EMPLOYEE RETIREMENT PLANS

3 Months Ended

Mar. 31, 2013

EMPLOYEE RETIREMENT PLANS

EMPLOYEE RETIREMENT PLANS

11. EMPLOYEE RETIREMENT PLANS

Defined Benefit Plans

The Company sponsors and/or contributes to pension and postretirement medical, insurance and other benefit plans covering many of our U.S. employees, in whole or in part, based on meeting certain eligibility criteria. In addition, our Company and its subsidiaries have various pension plans and other forms of postretirement arrangements outside the United States, namely in Canada and Taiwan. As part of the Transactions, we assumed certain liabilities related to pension and other postretirement benefit plans. These liabilities relate to various pension, postretirement welfare and defined contribution plans (collectively the "Assumed Plans"). Refer to Note 2 for additional information related to this merger. We did not have any other postretirement benefit obligations prior to the Transactions.

Pension and Postretirement Welfare Plans

Certain employees in the United States who were hired before January 1, 2009 are covered by a defined benefit pension plan. That plan was frozen to future benefit accruals in 2009.

The Assumed Plans provide ongoing benefit accruals to certain employees but the Assumed Plans are closed to new hires. The Assumed Plans are unfunded and provide medical and life insurance benefits for certain employees of the Merged Business and their dependents. In connection with the Merger, we also acquired an Employee Group Waiver Plan ("EGWP") for certain Medicare-eligible retirees of the Merged Business and their dependents. The EGWP includes a fully-insured Medicare Part D prescription drug plan. The postretirement medical and life insurance programs require retiree contributions based on retiree-selected coverage levels for certain retirees and their dependents and provide for sharing of future benefit cost increases between Axiall and participants.

The preliminary estimated fair value of pension investment assets related to the Assumed Plans was $479.2 million as of January 28, 2013. As of the same date, our estimated preliminary projected benefit obligation with respect to these assets was $576.1 million. The unfunded status of pension obligations assumed by us and calculated on a projected benefit obligation basis as of January 28, 2013, was approximately $96.9 million. The aggregate amount of the unfunded other post-retirement benefit obligations assumed by us as of January 28, 2013, was approximately $182.9 million.

Net periodic benefit cost (income) for the three months ended March 31, 2013 and 2012 includes the following:

	Pensions Three Months Ended March 31,						Other Postretirement Benefits Three Months Ended March 31,
(In millions)	2013			2012			2013
Components of net periodic benefit cost (income):
Interest cost	$	5.6		$	1.8		$	1.3
Service cost		1.1			-			0.4
Expected return on assets		(7.3	)		(2.2	)		-
Amortization of actuarial loss		0.5			0.4			-
Total net periodic benefit cost (income)	$	(0.1	)	$	-		$	1.7

Assumptions

The following weighted average assumptions were used to determine the benefit obligation for the defined benefit pension and other postretirement welfare plans. The rate of compensation increase was not applicable in 2012 as all future benefits with respect to compensation increases were frozen.

	Pensions		Other Postretirement Benefits
	2013	2012	2013
Discount rate	4.09%	5.00%	4.35%
Rate of compensation increase	3.15%	Not Applicable	3.11%

The weighted-average healthcare cost trend rate (inflation) used for 2013 is 6.64 percent declining to 4.50 percent in eleven years. In selecting the rates for our current and long-term health care cost assumptions, we take into consideration a number of factors including our actual health care cost increases, the design of our benefit programs, the demographics of our active and retiree populations and external expectations of future medical cost inflation rates.

The preliminary weighted average expected long-term rate of return on plan assets for 2013 is 6.81 percent. For 2012, the expected long-term rate of return on plan assets was 8.25 percent.

Contributions

We made no contributions to the pension plan trusts during the three months ended March 31, 2013 and 2012, respectively. We estimate that we will fund approximately $2.1 million and $6.8 million, respectively, to the pension and postretirement welfare plans for the year ending December 31, 2013. Pursuant to the Merger Agreement related to the Transactions, additional payments may be required to PPG or by PPG to Axiall depending on the final funded status of the Assumed Plans.

Defined Contribution Plans

Most pre-merger employees are covered by defined contribution plans under which we make contributions to individual employee accounts. Our expense related to our defined contribution plans was approximately $3.7 million and $2.0 million for the three months ended March 31, 2013 and 2012, respectively.