PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

9 Months Ended

Sep. 30, 2013

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

Nonunion Defined Benefit Pension, Supplemental Benefit Pension, and Postretirement Health Benefit Plans

The following is a summary of the components of net periodic benefit cost:

	Three Months Ended September 30
	Nonunion Defined Benefit Pension Plan						Supplemental Benefit Pension Plan				Postretirement Health Benefit Plan
	2013			2012			2013		2012		2013			2012
	(in thousands)
Service cost	$	—		$	2,298		$	—	$	—	$	82		$	79
Interest cost	2,039			2,173			37		52		188			187
Expected return on plan assets	(3,438		)	(3,016		)	—		—		—			—
Amortization of prior service credit	—			—			—		—		(47		)	(47		)
Pension settlement expense	1,834			—			—		—		—			—
Amortization of net actuarial loss and other	961			2,692			65		51		134			103
Net periodic benefit cost	$	1,396		$	4,147		$	102	$	103	$	357		$	322

	Nine Months Ended September 30
	Nonunion Defined Benefit Pension Plan						Supplemental Benefit Pension Plan				Postretirement Health Benefit Plan
	2013			2012			2013		2012		2013			2012
	(in thousands)
Service cost	$	4,734		$	6,892		$	—	$	—	$	248		$	236
Interest cost	5,884			6,519			112		157		563			562
Expected return on plan assets	(9,747		)	(9,048		)	—		—		—			—
Amortization of prior service credit	—			—			—		—		(142		)	(142		)
Pension settlement expense	1,834			—			—		—		—			—
Amortization of net actuarial loss and other	6,388			8,076			195		152		401			311
Net periodic benefit cost	$	9,093		$	12,439		$	307	$	309	$	1,070		$	967

Nonunion Defined Benefit Pension Plan

The Company’s nonunion defined benefit pension plan covers substantially all noncontractual employees hired before January 1, 2006. In June 2013, the Company amended the nonunion defined benefit pension plan to freeze the participants’ final average compensation and years of credited service as of July 1, 2013. The plan amendment did not impact the vested benefits of retirees or former employees whose benefits have not yet been paid from the plan. Effective July 1, 2013, participants of the nonunion defined benefit pension plan who are active employees of the Company became eligible for the discretionary defined contribution feature of the Company’s nonunion defined contribution plan in which all eligible noncontractual employees hired subsequent to December 31, 2005 also participate.

The plan amendment resulted in a plan curtailment which was recorded as of June 30, 2013. The effect of the plan curtailment was a reduction of the projected benefit obligation (“PBO”) to the amount of the plan’s accumulated benefit obligation. The decrease in the PBO reduced the unrecognized net actuarial loss of the plan, which is reported on an after-tax basis in accumulated other comprehensive loss in the consolidated balance sheet, with no curtailment gain or loss recognized in current earnings. The unrecognized net actuarial loss of the plan was also reduced by the net actuarial gain which resulted from the remeasurement of the assets and PBO of the plan upon curtailment.

The elimination of service cost effective July 1, 2013 pursuant to the plan freeze and the reduction of the PBO upon plan curtailment reduced the estimated total service and interest cost for the plan year ending December 31, 2013. Because total 2013 lump-sum benefit distributions from the plan will exceed the estimated total annual service and interest cost of the plan, the Company recognized pension settlement expense of $1.8 million (pre-tax), or $0.04 per share, for the three and nine months ended September 30, 2013 related to the lump-sum benefit distributions year-to-date through September 30, 2013. The settlement expense was recorded as an operating expense and a reduction of the net actuarial loss of the plan as of September 30, 2013. The remaining pre-tax unrecognized net actuarial loss of $24.0 million at September 30, 2013 will continue to be amortized over the average remaining future years of service of the plan participants, which is approximately eight years.

The following table discloses the changes in the PBO and plan assets of the nonunion defined benefit pension plan for the nine months endedSeptember 30, 2013:

	Nonunion Defined Benefit Pension Plan
	(in thousands)
Change in projected benefit obligation
Projected benefit obligation at December 31, 2012	$	260,950
Service cost	4,734
Interest cost	5,884
Actuarial gain and other(1)	(9,126		)
Benefits paid	(18,201		)
Curtailment	(29,262		)
Projected benefit obligation at September 30, 2013	214,979
Change in plan assets
Fair value of plan assets at December 31, 2012	181,225
Actual return on plan assets	21,496
Employer contributions	17,800
Benefits paid	(18,201		)
Fair value of plan assets at September 30, 2013	202,320
Funded status at September 30, 2013(2)	$	(12,659	)
Accumulated benefit obligation	$	214,979

(1) Net actuarial gains from remeasurements upon curtailment and settlement were impacted by actual returns on plan assets during the first six and nine month periods of 2013, respectively, that exceeded the assumed annualized return rate of 7.5%. The net actuarial gains upon curtailment and settlement were also impacted by changes in discount rates since the previous remeasurement date. The discount rate used to remeasure the PBO upon settlement was 3.7% and the discount rate used to remeasure the PBO upon curtailment was 3.9%, which compared to a rate of 3.1% as of the December 31, 2012 measurement date.

(2) Noncurrent liability recognized within pension and postretirement liabilities in the accompanying consolidated balance sheet at September 30, 2013.

During the nine months endedSeptember 30, 2013, the Company contributed $17.8 million to the nonunion defined benefit pension plan and elected to apply the contributions to the 2012 plan year under the applicable funding rules of the Internal Revenue Code (the “IRC”). After application of the Company's contributions, the plan had an adjusted funding target attainment percentage (“AFTAP”) of 102.7% as of the January 1, 2013 valuation date. The AFTAP is determined by measurements prescribed by the IRC, which differ from the funding measurements for financial statement reporting purposes. The Company’s required minimum contribution to its nonunion defined benefit pension plan for the 2013 plan year has been satisfied based upon currently available actuarial information.

Multiemployer Plans

Under the provisions of the Taft-Hartley Act, retirement and health care benefits for ABF’s contractual employees are provided by a number of multiemployer plans. ABF contributes to multiemployer pension and postretirement benefit plans monthly based generally on the time worked by its contractual employees, in accordance with its collective bargaining agreement with the IBT and other related supplemental agreements. ABF recognizes as expense the contractually required contribution for the period and recognizes as a liability any contributions due and unpaid. The Company intends to meet its obligations to the multiemployer plans under its collective bargaining agreement with the IBT.

ABF contributes to 25 multiemployer pension plans, which vary in size and in funded status. In the event of the termination of certain multiemployer pension plans or if ABF were to withdraw from certain multiemployer pension plans, under current law, the Company would have material liabilities for its share of the unfunded vested liabilities of each such plan. Multiemployer plans that enter reorganization status subject contributing employers to an increased contribution requirement but will generally not require a contribution increase of more than 7% over the level required in the preceding year. ABF has not received notification of any plan reorganization or plan termination, and ABF does not currently intend to withdraw from these plans. Therefore, the Company believes the occurrence of events that would require recognition of liabilities for its share of unfunded vested benefits is remote.

Approximately one half of ABF’s total contributions to multiemployer pension plans are made to the Central States, Southeast and Southwest Areas Pension Plan (the “Central States Pension Plan”). As disclosed in the Annual Funding Notice for the 2012 plan year, the actuarial funded percentage of the Central States Pension Plan was 53.9% as of January 1, 2012. ABF received a Notice of Critical Status for the Central States Pension Plan which reported that on March 29, 2013, the plan’s actuary certified that the plan remained in critical status, as defined by the Pension Protection Act of 2006, for the plan year beginning January 1, 2013.

The multiemployer plan administrators have provided to the Company no other significant changes in information related to multiemployer plans from the information disclosed in the Company’s 2012 Annual Report on Form 10-K.