Pensions and Other Postretirement Benefit Plans

9 Months Ended

Sep. 30, 2014

Pensions and Other Postretirement Benefit Plans [Abstract]

Pensions and Other Postretirement Benefit Plans

4. Pensions and Other Postretirement Benefit Plans

Pension Plans

The Company has defined benefit pension plans covering certain U.S. and non-U.S. employees. The U.S. qualified defined benefit pension plan has been closed to new participants since October 1998 and, as of February 2009, benefits accrued under this plan were frozen. As a result of the freeze, employees covered by the pension plan will receive, at retirement, benefits already accrued through February 2009, but no new benefits accrue after that date. Benefit accruals under the U.S. Supplemental Executive Retirement Plan ("SERP") were similarly frozen. The eligibility, benefit formulas, and contribution requirements for plans outside of the U.S. vary by location.

Other Postretirement Benefits

In addition to providing pension benefits, the Company provides various medical, dental, and life insurance benefits for certain retired United States employees. U.S. employees hired prior to 2005 may become eligible for these benefits if they reach normal retirement age while working for the Company. Benefits provided under this plan are subject to change. Retirees share in the cost of these benefits. Effective January 2005, any new employees who wish to be covered under this plan will be responsible for the full cost of such benefits. In September 2008, we changed the cost sharing arrangement under this program such that increases in health care costs are the responsibility of plan participants. In August 2013, we reduced the life insurance benefit for retirees and eliminated the benefit for active employees.

The Company also provides certain postretirement life insurance benefits to retired employees in Canada. The Company accrues the cost of providing postretirement benefits during the active service period of the employees. The Company currently funds the plan as claims are paid.

The composition of the net periodic benefit plan cost for the nine months ended September 30, 2014 and 2013 was as follows:
 

	Pension plans						Other postretirement benefits
(in thousands)	2014			2013			2014			2013
Components of net periodic benefit cost:
Service cost	$	2,521		$	2,526		$	236		$	789
Interest cost		7,217			5,999			2,057			2,374
Expected return on assets		(7,260	)		(6,103	)		-			-
Amortization of prior service cost/(credit)		41			27			(3,366	)		(2,818	)
Amortization of transition obligation		-			51			-			-
Amortization of net actuarial loss		1,845			2,357			2,181			2,606
Curtailment		(710	)		-			-			-
Settlement		-			315			-			-
Net periodic benefit cost	$	3,654		$	5,172		$	1,108		$	2,951

In September 2014, certain participants of the U.S. pension plan were notified of a limited-time opportunity whereby they could elect to receive the value of their pension benefit in a lump-sum payment. All lump-sum payments will be funded from pension plan assets and are expected to be made before the end of 2014. As a result of this initiative, and depending on the number of participants that elect the lump-sum payment, the Company expects to record a non-cash settlement charge of approximately $5 to $10 million in 2014. The payments are not expected to have a significant impact on the plan's funded status.