L.	EMPLOYEE BENEFITS

Severance Costs: The Company incurred severance expense in 2015, 2014 and 2013 of $3.3, $1.8 and $3.5, respectively.

Defined Benefit Pension Plans: The Company has several defined benefit pension plans, which cover a majority of its employees. The Company evaluates its actuarial assumptions on an annual basis and considers changes based upon market conditions and other factors.

The expected return on plan assets is determined by using a market-related value of assets, which is calculated based on an average of the previous five years of asset gains and losses.

Generally, accumulated unrecognized actuarial gains and losses are amortized using the 10% corridor approach. The corridor is defined as the greater of either 10% of the projected benefit obligation or the market-related value of plan assets. The amortization amount is the excess beyond the corridor divided by the average remaining estimated service life of participants on a straight-line basis.

The Company funds its pensions in accordance with applicable employee benefit and tax laws. The Company contributed $62.9 to its pension plans in 2015 and $81.1 in 2014. The Company expects to contribute in the range of $50.0 to $100.0 to its pension plans in 2016, of which $18.4 is estimated to satisfy minimum funding requirements. Annual benefits expected to be paid beginning January 1, 2016 are $78.9, $81.3, $86.7, $90.6, $97.3 and for the five years thereafter, a total of $571.5.

Plan assets are invested in global equity and debt securities through professional investment managers with the objective to achieve targeted risk adjusted returns and maintain liquidity sufficient to fund current benefit payments. Typically, each defined benefit plan has an investment policy that includes a target for asset mix, including maximum and minimum ranges for allocation percentages by investment category. The actual allocation of assets may vary at times based upon rebalancing policies and other factors. The Company periodically assesses the target asset mix by evaluating external sources of information regarding the long-term historical return, volatilities and expected future returns for each investment category. In addition, the long-term rates of return assumptions for pension accounting are reviewed annually to ensure they are appropriate. Target asset mix and forecast long-term returns by asset category are considered in determining the assumed long-term rates of return, although historical returns realized are given some consideration.

The fair value of mutual funds, common stocks and U.S. treasuries is determined using the market approach and is based on the quoted prices in active markets. These securities are categorized as Level 1. The fair value of commingled trust funds is determined using the market approach and is based on the unadjusted net asset value per unit as determined by the sponsor of the fund based on the fair values of underlying investments. These securities are categorized as Level 2. The fair value of debt securities is determined using the market approach and is based on the quoted market prices of the securities or other observable inputs. These securities are categorized as Level 2.

The following information details the allocation of plan assets by investment type. See Note P for definitions of fair value levels.


*At December 31, 2015*	TARGET			LEVEL 1		LEVEL 2			TOTAL
*Equities:*
U.S. equities						$	593.8		$	593.8
Global equities							674.2			674.2

Total equities		50 - 70	%				1,268.0			1,268.0


*Fixed income:*
U.S. fixed income				$	283.4		348.2			631.6
Non-U.S. fixed income							253.7			253.7

Total fixed income		30 - 50	%		283.4		601.9			885.3

Cash and other					8.2		57.5			65.7

Total plan assets				$	291.6	$	1,927.4		$	2,219.0


At December 31, 2014	TARGET			LEVEL 1		LEVEL 2			TOTAL
Equities:
U.S. equities						$	666.4		$	666.4
Global equities							691.3			691.3

Total equities		50 - 70	%				1,357.7			1,357.7


Fixed income:
U.S. fixed income				$	269.4		339.2			608.6
Non-U.S. fixed income							286.5			286.5

Total fixed income		30 - 50	%		269.4		625.7			895.1

Cash and other					7.7		48.9			56.6

Total plan assets				$	277.1	$	2,032.3		$	2,309.4


The following additional data relates to all pension plans of the Company:
At December 31,						2015			2014
Weighted average assumptions:
Discount rate							4.2	%		3.8	%
Rate of increase in future compensation levels							3.9	%		3.8	%
Assumed long-term rate of return on plan assets							6.5	%		6.5	%

The components of the change in projected benefit obligation and change in plan assets are as follows:


	2015			2014
Change in projected benefit obligation:
Benefit obligation at January 1	$	2,417.4		$	1,961.6
Service cost		91.3			67.3
Interest cost		92.2			91.8
Benefits paid		(121.3	)		(72.5	)
Actuarial (gain) loss		(141.6	)		412.8
Currency translation and other		(35.6	)		(47.6	)
Participant contributions		3.6			4.0

Projected benefit obligation at December 31	$	2,306.0		$	2,417.4


Change in plan assets:
Fair value of plan assets at January 1	$	2,309.4		$	2,108.4
Employer contributions		62.9			81.1
Actual return on plan assets		.3			235.8
Benefits paid		(121.3	)		(72.5	)
Currency translation and other		(35.9	)		(47.4	)
Participant contributions		3.6			4.0

Fair value of plan assets at December 31	$	2,219.0		$	2,309.4

Funded status at December 31	$	(87.0	)	$	(108.0	)


	2015			2014
Amounts recorded on balance sheet:
Other noncurrent assets	$	27.2		$	15.0
Other liabilities		114.2			123.0
Accumulated other comprehensive loss:
Actuarial loss		386.3			428.9
Prior service cost		3.9			3.9
Net initial transition amount		.2			.3

In 2015, the Company provided a one-time lump-sum offer to certain retired employees in the U.S. retirement plan, which resulted in a lump-sum distribution totaling $48.5. Of the December 31, 2015 amounts in accumulated other comprehensive loss, $26.3 of unrecognized actuarial loss and $1.2 of unrecognized prior service cost are expected to be amortized into net pension expense in 2016. The accumulated benefit obligation for all pension plans of the Company was $2,028.2 and $2,113.7 at December 31, 2015 and 2014, respectively. Information for all plans with an accumulated benefit obligation in excess of plan assets is as follows:
At December 31,	2015			2014
Projected benefit obligation	$	217.9		$	224.2
Accumulated benefit obligation		207.7			212.1
Fair value of plan assets		128.8			139.1

The components of pension expense are as follows:


Year Ended December 31,					2015			2014			2013
Service cost					$	91.3		$	67.3		$	73.5
Interest on projected benefit obligation						92.2			91.8			81.0
Expected return on assets						(140.8	)		(128.0	)		(119.4	)
Amortization of prior service costs						1.3			1.2			1.3
Recognized actuarial loss						41.1			20.8			44.0
Curtailment gain						(.1	)					(.3	)

Net pension expense					$	85.0		$	53.1		$	80.1


Multi-employer Plans: The Company participates in multi-employer plans in the U.S. and Europe. These are typically under collective bargaining agreements and cover its union-represented employees. The Company’s participation in the following multi-employer plans for the years ended December 31 are as follows:

			PENSION PLAN		COMPANY CONTRIBUTIONS
PENSION PLAN	EIN		NUMBER		2015			2014			2013
Metal and Electrical Engineering Industry Pension Fund				135668	$	23.0		$	27.1		$	24.5
Western Metal Industry Pension Plan		91-6033499		001		2.1			2.0			1.5
Other plans						.9			1.0			.9

					$	26.0		$	30.1		$	26.9

The Company contributions shown in the table above approximates the multi-employer pension expense for each of the years ended December 31, 2015, 2014 and 2013, respectively.

Metal and Electrical Engineering Industry Pension Fund is a multi-employer union plan incorporating all DAF employees in the Netherlands and is covered by a collective bargaining agreement which expired on April 30, 2015; a new agreement is currently under negotiation. The Company’s contributions were less than 5% of the total contributions to the plan for the last two reporting periods ending December 2015. The plan is required by law (the Netherlands Pension Act) to have a coverage ratio in excess of 104.3%. Because the coverage ratio of the plan was 97.7% at December 31, 2015, a funding improvement plan effective through 2026 is in place. The funding improvement plan includes a reduction in pension benefits and delays in future benefit increases.

The Western Metal Industry Pension Plan is located in the U.S. and is covered by a collective bargaining agreement that will expire on November 1, 2020. In accordance with the U.S. Pension Protection Act of 2006, the plan was certified as critical (red) status and a funding improvement plan was implemented requiring additional contributions through 2022 as long as the plan remains in critical status. For the last two reporting periods ending December 2015, contributions by the Company were 12% of the total contributions to the plan.

Other plans are principally located in the U.S. For the last two reporting periods, none were under funding improvement plans and Company contributions to these plans are less than 5% of each plan’s total contributions.

There were no significant changes for the multi-employer plans in the periods presented that affected comparability between periods.

Defined Contribution Plans: The Company maintains several defined contribution benefit plans whereby it contributes designated amounts on behalf of participant employees. The largest plan is for U.S. salaried employees where the Company matches a percentage of employee contributions up to an annual limit. The match was 5% of eligible pay in 2015, 2014 and 2013. Other plans are located in Australia, Brasil, Canada, the Netherlands, Belgium and Germany. Expenses for these plans were $36.1, $36.3 and $34.0 in 2015, 2014 and 2013, respectively.