Pension and Post-Retirement Benefits | 12 Months Ended |
Dec. 31, 2014 |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Pension and Post-retirement Benefit Plans | Pension and Post-retirement Benefit Plans |
The Company maintains several retirement plans covering substantially all U.S. employees and employees of certain international subsidiaries. Pension benefits are generally based on years of service and compensation. The Company also maintains post-retirement medical benefit plans covering some of its U.S. employees. Benefits are subject to deductibles, co-payment provisions and coordination with benefits available under Medicare. The Company has made a determination that the prescription drug benefits it provides are actuarially equivalent to the benefits provided under the Medicare Prescription Drug, Improvement and Modernization Act of 2003. |
Effective December 31, 2012, the U.S. defined benefit pension plan was frozen. Participants under this plan have not been accruing service-based benefits and have been treated as inactive for accounting purposes. Effective January 1, 2013, the affected employees were eligible for additional contributions under an enhanced defined contribution plan. |
In the fourth quarter of 2014, the Board approved and management communicated the termination of the Company's U.S. defined benefit pension plan effective December 31, 2014. Final asset distribution is expected to be complete in 2015 following Internal Revenue Service approval. |
Effective January 1, 2014, the Swiss defined benefit plan was amended from a final pay plan to a cash balance-type plan. The change resulted in a reduction of the Company's projected benefit obligation of $11. |
Effective June 30, 2014, post-retirement medical plan was eliminated for participants aged 65 and above. As a result, the projected benefit obligation decreased by $17 in 2014. |
The following chart reconciles the funded status of the plans with amounts included in the Company's consolidated balance sheets: |
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| Pension Plans | | Post-Retirement | | | | | | | | | | | | |
| United States | | International | | Medical Benefit Plans | | | | | | | | | | | | |
| 2014 | | 2013 | | 2014 | | 2013 | | 2014 | | 2013 | | | | | | | | | | | | |
Reconciliation of funded status of the plans and the amounts included in the Company's Consolidated Balance Sheets at December 31: | | | | | | | | | | | | | | | | | | | | | | | |
Change in benefit obligations | | | | | | | | | | | | | | | | | | | | | | | |
Beginning obligations | $ | 169 | | | $ | 178 | | | $ | 289 | | | $ | 299 | | | $ | 39 | | | $ | 47 | | | | | | | | | | | | | |
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Service cost | — | | | — | | | 7 | | | 9 | | | — | | | 1 | | | | | | | | | | | | | |
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Interest cost | 7 | | | 6 | | | 9 | | | 8 | | | 1 | | | 1 | | | | | | | | | | | | | |
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Participant contributions | — | | | — | | | 3 | | | 3 | | | 1 | | | 1 | | | | | | | | | | | | | |
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Plan amendments | — | | | — | | | — | | | (11 | ) | | (17 | ) | | — | | | | | | | | | | | | | |
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Plan settlements | (9 | ) | | (7 | ) | | — | | | (6 | ) | | — | | | — | | | | | | | | | | | | | |
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Benefits and expenses paid | (1 | ) | | (1 | ) | | (6 | ) | | (7 | ) | | (2 | ) | | (2 | ) | | | | | | | | | | | | |
Actuarial loss (gain) | 4 | | | (7 | ) | | 71 | | | (12 | ) | | — | | | (9 | ) | | | | | | | | | | | | |
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Changes in foreign currency exchange rates | — | | | — | | | (32 | ) | | 6 | | | — | | | — | | | | | | | | | | | | | |
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Ending obligations | $ | 170 | | | $ | 169 | | | $ | 341 | | | $ | 289 | | | $ | 22 | | | $ | 39 | | | | | | | | | | | | | |
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Changes in plans assets | | | | | | | | | | | | | | | | | | | | | | | |
Beginning fair value | $ | 181 | | | $ | 158 | | | $ | 255 | | | $ | 228 | | | $ | — | | | $ | — | | | | | | | | | | | | | |
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Actual return on plan assets | 10 | | | 31 | | | 24 | | | 20 | | | — | | | — | | | | | | | | | | | | | |
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Employer contributions | — | | | — | | | 6 | | | 8 | | | 1 | | | 1 | | | | | | | | | | | | | |
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Participant contributions | — | | | — | | | 3 | | | 3 | | | 1 | | | 1 | | | | | | | | | | | | | |
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Plan settlements | (9 | ) | | (7 | ) | | — | | | (3 | ) | | — | | | — | | | | | | | | | | | | | |
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Benefits and expenses paid | (1 | ) | | (1 | ) | | (6 | ) | | (7 | ) | | (2 | ) | | (2 | ) | | | | | | | | | | | | |
Changes in foreign currency exchange rates | — | | | — | | | (24 | ) | | 6 | | | — | | | — | | | | | | | | | | | | | |
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Ending fair value | $ | 181 | | | $ | 181 | | | $ | 258 | | | $ | 255 | | | $ | — | | | $ | — | | | | | | | | | | | | | |
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Reconciliation of funded status | | | | | | | | | | | | | | | | | | | | | | | |
Funded status | $ | 11 | | | $ | 12 | | | $ | (83 | ) | | $ | (34 | ) | | $ | (22 | ) | | $ | (39 | ) | | | | | | | | | | | | |
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Net Consolidated Balance Sheet asset/(liability) | $ | 11 | | | $ | 12 | | | $ | (83 | ) | | $ | (34 | ) | | $ | (22 | ) | | $ | (39 | ) | | | | | | | | | | | | |
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| Pension Plans | | Post-Retirement | | | | | | | | | | | | |
| United States | | International | | Medical Benefit Plans | | | | | | | | | | | | |
| 2014 | | 2013 | | 2014 | | 2013 | | 2014 | | 2013 | | | | | | | | | | | | |
Amounts recognized in the Company's Consolidated Balance Sheets: | | | | | | | | | | | | | | | | | | | | | | | |
Non current assets | $ | 11 | | | $ | 12 | | | $ | — | | | $ | 2 | | | $ | — | | | $ | — | | | | | | | | | | | | | |
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Current liabilities | — | | | — | | | (1 | ) | | — | | | (1 | ) | | (2 | ) | | | | | | | | | | | | |
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Pension and post-retirement benefits | — | | | — | | | (82 | ) | | (36 | ) | | (21 | ) | | (37 | ) | | | | | | | | | | | | |
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Net amount recognized | $ | 11 | | | $ | 12 | | | $ | (83 | ) | | $ | (34 | ) | | $ | (22 | ) | | $ | (39 | ) | | | | | | | | | | | | |
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Reconciliation of amounts recognized in the Company's Consolidated Balance Sheets | | | | | | | | | | | | | | | | | | | | | | | |
Prior service (cost) credit | $ | — | | | $ | — | | | $ | 9 | | | $ | 11 | | | $ | 18 | | | $ | 4 | | | | | | | | | | | | | |
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Net (loss) gain | (34 | ) | | (30 | ) | | (90 | ) | | (39 | ) | | 13 | | | 15 | | | | | | | | | | | | | |
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Accumulated other comprehensive (loss) income | $ | (34 | ) | | $ | (30 | ) | | $ | (81 | ) | | $ | (28 | ) | | $ | 31 | | | $ | 19 | | | | | | | | | | | | | |
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Accumulated contributions in excess of (less than) net periodic benefit cost | 45 | | | 42 | | | (2 | ) | | (6 | ) | | (53 | ) | | (58 | ) | | | | | | | | | | | | |
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Net amount asset/(liability) recognized in statement of financial position | $ | 11 | | | $ | 12 | | | $ | (83 | ) | | $ | (34 | ) | | $ | (22 | ) | | $ | (39 | ) | | | | | | | | | | | | |
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| Pension Plans | | Post-Retirement |
| United States | | International | | Medical Benefit Plans |
| 2014 | | 2013 | | 2012 | | 2014 | | 2013 | | 2012 | | 2014 | | 2013 | | 2012 |
Changes in plan assets and benefit obligations recognized in other comprehensive income | | | | | | | | | | | | | | | | | |
New prior service cost | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (11 | ) | | $ | — | | | $ | (17 | ) | | $ | — | | | $ | — | |
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Net loss (gain) arising during the year | 7 | | | (27 | ) | | (11 | ) | | 59 | | | (21 | ) | | 9 | | | — | | | (8 | ) | | (8 | ) |
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Effect of changes in foreign currency exchange rates on amounts included in AOCI | — | | | — | | | — | | | (6 | ) | | — | | | 2 | | | — | | | — | | | — | |
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Amounts recognized as a component of net periodic benefit cost | | | | | | | | | | | | | | | | | | |
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Amortization or curtailment recognition of prior service credit | — | | | — | | | — | | | 1 | | | — | | | — | | | 4 | | | 1 | | | 1 | |
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Amortization or settlement recognition of net loss | (2 | ) | | (1 | ) | | (5 | ) | | (1 | ) | | (6 | ) | | (4 | ) | | 1 | | | — | | | — | |
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Total recognized in other comprehensive loss (income)—pretax | $ | 5 | | | $ | (28 | ) | | $ | (16 | ) | | $ | 53 | | | $ | (38 | ) | | $ | 7 | | | $ | (12 | ) | | $ | (7 | ) | | $ | (7 | ) |
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Total recognized in net periodic benefit cost and other comprehensive loss | $ | 1 | | | $ | (31 | ) | | $ | (5 | ) | | $ | 57 | | | $ | (28 | ) | | $ | 18 | | | $ | (16 | ) | | $ | (6 | ) | | $ | (5 | ) |
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Estimated amounts that will be amortized from accumulated other comprehensive income over the next fiscal year | | | | | | | | | | | | | | | | | |
Prior service (cost) credit | $ | — | | | $ | — | | | $ | — | | | $ | 1 | | | $ | 1 | | | $ | — | | | $ | 4 | | | $ | 1 | | | $ | 1 | |
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Net loss | — | | | — | | | (1 | ) | | (6 | ) | | (1 | ) | | (4 | ) | | 1 | | | 1 | | | — | |
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Total estimated amortization | $ | — | | | $ | — | | | $ | (1 | ) | | $ | (5 | ) | | $ | — | | | $ | (4 | ) | | $ | 5 | | | $ | 2 | | | $ | 1 | |
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The components of the net periodic benefit costs are as follows: |
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| Pension Plans | | Post-Retirement |
| United States | | International | | Medical Benefit Plans |
| 2014 | | 2013 | | 2012 | | 2014 | | 2013 | | 2012 | | 2014 | | 2013 | | 2012 |
Service cost | $ | — | | | $ | — | | | $ | 10 | | | $ | 7 | | | $ | 9 | | | $ | 8 | | | $ | — | | | $ | 1 | | | $ | 1 | |
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Interest cost | 7 | | | 6 | | | 7 | | | 9 | | | 8 | | | 9 | | | 1 | | | 1 | | | 2 | |
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Expected return on plan assets | (13 | ) | | (11 | ) | | (11 | ) | | (12 | ) | | (11 | ) | | (10 | ) | | — | | | — | | | — | |
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Amortization | — | | | 1 | | | 5 | | | — | | | 4 | | | 4 | | | (5 | ) | | (1 | ) | | (1 | ) |
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Settlement loss | 2 | | | 1 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
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Net periodic benefit cost | $ | (4 | ) | | $ | (3 | ) | | $ | 11 | | | $ | 4 | | | $ | 10 | | | $ | 11 | | | $ | (4 | ) | | $ | 1 | | | $ | 2 | |
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The rate assumptions associated with the pension and post-retirement medical benefit plans to determine benefit obligations and additional year-end information are as follows:Â |
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| Pension Plans | | Post-Retirement | | | | | | | | | | | | |
| United States | | International | | Medical Benefit Plans | | | | | | | | | | | | |
| 2014 | | 2013 | | 2014 | | 2013 | | 2014 | | 2013 | | | | | | | | | | | | |
Assumptions to determine benefit obligations | | | | | | | | | | | | | | | | | | | | | | | |
Discount rate | 4.07 | % | | 4.45 | % | | 2.05 | % | | 3.36 | % | | 3.55 | % | | 4.8 | % | | | | | | | | | | | | |
Compensation rate increase | n/a | | | n/a | | | 2.64 | % | | 2.74 | % | | n/a | | | n/a | | | | | | | | | | | | | |
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Measurement date | 31-Dec | | | 31-Dec | | | 31-Dec | | | 31-Dec | | | 31-Dec | | | 31-Dec | | | | | | | | | | | | | |
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Additional year-end information | | | | | | | | | | | | | | | | | | | | | | | |
Accumulated benefit obligation | $ | 170 | | | $ | 169 | | | $ | 321 | | | $ | 271 | | | n/a | | | n/a | | | | | | | | | | | | | |
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Plans with accumulated benefit obligations in excess of plan assets: | | | | | | | | | | | | | | | | | | | | | | | |
Projected benefit obligation | $ | — | | | $ | — | | | $ | 341 | | | $ | 189 | | | n/a | | | n/a | | | | | | | | | | | | | |
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Accumulated benefit obligation | — | | | — | | | 321 | | | 176 | | | n/a | | | n/a | | | | | | | | | | | | | |
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Fair value of plan assets | — | | | — | | | 258 | | | 153 | | | n/a | | | n/a | | | | | | | | | | | | | |
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Plans with projected benefit obligations in excess of plan assets: | | | | | | | | | | | | | | | | | | | | | | | |
Projected benefit obligation | $ | — | | | $ | — | | | $ | 341 | | | $ | 189 | | | $ | 22 | | | $ | 39 | | | | | | | | | | | | | |
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Fair value of plan assets | — | | | — | | | 258 | | | 153 | | | — | | | — | | | | | | | | | | | | | |
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The rate assumptions associated with the pension and post-retirement medical benefit plans to determine periodic pension costs are as follows:Â |
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| Pension Plans | | Post-Retirement | | | | | | | | | |
| United States | | International | | Medical Benefit Plans | | | | | | | | | |
| 2014 | | 2013 | | 2012 | | 2014 | | 2013 | | 2012 | | 2014 | | 2013 | | 2012 | | | | | | | | | |
Discount rate | 4.45 | % | | 3.6 | % | | 4.35 | % | | 3.36 | % | | 2.96 | % | | 3.52 | % | | 4.8 | % | | 3.9 | % | | 4.5 | % | | | | | | | | | |
Expected rate of return on plan assets | 7.75 | % | | 7.75 | % | | 8.25 | % | | 4.95 | % | | 4.87 | % | | 4.98 | % | | n/a | | | n/a | | | n/a | | | | | | | | | | |
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Compensation rate increase | n/a | | | n/a | | | 3.55 | % | | 2.74 | % | | 2.59 | % | | 2.95 | % | | n/a | | | n/a | | | n/a | | | | | | | | | | |
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The expected employer contributions and benefit payments are shown in the following table for the pension and post-retirement medical benefit plans:Â |
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| | | Pension Plans | | Post-Retirement | | Expected | | | | | | | | | | | | | | | | | | | |
Medical | Medicare | | | | | | | | | | | | | | | | | | | |
Cash Flows | Year | | United | | International | | Benefit Plans(2) | Subsidy Receipts | | | | | | | | | | | | | | | | | | | |
States(1) | | | | | | | | | | | | | | | | | | | | | |
Expected employer contributions | 2015 | | $ | — | | | $ | 5 | | | $ | 1 | | | n/a | | | | | | | | | | | | | | | | | | | | |
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Expected benefit payments for year ending December 31st | 2015 | | 177 | | | 6 | | | 1 | | | — | | | | | | | | | | | | | | | | | | | | |
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| 2016 | | — | | | 7 | | | 2 | | | — | | | | | | | | | | | | | | | | | | | | |
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| 2017 | | — | | | 6 | | | 2 | | | — | | | | | | | | | | | | | | | | | | | | |
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| 2018 | | — | | | 7 | | | 2 | | | — | | | | | | | | | | | | | | | | | | | | |
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| 2019 | | — | | | 7 | | | 2 | | | — | | | | | | | | | | | | | | | | | | | | |
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| Next 5 years | | — | | | 46 | | | 10 | | | — | | | | | | | | | | | | | | | | | | | | |
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-1 | The Company's U.S. defined benefit pension plan was terminated effective December 31, 2014, pending Internal Revenue Service approval. Final asset distribution is expected in 2015. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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-2 | Expected payments for Post-Retirement Medical Benefit Plans are shown net of the expected Medicare subsidy receipts. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Pension Plans. For purposes of selecting a discount rate in both 2013 and 2012, the present value of the cash flows as of the measurement date is determined using the spot rates from the Mercer Above Mean Yield Curve, and based on the present values, a single equivalent discount rate is developed. This rate is the single uniform discount rate that, when applied to the same cash flows, results in the same present value of the cash flows as of the measurement date. The plans are assumed to continue in force for as long as the assets are expected to be invested. In estimating the expected long-term rate of return on assets, appropriate consideration is given to historical performance for the major asset classes held or anticipated to be held by the pension plans and to current forecasts of future rates of return for those asset classes. Cash flow and expenses are taken into consideration to the extent that the expected return would be affected by them. Because assets are held in qualified trusts, expected returns are not reduced for taxes. |
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As a result of the U.S. pension plan termination, the benefit obligations are the best-estimate termination liability consisting of estimated annuity premiums and lump-sum payouts. Annuity Pricing Rate Composites were used to estimate annuity premiums. The 2014 discount rate is the weighted average implicit discount rate taking into account the estimated annuity premiums and lump-sum payouts. |
The assets of the pension plans are invested with professional asset managers to produce a diversified portfolio. The Company believes the investments are sufficiently diversified to maintain a reasonable level of risk without unduly sacrificing return. Target asset allocations and weighted average asset allocations at December 31, 2014 are as follows: |
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| Target Allocations | | Weighted Average | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset Allocations | | | | | | | | | | | | | | | | | | | | | | | | | |
| U.S. | | International | | U.S. | | International | | | | | | | | | | | | | | | | | | | | | | | | | |
Plan | Plans | Plan | Plans | | | | | | | | | | | | | | | | | | | | | | | | | |
Equity Securities | — | % | | 38–50% | | — | % | | 49 | % | | | | | | | | | | | | | | | | | | | | | | | | | |
Real Estate | — | % | | 6–12% | | — | % | | 9 | % | | | | | | | | | | | | | | | | | | | | | | | | | |
Debt Securities | 100% | | | 36–57% | | 100 | % | | 39 | % | | | | | | | | | | | | | | | | | | | | | | | | | |
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Other | — | % | | 0–10% | | — | % | | 3 | % | | | | | | | | | | | | | | | | | | | | | | | | | |
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Fair Value Measurements at December 31, 2014 |
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Assets | Quoted Prices | | Significant Other | | Total | | | | | | | | | | | | | | | | | | | | | | | | |
in Active Markets for | Observable | | | | | | | | | | | | | | | | | | | | | | | | |
Identical Assets | Inputs | | | | | | | | | | | | | | | | | | | | | | | | |
(Level 1(1)) | (Level 2(2)) | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate | $ | — | | | $ | 23 | | | $ | 23 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Common/collective trust funds — equity | — | | | 126 | | | 126 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Common/collective trust funds — government debt | — | | | 161 | | | 161 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Common/collective trust funds — Corporate and other non-government debt | — | | | 120 | | | 120 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Common/collective trust funds — real estate | — | | | 1 | | | 1 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Cash and cash equivalents | 4 | | | 4 | | | 8 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total | $ | 4 | | | $ | 435 | | | $ | 439 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Fair Value Measurements at December 31, 2013 |
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Assets | Quoted Prices | | Significant Other | | Total | | | | | | | | | | | | | | | | | | | | | | | | |
in Active Markets for | Observable | | | | | | | | | | | | | | | | | | | | | | | | |
Identical Assets | Inputs | | | | | | | | | | | | | | | | | | | | | | | | |
(Level 1(1)) | (Level 2(2)) | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate | — | | | 22 | | | 22 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Common/collective trust funds — equity | — | | | 260 | | | 260 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Common/collective trust funds — government debt | — | | | 18 | | | 18 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Common/collective trust funds — Corporate and other non-government debt | — | | | 126 | | | 126 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Common/collective trust funds — real estate | — | | | 1 | | | 1 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Cash and cash equivalents | 5 | | | 4 | | | 9 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total | $ | 5 | | | $ | 431 | | | $ | 436 | | | | | | | | | | | | | | | | | | | | | | | | | |
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-1 | Level 1 instruments use observable market prices for the identical item in active markets and have the most reliable valuations. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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-2 | Level 2 instruments are valued through broker/dealer quotation or through market-observable inputs for similar items in active markets. Equity securities categorized as Level 2 assets are primarily non-exchange-traded commingled or collective funds where the underlying securities have observable prices available from active markets. Valuation is based on the net asset value of fund units held as derived from the fair value of the underlying assets. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Investment Strategy. The U.S. pension plan's overall investment strategy had been to hold a mix of approximately 75 percent of investments in U.S. and International equities and 25 percent in bonds. In the third quarter of 2014, in light of the planned termination of the U.S. pension plan, the investment strategy was revised to hold 100% of investment assets in fixed income funds, which contain mainly government and investment-grade corporate bonds. |
The trustee has engaged an investment manager for the U.S. pension plan that has the responsibility of selecting investment fund managers with demonstrated experience and expertise, and funds with demonstrated historical performance meeting the pension plan's investment guidelines. |
The UK pension plan's overall investment strategy is to hold a mix of approximately 70 percent of investments in equities (42 percent UK equities and 28 percent non-UK equities) and 30 percent in bonds. Equities are managed in passive and managed funds. Bond funds contain government and investment grade bonds. A small portion of investments are held in insured annuities. |
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The Swiss pension plan's overall target investment strategy is to achieve a mix of 27.5 percent equities, 54.5 percent bonds, 15 percent real estate and 3 percent other. Equities are invested in large Swiss companies and institutional funds. Bond funds contain government and investment-grade bonds. Real estate holdings are in an institutional real estate fund. |
The trustees of the international plans have engaged institutions that are believed to be reputable to invest the various plans' assets in funds with demonstrated historical performance and manage the various plans' assets in accordance with investment guidelines developed by the trustees. |
Post-Retirement Medical Benefit Plans. For purposes of selecting a discount rate, the present value of the cash flows as of the measurement date is determined using the spot rates from the Mercer Above Mean Yield Curve, and based on the present values, a single equivalent discount rate is developed. This rate is the single uniform discount rate that, when applied to the same cash flows, results in the same present value of the cash flows as of the measurement date. Assumed health care cost trend rates have a significant effect on the amounts reported for the post-retirement medical benefit plans. Medical costs were assumed to increase at an annual rate of 7.39 percent in 2014, decreasing ratably to a growth rate of 4.5 percent in 2030 and remaining at 4.5 percent per year thereafter. The effects of a one-percentage point increase or decrease in the assumed health care cost trend rates on the aggregate service and interest cost components and on the post-retirement benefit obligations are not material to the Company's consolidated financial statements. Benefits are funded as claims are paid. |
401(k) Retirement Savings Plan. The Company's 401(k) retirement savings plan provides retirement benefits to eligible U.S. employees in addition to those provided by the pension plan. The 401(k) plan permits participants to voluntarily defer a portion of their compensation, subject to Internal Revenue Code limitations. The Company also contributes a percentage of the employee's salary per year to the account of each eligible employee plus a percentage of the employee's salary deferral. The Company's policy is to fully fund the 401(k) plan. The cost for the 401(k) plan was $23, $22 and $11 for the years ended December 31, 2014, 2013 and 2012 respectively. |