ABX sponsors a qualified defined benefit pension plan for ABX crewmembers and a qualified defined benefit pension plan for a major portion of its other ABX employees that meet minimum eligibility requirements. ABX also sponsors non-qualified defined benefit pension plans for certain employees. These non-qualified plans are unfunded. Employees are no longer accruing benefits under any of the defined benefit pension plans. ABX also sponsors a post-retirement healthcare plan for its ABX crewmembers, which is unfunded. Benefits for covered individuals terminate upon reaching age 65 under the post-retirement healthcare plans.

The accounting and valuation for these post-retirement obligations are determined by prescribed accounting and actuarial methods that consider a number of assumptions and estimates. The selection of appropriate assumptions and estimates is significant due to the long time period over which benefits will be accrued and paid. The long term nature of these benefit payouts increases the sensitivity of certain estimates of our post-retirement obligations. The assumptions considered most sensitive in actuarially valuing ABX’s pension obligations and determining related expense amounts are discount rates and expected long term investment returns on plan assets. Additionally, other assumptions concerning retirement ages, mortality and employee turnover also affect the valuations. Actual results and future changes in these assumptions could result in future costs significantly higher than those recorded in our results of operations.

ABX measures plan assets and benefit obligations as of December 31 of each year. Information regarding ABX’s sponsored defined benefit pension plans and post-retirement healthcare plans follow below. The accumulated benefit obligation reflects pension benefit obligations based on the actual earnings and service to-date of current employees.

On August 30, 2017, the Company transferred investment assets totaling $106.6 million from the pension plan trust to purchase a group annuity contract from Mutual of America Life Insurance Company ("MUA"). The group annuity contract transfers payment obligations for pension benefits owed to certain former, non-pilot retirees of ABX (or their beneficiaries) to MUA. As a result of the transaction, the Company recognized pre-tax settlement charges of $5.3 million to continued operations and $7.6 million to discontinued operations due to the reclassification of $12.9 million of pretax losses from accumulated other comprehensive loss.



	Pension Plans						Post-retirement Healthcare Plans
	2019			2018			2019			2018
Accumulated benefit obligation	$	779,031		$	690,729		$	3,707		$	3,824
Change in benefit obligation
Obligation as of January 1	$	690,729		$	740,783		$	3,824		$	4,056
Service cost	—			—			107			123
Interest cost	31,299			29,135			148			127
Plan transfers	3,313			1,603			—			—
Benefits paid	(31,718		)	(29,439		)	(365		)	(365		)
Actuarial (gain) loss	85,408			(51,353		)	(7		)	(117		)
Obligation as of December 31	$	779,031		$	690,729		$	3,707		$	3,824
Change in plan assets
Fair value as of January 1	$	625,646		$	681,573		$	—		$	—
Actual gain (loss) on plan assets	144,108			(51,274		)	—			—
Plan transfers	3,313			1,603			—			—
Return of excess premiums	—			963			—			—
Employer contributions	5,414			22,220			365			365
Benefits paid	(31,718		)	(29,439		)	(365		)	(365		)
Fair value as of December 31	$	746,763		$	625,646		$	—		$	—
Funded status
Overfunded plans, net asset	$	4,996		$	—		$	—		$	—
Underfunded plans
Current liabilities	$	(3,796	)	$	(3,971	)	$	(431	)	$	(451	)
Non-current liabilities	$	(33,468	)	$	(61,112	)	$	(3,276	)	$	(3,373	)



	Pension Plans									Post-Retirement Healthcare Plan
	2019			2018			2017			2019		2018		2017
Service cost	$	—		$	—		$	—		$	107	$	123	158
Interest cost	31,299			29,135			33,585			148		127		142
Expected return on plan assets	(37,907		)	(42,093		)	(42,080		)	—		—		—
Curtailments and settlements	—			—			12,923			—		—		—
Amortization of prior service cost	—			—			—			—		—		(51		)
Amortization of net (gain) loss	15,528			3,547			7,778			172		219		283
Net periodic benefit cost (income)	$	8,920		$	(9,411	)	$	12,206		$	427	$	469	$	532



	Pension Plans				Post-Retirement Healthcare Plans
	2019		2018		2019		2018
Unrecognized prior service cost	$	—	$	—	$	—	$	—
Unrecognized net actuarial loss	89,871		126,192		1,031		1,210
Accumulated other comprehensive loss	$	89,871	$	126,192	$	1,031	$	1,210

The amounts of unrecognized net actuarial loss recorded in accumulated other comprehensive loss that is expected to be recognized as components of net periodic benefit expense during 2020 is $3.8 million and $0.1 million for the pension plans and the post-retirement healthcare plans, respectively.

The discount rate used to determine post-retirement healthcare obligations was 2.60%, 4.10% and 3.30% for pilots at December 31, 2019, 2018 and 2017, respectively. Post-retirement healthcare plan obligations have not been funded. The Company's retiree healthcare contributions have been fixed for each participant, accordingly, healthcare cost trend rates do not affect the post-retirement healthcare obligations.

ABX uses an investment management firm to advise it in developing and executing an investment policy. The portfolio is managed with consideration for diversification, quality and marketability. The investment policy permits the following ranges of asset allocation: equities – 15% to 35%; fixed income securities – 60% to 80%; cash – 0% to 10%. Except for U.S. Treasuries, no more than 10% of the fixed income portfolio and no more than 5% of the equity portfolio can be invested in securities of any single issuer.

In 2019 and 2018, the Company made contributions to its defined benefit plans of $5.4 million and $22.2 million, respectively. The Company estimates that its contributions in 2020 will be approximately $10.9 million for its defined benefit pension plans and $0.4 million for its post-retirement healthcare plans.

The pension plan assets are stated at fair value. The following is a description of the valuation methodologies used for the investments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy.

Common Trust Funds—Common trust funds are composed of shares or units in non-publicly traded funds whereby the underlying assets in these funds (cash, cash equivalents, fixed income securities and equity securities) are publicly traded on exchanges and price quotes for the assets held by these funds are readily available. Holdings of common trust funds are classified as Level 2 investments.

Corporate Stock—This investment category consists of common and preferred stock issued by domestic and international corporations that are regularly traded on exchanges and price quotes for these shares are readily available. These investments are classified as Level 1 investments.

Mutual Funds—Investments in this category include shares in registered mutual funds, unit trust and commingled funds. These funds consist of domestic equity, international equity and fixed income strategies. Investments in this category that are publicly traded on an exchange and have a share price published at the close of each business day are classified as Level 1 investments and holdings in the other mutual funds are classified as Level 2 investments.

Fixed Income Investments—Securities in this category consist of U.S. Government or Agency securities, state and local government securities, corporate fixed income securities or pooled fixed income securities. Securities in this category that are valued utilizing published prices at the close of each business day are classified as Level 1 investments. Those investments valued by bid data prices provided by independent pricing sources are classified as Level 2 investments.



As of December 31, 2019	Fair Value Measurement Using				Total
	Level 1		Level 2		Total
Plan assets
Common trust funds	$	—	$	3,467	$	3,467
Corporate stock	14,553		442		14,995
Mutual funds	59,710		117,067		176,777
Fixed income investments	—		549,441		549,441
Benefit Plan Assets	$	74,263	$	670,417	$	744,680

Investments measured at net asset value ("NAV")					2,083
Total benefit plan assets					$	746,763



As of December 31, 2018	Fair Value Measurement Using				Total
	Level 1		Level 2		Total
Plan assets
Common trust funds	$	—	$	3,961	$	3,961
Corporate stock	13,142		—		13,142
Mutual funds	48,645		91,085		139,730
Fixed income investments	2,065		462,149		464,214
Benefit Plan Assets	$	63,852	$	557,195	$	621,047

Investments measured at net asset value ("NAV")					4,599
Total benefit plan assets					$	625,646

Investments that were measured at NAV per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. These investments include hedge funds, private equity and real estate funds. Management’s estimates are based on information provided by the fund managers or general partners of those funds.

Hedge Funds and Private Equity—These investments are not readily tradeable and have valuations that are not based on readily observable data inputs. The fair value of these assets is estimated based on information provided by the fund managers or the general partners. These assets have been valued using NAV as a practical expedient.



	Fair Value		Redemption Frequency	Redemption Notice Period	Unfunded Commitments
As of December 31, 2019
Hedge Funds & Private Equity	$	2,083	(1) (2)	90 days	$	—
Real Estate	—		(3)	90 days	—
Total investments measured at NAV	$	2,083			$	—

As of December 31, 2018
Hedge Funds & Private Equity	$	4,599	(1) (2)	90 days	$	—
Real Estate	—		(3)	90 days	—
Total investments measured at NAV	$	4,599			$	—

The Company sponsors defined contribution capital accumulation plans (401k) that are funded by both voluntary employee salary deferrals and by employer contributions. Expenses for defined contribution retirement plans were $12.6 million, $9.0 million and $7.8 million for the years ended December 31, 2019, 2018 and 2017, respectively.