Employee Benefit Plans | 10. EMPLOYEE BENEFIT PLANS Defined Contribution Plans The Company and certain of its subsidiaries have defined contribution retirement savings plans, the most significant of which is a 401(k) plan in the U.S. These plans allow employees meeting certain requirements to contribute a portion of their compensation on a pretax and/or after-tax basis in accordance with guidelines established by the plans and the Internal Revenue Service or other tax authorities. The Company matches a percentage of the employee contributions up to certain limits. With the BNS acquisition in 2015, the Company assumed various international defined contribution retirement savings plans and BNS employees in the U.S. became eligible to participate in the U.S. 401(k) plan. During the years ended December 31, 2016, 2015 and 2014, the Company made contributions to defined contribution retirement savings plans of $24.5 million, $21.7 million and $19.6 million, respectively. The Company maintains noncontributory and contributory deferred compensation plans. During the years ended December 31, 2016, 2015 and 2014, the Company recognized pretax costs of $2.6 million, $1.4 million and $2.0 million, respectively, related to these plans. The liability was $32.5 million and $27.4 million as of December 31, 2016 and 2015, respectively. Pension and Other Postretirement Benefit Plans The Company sponsors defined benefit pension plans covering certain domestic former employees and certain foreign current and former employees. With the acquisition of the BNS business, the Company assumed various foreign defined benefit pension plans. Included in the defined benefit pension plans are both funded and unfunded plans. The Company also sponsors postretirement health care and life insurance benefit plans that provide benefits to certain domestic former employees and certain domestic full-time employees who retire from the Company. The health care plans contain various cost-sharing features such as participant contributions, deductibles, coinsurance and caps, with Medicare as the primary provider of health care benefits for eligible retirees. The accounting for the health care plans anticipates future cost-sharing changes that are consistent with the Company’s expressed intent to maintain a consistent level of cost sharing or capped benefits with retirees. The following table summarizes information for the defined benefit pension and other postretirement benefit plans based on a December 31 measurement date: Pension Benefits Other Postretirement Benefits U.S. Plans Non-U.S. Plans U.S Plans 2016 2015 2016 2015 2016 2015 Change in benefit obligation: Benefit obligation, beginning $ 159,973 $ 171,351 $ 203,117 $ 145,921 $ 16,696 $ 21,756 Service cost — — 5,352 2,271 3 29 Interest cost 6,452 6,498 6,096 5,988 538 643 Plan participants' contributions — — 115 — 1,016 1,332 BNS acquisition — — (7,073 ) 74,851 — — Actuarial loss (gain) 966 (6,986 ) 39,296 (13,314 ) (876 ) (3,505 ) Plan amendments — — — — (4,370 ) — Benefits paid, including settlements (10,869 ) (10,890 ) (6,861 ) (2,239 ) (3,461 ) (3,559 ) Foreign exchange and other — — (23,408 ) (10,361 ) — — Benefit obligation, ending $ 156,522 $ 159,973 $ 216,634 $ 203,117 $ 9,546 $ 16,696 Change in plan assets: Fair value of plan assets, beginning 152,661 160,325 199,915 147,324 592 1,543 Employer and plan participant contributions 261 9,103 6,119 8,596 2,869 2,608 BNS acquisition — — 38 56,328 — — Return on plan assets 13,585 (5,877 ) 21,683 225 — — Benefits paid, including settlements (10,869 ) (10,890 ) (6,861 ) (2,239 ) (3,461 ) (3,559 ) Foreign exchange and other — — (24,076 ) (10,319 ) — — Fair value of plan assets, ending $ 155,638 $ 152,661 $ 196,818 $ 199,915 $ — $ 592 Funded status (benefit obligation in excess of fair value of plan assets) $ 884 $ 7,312 $ 19,816 $ 3,202 $ 9,546 $ 16,104 The following table presents the balance sheet location of the Company's pension and postretirement liabilities and assets: December 31, U.S. Plans Non-U.S. Plans 2016 2015 2016 2015 Other accrued liabilities $ (1,980 ) $ (2,000 ) $ (1,145 ) $ — Pension and other postretirement benefit liabilities (10,068 ) (21,416 ) (21,603 ) (15,686 ) Other noncurrent assets 1,618 — 2,932 12,484 The accumulated benefit obligation for the Company’s U.S. defined benefit pension plans was $156,522 and $159,973 as of December 31, 2016 and 2015, respectively and the accumulated benefit obligation for the Company’s non-U.S. defined benefit pension plans was $175,016 and $160,087 as of December 31, 2016 and 2015, respectively. The following table summarizes information for the Company’s pension plans with an accumulated benefit obligation in excess of plan assets: December 31, U.S. Plans Non-U.S. Plans 2016 2015 2016 2015 Projected benefit obligation $ 2,502 $ 159,973 $ 14,467 $ 15,913 Accumulated benefit obligation 2,502 159,973 12,518 11,364 Fair value of plan assets — 152,661 3,640 17 The following table summarizes pretax amounts included in accumulated other comprehensive loss as of December 31, 2016 and 2015: Pension Benefits Other Postretirement Benefits U.S. Plans Non-U.S. Plans U.S. Plans 2016 2015 2016 2015 2016 2015 Unrecognized net actuarial gain (loss) $ (30,968 ) $ (37,508 ) $ (32,411 ) $ (8,661 ) $ 3,518 $ 4,023 Unrecognized prior service credit — — — — 18,137 17,987 Total $ (30,968 ) $ (37,508 ) $ (32,411 ) $ (8,661 ) $ 21,655 $ 22,010 Pretax amounts for net periodic benefit cost and other amounts included in other comprehensive income (loss) for the defined benefit pension and other postretirement benefit plans consisted of the following components: Pension Benefits Year Ended December 31, U.S. Plans Non-U.S. Plans 2016 2015 2014 2016 2015 2014 Service cost $ — $ — $ — $ 5,352 $ 2,271 $ 453 Interest cost 6,452 6,498 7,270 6,096 5,988 6,043 Recognized actuarial loss 923 675 309 116 52 — Expected return on plan assets (7,002 ) (7,516 ) (7,883 ) (8,632 ) (7,357 ) (7,366 ) Net periodic benefit cost (income) 373 (343 ) (304 ) 2,932 954 (870 ) Changes in plan assets and benefit obligations included in other comprehensive income (loss): Change in unrecognized net actuarial loss (gain) (6,540 ) 5,735 8,479 23,750 (6,867 ) 10,039 Total recognized in net periodic benefit cost and included in other comprehensive income (loss) $ (6,167 ) $ 5,392 $ 8,175 $ 26,682 $ (5,913 ) $ 9,169 Other Postretirement Benefits Year Ended December 31, U.S. Plans 2016 2015 2014 Service cost $ 3 $ 29 $ 86 Interest cost 538 643 901 Recognized actuarial gain (1,382 ) (1,132 ) (343 ) Amortization of prior service credit (4,220 ) (9,829 ) (9,977 ) Net periodic benefit income (5,061 ) (10,289 ) (9,333 ) Changes in plan assets and benefit obligations included in other comprehensive income (loss): Change in unrecognized net actuarial loss (gain) 505 (2,373 ) (2,734 ) Change in unrecognized prior service credit (150 ) 9,829 9,977 Total included in other comprehensive income (loss) 355 7,456 7,243 Total recognized in net periodic benefit cost and included in other comprehensive income (loss) $ (4,706 ) $ (2,833 ) $ (2,090 ) Amortization of amounts included in accumulated other comprehensive loss as of December 31, 2016 is expected to increase (decrease) net periodic benefit cost during 2017 as follows: Pension Benefits Other Postretirement Benefits Total U.S. Plans Non-U.S. Plans U.S. Plans U.S. Plans Non-U.S. Plans Amortization of net actuarial loss (gain) $ 678 $ 1,459 $ (793 ) $ (115 ) $ 1,459 Amortization of prior service credit — — (4,138 ) (4,138 ) — Total $ 678 $ 1,459 $ (4,931 ) $ (4,253 ) $ 1,459 Assumptions Significant weighted average assumptions used in determining benefit obligations and net periodic benefit cost are as follows: Pension Benefits U.S. Plans Non-U.S. Plans 2016 2015 2014 2016 2015 2014 Benefit obligations: Discount rate 3.94 % 4.19 % 3.89 % 2.38 % 3.52 % 3.75 % Rate of compensation increase — % — % — % 4.04 % 4.36 % 4.00 % Net periodic benefit cost: Discount rate 4.19 % 3.89 % 4.69 % 3.52 % 3.75 % 4.70 % Rate of return on plan assets 4.50 % 4.65 % 5.45 % 3.71 % 4.45 % 5.40 % Rate of compensation increase — % — % — % 4.18 % 4.00 % 4.30 % Other Postretirement Benefits U.S. Plans 2016 2015 2014 Benefit obligations: Discount rate 3.06 % 3.46 % 3.15 % Net periodic benefit cost: Discount rate 3.46 % 3.15 % 3.50 % The Company considered the available yields on high-quality fixed-income investments with maturities corresponding to the Company’s expected benefit obligations to determine the discount rates at each measurement date. Plan Assets In developing the expected rate of return on plan assets, the Company considered the expected long-term rate of return on individual asset classes. Expected return on plan assets is based on the market value of the assets. Substantially all of the U.S. pension assets and a portion of the non-U.S. pension assets are managed by independent investment advisors with an objective of transitioning to a portfolio of fixed income and absolute return investments that matches the durations of the obligations as the funded status of each plan improves. The absolute return investment fund is a diversified portfolio designed to achieve long-term total returns. The remainder of the non-U.S. pension assets is invested with the objective of maximizing return. Mutual funds classified as Level 1 are valued at net asset value, which is based on the fair value of the funds’ underlying securities. Certain mutual funds are classified as Level 2 because a portion of the funds’ underlying assets are valued using significant other observable inputs. Other assets are primarily composed of fixed income investments (including insurance and real estate products) and are valued based on the investment’s stated rate of return, which approximates market interest rates. The estimated fair values and the valuation input levels of the Company’s plan assets as of December 31, 2016 are as follows: Pension Benefits Other Postretirement Benefits U.S. Plans Non-U.S. Plans U.S. Plans Level 1 Fair Value Level 2 Fair Value Level 1 Fair Value Level 2 Fair Value Level 1 Fair Value Level 2 Fair Value Mutual funds: U.S. equity $ 2,693 $ — $ — $ — $ — $ — International equity 1,284 — 30,295 29,618 — — U.S. debt 142,121 — — — — — International debt 6,847 — 27,004 81,242 — — Absolute return — — — 18,727 — — Other 2,693 — 3,688 6,244 — — Total $ 155,638 $ — $ 60,987 $ 135,831 $ — $ — The estimated fair values and the valuation input levels of the Company’s plan assets as of December 31, 2015 are as follows: Pension Benefits Other Postretirement Benefits U.S. Plans Non-U.S. Plans U.S. Plans Level 1 Fair Value Level 2 Fair Value Level 1 Fair Value Level 2 Fair Value Level 1 Fair Value Level 2 Fair Value Mutual funds: U.S. equity $ 2,404 $ — $ — $ — $ — $ — International equity 1,692 — 28,309 50,240 — — U.S. debt 140,264 — — — 592 — International debt 6,164 — 26,721 91,772 — — Other 2,137 — 1,223 1,650 — — Total $ 152,661 $ — $ 56,253 $ 143,662 $ 592 $ — Expected Cash Flows The Company expects to contribute $0.3 million to U.S defined benefit pension plans and $6.6 million to non-U.S. defined benefit pension plans during 2017. The Company expects to contribute $1.7 million to U.S. other postretirement benefit plans during 2017. The following table summarizes projected benefit payments from pension and other postretirement benefit plans through 2026, including benefits attributable to estimated future service (in millions): Pension Benefits Other Postretirement Benefits U.S. Plans Non-U.S. Plans U.S Plans 2017 $ 10.8 $ 10.0 $ 1.7 2018 10.7 7.7 1.7 2019 10.6 6.4 1.5 2020 10.5 6.7 1.0 2021 10.4 7.6 0.9 2022-2026 50.0 47.7 2.5 |