Note 14 — Pension and other postretirement benefits

The Company has a number of defined benefit pension and other postretirement plans covering eligible United States and non-United States 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 United States plans is to contribute annually, at a minimum, amounts required by applicable laws and regulations. Obligations under non-United States plans are systematically provided for by depositing funds with trustees or by book reserves. As of December 31, 2013, the Company’s United States defined benefit pension plans and the Company’s other postretirement benefit plans, except certain postretirement benefit plans covering employees subject to a collective bargaining agreement, are frozen.

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

The following table provides information for the net benefit cost of pension and postretirement benefit plans for continuing operations:

	Pension									Other Benefits
	2013			2012			2011			2013		2012		2011
	(Dollars in thousands)
Service cost	$	1,819		$	2,331		$	2,297		$	663	$	704	$	479
Interest cost		16,842			16,561			17,284			2,707		2,122		2,054
Expected return on plan assets		(23,122	)		(20,245	)		(19,998	)		—		—		—
Net amortization and deferral		5,847			6,474			4,018			1,348		761		(45	)
Curtailment gain		—			(197	)		(37	)		—		—		—
Settlement loss (gain)		—			106			(5	)		—		—		—
Net benefit cost	$	1,386		$	5,030		$	3,559		$	4,718	$	3,587	$	2,488

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

	Pension								Other Benefits
	2013		2012			2011			2013			2012			2011
Discount rate	4.27	%		4.28	%		5.50	%		3.83	%		3.95	%		5.10	%
Rate of return	8.31	%		8.27	%		8.31	%		—			—			—
Initial healthcare trend rate	—			—			—			8.15	%		8.5	%		8.0	%
Ultimate healthcare trend rate	—			—			—			5.0	%		5.0	%		5.0	%

The following table provides summarized information on the Company’s pension and postretirement benefit plans, measured as of December 31, 2013 and 2012, and the amounts recognized in the consolidated balance sheet and in accumulated other comprehensive income with respect to the plans:

		Pension					Other Benefits
		2013		2012			2013			2012
		Under Funded					Under Funded
		(Dollars in thousands)
Benefit obligation, beginning of year	$	397,184		$	393,794		$	55,609		$	49,508
Service cost		1,819			2,331			663			704
Interest cost		16,842			16,561			2,707			2,122
Actuarial (gain) loss		(30,755	)		2,345			(3,833	)		6,161
Currency translation		861			678			—			—
Benefits paid		(17,004	)		(16,227	)		(2,860	)		(3,106	)
Medicare Part D reimbursement		—			—			162			220
Settlements		—			(767	)		—			—
Administrative costs		(1,216	)		(1,452	)		—			—
Curtailments		—			(79	)		—			—
Projected benefit obligation, end of year		367,731			397,184			52,448			55,609
Fair value of plan assets, beginning of year		276,863			243,324			—			—
Actual return on plan assets		28,813			33,946			—			—
Contributions		17,724			17,567			—			—
Benefits paid		(17,004	)		(16,227	)		—			—
Settlements paid		—			(767	)		—			—
Administrative costs		(1,216	)		(1,452	)		—			—
Currency translation		301			472			—			—
Fair value of plan assets, end of year		305,481			276,863			—			—
Funded status, end of year	$	(62,250	)	$	(120,321	)	$	(52,448	)	$	(55,609	)

The following table sets forth information as to amounts recognized in the consolidated balance sheet with respect to the plans:

	Pension						Other Benefits
	2013			2012			2013			2012

	(Dollars in thousands)
Payroll and benefit-related liabilities	$	(1,819	)	$	(1,784	)	$	(3,381	)	$	(3,200	)
Pension and postretirement benefit liabilities		(60,431	)		(118,537	)		(49,067	)		(52,409	)
Accumulated other comprehensive loss		144,866			186,916			7,073			12,254
	$	82,616		$	66,595		$	(45,375	)	$	(43,355	)

The following tables set forth information as to 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, 2011	$	251		$	204,257		$	(74,488	)	$	130,020
Reclassification adjustments related to components of Net Periodic Benefit Cost recognized during the period:
Net amortization and deferral		(35	)		(6,439	)		2,287			(4,187	)
Curtailment		—			118			(44	)		74
Settlement		—			(106	)		40			(66	)
Amounts arising during the period:
Actuarial changes in benefit obligation		—			(11,356	)		4,696			(6,660	)
Impact of currency translation		—			226			(58	)		168
Balance at December 31, 2012		216			186,700			(67,567	)		119,349
Reclassification adjustments related to components of Net Periodic Benefit Cost recognized during the period:
Net amortization and deferral		(34	)		(5,813	)		1,947			(3,900	)
Amounts arising during the period:
Actuarial changes in benefit obligation		—			(36,446	)		13,206			(23,240	)
Impact of currency translation		—			243			(66	)		177
Balance at December 31, 2013	$	182		$	144,684		$	(52,480	)	$	92,386

	Other Benefits
	Prior Service Cost (Credit)			Initial Obligation			Net (Gain) or Loss			Deferred Taxes			Accumulated Other Comprehensive (Income) Loss, Net of Tax
	(Dollars in thousands)
Balance at December 31, 2011	$	(93	)	$	102		$	6,845		$	(2,326	)	$	4,528
Reclassification adjustments related to components of Net Periodic Benefit Cost recognized during the period:
Net Amortization and deferral		55			(97	)		(719	)		277			(484	)
Amounts Arising During the period:
Actuarial changes in benefit obligation		—			—			6,161			(2,297	)		3,864
Balance at December 31, 2012		(38	)		5			12,287			(4,346	)		7,908
Reclassification adjustments related to components of Net Periodic Benefit Cost recognized during the period:
Net Amortization and deferral		55			(5	)		(1,398	)		492			(856	)
Amounts Arising During the period:
Actuarial changes in benefit obligation		—			—			(3,833	)		1,432			(2,401	)
Balance at December 31, 2013	$	17		$	—		$	7,056		$	(2,422	)	$	4,651

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

	Pension							Other Benefits
	2013			2012			2013			2012
Discount rate		4.98	%		4.27	%		4.70	%		3.83	%
Rate of compensation increase		3.0	%		3.0	%		—			—
Initial healthcare trend rate		—			—			7.0	%		8.15	%
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 5.09% and 4.70%, respectively, were established by comparing the projection of expected benefit payments to the AA Above Median yield curve as of December 31, 2013. 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.

As part of its evaluation of pension and other postretirement assumptions, assumptions for mortality and healthcare cost trends incorporate generational white and blue collar mortality trends. The Company currently uses the generational tables when determining the liability, which takes into consideration increases in plan participant longevity. As a result, the Company expects less significant increases in plan obligations in the future.

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 correcting for 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.

Increasing the assumed healthcare trend rate by 1% would increase the benefit obligation by $4.3 million and would increase the 2013 benefit expense by $0.3 million. Decreasing the trend rate by 1% would decrease the benefit obligation by $3.7 million and would decrease the 2013 benefit expense by $0.2 million.

The accumulated benefit obligation for all United States and foreign defined benefit pension plans was $367.3 million and $396.7 million for 2013 and 2012, respectively. All of our pension plans had accumulated benefit obligations in excess of their respective plan assets as of December 31, 2013 and 2012.

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 security of benefits for participants. These investments are held primarily in 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 domestic mutual funds held in the plans are subject to the diversification standards and industry limitations on concentration of holdings set forth in the Investment Company Act of 1940, as amended, and SEC staff guidance. The Company’s target allocation percentage is as follows: equity securities (45%); fixed-income securities (35%) and other securities (20%). The portfolio allocation was changed during 2012. The changes increase diversification of the portfolio and reduce expected variability of the portfolio returns, while maintaining the same expected return level. The new composition is expected to bring a better balance of return and risk expectations of the pension plan. 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 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, 2013 by asset category:

	Fair Value Measurements at 12/31/13
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	$	472	$	472	$	—	$	—
Money market funds		310		310		—		—
Equity securities:
Managed volatility (b)		77,140		77,140		—		—
United States small/mid-cap equity (c)		19,760		19,760		—		—
World Equity (excluding United States) (d)		30,183		30,183		—		—
Common Equity Securities – Teleflex Incorporated		10,972		10,972		—		—
Diversified United Kingdom Equity		928		928		—		—
Diversified Global		2,319		2,319		—		—
Emerging Markets		1,270		1,270		—		—

Fixed income securities:
Long duration bond fund (e)		76,608		76,608		—		—
UK corporate bond fund		2,569		2,569		—		—
UK Government bond fund		4,455		4,455		—		—
High yield bond fund (f)		12,754		12,754		—		—
Emerging markets debt fund (g)		9,003		—		9,003		—
Corporate, government and foreign bonds		87		—		87		—
Asset backed – home loans		847		—		847		—
Other types of investments:
Structured credit (h)		29,109		—		—		29,109
Hedge fund of funds (i)		22,540		—		—		22,540
UK Property Fund (j)		1,402		—		1,402		—
Multi asset fund (k)		2,748		2,748		—		—
Other		5		—		—		5
Total	$	305,481	$	242,488	$	11,339	$	51,654

The following table provides the fair values of the Company’s pension plan assets at December 31, 2012 by asset category:

	Fair Value Measurements at 12/31/12
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	$	408	$	408	$	—	$	—
Money market funds		361		361		—		—
Equity securities:
Managed volatility (b)		66,413		66,413		—		—
United States small/mid-cap equity (c)		16,543		16,543		—		—
World Equity (excluding United States) (d)		27,257		27,257		—		—
Common Equity Securities – Teleflex Incorporated		8,336		8,336		—		—
Diversified United Kingdom Equity		6,681		6,681		—		—
Diversified Global (excluding United Kingdom)		3,267		3,267		—		—
Fixed income securities:
Long duration bond fund (e)		73,370		73,370		—		—
High yield bond fund (f)		10,896		10,896		—		—
Emerging markets debt fund (g)		8,453		8,453		—		—
Corporate, government and foreign bonds		5,675		—		5,675		—
Asset backed – home loans		1,005		—		1,005		—
Other types of investments:
Structured credit (h)		26,828		—		—		26,828
Hedge fund of funds (i)		21,365		—		—		21,365
Other		5		—		—		5
Total	$	276,863	$	221,985	$	6,680	$	48,198

(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 and 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 than 30% 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, 2013 and 2012:

—	approximately 28% and 22%, 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 18% and 30%, respectively, of the assets were held in tactical/directional based funds, including global macro, long/short equity, commodity and systematic quantitative strategies;

—	approximately 25% and 25%, respectively, of the assets were held in relative value based funds, including convertible and fixed income arbitrage, credit long/short and volatility arbitrage strategies;

—	approximately 23% and 17%, respectively, of the assets were held in funds with an event driven strategy; and

—	approximately 6% and 6%, respectively, of the assets were held in cash.

(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, bonds and alternatives.

The following table provides a reconciliation of changes in Level 3 pension assets measured at fair value on a recurring basis from December 31, 2011 through December 31, 2013:

	Hedge Fund of Funds		Structured Credit		Other Investments
	(Dollars in thousands)
Balance at December 31, 2011	$	20,624	$	—	$	531
Purchases		—		26,000		—
Sales/redemptions		—		—		(509	)
Actual return on assets		741		828		(35	)
Foreign currency adjustment		—		—		18
Balance at December 31, 2012		21,365		26,828		5
Actual return on assets		1,175		2,281		—
Balance at December 31, 2013	$	22,540	$	29,109	$	5

The Company’s contributions to United States and foreign pension plans during 2014 are expected to be approximately $9.4 million. Contributions to postretirement healthcare plans during 2014 are expected to be approximately $3.4 million.

The following table provides information about the Company’s expected benefit payments for 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)
2014	$	16,969	$	3,381
2015		17,497		3,459
2016		18,145		3,580
2017		18,653		3,556
2018		19,382		3,859
Years 2019 — 2023		108,118		20,347

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 $12.1 million, $10.1 million and $10.2 million for 2013, 2012 and 2011, respectively.