loss on the consolidated balance sheet. When these gains or losses exceed 10% of the greater of the projected benefit obligation or the market-related value of plan assets, they are amortized to net periodic pension and other postretirement costs over the average remaining service period of employees expected to receive benefits under the plans. When the gains or losses are less than 10% of the greater of the projected benefit obligation or the market-related value of plan assets, they are included in net periodic pension and other postretirement costs indirectly as a result of lower/higher interest costs arising from a decrease/increase in the projected benefit obligation.

Net periodic pension and other postretirement benefit costs include the following components for the year ended December 31:


	U.S. Pension Benefits									Foreign Pension Benefits									Other Postretirement Benefits
	2016			2015			2014			2016			2015			2014			2016			2015			2014
Service cost	$	1,714		$	2,743		$	3,683		$	314		$	0		$	0		$	504		$	384		$	505
Interest cost		9,977			7,990			8,762			2,250			2,394			2,695			722			474			688
Expected return on plan assets		(13,424	)		(10,996	)		(10,747	)		(2,461	)		(2,681	)		(3,157	)		0			0			0
Amortization of:
Prior service cost (credit)		44			371			854			0			0			0			(1,277	)		(672	)		(441	)
Actuarial loss		3,324			5,440			4,183			670			845			599			36			26			104
Curtailment (gain) loss		(887	)		1,303			0			0			0			0			0			0			0
	$	748		$	6,851		$	6,735		$	773		$	558		$	137		$	(15	)	$	212		$	856

Assumptions

Assumptions are reviewed on an annual basis. The expected long-term rate of return on plan assets is an estimate of average rates of earnings expected to be earned on funds invested or to be invested to provide for the benefits included in the projected benefit obligation. Since these benefits will be paid over many years, the expected long-term rate of return is reflective of current investment returns and investment returns over a longer period. Consideration is also given to target and actual asset allocations, inflation and real risk-free return. The discount rates used in determining future pension obligations and other postretirement benefits for each of the plans are based on rates of return on high-quality fixed-income investments currently available and expected to be available during the period to maturity of the pension and other postretirement benefits. High-quality fixed-income investments are defined as those investments which have received one of the two highest ratings given by a recognized rating agency with maturities of 10+ years.

The discount rates and weighted-average wage increases used to determine the benefit obligations as of December 31, 2016 and 2015 are summarized below.


	U.S. Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
	2016			2015			2016			2015			2016			2015
Discount rate		4.02-4.25	%		4.40	%		2.50-2.65	%		3.65	%		3.90-4.13	%		4.20	%
Wage increases		3.00	%		3.00	%		n/a			n/a			n/a			n/a

In addition, the assumed health care cost trend rate at December 31, 2016 for other postretirement benefits is 6% for 2017 gradually decreasing to 4.75% in 2020. In selecting rates for current and long-term health care assumptions, the Corporation considers known health care cost increases, the design of the benefit programs, the demographics of its active and retiree populations and expectations of inflation rates in the future. A one percentage point increase or decrease in the assumed health care cost trend rate would result in an inconsequential change to the postretirement benefit obligation at December 31, 2016 and the annual benefit expense for 2016.

The following assumptions were used to determine net periodic pension and other postretirement benefit costs for the year ended December 31:


	U.S. Pension Benefits							Foreign Pension Benefits									Other Postretirement Benefits
	2016			2015			2014	2016			2015			2014			2016			2015			2014
Discount rate		4.20-4.40	%		4.00-4.10	%	5.00%		3.00-3.65	%		3.50	%		4.50	%		3.80-4.20	%		4.00	%		5.00	%
Expected long-term rate of return		6.90-7.75	%		8.00	%	8.00%		5.40	%		5.40	%		6.50	%		n/a			n/a			n/a
Wages increases		3.00	%		4.00	%	4.00%		n/a			n/a			n/a			n/a			n/a			n/a