| Employee Benefit Plans | Plans Defined Benefit Plans PPG has defined benefit pension plans that cover certain employees worldwide. The principal defined benefit pension plans are those in the U.S., Canada, the Netherlands and the U.K. These plans in the aggregate represent approximately 93% of the projected benefit obligation at December 31, 2016 , of which the U.S. defined benefit pension plans represent the majority. U.S. defined benefit plans As of January 1, 2006, the Company closed the salaried defined benefit plans to new entrants. The defined benefit plan of certain hourly employees was closed to new entrants in 2006 or thereafter. Eligible employees participate in a defined contribution retirement plan. Further in 2011, the Company approved amendments related to certain U.S. defined benefit plans so that depending upon the affected employee’s combined age and years of service to PPG, certain employees stopped accruing benefits either during 2011 or at some point in the future. The affected employees will participate in the Company’s defined contribution retirement plans from the date their benefits under their respective defined benefit plans are frozen. The Company has amended other defined benefit plans in other countries in a similar way and plans to continue reviewing and potentially changing other PPG defined benefit plans in the future. U.S. pension annuity contracts In June 2016, the Company entered into a Definitive Purchase Agreement by and among the Company, Massachusetts Mutual Life Insurance Company (“MassMutual”) and State Street Bank & Trust Company (“State Street”), as independent fiduciary to the Company’s United States defined benefit pension plans (the “Plans”), and a Definitive Purchase Agreement by and among the Company, Metropolitan Life Insurance Company (“MetLife”) and State Street. In August 2016, pursuant to the two Definitive Purchase Agreements, the Plans purchased group annuity contracts that irrevocably transferred to the two insurance companies certain pension benefit obligations for approximately 13,200 of the Company’s retirees in the United States who started receiving their monthly retirement benefit payments on or before April 1, 2016. The value of the benefit obligation of each affected former salaried employee’s retirement benefit obligation is irrevocably guaranteed by, and split equally between, MassMutual and MetLife. Pursuant to these Definitive Purchase Agreements, MassMutual serves as the lead administrator. The value of each affected former hourly employee’s retirement benefit obligation is irrevocably guaranteed by MetLife, and MetLife will serve as the administrator. The amount of each affected retiree’s annuity payment is equal to the amount of such individual’s pension benefit. The purchase of group annuity contracts was funded directly by the assets of the Plans. By irrevocably transferring the obligations and assets to MassMutual and MetLife, the Company reduced its overall pension projected benefit obligation by approximately $1.6 billion and recognized a non-cash pension settlement charge of approximately $535 million after-tax ( $857 million pre-tax). Following the transfer of the aforementioned U.S. retiree obligations and assets to third party insurers, PPG contributed $146 million and $29 million to its U.S. plans in 2016 and January 2017, respectively. These contributions will be funded by cash on hand. U.S. plan merger and remeasurement During 2016, as a result of the purchase of group annuity contracts, PPG merged two of its qualified defined benefit pension plans that contained retired plan participants into one surviving plan. In conjunction with the merger and purchase of group annuity contracts, PPG remeasured its qualified pension plan benefit obligations using prevailing discount rates as of July 31, 2016 which averaged 3.6% as compared to a 4.5% discount rate as of December 31, 2015. The remeasurement increased the Company's cumulative pension benefit obligation of its remaining plans by $306 million and increased the Company's full year 2016 qualified defined benefit pension expense by approximately $10 million . Canadian pension annuity contracts In August 2016, the Company purchased group annuity contracts that transferred pension benefit obligations for certain of the Company’s retirees and terminated vested participants in Canada who started receiving their monthly retirement benefit payments on or before April 1, 2016 to Sun Life Assurance Company of Canada (“Sun Life”) and The Canada Life Assurance Company (“Canada Life”). The amount of each affected retiree’s annuity payment is equal to the amount of such individual’s pension benefit. The purchase of group annuity contracts was funded directly by the assets of the Canadian plans. By transferring the obligations and assets to Sun Life and Canada Life, the Company reduced its overall pension projected benefit obligation by approximately $200 million and recognized a non-cash pension settlement charge of $47 million after-tax ( $64 million pre-tax). The Company made voluntary contributions aggregating $7 million to the Canadian plans in 2016 related to the pension annuity contracts. These contributions were funded by cash on hand. Sale of the flat glass business On October 1, 2016, PPG completed the sale of its flat glass business as discussed in Note 2, “Acquisitions and Divestitures.” PPG transferred certain defined benefit pension liabilities, resulting in a settlement charge of $11 million which is included in the net gain on the sale of the flat glass business. This transaction lowered the projected benefit obligation of PPG’s defined benefit pension plan by approximately $100 million . PPG transferred pension assets of $55 million in 2016 in connection with the sale and expects to transfer an additional $5 million to $10 million in 2018. Prior to the sale, results of operations for the flat glass business included pension expense of $4 million , $5 million , and $4 million in 2016, 2015, and 2014, respectively and other postretirement benefit expense of $1 million in 2016, 2015, and 2014, respectively. These amounts are included in “Income from discontinued operations, net of tax” in 2016, 2015 and 2014, respectively. During 2015, PPG‘s contributions to its U.S. pension plans included amounts attributable to flat glass participants totaling $16 million . The contribution attributable to the flat glass participants has been included in cash flows from operations - discontinued operations. Sale of the European fiber glass business On October 1, 2016, PPG completed the sale of its European fiber glass business as discussed in Note 2, “Acquisitions and Divestitures.” PPG transferred the defined benefit pension liabilities resulting in a net settlement charge of $46 million . This transaction lowered the projected benefit obligation of PPG’s defined benefit pension plans by approximately $340 million . PPG transferred pension assets of approximately $250 million in connection with the sale. Plan Termination During June 2014, PPG terminated one of the defined benefit pension plans containing only participants who are no longer accruing benefits, which lowered the projected benefit obligation and plan assets of PPG’s defined benefit pension plans by $41 million . Additionally, PPG recorded an immaterial settlement loss related to the termination of the plan. Postretirement medical PPG sponsors welfare benefit plans that provide postretirement medical and life insurance benefits for certain U.S. and Canadian employees and their dependents of which the U.S. welfare benefit plans represent approximately 88% of the projected benefit obligation at December 31, 2016. Salaried and certain hourly employees in the U.S. hired on or after October 1, 2004, or rehired on or after October 1, 2012 are not eligible for post retirement medical benefits. The U.S. welfare benefit plans include an Employee Group Waiver Plan (“EGWP”) for certain Medicare-eligible retirees and their dependents which includes a fully-insured Medicare Part D prescription drug plan. As such, PPG is not eligible to receive the federal subsidy provided under the Medicare Act of 2003 for these retirees and their dependents. These plans in the U.S. and Canada require retiree contributions based on retiree-selected coverage levels for certain retirees and their dependents and provide for sharing of future benefit cost increases between PPG and participants based on management discretion. The Company has the right to modify, amend or terminate certain of these benefit plans in the future. In August 2016, the Company communicated plan design changes to certain Medicare-eligible retiree plan participants. Effective January 1, 2017, the Company-sponsored Medicare-eligible plans will be replaced by a Medicare private exchange. By offering retiree health coverage through a private Medicare exchange, PPG is able to provide Medicare-eligible participants with more choice of plans and plan designs, greater flexibility, and different price points for coverage. After January 1, 2017, PPG’s contribution to coverage for Medicare-eligible retirees will be in the form of a tax-free account known as a Health Reimbursement Arrangement (HRA). The HRA can be used to pay for health care and prescription drug plan premiums and certain out-of-pocket medical costs; unused funds can be carried over to future years. The announcement of these plan design changes triggered a remeasurement of PPG’s retiree medical benefit obligation using prevailing interest rates. The announced plan design change resulted in a $306 million reduction in the Company's postretirement benefit obligation. PPG accounted for the plan design change prospectively, and the plan change will be amortized to periodic postretirement benefit cost over a 5.6 year period. The following table sets forth the changes in projected benefit obligations (“PBO”) (as calculated as of December 31), plan assets, the funded status and the amounts recognized in the accompanying consolidated balance sheet for the Company’s defined benefit pension and other postretirement benefit plans: Pensions Other Postretirement Benefits ($ in millions) 2016 2015 2016 2015 Projected benefit obligation, January 1 $ 5,349 $ 5,775 $ 1,084 $ 1,196 Service cost 48 57 15 16 Interest cost 142 196 31 45 Plan amendments — — (306 ) — Actuarial losses (gains) - net 538 (137 ) 13 (101 ) Benefits paid (233 ) (271 ) (53 ) (52 ) Plan transfers (4 ) — — — Foreign currency translation adjustments (141 ) (236 ) 2 (19 ) Settlements and curtailments (2,354 ) (8 ) — — Flat glass business changes, net (96 ) — 6 (2 ) Other 3 (27 ) — 1 Projected benefit obligation, December 31 $ 3,252 $ 5,349 $ 792 $ 1,084 Market value of plan assets, January 1 $ 4,627 $ 4,839 Actual return on plan assets 470 (19 ) Company contributions 204 273 Participant contributions 1 2 Benefits paid (205 ) (249 ) Plan transfers (3 ) — Plan settlements (2,338 ) (17 ) Plan expenses and other-net — (4 ) Foreign currency translation adjustments (134 ) (214 ) Flat glass business changes, net (61 ) 16 Market value of plan assets, December 31 $ 2,561 $ 4,627 Funded Status $ (691 ) $ (722 ) $ (792 ) $ (1,084 ) Amounts recognized in the Consolidated Balance Sheet: Other assets (long-term) 110 57 — — Accounts payable and accrued liabilities (61 ) (67 ) (61 ) (63 ) Accrued pensions (740 ) (695 ) — — Other postretirement benefits — — (731 ) (1,015 ) Liabilities held for sale — (17 ) — (6 ) Net liability recognized $ (691 ) $ (722 ) $ (792 ) $ (1,084 ) The PBO is the actuarial present value of benefits attributable to employee service rendered to date, including the effects of estimated future pay increases. The accumulated benefit obligation (“ABO”) is the actuarial present value of benefits attributable to employee service rendered to date, but does not include the effects of estimated future pay increases. The ABO for all defined benefit pension plans as of December 31, 2016 and 2015 was $3,171 million and $5,220 million , respectively. The following table details the pension plans where the benefit liability exceeds the fair value of the plan assets: Pensions ($ in millions) 2016 2015 Plans with PBO in Excess of Plan Assets: Projected benefit obligation $ 2,406 $ 4,717 Fair value of plan assets $ 1,609 $ 3,937 Plans with ABO in Excess of Plan Assets: Accumulated benefit obligation $ 2,302 $ 4,351 Fair value of plan assets $ 1,575 $ 3,676 Net actuarial losses / prior service cost/(credit) deferred in accumulated other comprehensive loss ($ in millions) Pensions Other Postretirement Benefits 2016 2015 2016 2015 Accumulated net actuarial losses $ 918 $ 1,872 $ 226 $ 228 Accumulated prior service cost (credit) 1 (18 ) (298 ) (24 ) Total $ 919 $ 1,854 $ (72 ) $ 204 The accumulated net actuarial losses for pensions and other postretirement benefits relate primarily to historical declines in the discount rate as well as updated mortality assumptions. The accumulated net actuarial losses exceed 10% of the higher of the market value of plan assets or the PBO at the beginning of the year, therefore, amortization of such excess has been included in net periodic benefit costs for pension and other postretirement benefits in each of the last three years. The amortization period is the average remaining service period of active employees expected to receive benefits unless a plan is mostly inactive in which case the amortization period is the average remaining life expectancy of the plan participants. Accumulated prior service cost (credit) is amortized over the future service periods of those employees who are active at the dates of the plan amendments and who are expected to receive benefits. The decrease in accumulated other comprehensive loss (pre-tax) in 2016 relating to defined benefit pension and other postretirement benefits is primarily attributable to pension settlement charges and other postretirement plan design changes, as follows: ($ in millions) Pensions Other Postretirement Benefits Net actuarial loss arising during the year $ 260 $ 17 New prior service cost (credit) 16 (305 ) Amortization of actuarial loss (110 ) (19 ) Amortization of prior service cost 1 31 Foreign currency translation adjustments (23 ) — Impact of settlements and curtailments (1,063 ) — Impact of flat glass transaction (16 ) — Net change $ (935 ) $ (276 ) The 2016 net actuarial loss related to the Company’s pension and other postretirement benefit plans of $277 million was primarily due to a decrease in the weighted average discount rate used to determine the benefit obligation at December 31, 2016. This decrease was partially offset by an actual gain on asset performance in excess of the expected return on plan assets for the year. The estimated amount of accumulated net actuarial loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2017 is $77 million . The estimated amounts of accumulated net actuarial loss and prior service (credit) for the other postretirement benefit plans that will be amortized from accumulated other comprehensive (loss) income into net periodic benefit cost in 2017 are $22 million and $(59) million , respectively. Net periodic benefit cost Net periodic benefit cost for the three years ended December 31, 2016 , included the following: Pensions Other Postretirement Benefits ($ in millions) 2016 2015 2014 2016 2015 2014 Service cost $ 48 $ 57 $ 52 $ 15 $ 16 $ 15 Interest cost 142 196 230 31 45 47 Expected return on plan assets (213 ) (287 ) (297 ) — — — Amortization of prior service credit (1 ) (2 ) (2 ) (31 ) (9 ) (10 ) Amortization of actuarial losses 110 119 77 19 32 11 Settlements, curtailments, and special termination benefits 1,015 8 8 — — — Net periodic benefit cost $ 1,101 $ 91 $ 68 $ 34 $ 84 $ 63 Net periodic benefit cost is included in Cost of sales, exclusive of depreciation and amortization, Selling, general and administrative and Research and development in the accompanying consolidated statements of income. Key assumptions The following weighted average assumptions were used to determine the benefit obligation for the Company’s defined benefit pension and other postretirement plans as of December 31, 2016 and 2015 : 2016 2015 Discount rate (1) 3.7 % 4.1 % Rate of compensation increase 1.6 % 2.0 % (1) The discount rate for U.S. defined benefit pension and other postretirement plans was 4.3% and 4.5% as of December 31, 2016 and 2015, respectively. The following weighted average assumptions were used to determine the net periodic benefit cost for the Company’s defined benefit pension and other postretirement benefit plans for the three years in the period ended December 31, 2016 : 2016 2015 2014 Discount rate 3.6 % 3.8 % 4.6 % Expected return on assets 6.1 % 6.1 % 6.5 % Rate of compensation increase 1.6 % 2.0 % 3.0 % These assumptions for each plan are reviewed on an annual basis. In determining the expected return on plan asset assumption, the Company evaluates the mix of investments that comprise each plan’s assets and external forecasts of future long-term investment returns. The Company compares the expected return on plan assets assumption to actual historic returns to ensure reasonability. For 2016, the return on plan assets assumption for PPG’s U.S. defined benefit pension plans was 7.15% . A change in the rate of return of 100 basis points, with other assumptions held constant, would impact 2017 net periodic pension expense by $11 million . The global expected return on plan assets assumption to be used in determining 2017 net periodic pension expense will be 5.40% ( 7.50% for the U.S. plans only). The discount rate used in accounting for pensions and other postretirement benefits is determined by reference to a current yield curve and by considering the timing and amount of projected future benefit payments. In 2016, the Company changed the method it uses to estimate the service and interest cost components of net periodic benefit cost for pension and other postretirement benefit costs for substantially all of its U.S. and foreign plans. Historically, the service and interest cost components were estimated using a single weighted-average discount rate derived from the yield curve used to measure the projected benefit obligation at the beginning of the period. The Company has elected to use a full yield curve approach (“Split-rate” method) in the estimation of these components of benefit cost by applying specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The Company made this change to improve the correlation between projected benefit cash flows and the corresponding yield curve spot rates and to provide a more precise measurement of service and interest costs. This change does not affect the measurement of the Company’s total benefit obligations. The Company accounted for this change as a change in estimate and, accordingly, began recognizing its effect in fiscal year 2016. A change in the discount rate of 100 basis points, with all other assumptions held constant, would impact 2017 net periodic benefit expense for our defined benefit pension and other postretirement benefit plans by $28 million and $24 million , respectively. In 2014, the Company updated the mortality tables used to calculate its U.S. defined benefit pension and other postretirement benefit liabilities. In October 2014, the Society of Actuaries’ Retirement Plans Experience Committee released new mortality tables known as RP 2014. The new tables released reflect a long period of significant improvement in mortality. The Company considered these new tables and performed a review of its own mortality history, as well as the industry in which the Company operates to assess future improvements in mortality rates based on its U.S. population. The Company chose to value its U.S. defined benefit pension and other postretirement benefit liabilities using a slightly modified assumption of future mortality which better approximates our plan participant population and reflects significant improvement in life expectancy over the previously used mortality table, known as RP 2000. The weighted-average healthcare cost trend rate (inflation) used for 2016 was 6.1% declining to a projected 4.4% in the year 2024 . For 2017 , the assumed weighted-average healthcare cost trend rate used will be 6.3% declining to a projected 4.5% between 2016 and 2039 for medical and prescription drug costs, respectively. These assumptions are reviewed on an annual basis. In selecting rates for current and long-term health care cost assumptions, the Company takes into consideration a number of factors including the Company’s actual health care cost increases, the design of the Company’s benefit programs, the demographics of the Company’s active and retiree populations and external expectations of future medical cost inflation rates. If these 2017 health care cost trend rates were increased or decreased by one percentage point per year, such increase or decrease would have the following effects: One-Percentage Point ($ in millions) Increase Decrease Increase (decrease) in the aggregate of service and interest cost components of annual expense $ 8 $ (5 ) Increase (decrease) in the benefit obligation $ 25 $ (17 ) Contributions to defined benefit plans ($ in millions) December 31, 2016 2015 2014 U.S. defined benefit pension contributions (a) $ 146 $ 234 $ 2 Non-U.S. defined benefit pension plans $ 58 $ 39 $ 39 (a) During 2015, U.S. contributions totaling $16 million associated with the flat glass business were recast as cash flows from operations - discontinued operations and are excluded from the table above. Following the transfer of certain U.S. retiree obligations and assets to third party insurers, PPG contributed $146 million and $29 million to its U.S. plans in 2016 and January 2017, respectively. Some contributions to PPG’s non-U.S. defined benefit pension plans in 2016 were required by local funding requirements. PPG expects to make mandatory contributions to its non-U.S. plans in the range of $20 million to $30 million in 2017 . PPG may make voluntary contributions to its defined benefit pension plans in 2017 and beyond. Benefit payments The estimated benefits expected to be paid under the Company’s defined benefit pension and other postretirement benefit plans (in millions) are: ($ in millions) Pensions Other Postretirement Benefits 2017 $ 169 $ 61 2018 $ 124 $ 61 2019 $ 118 $ 60 2020 $ 125 $ 60 2021 $ 127 $ 59 2022 to 2025 $ 704 $ 267 Beginning in 2012, the Company initiated a lump sum payout program that gave certain terminated vested participants in certain U.S. defined benefit pension plans the option to take a one-time lump sum cash payment in lieu of receiving a future monthly annuity. During 2016, PPG paid $13 million in lump sum benefits to terminated vested participants who elected to participate in the program. Plan assets Each PPG sponsored defined benefit pension plan is managed in accordance with the requirements of local laws and regulations governing defined benefit pension plans for the exclusive purpose of providing pension benefits to participants and their beneficiaries. Investment committees comprised of PPG managers have fiduciary responsibility to oversee the management of pension plan assets by third party asset managers. Pension plan assets are held in trust by financial institutions and managed on a day-to-day basis by the asset managers. The asset managers receive a mandate from each investment committee that is aligned with the asset allocation targets established by each investment committee to achieve the plan’s investment strategies. The performance of the asset managers is monitored and evaluated by the investment committees throughout the year. Pension plan assets are invested to generate investment earnings over an extended time horizon to help fund the cost of benefits promised under the plans while mitigating investment risk. The asset allocation targets established for each pension plan are intended to diversify the investments among a variety of asset categories and among a variety of individual securities within each asset category to mitigate investment risk and provide each plan with sufficient liquidity to fund the payment of pension benefits to retirees. The following summarizes the weighted average target pension plan asset allocation as of December 31, 2016 and 2015 for all PPG defined benefit plans: Asset Category 2016 2015 Equity securities 30-65% 30-65% Debt securities 30-65% 30-65% Real estate 0-10% 0-10% Other 0-20% 0-10% The fair values of the Company’s pension plan assets at December 31, 2016 , by asset category, are as follows: ($ in millions) Level 1 (1) Level 2 (1) Level 3 (1) Total Asset Category Equity securities: U.S. Large cap $ — $ 240 $ — $ 240 Small cap — 21 — 21 PPG common stock 53 — — 53 Non-U.S. Developed and emerging markets (2) 80 397 — 477 Debt securities: Cash and cash equivalents — 224 — 224 Corporate (3) U.S. (4) — 21 86 107 Developed and emerging markets (2) — 42 — 42 Diversified (5) — 622 — 622 Government U.S. (4) — 4 — 4 Developed markets — 170 — 170 Other (6) — — 15 15 Real estate, hedge funds, and other — 172 414 586 Total $ 133 $ 1,913 $ 515 $ 2,561 (1) These levels refer to the accounting guidance on fair value measurement described in Note 9, “Financial Instruments, Hedging Activities and Fair Value Measurements.” (2) These amounts represent holdings in investment grade debt or equity securities of issuers in both developed markets and emerging economies. (3) This category represents investment grade debt securities from a diverse set of industry issuers. (4) These investments are primarily long duration fixed income securities. (5) This category represents commingled funds invested in diverse portfolios of debt securities. (6) This category includes mortgage-backed and asset backed debt securities, municipal bonds and other debt securities including derivatives. The fair values of the Company’s pension plan assets at December 31, 2015 , by asset category, are as follows: ($ in millions) Level 1 (1) Level 2 (1) Level 3 (1) Total Asset Category Equity securities: U.S. Large cap $ — $ 336 $ — $ 336 Small cap — 104 — 104 PPG common stock 87 — — 87 Non-U.S. Developed and emerging markets (2) 91 690 — 781 Debt securities: Cash and cash equivalents — 51 — 51 Corporate (3) U.S. (4) — 1,016 125 1,141 Developed and emerging markets (2) — 146 — 146 Diversified (5) — 581 — 581 Government U.S. (4) 173 65 — 238 Developed markets — 383 — 383 Other (6) — 159 21 180 Real estate, hedge funds, and other — 110 489 599 Total $ 351 $ 3,641 $ 635 $ 4,627 (1) These levels refer to the accounting guidance on fair value measurement described in Note 9, “Financial Instruments, Hedging Activities and Fair Value Measurements.” (2) These amounts represent holdings in investment grade debt or equity securities of issuers in both developed markets and emerging economies. (3) This category represents investment grade debt securities from a diverse set of industry issuers. (4) These investments are primarily long duration fixed income securities. (5) This category represents commingled funds invested in diverse portfolios of debt securities. (6) This category includes mortgage-backed and asset backed debt securities, municipal bonds and other debt securities including derivatives. The change in the fair value of the Company’s Level 3 pension assets for the years ended December 31, 2016 and 2015 was as follows: ($ in millions) Real Estate Other Debt Securities Hedge Funds & Other Assets Total Balance, January 1, 2015 $ 210 $ 23 $ 379 $ 612 Realized gain 15 1 — 16 Unrealized gain/(loss) for positions still held 12 — (4 ) 8 Transfers in/(out) (24 ) (1 ) 38 13 Foreign currency loss (4 ) (2 ) (8 ) (14 ) Balance, December 31, 2015 $ 209 $ 21 $ 405 $ 635 Realized gain 28 1 — 29 Unrealized loss for positions still held (15 ) — (1 ) (16 ) Transfers (out)/in (88 ) (5 ) 16 (77 ) Foreign currency loss (5 ) (1 ) (50 ) (56 ) Balance, December 31, 2016 $ 129 $ 16 $ 370 $ 515 Real Estate properties are externally appraised at least annually by reputable, independent appraisal firms. Property valuations are also reviewed on a regular basis and are adjusted if there has been a significant change in circumstances related to the property since the last valuation. Other debt securities consist of insurance contracts, which are externally valued by insurance companies based on the present value of the expected future cash flows. Hedge funds consist of a wide range of investments which target a relatively stable investment return. The underlying funds are valued at different frequencies, some monthly and some quarterly, based on the value of the underlying investments. Other assets consist primarily of small investments in private equity funds and senior secured debt obligations of non-investment grade borrowers. Retained liabilities and legacy settlement charges PPG has retained certain liabilities for pension and post-employment benefits earned for service up to the date of sale of its former automotive glass and service business, totaling $342 million and $867 million at December 31, 2016 and 2015 , respectively, for employees who were active as of the divestiture date and for individuals who were retirees of the business as of the divestiture date. PPG recognized expense of $20 million , $17 million and $19 million related to these obligations in 2016 , 2015 , and 2014 , respectively. PPG has retained certain liabilities for defined benefit pension and post-retirement benefits earned for service up to the date of sale of its former automotive glass and service business for employees who were active as of the divestiture date and for individuals who were retirees of the business as of the divestiture date. There have been multiple PPG facilities closures in Canada related to the former automotive glass and services business as well as other PPG businesses. These various plant closures have resulted in partial and full windups, and related settlement charges, of pension plans for various hourly and salary employees employed by these locations. The charges are recorded for the individual plans when a particular windup is approved by the Canadian pension authorities, the Company has made all contributions to the individual plan and has discharged the liability through either lump sum payments to participants or purchasing annuities. During August and September 2016, PPG completed the wind-up of two legacy Canadian plans and recorded after-tax wind-up charges totaling $34 million ( $47 million pre-tax). Cash contributions made in conjunction with these windups were approximately $1 million . The Company recorded a settlement charge of $7 million in 2015 related to legacy plant closures. We expect limited additional settlement charges related to these legacy plant closures; although the Company retains the right to continue to review and potentially change other PPG defined benefit plans in the future. Other Plans Defined contribution plans The Company has defined contribution plans for certain employees in the U.S., China, United Kingdom, Australia, Italy, and other countries. In 2016, 2015 and 2014, the Company recognized expense for its defined contribution retirement plans of $70 million , $60 million and $55 million , respectively. The Company’s annual cash contributions to its defined contribution retirement plans approximated the expense recognized in each year. As of December 31, 2016 and 2015 , the Company’s liability for contributions to be made to its defined contribution retirement plans was $11 million and $12 million , respectively. Employee savings plan PPG’s Employee Savings Plan (“Savings Plan”) covers substantially all employees in the U.S., Puerto Rico and Canada. The Company makes matching contributions to the Savings Plan, at management’s discretion, based upon participants’ savings, subject to certain limitations. For most participants not covered by a collective bargaining agreement, Company-matching contributions are established each year at the discretion of the Company and are applied to participant savings up to a maximum of 6% of eligible participant compensation. For those participants whose employment is covered by a collective bargaining agreement, the level of Company-matching contribution, if any, is determined by the relevant collective bargaining agreement. The Company-matching contribution remained at 100% for 2016. In 2016, the Company terminated |
