Employee Benefit Plans

Defined Contribution Plans

We offer a defined contribution plan for employees in the United Kingdom ("UK"), which allows eligible participants to contribute eligible compensation through payroll deductions. We double employee contributions up to the first 5% of eligible compensation and therefore the maximum level provided by Avon is 10% of eligible compensation. We made matching contributions in cash to the UK defined contribution plan of $5.9 in 2018, $6.7 in 2017 and $6.5 in 2016, which follow the same investment allocation that the participant has selected for his or her own contributions.

We also offer a qualified defined contribution plan for U.S.-based employees, the Avon Personal Savings Account Plan (the "PSA"), which allows eligible participants to contribute up to 25% of eligible compensation through payroll deductions. We match employee contributions dollar for dollar up to the first 3% of eligible compensation and fifty cents for each dollar contributed from 4% to 6% of eligible compensation. We made matching contributions in cash to the PSA of $2.2 in 2018, $2.6 in 2017 and $3.8 in 2016, which follow the same investment allocation that the participant has selected for his or her own contributions. Prior to the separation of the North America business, the costs associated with the contributions to the PSA were allocated between Discontinued Operations and Global as the plan included both North America and U.S. Corporate Avon associates. See Note 3, Discontinued Operations and Assets and Liabilities Held for Sale.

For U.S.-based employees hired on or after January 1, 2015, we made additional contributions to a Retirement Savings Account ("RSA") within the PSA. Such contributions will range from 3% to 6% of a participant's eligible compensation depending on the sum of the participant's age and length of service (as of December 31 of the prior year). Investment of such contributions will follow the same investment allocation that the participant has selected for his or her own contributions to the PSA. A participant will be vested in the RSA generally after three full years of applicable service.

Defined Benefit Pension and Postretirement Plans

Avon and certain subsidiaries have contributory and noncontributory defined benefit retirement plans for substantially all employees of those subsidiaries. Benefits under these plans are generally based on an employee’s length of service and average compensation near retirement, and certain plans have vesting requirements. Plans are funded based on legal requirements and cash flow.

Our largest non-U.S. defined benefit pension plan is in the UK. The UK defined benefit pension plan was frozen for future accruals as of April 1, 2013. The U.S. defined benefit pension plan, the Avon Products, Inc. Personal Retirement Account Plan (the "PRA"), is closed to employees hired on or after January 1, 2015. Qualified retirement benefits for U.S.-based employees hired on or after January 1, 2015 will be provided solely through the PSA, as described above.

As part of the separation of the North America business, in 2016 we transferred $499.6 of pension liabilities under the PRA associated with current and former employees of the North America business and certain other former Avon employees, along with $355.9 of assets held by the PRA, to a defined benefit pension plan sponsored by New Avon. We also transferred $60.4 of other postretirement liabilities (namely, retiree medical and supplemental pension liabilities) in respect of such employees and former employees. See Note 3, Discontinued Operations and Assets and Liabilities Held for Sale. We continue to retain certain U.S. pension and other postretirement liabilities primarily associated with employees who are actively employed by Avon in the U.S. providing services other than with respect to the North America business. Prior to this separation, our net periodic benefit costs for the U.S. pension and postretirement benefit plans were allocated between Discontinued Operations and Global as the plan included both North America and U.S. Corporate Avon associates.

We provide health care benefits, subject to certain limitations, to certain retired associates in the U.S. and certain foreign countries. In the U.S., such health care benefits for Corporate Avon associates hired on or before January 1, 2005 are in the form of a health reimbursement account. U.S. Corporate Avon associates hired after January 1, 2005 are not eligible for retiree health care benefits. Certain retiree health care obligations for current and former employees of the North America business and certain other former Avon employees based in the U.S. were transferred to New Avon.

We recognize the funded status of defined benefit pension and other postretirement benefit plans on the balance sheet. Each overfunded plan is recognized as an asset and each underfunded plan is recognized as a liability. The recognition of prior service costs or credits and net actuarial gains or losses, as well as subsequent changes in the funded status, are recognized as components of AOCI, net of tax, in shareholders’ equity, until they are amortized as a component of net periodic benefit cost. We recognize prior service costs or credits and actuarial gains and losses beyond a 10% corridor to earnings based on the estimated future service period of the participants. The determination of the 10% corridor utilizes a calculated value of plan assets for our more significant plans, whereby gains and losses are smoothed over three- and five-year periods.

Reconciliation of Benefit Obligations, Plan Assets and Funded Status

The following table summarizes changes in the benefit obligation, plan assets and the funded status of our significant defined benefit pension and postretirement plans. We use a December 31 measurement date for all of our employee benefit plans.



	Pension Plans
	U.S. Plans						Non-U.S. Plans						Postretirement Benefits
	2018			2017			2018			2017			2018			2017
Change in Benefit Obligation:
Beginning balance	$	(88.9	)	$	(87.6	)	$	(714.2	)	$	(652.9	)	$	(28.2	)	$	(26.0	)
Service cost	(2.9		)	(4.3		)	(4.7		)	(4.6		)	(.1		)	(.1		)
Interest cost	(2.3		)	(3.0		)	(15.4		)	(18.0		)	(1.1		)	(1.3		)
Actuarial (loss) gain	9.9			.6			47.4			(15.5		)	1.2			.3
Benefits paid	7.8			5.4			35.5			42.5			1.4			.4
Actual expenses and taxes	—			—			0.5			—			—			—
Plan amendments	—			—			(2.2		)	—			—			—
Curtailments	1.7			—			—			—			—			—
Settlements	—			—			2.6			—			—			—
Special termination benefits	—			—			—			—			(.1		)	—
Foreign currency changes and other	—			—			33.5			(65.7		)	.9			(1.5		)
Ending balance	$	(74.7	)	$	(88.9	)	$	(617.0	)	$	(714.2	)	$	(26.0	)	$	(28.2	)
Change in Plan Assets:
Beginning balance	$	63.1		$	51.4		$	705.4		$	613.7		$	—		$	—
Actual return on plan assets	(5.4		)	5.5			(27.7		)	49.9			—			—
Company contributions	12.8			11.6			11.6			19.7			1.4			.4
Benefits paid	(7.8		)	(5.4		)	(35.5		)	(42.5		)	(1.4		)	(.4		)
Settlements	—			—			(2.6		)	—			—			—
Foreign currency changes and other	—			—			(35.4		)	64.6			—			—
Ending balance	$	62.7		$	63.1		$	615.8		$	705.4		$	—		$	—
Funded Status:
Funded status at end of year	$	(12.0	)	$	(25.8	)	$	(1.2	)	$	(8.8	)	$	(26.0	)	$	(28.2	)
Amount Recognized in Balance Sheet:
Other assets	$	—		$	—		$	88.1		$	82.0		$	—		$	—
Accrued compensation	(1.0		)	(1.0		)	(2.8		)	(2.2		)	(4.5		)	(2.7		)
Employee benefit plans liability	(11.0		)	(24.8		)	(86.5		)	(88.6		)	(21.5		)	(25.5		)
Net amount recognized	$	(12.0	)	$	(25.8	)	$	(1.2	)	$	(8.8	)	$	(26.0	)	$	(28.2	)
Pretax Amounts Recognized in Accumulated Other Comprehensive Loss:
Net actuarial loss	$	33.1		$	41.4		$	173.6		$	176.8		$	—		$	1.2
Prior service (credit) cost	(.1		)	(.2		)	1.3			(.9		)	.6			(1.3		)
Total pretax amount recognized	$	33.0		$	41.2		$	174.9		$	175.9		$	.6		$	(.1	)
Supplemental Information:
Accumulated benefit obligation	$	72.7		$	85.9		$	179.9		$	199.8		N/A			N/A
Plans with Projected Benefit Obligation in Excess of Plan Assets:
Projected benefit obligation	$	74.7		$	88.9		$	195.3		$	216.7		N/A			N/A
Fair value plan assets	62.7			63.1			106.0			125.9			N/A			N/A
Plans with Accumulated Benefit Obligation in Excess of Plan Assets:
Projected benefit obligation	$	74.7		$	88.9		$	185.7		$	202.0		N/A			N/A
Accumulated benefit obligation	72.7			85.9			174.6			191.9			N/A			N/A
Fair value plan assets	62.7			63.1			98.0			114.0			N/A			N/A

The U.S. pension plans include a funded qualified plan (the PRA) and unfunded non-qualified plans. At December 31, 2018, the PRA had benefit obligations of $65.4 and plan assets of $62.7. At December 31, 2017, the PRA had benefit obligations of $76.7 and plan assets of $63.0. We believe we have adequate investments and cash flows to fund the liabilities associated with the unfunded non-qualified plans. The Non-U.S. pension plans include a funded qualified pension plan in the UK. At December 31, 2018, the UK qualified pension plan had benefit obligations of $416.5 and plan assets of $501.7. At December 31, 2017, the UK qualified pension plan had benefit obligations of $494.0 and plan assets of $573.6.

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Loss



	Pension Benefits
	U.S. Plans									Non-U.S. Plans									Postretirement Benefits
	2018			2017			2016			2018			2017			2016			2018			2017			2016
Net Periodic Benefit Cost:
Service cost	$	2.9		$	4.3		$	6.4		$	4.7		$	4.6		$	5.0		$	.1		$	.1		$	.1
Interest cost	2.3			3.0			6.5			15.4			18.0			21.8			1.1			1.3			1.7
Expected return on plan assets	(3.5		)	(3.2		)	(8.2		)	(31.9		)	(28.2		)	(33.0		)	—			—			—
Amortization of prior service credit	—			(.1		)	(.2		)	(.1		)	(.1		)	(.1		)	(.4		)	(.3		)	(1.2		)
Amortization of net actuarial losses	4.1			5.2			10.8			6.8			7.6			6.5			—			.1			.3
Settlements/curtailments	1.4			—			.1			(.4		)	3.7			.3			(.3		)	—			(.1		)
Other	—			—			—						(.7		)	—			.1			1.6			—
Net periodic benefit cost⁽¹⁾	$	7.2		$	9.2		$	15.4		$	(5.5	)	$	4.9		$	.5		$	.7		$	2.8		$	.8
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income:
Actuarial (gains) losses	$	(2.8	)	$	(2.9	)	$	13.6		$	12.2		$	(7.4	)	$	(24.6	)	$	(1.2	)	$	(.3	)	$	(2.6	)
Prior service cost (credit)	—			—			—			2.2			—			—			—						1.0
Amortization of prior service credit	.1			.1			1.3			.1			.1			.1			.6			.3			26.7
Amortization of net actuarial losses	(5.6		)	(5.2		)	(274.4		)	(6.4		)	(11.3		)	(7.8		)	—			(.1		)	(11.3		)
Foreign currency changes	—			—			—			(9.1		)	18.9			(29.6		)	—			—			(.1		)
Total recognized in other comprehensive (loss) income*	$	(8.3	)	$	(8.0	)	$	(259.5	)	$	(1.0	)	$	.3		$	(61.9	)	$	(.6	)	$	(.1	)	$	13.7
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	(1.1	)	$	1.2		$	(244.1	)	$	(6.5	)	$	5.2		$	(61.4	)	$	.1		$	2.7		$	14.5

(1) Includes $4.4 of the U.S. pension plans in 2016, and immaterial amounts of the postretirement benefit plans (related to the U.S.) in 2016, which are included in discontinued operations. Amounts associated with the pension and postretirement benefit plans in Canada and the postretirement benefit plan in Puerto Rico, which are included in discontinued operations, have been excluded from all amounts in the table above.

* Amounts represent the pre-tax effect classified within other comprehensive (loss) income. The net of tax amounts are classified within our Consolidated Statements of Comprehensive Income (Loss).

In addition to the amounts in the table above, during the second quarter of 2017, we recorded an $18.2 charge for a loss contingency related to a non-U.S. pension plan, for which an amendment to the plan that occurred in a prior year may not have been appropriately implemented.

The amounts in AOCI that are expected to be recognized as components of net periodic benefit cost during 2019 are as follows:



	Pension Benefits
	U.S. Plans		Non-U.S. Plans		Postretirement Benefits
Net actuarial loss	$	3.0	$	5.0	$	—
Prior service credit	—		—		(.2		)

Assumptions

Weighted-average assumptions used to determine benefit obligations recorded in our Consolidated Balance Sheets as of December 31 were as follows:



	Pension Benefits								Postretirement
	U.S. Plans				Non-U.S. Plans				Benefits
	2018		2017		2018		2017		2018		2017
Discount rate	4.24	%	3.48	%	2.91	%	2.56	%	5.17	%	4.75	%
Rate of compensation increase	4.00	%	4.00	%	2.69	%	2.71	%	N/A		N/A

The discount rate used for determining the present value of future pension obligations for each individual defined benefit pension plan is based on a review of bonds that receive a high-quality rating from a recognized rating agency. The discount rates for our more significant plans, including the UK defined benefit pension plan and the PRA, were based on the internal rates of return for a portfolio of high-quality bonds with maturities that are consistent with the projected future benefit payment obligations of each plan. The weighted-average discount rate for U.S. and non-U.S. defined benefit pension plans determined on this basis has increased to 3.06% at December 31, 2018, from 2.66% at December 31, 2017.

Effective as of January 1, 2018, we changed the method we use to estimate the service and interest cost components of net periodic benefit cost for the PRA and the majority of our significant non-U.S. pension plans, including the UK defined benefit pension plan. Historically, including in 2017, we estimated the service and interest cost components using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. Beginning in 2018, we have elected to use a full yield curve approach in the estimation of these components of net periodic benefit cost by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. We have made this change to improve the correlation between projected benefit cash flows and the corresponding yield curve spot rates, which we believe results in a more precise measurement of service and interest costs.

Weighted-average assumptions used to determine net benefit cost recorded in our Consolidated Statements of Operations for the years ended December 31 were as follows:



	Pension Benefits
	U.S. Plans						Non-U.S. Plans						Postretirement Benefits
	2018		2017		2016		2018		2017		2016		2018		2017		2016
Discount rate	3.48	%	3.67	%	4.19	%	2.56	%	2.69	%	3.58	%	4.75	%	5.33	%	4.50	%
Rate of compensation increase	4.00	%	4.00	%	4.00	%	2.71	%	2.79	%	2.94	%	N/A		N/A		N/A
Rate of return on assets	5.50	%	5.50	%	7.00	%	5.20	%	5.09	%	6.40	%	N/A		N/A		N/A

In determining the long-term rates of return, we consider the nature of each plan’s investments, an expectation for each plan’s investment strategies, historical rates of return and current economic forecasts, among other factors. We generally evaluate the expected rate of return on plan assets annually and adjust as necessary. In determining the net cost for the year ended December 31, 2018, the assumed rate of return on assets globally was 5.23%, which represents the weighted-average rate of return on all plan assets. Amounts associated with the pension and postretirement benefit plans in Canada and the postretirement benefit plan in Puerto Rico, which are associated with discontinued operations, have been excluded from all amounts above.

A significant portion of our pension plan assets relate to the UK defined benefit pension plan. The assumed rate of return for determining 2018 net periodic benefit cost for the UK defined benefit pension plan was 5.20%. In addition, the 2018 rate of return assumption for the UK defined benefit pension plan was based on an asset allocation of approximately 80% in corporate and government bonds and mortgage-backed securities (which are expected to earn approximately 2% to 4% in the long-term) and approximately 20% in equity securities, emerging market debt and high yield securities (which are expected to earn approximately 5% to 9% in the long-term). In addition to the physical assets, the asset portfolio for the UK defined benefit pension plan has derivative instruments which increase our exposure to fixed income (in order to better match liabilities) and, to a lesser extent, impact our equity exposure.

Historically, the pension plan with the most significant pension plan assets was the PRA. The assumed rate of return for determining 2018 net periodic benefit cost for the PRA was 5.50%. In addition, the 2018 rate of return assumption for the PRA was based on an asset allocation of approximately 70% in corporate and government bonds (which are expected to earn approximately 3% to 5% in the long-term) and approximately 30% in equity securities (which are expected to earn approximately 6% to 8% in the long-term).

Similar assessments were performed in determining rates of return on other non-U.S. defined benefit pension plan assets, to arrive at our weighted-average assumed rate of return of 5.20% for determining 2018 net cost for all non-US defined benefit pension plan assets.

Plan Assets

Our U.S. and non-U.S. funded defined benefit pension plans target and weighted-average asset allocations at December 31, 2018 and 2017, by asset category were as follows:



	U.S. Pension Plan						Non-U.S. Pension Plans
	% of Plan Assets						% of Plan Assets
	Target		at Year-End				Target		at Year-End
Asset Category	2019		2018		2017		2019		2018		2017
Equity securities	30	%	30	%	30	%	15	%	16	%	18	%
Debt securities	70		70		70		80		79		77
Other	—		—		—		5		5		6
Total	100	%	100	%	100	%	100	%	100	%	100	%

The following tables present the fair value hierarchy for pension assets measured at fair value on a recurring basis as of December 31, 2018 :



	U.S. Pension Plan
Asset Category	Level 1		Level 2		Total
Equity Securities:
Domestic equity	$	—	$	8.4	$	8.4
International equity	—		6.3		6.3
Emerging markets	—		1.8		1.8
	—		16.5		16.5
Fixed Income Securities:
Corporate bonds	—		32.2		32.2
Government securities	—		13.3		13.3
	—		45.5		45.5
Cash	.7				.7
Total	$	.7	$	62.0	$	62.7



	Non-U.S. Pension Plans
Asset Category	Level 1		Level 2			Level 3		Total
Equity Securities:
Domestic equity	$	—	$	25.8		$	—	$	25.8
International equity	—		72.5			—		72.5
	—		98.3			—		98.3
Fixed Income Securities:
Corporate bonds	—		212.7			—		212.7
Government securities	—		201.7			—		201.7
Other	—		70.1			—		70.1
	—		484.5			—		484.5
Other
Cash	35.1		—			—		35.1
Derivatives	—		(4.1		)	—		(4.1		)
Real estate	—		—			2.0		2.0
Other	—		—			—		—
	35.1		(4.1		)	2.0		33.0
Total	$	35.1	$	578.7		$	2.0	$	615.8

The following tables present the fair value hierarchy for pension assets measured at fair value on a recurring basis as of December 31, 2017:



	U.S. Pension Plan
Asset Category	Level 1		Level 2		Total
Equity Securities:
Domestic equity	$	—	$	7.4	$	7.4
International equity	—		9.7		9.7
Emerging markets	—		2.0		2.0
	—		19.1		19.1
Fixed Income Securities:
Corporate bonds	—		31.8		31.8
Government securities	—		12.2		12.2
	—		44.0		44.0
Cash	—		—		—
Total⁽³⁾	$	—	$	63.1	$	63.1



	Non-U.S. Pension Plans
Asset Category	Level 1		Level 2		Level 3		Total
Equity Securities:
Domestic equity	$	—	$	33.9	$	—	$	33.9
International equity	—		91.1		—		91.1
	—		125.0		—		125.0
Fixed Income Securities:
Corporate bonds	—		223.9		—		223.9
Government securities	—		236.0		—		236.0
Other	—		79.9		—		79.9
	—		539.8		—		539.8
Other:
Cash	29.3		—		—		29.3
Derivatives	—		34.1		—		34.1
Real estate	—		—		.9		.9
Other	—		—		.6		.6
	29.3		9.8		1.5		40.6
Total	$	29.3	$	674.6	$	1.5	$	705.4

A reconciliation of the beginning and ending balances for our Level 3 investments is provided in the table below:



	Amount
Balance at January 1, 2017	$	1.5
Actual return on plan assets held	(.1		)
Foreign currency changes	.1

Balance at December 31, 2017	1.5
Purchases and sales net	(.7		)
Actual return on plan assets held	1.4
Foreign currency changes	(.2		)

Balance at December 31, 2018	$	2.0

Investments in equity securities classified as Level 1 in the fair value hierarchy are valued at quoted market prices. Investments in equity securities classified as Level 2 in the fair value hierarchy include collective funds that are valued at quoted market prices for non-active securities. Fixed income securities are based on broker quotes for non-active securities. Mutual funds are valued at quoted market prices. Real estate is valued by reference to investment and leasing transactions at similar types of property, supplemented by third party appraisals. Derivative instruments are not publicly traded and each derivative contract is specifically negotiated with a unique financial counterparty. The derivative instruments are valued based upon valuation statements received from the financial counterparties, which use underlying yield curves or market indices.

The overall objective of the plan assets associated with the PRA and the UK defined benefit pension plan is to provide the means to pay benefits to participants and their beneficiaries in the amounts and at the times called for by the plan. This is expected to be achieved through the investment of our contributions and other trust assets and by utilizing investment policies designed to achieve adequate funding over a reasonable period of time.

In some of our defined benefit pension plans, we have adopted investment strategies which are designed to match the movements in the pension liability through an increased allocation towards debt securities. In addition, we also utilize derivative instruments in our UK defined benefit pension plans to achieve the desired market exposures or to hedge certain risks. Derivative instruments may include, but are not limited to, futures, options, swaps or swaptions. Investment types, including the use of derivatives are based on written guidelines established for each investment manager and monitored by the plan's investment committee.

Pension trust assets are invested so as to achieve a return on investment, based on levels of liquidity and investment risk that are prudent and reasonable as circumstances change from time to time. While we recognize the importance of the preservation of capital, we also adhere to the theory of capital market pricing which maintains that varying degrees of investment risk should be rewarded with compensating returns. Consequently, prudent risk-taking is justifiable.

The asset allocation decision includes consideration of the non-investment aspects of the PRA and the UK defined benefit pension plan, including future retirements, lump-sum elections, growth in the number of participants, company contributions, and cash flow. These characteristics of the plan place certain demands upon the level, risk, and required growth of trust assets. We regularly conduct analyses of the plan’s current and likely future financial status by forecasting assets, liabilities, benefits and company contributions over time. In so doing, the impact of alternative investment policies upon the plan’s financial status is measured and an asset mix which balances asset returns and risk is selected.

Our decision with regard to asset mix is reviewed periodically. Asset mix guidelines include target allocations and permissible ranges for each asset category. Assets are monitored on an ongoing basis and rebalanced as required to maintain an asset mix within the permissible ranges. The guidelines will change from time to time, based on an ongoing evaluation of the factors discussed above.

Cash flows

We expect to make contributions related to continuing operations in the range of $5 to $10 to our U.S. defined benefit pension and postretirement plans and in the range of $10 to $15 to our non-U.S. defined benefit pension and postretirement plans during 2019.

Total benefit payments expected to be paid from the plans are as follows:



	Pension Benefits
	U.S. Plans		Non-U.S. Plans		Total		Postretirement Benefits
2019	$	12.6	$	41.1	$	53.7	$	4.5
2020	21.4		40.4		61.8		2.4
2021	5.5		41.2		46.7		2.3
2022	4.6		52.6		57.2		2.2
2023	4.0		54.8		58.8		2.1
2024-2028	15.8		280.7		296.5		8.7

Postemployment Benefits

We provide postemployment benefits, which include salary continuation, severance benefits, disability benefits and continuation of health care benefits to eligible former employees. The accrued cost for such postemployment benefits was $9.2 and $9.7 at December 31, 2018 and 2017, respectively, and was included in employee benefit plans in our Consolidated Balance Sheets.

Supplemental Retirement Programs

In the U.S., in addition to qualified retirement plans (i.e., the PSA and the PRA), we also maintain unfunded non-qualified plans. We offer a non-qualified deferred compensation plan, the Avon Products, Inc. Deferred Compensation Plan (the "DCP"), for certain higher paid key employees. The DCP is an unfunded, unsecured plan for which obligations are paid to participants out of our general assets. The DCP allows for the deferral of up to 50% of a participant’s base salary, the deferral of up to 100% of incentive compensation bonuses, and the deferral of contributions that would normally have been made to the PSA but are not deferred because the amount was in excess of U.S. Internal Revenue Code limits on contributions to the PSA. Participants may elect to have their deferred compensation invested in one or more of three permitted investment alternatives. Expense associated with the DCP was $.1 in 2018, $1.4 in 2017 and $1.0 in 2016. The benefit obligation under the DCP was $16.4 at December 31, 2018 and $21.0 at December 31, 2017 and was included in other liabilities and accrued compensation in our Consolidated Balance Sheets.

We maintain supplemental retirement programs consisting of the Supplemental Executive Retirement Plan of Avon Products, Inc. ("SERP") and the Benefit Restoration Pension Plan of Avon Products, Inc. ("BRP") under which non-qualified supplemental pension benefits are paid to higher paid key employees in addition to amounts received under our qualified defined benefit retirement plan, which is subject to IRS limitations on covered compensation. The SERP has not been offered to new employees in the last eight years, and the BRP is closed to employees hired on or after January 1, 2015 in conjunction with the closure of the PRA. The annual cost of these programs has been included in the determination of the net periodic benefit cost shown previously and amounted to $2.1 in 2018, $3.0 in 2017 and $3.9 in 2016. The benefit obligation under these programs was $9.3 at December 31, 2018 and $12.3 at December 31, 2017 and was included in employee benefit plans and accrued compensation in our Consolidated Balance Sheets.

We also maintain a Supplemental Life Plan ("SLIP") under which additional death benefits ranging from $.4 to $2.0 are provided to certain active and retired officers. The SLIP has not been offered to new officers in over eight years.

We established a grantor trust to provide assets that may be used for the benefits payable under the SERP and SLIP. The trust is irrevocable and, although subject to creditors’ claims, assets contributed to the trust can only be used to pay such benefits with certain exceptions. The assets held in the trust are included in other assets and at December 31 consisted of the following:



	2018		2017
Corporate-owned life insurance policies	$	35.8	$	36.0
Cash and cash equivalents	1.2		1.1
Total	$	37.0	$	37.1

The assets are recorded at fair market value, except for investments in corporate-owned life insurance policies which are recorded at their cash surrender values as of each balance sheet date, which is a proxy of fair value. Changes in the cash surrender value during the period are recorded as a gain or loss within SG&A expenses in our Consolidated Statements of Operations.