Pension and Other Postretirement Benefits

The accounting standards related to employers’ accounting for defined benefit pension and other postretirement plans requires the Company to recognize the funded status of its defined benefit postretirement plans as assets or liabilities in the accompanying consolidated balance sheets and to recognize changes in the funded status of the plans in comprehensive income.

The Company has various defined contribution plans, the largest of which is its Retirement Savings Plan. Most U.S. salaried and non-union hourly employees are eligible to participate in this plan. See Note 17 for further discussion of the Retirement Savings Plan. The Company also maintains various other defined contribution plans which cover certain other employees. Company contributions under these plans are based primarily on the performance of the business units and employee compensation. Contribution expense under these other defined contribution plans was $5,213, $4,780 and $5,319 in 2014, 2013 and 2012, respectively.

Defined benefit pension plans in the U.S. cover a majority of the Company’s U.S. employees at the Associated Spring business of Industrial, the Company’s Corporate Office and certain former U.S. employees, including retirees. Plan benefits for salaried and non-union hourly employees are based on years of service and average salary. Plans covering union hourly employees provide benefits based on years of service. In 2012, the Company closed the U.S. salaried defined benefit pension plan (the "U.S. Salaried Plan") to employees hired on or after January 1, 2013, with no impact to the benefits of existing participants. Effective January 1, 2013, the Retirement Savings Plan was amended to provide certain salaried employees hired on or after January 1, 2013 with an additional annual retirement contribution of 4% of eligible earnings, in place of pensionable benefits under the closed U.S. Salaried Plan. The Company funds U.S. pension costs in accordance with the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Non-U.S. defined benefit pension plans cover certain employees of certain international locations in Europe and Canada.

The Company provides other medical, dental and life insurance postretirement benefits for certain of its retired employees in the U.S. and Canada. It is the Company’s practice to fund these benefits as incurred.

The accompanying balance sheets reflect the funded status of the Company’s defined benefit pension plans at December 31, 2014 and 2013, respectively. Reconciliations of the obligations and funded status of the plans follow:



	2014									2013
	U.S.			Non-U.S.			Total			U.S.			Non-U.S.			Total
Benefit obligation, January 1	$	374,740		$	78,982		$	453,722		$	423,547		$	72,769		$	496,316
Service cost	3,549			997			4,546			5,403			778			6,181
Interest cost	19,129			2,897			22,026			17,571			2,541			20,112
Actuarial (gain) loss	58,906			9,728			68,634			(40,734		)	31			(40,703		)
Benefits paid	(23,960		)	(3,405		)	(27,365		)	(23,348		)	(4,712		)	(28,060		)
Transfers in	—			1,929			1,929			—			6,786			6,786
Plan curtailments	—			—			—			(8,715		)	—			(8,715		)
Plan settlements	—			(4,949		)	(4,949		)	—			—			—
Special termination benefit	715			—			715			1,016			—			1,016
Participant contributions	—			906			906			—			545			545
Foreign exchange rate changes	—			(6,780		)	(6,780		)	—			244			244
Benefit obligation, December 31	433,079			80,305			513,384			374,740			78,982			453,722
Fair value of plan assets, January 1	379,059			74,519			453,578			323,711			63,842			387,553
Actual return on plan assets	20,436			6,349			26,785			74,622			6,357			80,979
Company contributions	5,402			2,219			7,621			4,074			1,910			5,984
Participant contributions	—			906			906			—			545			545
Benefits paid	(23,960		)	(3,405		)	(27,365		)	(23,348		)	(4,712		)	(28,060		)
Plan settlements	—			(4,949		)	(4,949		)	—			—			—
Transfers in	—			1,929			1,929			—			6,627			6,627
Foreign exchange rate changes	—			(5,818		)	(5,818		)	—			(50		)	(50		)
Fair value of plan assets, December 31	380,937			71,750			452,687			379,059			74,519			453,578
Funded/(underfunded) status, December 31	$	(52,142	)	$	(8,555	)	$	(60,697	)	$	4,319		$	(4,463	)	$	(144	)

In 2013, "transfers in" relate primarily to the defined benefit pension plans associated with the acquisition of the Männer Business. See Note 3 of the Consolidated Financial Statements. In 2013, plan curtailments and special termination benefits relate to the sale of BDNA. See Note 2 of the Consolidated Financial Statements.

Projected benefit obligations related to pension plans with benefit obligations in excess of plan assets follow:



	2014						2013
	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
Projected benefit obligation	$	297,067	$	29,971	$	327,038	$	31,231	$	27,415	$	58,646
Fair value of plan assets	234,305		17,660		251,965		—		19,353		19,353

Information related to pension plans with accumulated benefit obligations in excess of plan assets follows:



	2014						2013
	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
Projected benefit obligation	$	297,067	$	23,496	$	320,563	$	31,231	$	9,421	$	40,652
Accumulated benefit obligation	286,217		20,446		306,663		30,913		8,994		39,907
Fair value of plan assets	234,305		12,552		246,857		—		1,779		1,779

The accumulated benefit obligation for all defined benefit pension plans was $497,453 and $444,096 at December 31, 2014 and 2013, respectively.

Amounts related to pensions recognized in the accompanying balance sheets consist of:



	2014									2013
	U.S.			Non-U.S.			Total			U.S.			Non-U.S.			Total
Other assets	$	10,620		$	3,882		$	14,502		$	35,550		$	3,599		$	39,149
Accrued liabilities	2,810			376			3,186			2,707			627			3,334
Accrued retirement benefits	59,952			12,061			72,013			28,524			7,435			35,959
Accumulated other non-owner changes to equity, net	(86,925		)	(20,689		)	(107,614		)	(48,564		)	(18,858		)	(67,422		)

Amounts related to pensions recognized in accumulated other non-owner changes to equity, net of tax, at December 31, 2014 and 2013, respectively, consist of:



	2014									2013
	U.S.			Non-U.S.			Total			U.S.			Non-U.S.			Total
Net actuarial loss	$	(86,399	)	$	(20,406	)	$	(106,805	)	$	(47,538	)	$	(18,477	)	$	(66,015	)
Prior service costs	(526		)	(283		)	(809		)	(1,026		)	(381		)	(1,407		)
	$	(86,925	)	$	(20,689	)	$	(107,614	)	$	(48,564	)	$	(18,858	)	$	(67,422	)

The accompanying balance sheets reflect the underfunded status of the Company’s other postretirement benefit plans at December 31, 2014 and 2013. Reconciliations of the obligations and underfunded status of the plans follow:



	2014			2013
Benefit obligation, January 1	$	46,243		$	53,988
Service cost	139			233
Interest cost	2,179			2,061
Actuarial (gain) loss	3,049			(2,328		)
Benefits paid	(7,568		)	(9,133		)
Curtailment gain	—			(1,675		)
Participant contributions	2,833			3,039
Foreign exchange rate changes	(61		)	58
Benefit obligation, December 31	46,814			46,243
Fair value of plan assets, January 1	—			—
Company contributions	4,735			6,094
Participant contributions	2,833			3,039
Benefits paid	(7,568		)	(9,133		)
Fair value of plan assets, December 31	—			—
Underfunded status, December 31	$	46,814		$	46,243

Amounts related to other postretirement benefits recognized in the accompanying balance sheets consist of:



	2014			2013
Accrued liabilities	$	5,047		$	4,891
Accrued retirement benefits	41,767			41,352
Accumulated other non-owner changes to equity, net	(7,675		)	(5,804		)

Amounts related to other postretirement benefits recognized in accumulated other non-owner changes to equity, net of tax, at December 31, 2014 and 2013 consist of:



	2014			2013
Net actuarial loss	$	(8,212	)	$	(6,885	)
Prior service credits	537			1,081
	$	(7,675	)	$	(5,804	)

The sources of changes in accumulated other non-owner changes to equity, net, during 2014 were:



	Pension			Other Postretirement Benefits
Net loss	$	(48,957	)	$	(1,930	)
Amortization of prior service costs (credits)	570			(544		)
Amortization of actuarial loss	6,477			628
Foreign exchange rate changes	1,765			(25		)
	$	(40,145	)	$	(1,871	)

Weighted-average assumptions used to determine benefit obligations at December 31, are:



	2014		2013
U.S. plans:
Discount rate	4.25	%	5.20	%
Increase in compensation	3.73	%	3.72	%
Non-U.S. plans:
Discount rate	2.74	%	3.93	%
Increase in compensation	2.72	%	2.76	%

The investment strategy of the plans is to generate a consistent total investment return sufficient to pay present and future plan benefits to retirees, while minimizing the long-term cost to the Company. Target allocations for asset categories are used to earn a reasonable rate of return, provide required liquidity and minimize the risk of large losses. Targets may be adjusted, as necessary, to reflect trends and developments within the overall investment environment. The weighted-average target investment allocations by asset category were as follows during 2014: 70% in equity securities, 20% in fixed income securities, 5% in real estate and 5% in other investments, including cash. During the fourth quarter of 2014, the Company approved a strategic shift that resulted in a change in the targeted mix of assets. The revised target mix reflects the following investment allocations by asset category: 65% in equity securities, 30% in fixed income securities and 5% in other investments, including cash.

The fair values of the Company’s pension plan assets at December 31, 2014 and 2013, by asset category are as follows:



			Fair Value Measurements Using
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2014
Cash and short-term investments	$	10,805	$	10,805	$	—	$	—
Equity securities:
U.S. large-cap	137,051		65,484		71,567		—
U.S. mid-cap	48,614		48,614		—		—
U.S. small-cap	47,972		47,972		—		—
International equities	71,451		—		71,451		—
Fixed income securities:
U.S. bond funds	79,810		—		79,810		—
International bonds	35,949		—		35,949		—
Real estate securities	18,915		—		18,915		—
Other	2,120		—		—		2,120
	$	452,687	$	172,875	$	277,692	$	2,120
December 31, 2013
Cash and short-term investments	$	18,885	$	18,885	$	—	$	—
Equity securities:
U.S. large-cap	131,749		61,257		70,492		—
U.S. mid-cap	47,276		47,276		—		—
U.S. small-cap	53,627		53,627		—		—
International equities	80,479		—		80,479		—
Fixed income securities:
U.S. bond funds	65,740		—		65,740		—
International bonds	37,357		—		37,357		—
Real estate securities	16,686		—		16,686		—
Other	1,779		—		—		1,779
	$	453,578	$	181,045	$	270,754	$	1,779

The fair values of the Level 1 assets are based on quoted market prices from various financial exchanges. The fair values of the Level 2 assets are based primarily on quoted prices in active markets for similar assets or liabilities. The Level 2 assets are comprised primarily of commingled funds and fixed income securities. Commingled equity funds are valued at their net asset values based on quoted market prices of the underlying assets. Fixed income securities are valued using a market approach which considers observable market data for the underlying asset or securities. The Level 3 assets relate to the defined benefit pension plan of the Synventive business and were transferred to the Company in the August 2012 acquisition. These pension assets are fully insured and have been estimated based on accrued pension rights and actuarial rates. These pension assets are limited to fulfilling the Company's pension obligations.

The Company expects to contribute approximately $5,169 to the pension plans in 2015.

The following are the estimated future net benefit payments, which include future service, over the next 10 years:



	Pensions		Other Postretirement Benefits
2015	$	29,161	$	4,547
2016	29,319		4,177
2017	29,471		3,971
2018	29,745		4,108
2019	30,570		3,846
Years 2020-2024	151,904		16,112
Total	$	300,170	$	36,761

Pension and other postretirement benefit expenses consist of the following:



	Pensions									Other Postretirement Benefits
	2014			2013			2012			2014			2013			2012
Service cost	$	4,546		$	6,181		$	6,530		$	139		$	233		$	273
Interest cost	22,026			20,112			21,624			2,179			2,061			2,532
Expected return on plan assets	(34,232		)	(33,144		)	(32,827		)	—			—			—
Amortization of prior service cost (credit)	648			752			845			(871		)	(1,006		)	(1,585		)
Recognized losses	8,617			16,365			12,048			1,017			1,004			1,082
Curtailment loss (gain)	219			199			—			4			(3,081		)	—
Settlement loss	871			637			92			—			—			—
Special termination benefits	715			1,016			—			—			—			—
Net periodic benefit cost	$	3,410		$	12,118		$	8,312		$	2,468		$	(789	)	$	2,302

The estimated net actuarial loss and prior service cost for the defined benefit pension plans that will be amortized from accumulated other non-owner changes to equity into net periodic benefit cost in 2015 are $14,640 and $313, respectively. The estimated net actuarial loss and prior service credit for other defined benefit postretirement plans that will be amortized from accumulated other non-owner changes to equity into net periodic benefit cost in 2015 are $1,043 and $(564), respectively.

Weighted-average assumptions used to determine net benefit expense for years ended December 31, are:



	2014		2013		2012
U.S. plans:
Discount rate	5.20	%	4.25	%	5.05	%
Long-term rate of return	9.00	%	9.00	%	9.00	%
Increase in compensation	3.72	%	3.71	%	3.71	%
Non-U.S. plans:
Discount rate	3.93	%	3.73	%	4.46	%
Long-term rate of return	5.07	%	5.33	%	5.79	%
Increase in compensation	2.76	%	2.69	%	2.76	%

The expected long-term rate of return is based on projected rates of return and the historical rates of return of published indices that are used to measure the plans’ target asset allocation. The historical rates are then discounted to consider fluctuations in the historical rates as well as potential changes in the investment environment.

The Company’s accumulated postretirement benefit obligations, exclusive of pensions, take into account certain cost-sharing provisions. The annual rate of increase in the cost of covered benefits (i.e., health care cost trend rate) is assumed to be 6.88% and 7.11% at December 31, 2014 and 2013, respectively, decreasing gradually to a rate of 4.50% by December 31, 2029. A one percentage point change in the assumed health care cost trend rate would have the following effects:



	One Percentage Point Increase		One Percentage Point Decrease
Effect on postretirement benefit obligation	$	509	$	(467	)
Effect on postretirement benefit cost	25		(23		)

The Company previously contributed to a multi-employer defined benefit pension plan under the terms of a collective bargaining agreement. This multi-employer plan provides pension benefits to certain former union-represented employees of the Edison, New Jersey facility at BDNA. The Company determined that a withdrawal from this multi-employer plan, following its entry into a definitive agreement to sell BDNA in February 2013, was probable. The Company estimated its assessment of a withdrawal liability, on a pre-tax discounted basis, and recorded a liability of $2,788 during the first quarter of 2013. The expense was recorded within discontinued operations. The Company completed the sale of BDNA and ceased making contributions into the multi-employer plan during the second quarter of 2013. The Company settled the withdrawal liability in the fourth quarter of 2013, with the agreed-upon settlement payment being made in January 2014.

The Company actively contributes to a Swedish pension plan that supplements the Swedish social insurance system. The pension plan guarantees employees a pension based on a percentage of their salary and represents a multi-employer pension plan, however the pension plan was not significant in any year presented. This pension plan is not underfunded.

Contributions related to the individually insignificant multi-employer plans, as disclosure is required pursuant to the applicable accounting standards, are as follows:



	Contributions by the Company
Pension Fund:	2014		2013		2012
Teamsters Local 641 Pension Fund (Edison, New Jersey)	$	—	$	23	$	97
Swedish Pension Plan (ITP2)	379		414		409
Total Contributions	$	379	$	437	$	506

The Company also contributed to a multi-employer other postretirement benefit plan under the terms of the collective bargaining agreement at the former Edison, New Jersey facility. This postretirement benefit plan was settled in conjunction with the defined benefit pension plan. This health and welfare postretirement plan provides medical, prescription, optical and other benefits to certain former union-represented active employees and retirees. Company contributions to the postretirement plan were $0, $40 and $171 in 2014, 2013 and 2012, respectively. There have been no significant changes that affect the comparability of 2014, 2013 or 2012 contributions, however contributions to the postretirement benefit plan ceased during the second quarter of 2013 following the sale of BDNA.