Employee Benefit Plans

We sponsor various noncontributory defined benefit pension plans covering substantially all full-time employees that began employment prior to June 30, 2008. Benefits earned by employees are generally based upon employee compensation and years of service credits. We also have a non-qualified Supplemental Executive Retirement Plan ("SERP"). Effective June 30, 2009, we froze the accrual of benefits under our defined benefit pension plans and our SERP that cover the majority of our employees.

We sponsor a defined contribution plan covering substantially all non-union and certain union employees. We match a portion of employees' voluntary contributions to this plan. In connection with freezing the accrual of service credits under certain of our defined benefit pension plans, we began contributing additional amounts (transition credits) to certain employees' defined contribution retirement accounts in 2011. These transition credits, which we will make through 2015, are determined based upon the employee’s age, compensation and years of service.

Other union-represented employees are covered by defined benefit pension plans jointly sponsored by us and the union, or by union-sponsored multi-employer plans.

We use a December 31 measurement date for our retirement plans. Retirement plans expense is based on valuations as of the beginning of each fiscal year.

The components of the expense consisted of the following:



	For the years ended December 31,
(in thousands)	2014			2013			2012

Service cost	$	85		$	79		$	104
Interest cost	25,539			23,732			25,830
Expected return on plan assets, net of expenses	(23,481		)	(21,501		)	(22,520		)
Amortization of actuarial loss	2,861			4,192			3,586
Curtailment/Settlement losses	—			—			664
Total for defined benefit plans	5,004			6,502			7,664
Multi-employer plans	393			407			467
Withdrawal from GCIU multi-employer plan	4,100			—			—
SERP	896			2,335			956
Defined contribution plans	11,739			11,379			10,538
Net periodic benefit cost	22,132			20,623			19,625

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) were as follows:



	For the years ended December 31,
(in thousands)	2014			2013		2012

Current year actuarial gain/(loss)	$	(75,527	)	$	52,063	$	(30,761	)
Amortization of actuarial loss	2,861			4,192		4,246
Amortization of prior service cost	—			—		4
Total	$	(72,666	)	$	56,255	$	(26,511	)

In addition to the amounts summarized above, amortization of actuarial losses of $0.3 million, $0.4 million and $0.3 million were recorded through other comprehensive income in 2014, 2013 and 2012, respectively, related to our SERP plan. A current year actuarial loss of $0.6 million, $0.7 million and $2.3 million was recognized in 2014, 2013 and 2012, respectively, related to our SERP plan. In 2013, a settlement charge of $1.1 million was recorded for our SERP plan.

Assumptions used in determining the annual retirement plans expense were as follows:



	2014		2013		2012

Discount rate	5.08	%	4.27	%	5.29	%
Long-term rate of return on plan assets	5.25	%	4.65	%	5.30	%
Increase in compensation levels	2.0	%	3.3	%	3.3	%

The discount rate used to determine our future pension obligations is based on a dedicated bond portfolio approach that includes securities rated Aa or better with maturities matching our expected benefit payments from the plans. The increase in compensation levels assumption is based on actual past experience and our near-term outlook.

The expected long-term rate of return on plan assets is based upon the weighted-average expected rate of return and capital market forecasts for each asset class employed. Our expected rate of return on plan assets also considers our historical compounded return on plan assets for 10- and 15-year periods.

Changes in other key actuarial assumptions affect the determination of the benefit obligations as of the measurement date and the calculation of net periodic benefit costs in subsequent periods. Recent actuarial studies indicate life expectancies are longer and thus increase the total expected benefit payments to plan participants. Our benefit obligations at December 31, 2014 reflect the new life expectancy assumptions which increased our pension obligations by approximately $45 million in 2014.

Obligations and Funded Status — The defined benefit pension plan obligations and funded status are actuarially valued as of the end of each year. The following table presents information about our employee benefit plan assets and obligations:



	For the years ended December 31,
	Defined Benefit Plans						SERP
(in thousands)	2014			2013			2014			2013

Accumulated benefit obligation	$	620,623		$	503,500		$	15,261		$	14,593
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	504,571		$	570,219		$	14,872		$	15,920
Service cost	85			79			—			—
Interest cost	25,539			23,732			638			749
Benefits paid	(24,708		)	(24,806		)	(810		)	(804		)
Actuarial (gains)/losses	115,136			(64,653		)	561			662
Curtailments/Settlements	—			—			—			(1,655		)
Projected benefit obligation at end of year	620,623			504,571			15,261			14,872
Plan assets:
Fair value at beginning of year	456,591			472,417			—			—
Actual return on plan assets	63,090			8,911			—			—
Company contributions	74			69			810			2,459
Benefits paid	(24,708		)	(24,806		)	(810		)	(804		)
Curtailments/Settlements	—			—			—			(1,655		)
Fair value at end of year	495,047			456,591			—			—
Funded status	$	(125,576	)	$	(47,980	)	$	(15,261	)	$	(14,872	)
Amounts recognized in Consolidated Balance Sheets:
Current liabilities	$	—		$	—		$	(1,048	)	$	(832	)
Noncurrent liabilities	(125,576		)	(47,980		)	(14,213		)	(14,040		)
Total	$	(125,576	)	$	(47,980	)	$	(15,261	)	$	(14,872	)
Amounts recognized in accumulated other comprehensive loss consist of:
Unrecognized net actuarial loss	$	191,757		$	119,091		$	9,632		$	9,343

In 2015, for our defined benefit pension plans, we expect to recognize amortization of actuarial loss from accumulated other comprehensive loss into net periodic benefit costs of $4.9 million (including $0.3 million for the SERP).

Information for pension plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets was as follows:



	As of December 31,
	Defined Benefit Plans				SERP
(in thousands)	2014		2013		2014		2013

Accumulated benefit obligation	$	620,623	$	503,500	$	15,261	$	14,593
Projected benefit obligation	620,623		504,571		15,261		14,872
Fair value of plan assets	495,047		456,591		—		—

Assumptions used to determine the defined benefit pension plans benefit obligations were as follows:



	2014		2013		2012

Weighted average discount rate	4.23	%	5.08	%	4.27	%
Increase in compensation levels	N/A		2.0	%	3.3	%

We expect to contribute $1.0 million in 2015 to fund SERP benefits. We have met the minimum funding requirements for our qualified defined benefit pension plans and do not expect to make contributions in 2015.

Estimated future benefit payments expected to be paid from the plans for the next ten years are $22.8 million in 2015, $24.0 million in 2016, $25.6 million in 2017, $27.6 million in 2018, $29.2 million in 2019 and a total of $167.9 million for the five years ending 2024.

Plan Assets and Investment Strategy

Our long-term investment strategy for pension assets is to earn a rate of return over time that minimizes future contributions to the plan while reducing the volatility of pension assets relative to pension liabilities. The strategy reflects the fact that we have frozen the accrual of service credits under defined benefit pension plans covering the majority of employees. We evaluate our asset allocation target ranges for equity, fixed income and other investments annually. We monitor actual asset allocations monthly and adjust as necessary. We control risk through diversification among multiple asset classes, managers and styles. Risk is further monitored at the manager and asset class level by evaluating performance against appropriate benchmarks.

Information related to our pension plan asset allocations by asset category were as follows:



	Target allocation		Percentage of plan assets as of December 31,
	2015		2014		2013

US equity securities	10	%	11	%	10	%
Non-US equity securities	15	%	15	%	16	%
Fixed-income securities	70	%	70	%	69	%
Other	5	%	4	%	5	%
Total	100	%	100	%	100	%

U.S. equity securities include common stocks of large, medium and small capitalization companies, which are predominantly U.S. based. Non-U.S. equity securities include companies domiciled outside of the U.S. and American depository receipts. Fixed-income securities include securities issued or guaranteed by the U.S. government, mortgage backed securities and corporate debt obligations. Other investments include real estate funds.

We have target asset allocations to invest plan assets in securities that match the timing of the payment of plan obligations. As a result, approximately 70% of plan assets are invested in a portfolio of fixed income securities with a duration approximately that of the projected payment of benefit obligations. The remaining 30% of plan assets are invested in equity securities and other return-seeking assets. The expected long-term rate of return on plan assets is based primarily upon the target asset allocation for plan assets and capital markets forecasts for each asset class employed. Our expected rate of return on plan assets also considers our historical compound rate of return on plan assets for 10- and 15 year periods.

The following tables present our plan assets using the fair value hierarchy as of December 31, 2014 and 2013:



	December 31, 2014
(in thousands)	Total		Level 1		Level 2		Level 3

Equity securities
Common/collective trust funds	$	128,189	$	—	$	128,189	$	—
Fixed income
Common/collective trust funds	343,462		—		343,462		—
Real estate fund	21,661		—		—		21,661
Cash equivalents	1,735		1,735		—		—
Fair value of plan assets	$	495,047	$	1,735	$	471,651	$	21,661



	December 31, 2013
(in thousands)	Total		Level 1		Level 2		Level 3

Equity securities
Common/collective trust funds	$	122,851	$	—	$	122,851	$	—
Fixed income
Common/collective trust funds	312,626		—		312,626		—
Real estate fund	19,534		—		—		19,534
Cash equivalents	1,580		1,580		—		—
Fair value of plan assets	$	456,591	$	1,580	$	435,477	$	19,534

Equity securities-common/collective trust funds and fixed income-common/collective trust funds are comprised of shares or units in commingled funds that are not publicly traded. The underlying assets in these funds (equity securities and fixed income securities) are publicly traded on exchanges and price quotes for the assets held by these funds are readily available. Common/collective trust funds are typically valued at their net asset values that are calculated by the investment manager or sponsor of the fund and have daily or monthly liquidity.

Real estate pertains to an investment in a real estate fund which invests in limited partnerships, limited liability corporations, real estate investment trusts, other funds and insurance company group annuity contracts. The valuations for these holdings are based on property appraisals using cash flow analysis and market transactions.

The following table presents a reconciliation of Level 3 assets held during 2014 and 2013:



(in thousands)	Real Estate Fund

As of December 31, 2012	$	17,766
Unrealized gains/(losses)	1,768
As of December 31, 2013	19,534
Unrealized gains/(losses)	2,127
As of December 31, 2014	$	21,661

Multi-employer plans

We participate in four multi-employer pension plans that cover certain employees that are members of unions or trade associations that have a collective bargaining agreement with us. We represent fewer than 5% of the total contributions made to the four plans and deem only two of the four plans we participate in to be significant. The following table summarizes the two plans we deem significant:



		Pension Protection Act Zone Status			Contributions of the Company
Pension Fund	EIN/Pension Plan Number	2014	2013	FIP/RP Status Pending/Implemented	2014		2013		2012		Surcharge Imposed	Expiration Date of Collective Bargaining Agreement

CWA/ITU	13-6212879	Red	Red	Implemented	$	126,453	$	116,295	$	126,205	NA	2015
GCIU	91-6024903	Red	Red	Implemented	$	80,972	$	99,594	$	117,131	Yes	2016

The CWA/ITU Negotiated Pension Plan has a withdrawal liability of approximately $4.8 million. Contribution rates are scheduled to remain consistent with current rates for the foreseeable future. A rehabilitation plan was adopted in 2010 related to pension vesting and early retirement, however, mandatory increases in contributions or surcharges were not implemented.

The GCIU-Employer Retirement Fund has a withdrawal liability of approximately $6.5 million. A rehabilitation plan was adopted in 2009, which increased employer contributions beginning in 2013 and continued through 2014. In the second quarter of 2014, unions ratified our plan to withdraw from the GCIU Employer Retirement Fund. Upon ratification of the agreement, we recorded $4.1 million for the present value of the liability. Once we reach a final agreement with the GCIU, we either will pay the liability in a lump sum or make equal monthly installments over 20 years beginning in 2015.