Note 6. Pension and Other Postretirement Benefits

Defined Benefit Plans

We sponsor a number of defined benefit plans, the benefits under some of which have been frozen, covering eligible employees in the U.S. and certain other countries. Benefits payable to an employee are based primarily on years of service and the employee’s compensation during the course of his or her employment with us. While we have not expressed any intent to terminate these plans, we may do so at any time, subject to applicable laws and regulations.

We are also obligated to pay unfunded termination indemnity benefits to certain employees outside of the U.S., which are subject to applicable agreements, local laws and regulations. We have not incurred significant costs related to termination indemnity arrangements, and therefore, no related costs are included in the disclosures below.

The following tables set forth the components of net periodic benefit cost (credit), which are recorded in income from continuing operations, for our defined benefit plans:

	Pension Benefits
	Three Months Ended												Six Months Ended
	June 28, 2014						June 29, 2013						June 28, 2014						June 29, 2013
(In millions)	U.S.			Int’l			U.S.			Int’l			U.S.			Int’l			U.S.			Int’l
Service cost	$	.1		$	3.2		$	.1		$	3.0		$	.2		$	6.7		$	.2		$	6.1
Interest cost	11.4			6.2			9.5			5.6			22.4			12.2			19.0			11.4
Expected return on plan assets	(13.0		)	(6.5		)	(11.7		)	(5.5		)	(26.0		)	(13.0		)	(23.4		)	(11.1		)
Recognized net actuarial loss	4.2			1.3			4.8			1.6			8.1			2.6			9.7			3.1
Amortization of prior service cost	.3			.1			.1			.1			.6			.2			.2			.2
Amortization of transition asset	–			–			–			(.1		)	–			–			–			(.1		)
Recognized loss on curtailment (1)	–			.6			–			–			–			.6			–			–
Net periodic benefit cost	$	3.0		$	4.9		$	2.8		$	4.7		$	5.3		$	9.3		$	5.7		$	9.6

(1) Recognized loss on curtailment related to a pension plan in the Netherlands and was recorded in “Other expense (income), net” in the unaudited Consolidated Statements of Income.

	U.S. Postretirement Health Benefits
	Three Months Ended						Six Months Ended
(In millions)	June 28, 2014			June 29, 2013			June 28, 2014			June 29, 2013
Interest cost	$	.1		$	–		$	.1		$	.1
Recognized net actuarial loss	.7			.6			1.4			1.3
Amortization of prior service credit	(.8		)	(1.2		)	(1.6		)	(2.4		)
Net periodic benefit credit	$	–		$	(.6	)	$	(.1	)	$	(1.0	)

During the three months ended June 29, 2013, in connection with the sale of our OCP and DES businesses, we recognized curtailment and settlement losses of $10.4 million associated with certain U.S. pension plans. These losses were recorded in “Loss from discontinued operations, net of tax” in the unaudited Consolidated Statements of Income. Refer to Note 2, “Discontinued Operations, Assets Held for Sale and Sale of Assets,” for more information on the sale.

We make contributions to our defined benefit plans sufficient to meet the minimum funding requirements of applicable laws and regulations, plus additional amounts, if any, we determine to be appropriate. We contributed $2.4 million and $18.5 million to our U.S. pension plans during the six months ended June 28, 2014 and June 29, 2013, respectively. We contributed $.9 million and $1.1 million to our U.S. postretirement health benefit plan during the six months ended June 28, 2014 and June 29, 2013, respectively. We contributed approximately $11 million and $10 million to our international pension plans during the six months ended June 28, 2014 and June 29, 2013, respectively. All of the contributions made in the first six months of 2014 and 2013 were made to meet minimum funding requirements.

Defined Contribution Plans

We sponsor various defined contribution plans worldwide, with the largest plan being the Avery Dennison Corporation Employee Savings Plan (“Savings Plan”), a 401(k) plan available to our U.S. employees. We recognized expense from continuing operations of $5 million and $11 million during the three and six months ended June 28, 2014, respectively, and $4.9 million and $11.5 million during the three and six months ended June 29, 2013, respectively, related to our employer contributions and employer match of participant contributions to the Savings Plan.