Employee Benefit Plans and Other Postretirement Plans

6 Months Ended

Jun. 30, 2013

Employee Benefit Plans and Other Postretirement Plans

8. Employee Benefit Plans and Other Postretirement Plans

For the three- and six-month periods ended June 30, 2013 and 2012, net pension costs were comprised of the following:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
(In thousands)
Components of Net Pension Costs
Service cost for benefits earned during the year	$	6,249		$	5,606		$	12,497		$	11,212
Interest cost on accumulated benefit obligation		3,991			3,700			7,982			7,400
Expected return on assets		(3,751	)		(3,027	)		(7,501	)		(6,054	)
Net amortization of unrecognized amounts
Prior service cost		1,560			1,498			3,121			2,996
Curtailment loss		7,776			—			7,776			—
Actuarial loss		1,502			1,229			3,003			2,458
Net pension costs	$	17,327		$	9,006		$	26,878		$	18,012

In June 2013, the United Steelworkers (“USW”) ratified a master labor agreement with PCA under which certain USW-represented corrugated plant employees will have pension accruals frozen under PCA’s hourly pension plan. As of the date of the pension freeze, affected USW-represented employees will transition to a defined contribution 401k plan for future service. In accordance with ASC 715, “Compensation — Retirement Benefits,” the Company recorded a $7.8 million pre-tax pension curtailment charge related to the unrecognized prior service costs of employees impacted by the pension freeze during the second quarter of 2013. The Company 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 $13.8 million with a corresponding decrease in accumulated other comprehensive income (loss) of $8.4 million and deferred taxes of $5.4 million.

The Company 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). However, from time to time the Company may make discretionary contributions in excess of the required minimum amounts. The Company expects to contribute $30.1 million to the pension plans in 2013.

For the three- and six-month periods ended June 30, 2013 and 2012, net postretirement costs were comprised of the following:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
(In thousands)
Components of Net Postretirement Costs
Service cost for benefits earned during the year	$	515		$	464		$	1,030		$	928
Interest cost on accumulated benefit obligation		311			310			623			620
Net amortization of unrecognized amounts
Prior service cost		(106	)		(104	)		(212	)		(209	)
Actuarial loss		134			113			267			226
Net postretirement costs	$	854		$	783		$	1,708		$	1,565