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Benefit Plans
 12 Months Ended
Dec. 31, 2015
Benefit Plans [Abstract]  
Benefit Plans
Note 15.Benefit Plans

Pension Plans and Other Postretirement Benefit Plans

The Company and its subsidiaries have pension plans covering the majority of eligible employees on a contributory or non-contributory basis.  Benefits under defined benefit plans are generally based on years of service and an employee's career earnings. Employees generally become fully vested after five years.

The Company also provides postretirement health care and life insurance benefits for the majority of its U.S. retired employees. Employees are generally eligible for benefits upon retirement and completion of a specified number of years of creditable service. The Company does not pre-fund these benefits and has the right to modify or terminate the plan in the future.

In May 2014, as a part of its acquisition of AMCOL businesses, the Company assumed AMCOL’s qualified defined benefit pension plan, supplementary pension plan (SERP) and defined contribution plan. The defined benefit pension plan covers substantially all of AMCOL’s domestic employees hired before January 1, 2004. The SERP plan provides benefit in excess of qualified plan limitation for certain employees. AMCOL’s domestic employees hired on or after January 1, 2004 participate in AMCOL’s defined contribution plan whereby the Company will make a retirement contribution into the employee’s savings plan equal to 3% of their compensation. For more information on the AMCOL acquisition, see Note 2.

The Company’s disclosures for the U.S. plans have been combined with those outside of the U.S. as the international plans do not have significantly different assumptions, and together represent less than 25% of our total benefit obligation.
 
The following table set forth Company's pension obligation and funded status at December 31:
 
  
Pension Benefits
  
Post-Retirement Benefits
 
  
2015
  
2014
  
2015
  
2014
 
  
(millions of dollars)
 
Change in benefit obligations:
 
  
  
  
 
Beginning projected benefit obligation
 
$
433.8
  
$
289.5
  
$
10.1
  
$
9.9
 
Service cost
  
10.3
   
8.9
   
0.4
   
0.4
 
Interest cost
  
15.4
   
14.9
   
0.3
   
0.4
 
Actuarial (gain)/loss
  
(17.0
)
  
57.3
   
(0.9
)
  
0.7
 
Benefits paid
  
(19.5
)
  
(12.7
)
  
(0.4
)
  
(1.2
)
Settlements
      
-
         
Acquisition
      
83.3
         
Foreign exchange impact
  
(7.0
)
  
(7.7
)
  
(0.2
)
  
(0.1
)
Other
  
0.6
   
0.3
         
Ending projected benefit obligation
  
416.6
   
433.8
   
9.3
   
10.1
 
                 
Change in plan assets:
                
Beginning fair value
  
295.8
   
240.3
   
-
   
-
 
Actual return on plan assets
  
1.2
   
20.7
   
-
   
-
 
Employer contributions
  
10.0
   
6.4
   
0.4
   
1.2
 
Plan participants' contributions
  
0.5
   
0.5
   
-
     
Benefits paid
  
(19.5
)
  
(12.7
)
  
(0.4
)
  
(1.2
)
Settlements
  
-
   
-
   
-
   
-
 
Acquisition
  
-
   
46.3
   
-
   
-
 
Foreign exchange impact
  
(5.5
)
  
(5.7
)
  
-
   
-
 
Ending fair value
  
282.5
   
295.8
   
-
   
-
 
                 
Funded status of the plan
 
$
(134.1
)
 
$
(138.0
)
 
$
(9.3
)
 
$
(10.1
)
 
Amounts recognized in the consolidated balance sheet consist of:

 
Pension Benefits
  
Post-Retirement Benefits
 
 
2015
  
2014
  
2015
  
2014
 
  
(millions of dollars)
 
  
  
  
  
 
Current liability
 
$
(0.9
)
 
$
(0.8
)
 
$
(0.7
)
 
$
(0.8
)
Non-current liability
  
(133.2
)
  
(137.2
)
  
(8.6
)
  
(9.3
)
Recognized liability
 
$
(134.1
)
 
$
(138.0
)
 
$
(9.3
)
 
$
(10.1
)

The current portion of pension liabilities is included in accrued compensation and related items.

Amounts recognized in accumulated other comprehensive income, net of related tax effects, consist of:

 
Pension Benefits
  
Post-Retirement Benefits
 
  
2015
  
2014
  
2015
  
2014
 
 
(millions of dollars)
 
  
  
  
  
 
Net actuarial (gain) loss
 
$
80.3
  
$
88.4
  
$
(1.5
)
 
$
(1.0
)
Prior service cost
  
0.2
   
1.0
   
(4.3
)
  
(6.3
)
Amount recognized end of year
 
$
80.5
  
$
89.4
  
$
(5.8
)
 
$
(7.3
)
 
The accumulated benefit obligation for all defined benefit pension plans was $382.6 million and $393.3 million at December 31, 2015 and 2014, respectively.

Changes in the Plan assets and benefit obligations recognized in other comprehensive income:

 
 
Pension Benefits  
Post-Retirement Benefits
 
  
2015
  
2014
  
2015
  
2014
 
  
(millions of dollars)
 
  
  
  
  
 
Current year actuarial gain (loss)
 
$
0.5
  
$
(34.0
)
 
$
0.6
  
$
(0.5
)
Amortization of actuarial (gain) loss
  
7.7
   
4.8
   
(0.1
)
  
(0.1
)
Amortization of prior service credit (gain) loss
  
0.5
   
0.6
   
(1.9
)
  
(1.9
)
Total recognized in other comprehensive income
 
$
8.7
  
$
(28.6
)
 
$
(1.4
)
 
$
(2.5
)

The components of net periodic benefit costs are as follows:

  
Pension Benefits
  
Post-Retirement Benefits
 
  
2015
  
2014
  
2013
  
2015
  
2014
  
2013
 
  
(millions of dollars)
 
  
  
  
  
  
  
 
Service cost
 
$
10.3
  
$
8.9
  
$
8.4
  
$
0.4
  
$
0.4
  
$
0.6
 
Interest cost
  
15.4
   
14.9
   
11.3
   
0.3
   
0.4
   
0.3
 
Expected return on plan assets
  
(19.7
)
  
(19.4
)
  
(14.8
)
  
-
   
-
   
-
 
Amortization of prior service cost
  
0.8
   
1.0
   
1.0
   
(3.1
)
  
(3.1
)
  
(3.1
)
Recognized net actuarial (gain) loss
  
12.1
   
7.4
   
13.9
   
(0.1
)
  
(0.2
)
  
-
 
Settlement/curtailment loss
      
-
   
-
       
-
   
-
 
Net periodic benefit cost
 
$
18.9
  
$
12.8
  
$
19.8
  
$
(2.5
)
 
$
(2.5
)
 
$
(2.2
)

Unrecognized prior service cost is amortized over the average remaining service period of each active employee.

The Company's funding policy for U.S. plans generally is to contribute annually into trust funds at a rate that provides for future plan benefits and maintains appropriate funded percentages.  Annual contributions to the U.S. qualified plans are at least sufficient to satisfy regulatory funding standards and are not more than the maximum amount deductible for income tax purposes. The funding policies for the international plans conform to local governmental and tax requirements. The plans' assets are invested primarily in stocks and bonds.

The 2016 estimated amortization of amounts in other accumulated comprehensive income are as follows:

  
Pension Benefits
  
Post-Retirement
Benefits
 
  
(millions of dollars)
 
  
  
 
Amortization of prior service credit (gain) loss
 
$
0.7
  
$
(3.1
)
Amortization of net (gain) loss
  
10.7
   
(0.2
)
Total cost to be recognized
 
$
11.4
  
$
(3.3
)
 
Additional Information

The weighted average assumptions used to determine net periodic benefit cost in the accounting for the pension benefit plans and other benefit plans for the years ended December 31, 2015, 2014 and 2013 are as follows:

  
2015
  
2014
  
2013
 
  
  
  
 
Discount rate
  
3.71
%
  
4.39
%
  
3.80
%
Expected return on plan assets
  
6.89
%
  
7.34
%
  
7.18
%
Rate of compensation increase
  
3.04
%
  
3.08
%
  
3.16
%

The weighted average assumptions used to determine benefit obligations for the pension benefit plans and other benefit plans at December 31, 2014, 2013 and 2012 are as follows:

  
2015
  
2014
  
2013
 
  
  
  
 
Discount rate
  
3.89
%
  
3.66
%
  
4.37
%
Rate of compensation increase
  
3.04
%
  
3.05
%
  
3.10
%

For 2015, 2014 and 2013, the discount rate was based on a Citigroup yield curve of high quality corporate bonds with cash flows matching our plans' expected benefit payments. The expected return on plan assets is based on our asset allocation mix and our historical return, taking into account current and expected market conditions. The actual return on pension assets was approximately 1% in 2015, 7% in 2014 and 14% in 2013.

The Company maintains a self-funded health insurance plan for its retirees.  This plan provided that the maximum health care cost trend rate would be 5%.  Effective June 2010, the Company amended its plan to change the eligibility requirement for retirees and revised its plan so that increases in expected health care costs would be borne by the retiree.

Plan Assets

The Company's pension plan weighted average asset allocation percentages at December 31, 2015 and 2014 by asset category are as follows:

Asset Category
 
2015
  
2014
 
  
  
 
Equity securities
  
58.9
%
  
58.2
%
Fixed income securities
  
34.7
%
  
32.4
%
Real estate
  
0.9
%
  
0.7
%
Other
  
5.5
%
  
8.7
%
Total
  
100.0
%
  
100.0
%

The Company's pension plan fair values at December 31, 2015 and 2014 by asset category are as follows:

Asset Category
 
2015
  
2014
 
 
(millions of dollars)
 
Equity securities
 
$
166.4
  
$
172.3
 
Fixed income securities
  
98.0
   
95.7
 
Real estate
  
2.5
   
2.2
 
Other
  
15.6
   
25.6
 
Total
  
282.5
   
295.8
 
 
The following table presents domestic and foreign pension plan assets information at December 31, 2015, 2014 and 2013 (the measurement date of pension plan assets):

 
U.S. Plans
  
International Plans
 
  
2015
  
2014
  
2013
  
2015
  
2014
  
2013
 
  
(millions of dollars)
 
  
  
  
  
  
  
 
Fair value of plan assets
 
$
213.0
  
$
224.1
  
$
170.6
  
$
69.5
  
$
71.7
  
$
70.1
 

The following table summarizes our defined benefit pension plan assets measured at fair value as of December 31, 2015:

Pension Assets Fair Value as of December 31, 2015
 
Quoted
Prices In
Active
Markets
for
Identical
Assets
  
Significant
Other
Observable
Inputs
  
Significant
Unobservable
Inputs
  
Total
 
 
(Level 1)
  
(Level 2)
  
(Level 3)
  
 
  
(millions of dollars)
 
  
  
  
  
 
Equity securities
 
  
  
  
 
US equities
 
$
143.7
  
$
0.2
  
$
-
  
$
143.9
 
Non-US equities
  
22.5
   
-
   
-
   
22.5
 
                 
Fixed income securities
                
Corporate debt instruments
  
65.4
   
32.6
   
0.0
   
98.0
 
                 
Real estate and other
                
Real estate
  
-
   
-
   
2.5
   
2.5
 
Other
  
-
   
0.2
   
15.4
   
15.6
 
                 
Total assets
 
$
231.6
  
$
33.0
  
$
17.9
  
$
282.5
 

The following table summarizes our defined benefit pension plan assets measured at fair value as of December 31, 2014:

Pension Assets Fair Value as of December 31, 2014
  
Quoted
Prices In
Active
Markets
for
Identical
Assets
  
Significant
Other
Observable
Inputs
  
Significant
Unobservable
Inputs
  
Total
 
(Level 1)
  
(Level 2)
  
(Level 3)
  
 
  
(millions of dollars)
 
  
  
  
  
 
Equity securities
 
  
  
  
 
US equities
 
$
132.1
  
$
10.0
  
$
-
  
$
142.1
 
Non-US equities
  
22.2
   
8.0
   
-
   
30.2
 
                 
Fixed income securities
                
Corporate debt instruments
  
62.8
   
32.9
   
-
   
95.7
 
                 
Real estate and other
                
Real estate
  
-
   
1.0
   
1.2
   
2.2
 
Other
  
0.2
   
-
   
25.4
   
25.6
 
                 
Total assets
  
217.3
   
51.9
   
26.6
   
295.8
 
 
U.S. equities—This class included actively and passively managed common equity securities comprised primarily of large-capitalization stocks with value, core and growth strategies.

Non-U.S. equities—This class included actively managed common equity securities comprised primarily of international large-capitalization stocks.

Fixed income—This class included debt instruments issued by the US Treasury, and corporate debt instruments.

Real Estate and other— This class includes assets related to real estate and other assets such as insurance contracts.

Asset classified as Level 1 are valued using quoted prices on major stock exchange on which individual assets are traded. Our Level 2 assets are valued using net asset value. The net asset value is quoted on a private market that is not active; however, the unit price is based on the underlying investments that are traded on an active market. Our Level 3 assets are estimated at fair value based on the most recent financial information available for the underlying securities, which are not traded on active market, and represents significant unobservable input.

The following is a reconciliation of changes in fair value measurement of plan assets using significant unobservable inputs (Level 3):

  
(millions of dollars)
 
  
 
Beginning balance at December 31, 2013
 
$
20.2
 
Acquisition
 
$
4.9
 
Purchases, sales, settlements
  
-
 
Actual return on plan assets still held at reporting date
  
2.0
 
Foreign exchange impact
  
(0.5
)
Ending balance at December 31, 2014
 
$
26.6
 
Purchases, sales, settlements
  
-
 
Actual return on plan assets still held at reporting date
  
(8.4
)
Foreign exchange impact
  
(0.3
)
Ending balance at December 31, 2015
 
$
17.9
 

There were no transfers in or out of Level 3 during the year ended December 31, 2015 and 2014

Contributions

The Company expects to contribute $11.0 million to its pension plans and $0.6 million to its other post-retirement benefit plan in 2016.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

  
Pension
Benefits
  
Other
Benefits
 
  
(millions of dollars)
 
  
  
 
2016
 
$
20.6
  
$
0.6
 
2017
 
$
21.7
  
$
0.7
 
2018
 
$
22.2
  
$
0.7
 
2019
 
$
22.8
  
$
0.7
 
2020
 
$
24.0
  
$
0.7
 
2021-2025
 
$
127.5
  
$
3.4
 
 
Investment Strategies

The investment strategy for pension plan assets is to maintain a broadly diversified portfolio designed to both preserve and grow plan assets to meet future plan obligations. The Company's average rate of return on assets from inception through December 31, 2015 was over 9%.  The Company’s assets are strategically allocated among equity, debt and other investments to achieve a diversification level that dampens fluctuations in investment returns.  The Company’s long-term investment strategy is an investment portfolio mix of approximately 55%-65% in equity securities, 30%-35% in fixed income securities and 0%-15% in other securities.
 
Savings and Investment Plans

The Company maintains a voluntary Savings and Investment Plan (a 401K plan) for most non-union employees in the U.S.  On January 1, 2015, as a result of the acquisition and subsequent integration, the Savings and Investment Plan of AMCOL International was merged into the Minerals Technologies Inc. Savings and Investment Plan.  Within prescribed limits, the Company bases its contribution to the Plan on employee contributions. The Company's contributions amounted to $6.3 million, $2.9 million and $2.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. The Company also contributed $2.6 million to AMCOL’s savings plan in 2014.