Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2014

TABLE 92: CHANGE IN PLAN ASSETS


	U.S. PLAN						NON-U.S. PLANS
(In Millions)	2014			2013			2014			2013
Fair Value of Assets at Beginning of Period	$	1,342.1		$	1,277.7		$	148.5		$	133.9
Actual Return on Assets		157.1			122.1			22.2			11.5
Employer Contributions		–			–			4.8			4.3
Benefits Paid		(58.4	)		(57.7	)		(6.6	)		(5.0	)
Foreign Exchange Rate Changes		–			–			(11.3	)		3.8

Fair Value of Assets at End of Period	$	1,440.8		$	1,342.1		$	157.6		$	148.5

Fair Values of U.S. Pension Plan Assets by Major Asset Category, and their Level within Fair Value Hierarchy

The following table presents the fair values of Northern Trust’s U.S. pension plan assets, by major asset category, and their level within the fair value hierarchy defined by GAAP as of December 31, 2014, and 2013.

TABLE 93: FAIR VALUE OF U.S. PENSION PLAN ASSETS

DECEMBER 31, 2014

(In Millions)

LEVEL 1

LEVEL 2

LEVEL 3

TOTAL

Common Stock

U.S.

14.8

–

14.8

Fixed Income – U.S. Government

–

159.5

–

159.5

Other Investments

Mutual Funds:

Global Large Cap Blend

69.6

–

69.6

Collective Trust Funds:

Foreign Large Cap Blend

–

105.4

–

105.4

Foreign Small Cap Blend

–

37.2

–

37.2

Domestic Large Cap Blend

–

196.7

–

196.7

Domestic Small Cap Value

–

26.5

–

26.5

Domestic Mid Cap Value

–

14.4

–

14.4

Domestic Small Cap Growth

–

21.2

–

21.2

Domestic Mid Cap Growth

–

15.2

–

15.2

Short-Term Investment

–

3.4

–

3.4

Global Real Estate Blend

–

73.8

–

73.8

Domestic Long-Term Bond

–

508.0

–

508.0

Emerging Market Large Cap Blend

–

68.2

–

68.2

Private Equity Funds

–

49.0

Hedge Funds

–

68.6

Cash and Other

9.3

–

9.3

Total Assets at Fair Value

93.7

1,229.5

117.6

1,440.8


	DECEMBER 31, 2013
(In Millions)	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Preferred and Common Stock
U.S.	$	116.0	$	–	$	–	$	116.0
Non-U.S.		52.9		3.9		–		56.8
Fixed Income – U.S. Government		–		131.7		–		131.7
Other Investments
Mutual Funds:
Domestic Large Cap Growth		69.4		–		–		69.4
Foreign Large Cap Blend		66.6		–		–		66.6
Collective Trust Funds:
Foreign Large Cap Blend		–		74.3		–		74.3
Foreign Small Cap Blend		–		31.6		–		31.6
Domestic Large Cap Blend		–		101.0		–		101.0
Domestic Small Cap Value		–		26.3		–		26.3
Domestic Mid Cap Value		–		19.1		–		19.1
Domestic Small Cap Growth		–		14.3		–		14.3
Domestic Mid Cap Growth		–		38.0		–		38.0
Short-Term Investment		–		6.6		–		6.6
Global Real Estate Blend		–		65.4		–		65.4
Domestic Long-Term Bond		–		333.7		–		333.7
Emerging Market Large Cap Blend		–		40.9		–		40.9
Commodity Linked Fund		39.7		–		–		39.7
Ishares Index Fund		2.4		–		–		2.4
Private Equity Funds		–		–		47.7		47.7
Hedge Funds		–		–		55.1		55.1
Cash and Other		5.5		–		–		5.5

Total Assets at Fair Value	$	352.5	$	886.8	$	102.8	$	1,342.1

Health Care Cost Trend Rate Sensitivity Analysis

For example, increasing or decreasing the assumed health care trend rate by one percentage point in each year would have the following effect.


TABLE 100: HEALTH CARE COST TREND RATE ASSUMPTION
(In Millions)	1–PERCENTAGE POINT INCREASE		1–PERCENTAGE POINT DECREASE
Effect on Postretirement Benefit Obligation	$	1.0	$	(0.9	)
Effect on Total Service and Interest Cost Components		–		–

Pension Plans, Defined Benefit

Plan Status of U.S. Plan, Non-U.S. Plans and Supplemental Plan

TABLE 87: EMPLOYEE BENEFIT PLAN STATUS


	U.S. PLAN						NON-U.S. PLANS						SUPPLEMENTAL PLAN
($ In Millions)	2014			2013			2014			2013			2014			2013
Accumulated Benefit Obligation	$	974.8		$	827.9		$	184.6		$	164.7		$	109.2		$	89.8

Projected Benefit Obligation		1,091.5			919.7			184.6			164.7			123.0			101.5
Plan Assets at Fair Value		1,440.8			1,342.1			157.6			148.5			–			–

Funded Status at December 31	$	349.3		$	422.4		$	(27.0	)	$	(16.2	)	$	(123.0	)	$	(101.5	)
Weighted-Average Assumptions:
Discount Rates		4.25	%		5.00	%		3.20	%		4.31	%		4.25	%		5.00	%
Rate of Increase in Compensation Level		4.25			4.25			N/A			N/A			4.25			4.25
Expected Long-Term Rate of Return on Assets		7.25			7.75			4.00			4.84			N/A			N/A

Amount Included in Accumulated Other Comprehensive Income

TABLE 88: AMOUNTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME


	U.S. PLAN						NON-U.S. PLANS				SUPPLEMENTAL PLAN
(In Millions)	2014			2013			2014		2013		2014		2013
Net Actuarial Loss	$	382.9		$	310.7		$	60.5	$	40.9	$	81.5	$	64.2
Prior Service Cost		(3.1	)		(3.5	)		–		–		1.1		1.6

Gross Amount in Accumulated Other Comprehensive Income		379.8			307.2			60.5		40.9		82.6		65.8
Income Tax Effect		143.3			119.5			6.3		4.8		30.9		25.6

Net Amount in Accumulated Other Comprehensive Income	$	236.5		$	187.7		$	54.2	$	36.1	$	51.7	$	40.2

Components of Company's Net Periodic Benefit Cost

TABLE 89: NET PERIODIC PENSION EXPENSE


	U.S. PLAN									NON-U.S. PLANS									SUPPLEMENTAL PLAN
($ In Millions)	2014			2013			2012			2014			2013			2012			2014			2013			2012
Service Cost	$	32.7		$	30.3		$	35.3		$	–		$	–		$	–		$	3.1		$	1.6		$	3.0
Interest Cost		44.4			42.1			41.4			6.9			6.6			6.2			4.8			4.4			4.5
Expected Return on Plan Assets		(97.7	)		(93.3	)		(87.0	)		(7.0	)		(6.2	)		(6.8	)		N/A			N/A			N/A
Amortization:
Net Loss (Gain)		21.5			42.5			34.3			(1.6	)		1.0			0.7			5.8			6.7			6.1
Prior Service Cost		0.4			(0.4	)		(0.4	)		–			–			–			0.5			0.5			0.6

Net Periodic Pension Expense (Benefit)	$	0.5		$	21.2		$	23.6		$	(1.7	)	$	1.4		$	0.1		$	14.2		$	13.2		$	14.2

Weighted-Average Assumptions:
Discount Rates		5.00	%		4.25	%		4.75	%		4.31	%		4.42	%		5.02	%		5.00	%		4.25	%		4.75	%
Rate of Increase in Compensation Level		4.25			4.02			4.02			N/A			N/A			N/A			4.25			4.02			4.02
Expected Long-Term Rate of Return on Assets		7.75			7.75			8.00			4.84			4.76			5.28			N/A			N/A			N/A

Change in Benefit Obligation, Postretirement Health Care, and in Accumulated Postretirement Benefit Obligation

TABLE 90: CHANGE IN PROJECTED BENEFIT OBLIGATION


	U.S. PLAN						NON-U.S. PLANS						SUPPLEMENTAL PLAN
(In Millions)	2014			2013			2014			2013			2014			2013
Beginning Balance	$	919.7		$	1,030.4		$	164.7		$	158.1		$	101.5		$	106.4
Service Cost		32.7			30.3			–			–			3.1			1.6
Interest Cost		44.4			42.1			6.9			6.6			4.8			4.4
Actuarial (Gain) Loss		153.1			(125.4	)		33.2			0.4			23.1			(0.5	)
Benefits Paid		(58.4	)		(57.7	)		(6.6	)		(5.0	)		(9.5	)		(10.4	)
Foreign Exchange Rate Changes		–			–			(13.6	)		4.6			–			–

Ending Balance	$	1,091.5		$	919.7		$	184.6		$	164.7		$	123.0		$	101.5

Estimated Future Benefit Payments

TABLE 91: ESTIMATED FUTURE BENEFIT PAYMENTS


(In Millions)	U.S. PLAN		NON-U.S. PLANS		SUPPLEMENTAL PLAN
2015	$	69.4	$	2.5	$	9.5
2016		68.4		3.1		10.6
2017		70.2		2.6		12.7
2018		70.7		3.0		12.4
2019		71.2		3.3		12.3
2020-2024		345.2		22.4		60.2

Changes in Level 3 U.S. Pension Plan Assets

The following table presents the changes in Level 3 assets for the years ended December 31, 2014, and 2013.

TABLE 94: CHANGE IN LEVEL 3 ASSETS


	PRIVATE EQUITY FUNDS						HEDGE FUNDS
(In Millions)	2014			2013			2014			2013
Fair Value at January 1	$	47.7		$	47.4		$	55.1		$	30.2
Actual Return on Plan Assets		10.3			5.5			1.8			4.9
Realized Gain		–			–			1.7			–
Purchases		3.5			6.2			15.0			20.0
Sales		(12.5	)		(11.4	)		(5.0	)		–

Fair Value at December 31	$	49.0		$	47.7		$	68.6		$	55.1

Other Postretirement Plan

Plan Status of U.S. Plan, Non-U.S. Plans and Supplemental Plan


TABLE 95: POSTRETIREMENT HEALTH CARE PLAN STATUS	DECEMBER 31,
(In Millions)	2014		2013
Accumulated Postretirement Benefit Obligation at Measurement Date:
Retirees and Dependents	$	25.0	$	22.5
Actives Eligible for Benefits		8.4		8.7

Net Postretirement Benefit Obligation	$	33.4	$	31.2

Amount Included in Accumulated Other Comprehensive Income


TABLE 96: AMOUNTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME	DECEMBER 31,
(In Millions)	2014			2013
Net Actuarial Gain	$	(2.4	)	$	(6.0	)
Prior Service Benefit		–			–

Gross Amount in Accumulated Other Comprehensive Income		(2.4	)		(6.0	)
Income Tax Effect		(0.9	)		(2.3	)

Net Amount in Accumulated Other Comprehensive Income	$	(1.5	)	$	(3.7	)

Components of Company's Net Periodic Benefit Cost


TABLE 97: NET PERIODIC POSTRETIREMENT (BENEFIT) EXPENSE	FOR THE YEAR ENDED DECEMBER 31,
(In Millions)	2014			2013			2012
Service Cost	$	0.1		$	0.1		$	0.2
Interest Cost		1.5			1.2			1.3
Amortization
Net (Gain) Loss		(0.6	)		(1.2	)		(2.3	)
Prior Service Benefit		–			(3.0	)		(5.1	)

Net Periodic Postretirement (Benefit) Expense	$	1.0		$	(2.9	)	$	(5.9	)

Change in Benefit Obligation, Postretirement Health Care, and in Accumulated Postretirement Benefit Obligation


TABLE 98: CHANGE IN ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION	FOR THE YEAR ENDED DECEMBER 31,
(In Millions)	2014			2013
Beginning Balance	$	31.2		$	30.6
Service Cost		0.1			0.1
Interest Cost		1.5			1.2
Actuarial Loss		3.0			1.9
Net Claims Paid		(3.1	)		(2.8	)
Medicare Subsidy		0.7			0.2

Ending Balance	$	33.4		$	31.2

Estimated Future Benefit Payments


TABLE 99: ESTIMATED FUTURE BENEFIT PAYMENTS
(In Millions)	TOTAL POSTRETIREMENT MEDICAL BENEFITS
2015	$	3.0
2016		3.1
2017		3.1
2018		3.1
2019		3.1
2020-2024		12.9