Employee Benefit Plans

General Cable provides retirement benefits through contributory and noncontributory qualified and non-qualified defined benefit pension plans covering eligible domestic and international employees as well as through defined contribution plans and other postretirement benefits.

Defined Benefit Pension Plans

The changes in the benefit obligation and plan assets, the funded status of the plans and the amounts recognized in the Consolidated Balance Sheets are as follows (in millions):



	U.S. Plans						Non-U.S. Plans
	Dec 31, 2016			Dec 31, 2015			Dec 31, 2016			Dec 31, 2015
Changes in Benefit Obligation:
Beginning benefit obligation	$	175.0		$	191.0		$	115.8		$	151.0
Foreign currency exchange rate changes and other	—			—			8.5			(20.8		)
Transfers	—			—			—			(8.1		)
Service cost	1.4			1.5			4.2			4.9
Interest cost	7.3			7.3			3.7			3.6
Curtailment (gain) loss	—			—			(0.8		)	(0.3		)
Settlements	(19.3		)	—			—			(2.7		)
Benefits paid	(9.8		)	(13.8		)	(7.1		)	(8.4		)
Employee contributions	—			—			0.4			0.4
Amendments / Change in assumptions	—			(0.1		)	(1.3		)	0.1
Actuarial (gain) loss	(3.0		)	(10.9		)	7.3			(3.9		)
Ending benefit obligation	$	151.6		$	175.0		$	130.7		$	115.8
Changes in Plan Assets:
Beginning fair value of plan assets	$	132.1		$	140.9		$	37.7		$	45.8
Foreign currency exchange rate changes and other	—			—			10.1			(7.5		)
Employee contributions	—			—			0.4			0.4
Actual return on plan assets	6.2			(0.1		)	5.1			1.4
Company contributions	3.2			5.1			6.3			8.7
Settlements	(19.3		)	—			—			(2.7		)
Benefits paid	(9.8		)	(13.8		)	(7.1		)	(8.4		)
Ending fair value of plan assets	$	112.4		$	132.1		$	52.5		$	37.7
Funded status at end of year	$	(39.2	)	$	(42.9	)	$	(78.2	)	$	(78.1	)
Amounts Recognized in Consolidated Balance Sheets:
Other Assets	$	—		$	—		$	1.7		$	2.0
Accrued liabilities	$	(0.3	)	$	(0.3	)	$	(2.3	)	$	(3.5	)
Other liabilities	$	(38.9	)	$	(42.6	)	$	(77.6	)	$	(76.6	)
Recognized in Accumulated Other Comprehensive Income:
Net actuarial loss	$	58.9		$	68.8		$	26.9		$	25.4
Prior service cost	(0.2		)	(0.2		)	1.2			2.0
	$	58.7		$	68.6		$	28.1		$	27.4

The accumulated benefit obligation for U.S. defined benefit retirement pension plans was $150.8 million and $174.2 million for 2016 and 2015, respectively. The accumulated benefit obligation for Non-U.S. defined benefit retirement pension plans was $123.3 million and $110.4 million for 2016 and 2015, respectively. Pension plans with accumulated benefit obligations in excess of plan assets consist of the following (in millions):



	U.S. Plans				Non-U.S. Plans
	Dec 31, 2016		Dec 31, 2015		Dec 31, 2016		Dec 31, 2015
Projected benefit obligation	$	151.6	$	175.0	$	102.4	$	100.4
Accumulated benefit obligation	150.8		174.2		97.2		95.5
Fair value of the plan assets	112.4		132.1		41.5		36.9

Pension expense included the following components (in millions):



	U.S. Plans Year ended									Non-U.S. Plans Year ended
	Dec 31, 2016			Dec 31, 2015			Dec 31, 2014			Dec 31, 2016			Dec 31, 2015			Dec 31, 2014
Pension expense:
Service cost	$	1.4		$	1.5		$	1.6		$	4.2		$	4.9		$	4.6
Interest cost	7.3			7.3			8.0			3.7			3.6			5.4
Expected return on plan assets	(9.2		)	(10.2		)	(10.4		)	(2.9		)	(2.4		)	(3.1		)
Amortization of prior service cost	—			—			0.1			0.7			0.7			0.9
Amortization of net loss	2.5			7.7			4.8			1.3			1.7			0.3
Amortization of transition obligation	—			—			—			—			0.1			0.3
Curtailment (gain) loss	—			—			(0.1		)	(0.2		)	—			0.3
Settlement loss	7.4			—			—			—			0.9			2.7
Net pension expense	$	9.4		$	6.3		$	4.0		$	6.8		$	9.5		$	11.4

The estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net pension expense over the next fiscal year is $4.0 million. The prior service cost to be amortized from accumulated other comprehensive income into net pension expense over the next fiscal year is $0.6 million.

In 2016, the Company offered a one-time lump sum payment option to deferred vested participants in the U.S. defined benefit pension plan. Lump sum payments were approximately $19.3 million in 2016, which exceeded the settlement threshold, and the Company recorded a pre-tax non-cash settlement loss of approximately $7.4 million for the year ended December 31, 2016.

In 2015, the Company recorded a pre-tax non-cash settlement loss of $0.9 million for the termination of pension plans related to the closure of one North America manufacturing plant.

The Company evaluates its actuarial assumptions at least annually, and adjusts them as necessary. The Company uses a measurement date of December 31 for all of its defined benefit pension plans. The weighted average assumptions used in determining benefit obligations were:



	U.S. Plans				Non-U.S. Plans
	Dec 31, 2016		Dec 31, 2015		Dec 31, 2016		Dec 31, 2015
Discount rate	4.01	%	4.30	%	2.55	%	2.81	%
Expected rate of increase in future compensation levels	2.50	%	2.50	%	2.88	%	3.10	%

The weighted average assumptions used to determine net pension expense were:



	U.S. Plans						Non-U.S. Plans
	Dec 31, 2016		Dec 31, 2015		Dec 31, 2014		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014
Discount rate	4.30	%	4.00	%	4.85	%	3.18	%	3.18	%	4.27	%
Expected rate of increase in future compensation levels	2.50	%	2.50	%	2.50	%	3.46	%	3.78	%	3.91	%
Long-term expected rate of return on plan assets	7.50	%	7.50	%	7.50	%	6.30	%	6.36	%	6.47	%

Pension expense for the defined benefit pension plans sponsored by General Cable is determined based principally upon certain actuarial assumptions, including the discount rate and the expected long-term rate of return on assets. The discount rates for the U.S. defined benefit pension plans were determined based on hypothetical yield curves developed using yields of corporate bonds across the full maturity spectrum of the projected pension benefit obligations and based on information received from actuaries. The included bonds are AA-rated (or equivalent quality) by a recognized rating agency. Non-U.S. defined benefit pension plans followed a similar evaluation process based on financial markets in those countries where General Cable provides a defined benefit pension plan.

The weighted-average long-term expected rate of return on assets is based on input from actuaries, including their review of historical 10-year, 20-year, and 25-year rates of inflation and real rates of return on various broad equity and bond indices in conjunction with the diversification of the asset portfolio. The Company’s overall investment strategy is to diversify its investments for the qualified U.S. defined benefit pension plan based on an asset allocation assumption of 65% allocated to equity investments, with an expected real rate of return of 6%, and 35% to fixed-income investments, with an expected real rate of return of 2%, and an assumed long-term rate of inflation of 3%. Equity investments primarily include investments in large-cap and mid-cap companies primarily located in the United States. The actual asset allocations were 64% of equity investments and 36% of fixed-income investments at December 31, 2016 and 65% of equity investments and 35% of fixed-income investments at December 31, 2015. Approximately 30% and 43% of plan assets were concentrated in two mutual funds as of December 31, 2016 and 2015, respectively. The expected long-term rate of return on assets for qualified non-U.S. defined benefit plans is based on a weighted-average asset allocation assumption of 50% allocated to equity investments and 50% to fixed-income investments. The actual weighted-average asset allocations were 48% of equity investments and 52% of fixed-income investments at December 31, 2016 and 61% of equity investments and 39% of fixed-income investments at December 31, 2015. Management believes that long-term asset allocations on average and by location will approximate the Company’s assumptions and that the long-term rate of return used by each country that is included in the weighted-average long-term expected rate of return on assets is a reasonable assumption.

The Company determined the fair market values of the pension plan assets based on the fair value hierarchy established in ASC 820. The standard describes three levels of inputs that may be used to measure fair values which are provided in Note 2 - Summary of Significant Accounting Policies. The fair value of Level 1 assets are based on quoted market prices in active markets. The fair value of Level 2 assets are determined using a market approach and inputs that are primarily directly or indirectly observable. The fair value of the Company’s pension plan assets at December 31, 2016 by asset category are as follows (in millions):



			Quoted prices in Active Markets for Identical		Significant Observable		Significant Unobservable
Asset Category	Total		Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)
Equity Securities	$	35.9	$	35.9	$	—	$	—
Equity Securities at NAV ⁽¹⁾	25.0		—		—		—
Mutual Funds - Equity Securities	35.8		35.8		—		—
Mutual Funds - Fixed Income	33.6		33.6		—		—
Bond Funds - Fixed Income at NAV ⁽¹⁾	16.5		—		—		—
Equitable Contract	11.0		—		11.0		—
Equitable Contract at NAV ⁽¹⁾	0.8		—		—		—
Coal Lease ⁽²⁾	3.2		—		—		3.2
Cash and cash equivalents	3.1		3.1		—		—
Total	$	164.9	$	108.4	$	11.0	$	3.2

The fair value of the Company’s pension plan assets at December 31, 2015 by asset category are as follows (in millions):



			Quoted prices in Active Markets for Identical		Significant Observable		Significant Unobservable
Asset Category	Total		Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)
Equity Securities	$	47.7	$	47.7	$	—	$	—
Equity Securities at NAV ⁽¹⁾	22.3		—		—		—
Mutual Funds - Equity Securities	37.4		37.4		—		—
Mutual Funds - Fixed Income	39.6		39.6		—		—
Bond Funds - Fixed Income at NAV ⁽¹⁾	15.4		—		—		—
Short Term Investments	2.8		—		2.8		—
Equitable Contract at NAV ⁽¹⁾	1.1		—		—		—
Coal Lease ⁽²⁾	3.5		—		—		3.5
Total	$	169.8	$	124.7	$	2.8	$	3.5


(1)	In accordance with ASC 820, investments measured at fair value using the NAV practical expedient are excluded from the fair value hierarchy. Prior period amounts have been adjusted to conform to current year presentation.


(2)	The Company’s interest represents approximately 26% of the lease which is currently between American Premier Underwriters (APU), the Lessor and CONSOL Energy (CONSOL), the Lessee. The lease pertains to real property mined by CONSOL located in Pennsylvania.

The following table represents details of the fair value measurements using significant unobservable inputs (Level 3):



	Coal Lease
Beginning balance at January 1, 2015	$	3.7
Change in fair value of plan assets	(0.2		)
Ending balance December 31, 2015	$	3.5
Change in fair value of plan assets	(0.3		)
Ending balance at December 31, 2016	$	3.2

The determination of pension expense for the qualified defined benefit pension plans is based on the fair market value of assets as of the measurement date. Investment gains and losses are recognized in the measurement of assets immediately. Such gains and losses will be amortized and recognized as part of the annual benefit cost to the extent that unrecognized net gains and losses from all sources exceed 10% of the greater of the projected benefit obligation or the market value of assets.

The Company’s expense under both U.S. and non-U.S. defined benefit pension plans is determined using the discount rate as of the beginning of the fiscal year. The 2017 expense for the pension plans will be based on the weighted-average discount rate of approximately 4.01% for U.S. defined benefit pension plans and 2.55% for non-U.S. defined benefit pension plans.

The Company expects to contribute, at least the minimum required, but not more than is tax deductible, $4.3 million to its defined benefit pension plans for 2017. The estimated future benefit payments expected to be paid for the Company’s defined benefit pension plans are $17.5 million in 2017, $17.3 million in 2018, $17.6 million in 2019, $18.3 million in 2020, $18.2 million in 2021 and $91.3 million from 2022 through 2026.

Defined Contribution Plans

Expense under both U.S. and non-U.S. defined contribution plans generally equals up to six percent of each eligible employee’s covered compensation based on the location and status of the employee. The net defined contribution plan expense recognized was $11.5 million, $12.0 million and $12.8 million, respectively, for the years ended December 31, 2016, 2015 and 2014.