Employee Benefit Plans and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2014

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans and Other Postretirement Benefits

Employee Benefit Plans and Other Postretirement Benefits

The components of net periodic benefit cost for our pension plans were as follows (dollars in thousands):

	Pension Plans
	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Service cost	$	5,828		$	5,825		$	17,428		$	18,322
Interest cost	11,507			4,269			34,400			12,250
Expected return on plan assets	(12,657		)	(3,796		)	(38,008		)	(11,297		)
Net amortization of unrecognized amounts
Prior service cost	1,641			163			4,922			3,284
Actuarial loss	155			2,217			465			5,221
Curtailment loss (a)	—			3,132			—			10,908
Net periodic benefit cost	$	6,474		$	11,810		$	19,207		$	38,688

___________

(a) In June 2013, the United Steelworkers (“USW”) ratified a master labor agreement with PCA under which we froze certain USW-represented corrugated plant employees pension accruals under PCA’s hourly pension plan. Additionally, in September 2013, the USW ratified a master labor agreement with PCA under which we froze certain USW-represented containerboard mill employees pension accruals under PCA’s hourly pension plan. Following the pension freezes, affected USW-represented employees will transition to a defined contribution 401k plan. We recorded a $3.1 million and $10.9 million pre-tax pension curtailment charge related to the unrecognized prior service costs of employees impacted by the pension freezes during the three and nine months ended September 30, 2013, respectively. We also remeasured the hourly pension plan benefit obligation using current fair values of plan assets and current assumptions, resulting in a decrease in the benefit obligation of $21.9 million with a corresponding decrease in accumulated other comprehensive income (loss) of $13.4 million and deferred taxes of $8.5 million.

PCA makes pension plan contributions that are sufficient to fund its actuarially determined costs, generally equal to the minimum amounts required by the Employee Retirement Income Security Act (ERISA). During the nine months ended September 30, 2014, we contributed $0.4 million to our pension plans, which exceeds our 2014 minimum required contributions, calculated under the pension provisions of the Highway and Transportation Funding Act passed in August 2014. We do not expect to make any additional contributions during the fourth quarter of 2014.

The components of net periodic benefit cost for our postretirement plans were as follows (dollars in thousands):

	Postretirement Plans
	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Service cost	$	392		$	515		$	1,177		$	1,545
Interest cost	311			311			933			934
Net amortization of unrecognized amounts
Prior service benefit	(57		)	(106		)	(170		)	(319		)
Actuarial loss	26			134			77			401
Net periodic benefit cost	$	672		$	854		$	2,017		$	2,561