Pension and other postretirement benefits

The Company has a number of defined benefit pension and postretirement plans covering eligible U.S. and non-U.S. employees. The defined benefit pension plans are noncontributory. The benefits under these plans are based primarily on years of service and employees’ pay near retirement. The Company’s funding policy for U.S. plans is to contribute annually, at a minimum, amounts required by applicable laws and regulations. Obligations under non-U.S. plans are systematically provided for by depositing funds with trustees or by book reserves. As of December 31, 2015, no further benefits are being accrued under the Company’s U.S. defined benefit pension plans and the Company’s other postretirement benefit plans, other than certain postretirement benefit plans covering employees subject to a collective bargaining agreement.

The Company and certain of its subsidiaries provide medical, dental and life insurance benefits to pensioners or their survivors. The associated plans are unfunded and approved claims are paid from Company funds.

The following table provides information regarding the components of the net benefit expense (income) of the Company's pension and postretirement benefit plans:



	Pension									Other Benefits
	2015			2014			2013			2015		2014			2013
	(Dollars in thousands)
Service cost	$	1,880		$	1,794		$	1,819		$	495	$	424		$	663
Interest cost	17,948			18,000			16,842			1,967		2,169			2,707
Expected return on plan assets	(25,940		)	(25,006		)	(23,122		)	—		—			—
Net amortization and deferral	6,159			4,371			5,847			216		(7		)	1,348
Net benefit expense (income)	$	47		$	(841	)	$	1,386		$	2,678	$	2,586		$	4,718

The following table provides the weighted average assumptions for United States and foreign plans used in determining net benefit cost:



	Pension						Other Benefits
	2015		2014		2013		2015		2014		2013
Discount rate	4.1	%	5.0	%	4.3	%	4.0	%	4.7	%	3.8	%
Rate of return	8.1	%	8.3	%	8.3	%
Initial healthcare trend rate							7.3	%	7.5	%	8.2	%
Ultimate healthcare trend rate							5.0	%	5.0	%	5.0	%

The following table provides summarized information with respect to the Company’s pension and postretirement benefit plans, measured as of December 31, 2015 and 2014:



	Pension						Other Benefits
	2015			2014			2015			2014
	Under Funded						Under Funded
	(Dollars in thousands)
Benefit obligation, beginning of year	$	447,964		$	367,731		$	53,154		$	52,448
Service cost	1,880			1,794			495			424
Interest cost	17,948			18,000			1,967			2,169
Actuarial loss (gain)	(22,880		)	82,922			(3,914		)	1,273
Currency translation	(2,721		)	(2,973		)	—			—
Benefits paid	(18,682		)	(17,988		)	(3,216		)	(3,287		)
Medicare Part D reimbursement	—			—			130			127
Administrative costs	(1,773		)	(1,522		)	—			—
Projected benefit obligation, end of year	421,736			447,964			48,616			53,154
Fair value of plan assets, beginning of year	328,830			305,481
Actual return on plan assets	(4,460		)	34,332
Contributions	12,797			9,539
Benefits paid	(18,682		)	(17,988		)
Settlements paid	—			—
Administrative costs	(1,773		)	(1,522		)
Currency translation	(761		)	(1,012		)
Fair value of plan assets, end of year	315,951			328,830
Funded status, end of year	$	(105,785	)	$	(119,134	)	$	(48,616	)	$	(53,154	)

The following table sets forth the amounts recognized in the consolidated balance sheet with respect to the Company's pension and postretirement plans:



	Pension						Other Benefits
	2015			2014			2015			2014
	(Dollars in thousands)
Payroll and benefit-related liabilities	$	(1,653	)	$	(1,779	)	$	(3,307	)	$	(3,268	)
Pension and postretirement benefit liabilities	(104,132		)	(117,355		)	(45,309		)	(49,886		)
Accumulated other comprehensive loss	213,301			213,117			4,223			8,353
	$	107,516		$	93,983		$	(44,393	)	$	(44,801	)

The following tables set forth the amounts recognized in accumulated other comprehensive income (loss) with respect to the plans:



	Pension
	Prior Service Cost (Credit)			Net (Gain) or Loss			Deferred Taxes			Accumulated Other Comprehensive (Income) Loss, Net of Tax
	(Dollars in thousands)
Balance at December 31, 2013	$	182		$	144,684		$	(52,480	)	$	92,386
Reclassification adjustments related to components of Net Periodic Benefit Cost recognized during the period:
Net amortization and deferral	(34		)	(4,337		)	1,539			(2,832		)
Amounts arising during the period:
Actuarial changes in benefit obligation	—			73,596			(26,131		)	47,465
Impact of currency translation	—			(974		)	265			(709		)
Balance at December 31, 2014	148			212,969			(76,807		)	136,310
Reclassification adjustments related to components of Net Periodic Benefit Cost recognized during the period:
Net amortization and deferral	(35		)	(6,124		)	2,164			(3,995		)
Amounts arising during the period:
Actuarial changes in benefit obligation	—			7,520			(2,928		)	4,592
Impact of currency translation	—			(1,177		)	316			(861		)
Balance at December 31, 2015	$	113		$	213,188		$	(77,255	)	$	136,046



	Other Benefits
	Prior Service Cost (Credit)		Net (Gain) or Loss			Deferred Taxes			Accumulated Other Comprehensive (Income) Loss, Net of Tax
	(Dollars in thousands)
Balance at December 31, 2013	$	17	$	7,056		$	(2,422	)	$	4,651
Reclassification adjustments related to components of Net Periodic Benefit Cost recognized during the period:
Net amortization and deferral	55		(48		)	(4		)	3
Amounts arising during the period:
Actuarial changes in benefit obligation	—		1,273			(493		)	780
Balance at December 31, 2014	72		8,281			(2,919		)	5,434
Reclassification adjustments related to components of Net Periodic Benefit Cost recognized during the period:
Net amortization and deferral	35		(251		)	78			(138		)
Amounts arising during the period:
Actuarial changes in benefit obligation	—		(3,914		)	1,459			(2,455		)
Balance at December 31, 2015	$	107	$	4,116		$	(1,382	)	$	2,841

The following table provides the weighted average assumptions for United States and foreign plans used in determining benefit obligations:



	Pension				Other Benefits
	2015		2014		2015		2014
Discount rate	4.5	%	4.1	%	4.3	%	4.0	%
Rate of compensation increase	2.8	%	3.0	%
Initial healthcare trend rate					8.4	%	7.3	%
Ultimate healthcare trend rate					5.0	%	5.0	%

The discount rate represents the interest rate used to determine the present value of future cash flows currently expected to be required to settle the Company’s pension and other benefit obligations. The weighted average discount rates for United States pension plans and other benefit plans of 4.63% and 4.31%, respectively, were established by comparing the projection of expected benefit payments to the AA Above Median yield curve as of December 31, 2015. The expected benefit payments are discounted by each corresponding discount rate on the yield curve. For payments beyond 30 years, the Company extends the curve assuming that the discount rate derived in year 30 is extended to the end of the plan’s payment expectations. Once the present value of the string of benefit payments is established, the Company determines the single rate on the yield curve that, when applied to all obligations of the plan, will exactly match the previously determined present value.

Effective December 31, 2015, the Company changed the method it uses to estimate the service and interest cost components of net periodic benefit cost for its pension and other postretirement benefits. Previously, the Company used a single equivalent discount rate to estimate the interest and service cost components of net periodic benefit cost. The single discount rate represented the constant annual rate that would be required to discount all future benefit payments related to past service from the date of expected future payment to the measurement date. Under the new method, these components are estimated by applying specific spot rates along the yield curve used by the Company in determining the benefit obligation to their underlying projected cash flow. This change in method provides a more precise estimate of service and interest costs by improving the correlation between projected cash flows and their corresponding spot rates and will not affect the measurement of the Company’s pension and postretirement benefit obligations. The Company accounted for this change as a change in accounting estimate, which is applied prospectively. Therefore, adoption of this change had no impact on the results for the year ended December 31, 2015.

As part of the evaluation of pension and other postretirement assumptions, the Company applied assumptions for mortality and healthcare cost trends that incorporate generational white and blue collar mortality trends. In determining its benefit obligations, the Company used generational tables that take into consideration increases in plan participant longevity.

The Company’s assumption for the Expected Return on Plan Assets is primarily based on the determination of an expected return for its current portfolio. This determination is made using assumptions for return and volatility of the portfolio. Asset class assumptions are set using a combination of empirical and forward-looking analysis. To the extent historical results have been affected by unsustainable trends or events, the effects of those trends are quantified and removed. The Company applies a variety of models for filtering historical data and isolating the fundamental characteristics of asset classes. These models provide empirical return estimates for each asset class, which are then reviewed and combined with a qualitative assessment of long term relationships between asset classes before a return estimate is finalized. The qualitative analysis is intended to provide an additional means for addressing the effect of unrealistic or unsustainable short-term valuations or trends, resulting in return levels and behavior the Company believes are more likely to prevail over long periods. Effective in 2015, the Company changed its Expected Return on Plan Assets of the United States pension plans from 8.50% to 8.25% to reflect modifications to assumptions resulting from the analysis described above.

An increase in the assumed healthcare trend rate of 1% would increase the benefit obligation at December 31, 2015 by $3.8 million and would increase the 2015 benefit expense by $0.2 million. Decreasing this assumed rate by 1% would decrease the benefit obligation at December 31, 2015 by $3.3 million and would decrease the 2015 benefit expense by $0.2 million.

The accumulated benefit obligation for all United States and foreign defined benefit pension plans was $421.2 million and $447.4 million for 2015 and 2014, respectively. All of the Company's pension plans had accumulated benefit obligations in excess of their respective plan assets as of December 31, 2015 and 2014.

The Company’s investment objective is to achieve an enhanced long-term rate of return on plan assets, subject to a prudent level of portfolio risk, for the purpose of enhancing the availability of benefits for participants. These investments are primarily comprised of equity and fixed income mutual funds. The Company’s other investments are largely comprised of a hedge fund of funds and a structured credit fund. The equity funds are diversified in terms of domestic and international equity securities, as well as small, middle and large capitalization stocks. The Company’s target allocation percentage is as follows: equity securities (45%); fixed-income securities (35%) and other securities (20%). Equity funds are held for their expected return over inflation. Fixed-income funds are held for diversification relative to equities and as a partial hedge of interest rate risk with respect to plan liabilities. The other investments are held to further diversify assets within the plans and are designed to provide a mix of equity and bond like return with a bond like risk profile. The plans may also hold cash to meet liquidity requirements. Actual performance may not be consistent with the respective investment strategies. Investment risks and returns are measured and monitored on an ongoing basis through annual liability measurements and investment portfolio reviews to determine whether the asset allocation targets continue to represent an appropriate balance of expected risk and reward.

The following table provides the fair values of the Company’s pension plan assets at December 31, 2015 by asset category:



	Fair Value Measurements
Asset Category (a)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in thousands)
Cash	$	664	$	664
Money market funds	184		184
Equity securities:
Managed volatility (b)	80,052		80,052
United States small/mid-cap equity (c)	18,549		18,549
World Equity (excluding United States) (d)	29,632		29,632
Common Equity Securities – Teleflex Incorporated	15,366		15,366
Diversified United Kingdom Equity	845		845
Diversified Global	2,948		2,948
Emerging Markets	1,055		1,055
Fixed income securities:
Long duration bond fund (e)	80,855		80,855
UK corporate bond fund	2,467		2,467
UK Government bond fund	4,838		4,838
High yield bond fund (f)	10,702		10,702
Emerging markets debt fund (g)	10,060				$	10,060
Corporate, government and foreign bonds	75				75
Asset backed – home loans	655				655
Other types of investments:
Structured credit (h)	29,591						$	29,591
Hedge fund of funds (i)	22,599						22,599
UK Property Fund (j)	1,654				1,654
Multi asset fund (k)	3,155		3,155
Other	5						5
Total	$	315,951	$	251,312	$	12,444	$	52,195

The following table provides the fair values of the Company’s pension plan assets at December 31, 2014 by asset category:



	Fair Value Measurements
Asset Category (a)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in thousands)
Cash	$	659	$	659
Money market funds	31		31
Equity securities:
Managed volatility (b)	83,068		83,068
United States small/mid-cap equity (c)	20,312		20,312
World Equity (excluding United States) (d)	26,064		26,064
Common Equity Securities – Teleflex Incorporated	13,422		13,422
Diversified United Kingdom Equity	875		875
Diversified Global	2,884		2,884
Emerging Markets	1,266		1,266
Fixed income securities:
Long duration bond fund (e)	92,553		92,553
UK corporate bond fund	2,719		2,719
UK Government bond fund	5,078		5,078
High yield bond fund (f)	11,618		11,618
Emerging markets debt fund (g)	8,531				$	8,531
Corporate, government and foreign bonds	81				81
Asset backed – home loans	782				782
Other types of investments:
Structured credit (h)	31,176						$	31,176
Hedge fund of funds (i)	23,171						23,171
UK Property Fund (j)	1,549				1,549
Multi asset fund (k)	2,986		2,986
Other	5						5
Total	$	328,830	$	263,535	$	10,943	$	54,352


(a)	Information on asset categories described in notes (b)-(k) is derived from prospectuses and other material provided by the respective funds comprising the respective asset categories.


(b)	This category comprises mutual funds that invest in securities of United States and non-United States companies of all capitalization ranges that exhibit relatively low volatility.


(c)	This category comprises a mutual fund that invests at least 80% of its net assets in equity securities of small and mid-sized companies. The fund invests in common stocks or exchange traded funds holding common stock of United States companies with market capitalizations in the range of companies in the Russell 2500 Index.

(d)

This category comprises a mutual fund that invests at least 80% of its net assets in equity securities of foreign companies. These securities may include common stocks, preferred stocks, warrants, exchange traded funds based on an international equity index, derivative instruments whose value is based on an international equity index and derivative instruments whose value is based on an underlying equity security or a basket of equity securities. The fund invests in securities of foreign issuers located in developed and emerging market countries. However, the fund will not invest more than35% of its assets in the common stocks or other equity securities of issuers located in emerging market countries.

(e)

This category comprises a mutual fund that invests in instruments or derivatives having economic characteristics similar to fixed income securities. The fund invests in investment grade fixed income instruments, including securities issued or guaranteed by the United States Government and its agencies and instrumentalities, corporate bonds, asset-backed securities, exchange traded funds, mortgage-backed securities and collateralized mortgage-backed securities. The fund invests primarily in long duration government and corporate fixed income securities, and uses derivative instruments, including interest rate swap agreements and Treasury futures contracts, for the purpose of managing the overall duration and yield curve exposure of the Fund’s portfolio of fixed income securities.


(f)	This category comprises a mutual fund that invests at least 80% of its net assets in higher-yielding fixed income securities, including corporate bonds and debentures, convertible and preferred securities and zero coupon obligations.


(g)	This category comprises a mutual fund that invests at least 80% of its net assets in fixed income securities of emerging market issuers, primarily in United States dollar-denominated debt of foreign governments, government-related and corporate issuers in emerging market countries and entities organized to restructure the debt of those issuers.


(h)	This category comprises a fund that invests primarily in collateralized debt obligations (“CDOs”) and other structured credit vehicles. The fund investments may include fixed income securities, loan participants, credit-linked notes, medium-term notes, pooled investment vehicles and derivative instruments.


(i)	This category comprises a hedge fund that invests in various other hedge funds. As of December 31, 2015 and 2014:


•	approximately 41% and 33%, respectively, of the assets of the hedge fund were invested in equity hedge based funds, including equity long/short and equity market neutral strategies;


•	approximately 12% and 10%, respectively, of the assets were held in tactical/directional based funds, including global macro, long/short equity, commodity and systematic quantitative strategies;


•	approximately 19% and 24%, respectively, of the assets were held in relative value based funds, including convertible and fixed income arbitrage, credit long/short and volatility arbitrage strategies; and


•	approximately 28% and 33%, respectively, of the assets were held in funds with an event driven strategy.


(j)	This category comprises a fund that invests primarily in UK freehold and leasehold property. The fund does not invest in higher risk activities such as developments. The fund may invest in indirect vehicles and property derivatives.


(k)	This category comprises a mutual fund that invests primarily in equities and bonds.

The following table provides a reconciliation of changes in pension assets measured at fair value on a recurring basis, using Level 3 inputs, from December 31, 2013 through December 31, 2015:



	(Dollars in thousands)
Balance at December 31, 2013	$	51,654
Unrealized gain on assets	2,698
Balance at December 31, 2014	54,352
Unrealized gain on assets	(2,157		)
Balance at December 31, 2015	$	52,195

The Company’s contributions to United States and foreign pension plans during 2016 are required to be approximately $2.4 million. Contributions to postretirement healthcare plans during 2016 are expected to be approximately $3.3 million.

The following table provides information about the Company’s expected benefit payments under its U.S. and foreign plans for each of the five succeeding years and the aggregate of the five years thereafter, net of the annual average Medicare Part D subsidy of approximately $0.2 million:



	Pension		Other Benefits
	(Dollars in thousands)
2016	$	18,580	$	3,307
2017	19,394		3,349
2018	20,139		3,323
2019	20,957		3,387
2020	21,602		3,456
Years 2021 — 2025	119,017		17,882

The Company maintains a number of defined contribution savings plans covering eligible United States and non-United States employees. The Company partially matches employee contributions. Costs related to these plans were $12.6 million, $11.5 million and $12.1 million for 2015, 2014 and 2013, respectively.