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EMPLOYEE BENEFIT PLANS
12 Months Ended
Dec. 31, 2015
Compensation and Retirement Disclosure [Abstract]  
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS

Pension plans
The Company has three frozen defined benefit pension plans covering certain employees or former employees of three U.S. subsidiaries. The Company also has pension plans covering certain employees of several foreign subsidiaries. The Company’s policy is to fund pension costs as required by law, which is consistent with the funding requirements of federal laws and regulations. Certain foreign subsidiaries maintain unfunded pension plans consistent with local practices and requirements.

The following table provides the change in benefit obligation, change in plan assets, funded status and amounts recognized in the consolidated balance sheet of the defined benefit pension plans as of December 31, 2015 and 2014 (amounts in thousands):
Change in benefit obligation:
2015
 
2014
Benefit obligation at beginning of year
$
126,766

 
$
123,182

Service cost
404

 
618

Interest cost
4,837

 
5,653

Actuarial (gain) loss
(4,859
)
 
9,382

Benefits paid
(8,550
)
 
(9,187
)
Foreign currency translation
(3,000
)
 
(2,882
)
Benefit obligation at end of year
$
115,598

 
$
126,766

Change in plan assets:
 

 
 

Fair value of plan assets at beginning of year
$
84,281

 
$
83,952

Actual return on plan assets
(1,670
)
 
3,912

Employer contributions
3,575

 
5,685

Benefits paid
(7,608
)
 
(9,032
)
Foreign currency translation
(186
)
 
(236
)
Fair value of plan assets at end of year
$
78,392

 
$
84,281

Unfunded status at end of year
$
(37,206
)
 
$
(42,485
)
Amounts recognized in consolidated balance sheet:
 

 
 

Noncurrent assets
$
812

 
$
537

Current liabilities
(1,613
)
 
(3,569
)
Noncurrent liabilities
(36,405
)
 
(39,453
)
Net amount recognized in the consolidated balance sheet
$
(37,206
)
 
$
(42,485
)


The pension benefit obligation included $98.1 million of pension benefit obligation for the three frozen plans in the U.S. and $17.5 million of pension benefit obligation for plans at foreign subsidiaries. The fair value of plan assets included $76.4 million of plan assets for the three frozen plans in the U.S. and $2.0 million of plan assets for foreign plans.

Amounts recognized in accumulated other comprehensive loss:
 
 
 
 
2015
 
2014
Unrecognized prior service cost
$
(481
)
 
$
(618
)
Unrecognized net loss
(41,730
)
 
(41,370
)
Deferred tax effect of unrecognized items
15,490

 
15,929

Net amount recognized in accumulated other comprehensive loss
$
(26,721
)
 
$
(26,059
)

 
The weighted-average assumptions used in the actuarial computation that derived the benefit obligations at December 31 were as follows:
2015
 
2014
Discount rate
4.4
%
 
4.1
%
Expected long-term return on plan assets
7.4
%
 
7.4
%

 
The following table provides the components of net periodic pension cost for the plans, settlement cost and the assumptions used in the measurement of the Company’s benefit obligation for the years ended December 31, 2015, 2014 and 2013 (amounts in thousands):
Components of net periodic benefit cost and other
amounts recognized in other comprehensive income (loss)
 
 
 
 
 
Net periodic benefit cost:
2015
 
2014
 
2013
Service cost
$
404

 
$
618

 
$
850

Interest cost
4,837

 
5,653

 
5,408

Assumed return on assets
(6,051
)
 
(6,068
)
 
(5,585
)
Amortization of unrecognized prior service cost
137

 
137

 
137

Amortization of net unrecognized loss
2,917

 
3,033

 
5,264

Net periodic pension cost
$
2,244

 
$
3,373

 
$
6,074



The estimated net loss and prior service cost that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year are $3.1 million and $0.1 million, respectively.

The weighted-average assumptions used in the actuarial computation that derived net periodic pension cost for the years ended December 31, 2015, 2014 and 2013 were as follows:
 
2015
 
2014
 
2013
Discount rate
5.8
%
 
5.9
%
 
4.7
%
Expected long-term return on plan assets
7.4
%
 
7.4
%
 
7.4
%


The allocation of the fair value of plan assets was as follows:
 
Percentage of Plan Assets
at December 31,
 
Target
Allocation
Asset Category
2015
 
2014
 
2016
U.S. equities (a)
54
%
 
61
%
 
40% - 80%
Fixed income
27
%
 
25
%
 
20% - 50%
Cash and cash equivalents
10
%
 
5
%
 
0% - 20%
International equities (a)
9
%
 
9
%
 
0% - 16%
 
100
%
 
100
%
 
 
 
(a)
Total equities may not exceed 80% of total plan assets.
 

The majority of the Company's foreign plans do not have plan assets. The foreign plans which have plan assets holds these plan assets in an insurance or money market fund.
 
The fair value of the plan assets by asset categories at December 31, 2015 was as follows (amounts in thousands):
 
Fair Value Measurements as of December 31, 2015
 
Total
 
Level 1
 
Level 2
 
Level 3
Money market funds
$
5,514

 
$
5,514

 
$

 
$

Domestic common stock
27,996

 
27,996

 

 

Foreign common stock
2,727

 
2,727

 

 

Corporate bonds
4,996

 
4,996

 

 

Foreign bonds
1,590

 

 
1,590

 

U.S. government securities
13

 
13

 

 

Insurance fund
1,663

 

 
1,663

 

Common / collective trusts
33,893

 

 
33,893

 

Totals
$
78,392

 
$
41,246

 
$
37,146

 
$


 
 
The fair value of the plan assets by asset categories at December 31, 2014 was as follows (amounts in thousands):
 
Fair Value Measurements as of December 31, 2014
 
Total
 
Level 1
 
Level 2
 
Level 3
Money market funds
$
3,325

 
$
3,325

 
$

 
$

Domestic common stock
32,472

 
32,472

 

 

Foreign common stock
3,986

 
3,986

 

 

Corporate bonds
5,875

 
5,875

 

 

Foreign bonds
1,611

 

 
1,611

 

U.S. government securities
14

 
14

 

 

Mutual funds

 

 

 

Insurance funds
1,799

 

 
1,799

 

Common / collective trusts
35,199

 

 
35,199

 

Totals
$
84,281

 
$
45,672

 
$
38,609

 
$



The Company invests in a diversified portfolio consisting of an array of asset classes in an attempt to maximize returns while minimizing risk.  These asset classes include U.S. equities, fixed income, cash and cash equivalents, and international equities.  The investment objectives are to provide for the growth and preservation of plan assets on a long-term basis through investments in: (i) investment grade securities that provide investment returns that meet or exceed the Standard & Poor’s 500 Index and (ii) investment grade fixed income securities that provide investment returns that meet or exceed the Barclays Capital Aggregate Bond Index.  The U.S. equities asset category included the Company’s common stock in the amount of $0.7 million (approximately one percent of total plan assets) at December 31, 2015, and $1.8 million (approximately two percent of total plan assets) at December 31, 2014.

The fair value of money market funds, stock, bonds, U.S. government securities and mutual funds are determined based on valuation for identical instruments in active markets. The fair value of common and collective trusts is determined based on the fair value of the underlying instruments.

The long-term rate of return for plan assets is determined using a weighted-average of long-term historical approximate returns on cash and cash equivalents, fixed income securities, and equity securities considering the anticipated investment allocation within the plans.  The expected return on plan assets is anticipated to be 7.4% over the long-term.  This rate assumes long-term historical returns of approximately 9% for equities and approximately 4.5% for fixed income securities using the plans’ target allocation percentages.  Professional investment firms, none of which are Titan employees, manage the plan assets.

Although the 2016 minimum pension funding calculations are not finalized, the Company estimates those funding requirements will be approximately $5 million.

Projected benefit payments from the plans as of December 31, 2015, are estimated as follows (amounts in thousands):
2016
$
8,861

2017
8,406

2018
8,355

2019
8,043

2020
8,168

2021-2025
40,021



401(k)/Defined contribution plans
The Company sponsors two 401(k) retirement savings plans in the U.S. and a number of defined contribution plans at foreign subsidiaries.  One U.S. plan is for the benefit of substantially all employees who are not covered by a collective bargaining arrangement.  Titan provides a 25% matching contribution in the form of the Company’s common stock on the first 6% of the employee’s contribution in this plan.  The Company issued 65,481 shares, 39,935 shares and 35,207 shares of treasury stock in connection with this 401(k) plan during 2015, 2014 and 2013, respectively.  Expenses to the Company related to this common stock matching contribution were $0.6 million, $0.6 million and $0.7 million for 2015, 2014 and 2013, respectively. The other U.S. 401(k) plan is for employees covered by collective bargaining agreements and does not include a Company matching contribution. Expenses related to foreign defined contribution plans were $3.7 million, $4.7 million and $4.1 million for 2015, 2014 and 2013, respectively.