Pension and Other Postretirement Benefits | 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 16 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 $5,907 , $5,347 and $5,213 in 2016 , 2015 and 2014 , respectively. Defined benefit pension plans in the U.S. cover a majority of the Company’s U.S. employees at the Associated Spring and Nitrogen Gas Products businesses 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, 2016 and 2015 , respectively. Reconciliations of the obligations and funded status of the plans follow: 2016 2015 U.S. Non-U.S. Total U.S. Non-U.S. Total Benefit obligation, January 1 $ 385,629 $ 75,406 $ 461,035 $ 433,079 $ 80,305 $ 513,384 Service cost 3,892 1,503 5,395 4,160 1,348 5,508 Interest cost 17,523 1,971 19,494 17,967 2,052 20,019 Amendments 2,405 (174 ) 2,231 — (463 ) (463 ) Actuarial loss (gain) 6,661 10,814 17,475 (16,622 ) (2,288 ) (18,910 ) Benefits paid (26,497 ) (4,691 ) (31,188 ) (52,490 ) (4,244 ) (56,734 ) Transfers in — 25,968 25,968 — 3,951 3,951 Plan curtailments — — — (465 ) — (465 ) Plan settlements — — — — (375 ) (375 ) Participant contributions — 1,444 1,444 — 368 368 Foreign exchange rate changes — (7,902 ) (7,902 ) — (5,248 ) (5,248 ) Benefit obligation, December 31 389,613 104,339 493,952 385,629 75,406 461,035 Fair value of plan assets, January 1 326,829 68,553 395,382 380,937 71,750 452,687 Actual return on plan assets 13,051 7,276 20,327 (5,045 ) 1,264 (3,781 ) Company contributions 17,877 2,224 20,101 3,427 1,100 4,527 Participant contributions — 1,444 1,444 — 368 368 Benefits paid (26,497 ) (4,691 ) (31,188 ) (52,490 ) (4,244 ) (56,734 ) Plan settlements — — — — (376 ) (376 ) Transfers in — 18,320 18,320 — 3,434 3,434 Foreign exchange rate changes — (7,474 ) (7,474 ) — (4,743 ) (4,743 ) Fair value of plan assets, December 31 331,260 85,652 416,912 326,829 68,553 395,382 Underfunded status, December 31 $ (58,353 ) $ (18,687 ) $ (77,040 ) $ (58,800 ) $ (6,853 ) $ (65,653 ) In September 2015, the Company announced a limited-time program offering (the "Program") to certain eligible, vested, terminated participants ("eligible participants") for a voluntary lump-sum pension payout or reduced annuity option (the "payout") that, if accepted, would settle the Company's pension obligation to them. The Program provided the eligible participants with a limited time opportunity of electing to receive a lump-sum settlement of their remaining pension benefit, or reduced annuity. The scheduled payments of $27,986 were made in December 2015, and are included within the "Benefits Paid" of $52,490 above. The payouts were funded by the assets of the Company's pension plan and therefore the Program did not require significant cash outflows by the Company. The resultant pre-tax settlement charge of $9,856 represents accelerated amortization of actuarial losses and was reflected within costs of sales and selling and administrative expenses within the Consolidated Statements of Income. Projected benefit obligations related to pension plans with benefit obligations in excess of plan assets follow: 2016 2015 U.S. Non-U.S. Total U.S. Non-U.S. Total Projected benefit obligation $ 389,613 $ 61,060 $ 450,673 $ 271,459 $ 31,613 $ 303,072 Fair value of plan assets 331,260 39,356 370,616 204,270 20,199 224,469 Information related to pension plans with accumulated benefit obligations in excess of plan assets follows: 2016 2015 U.S. Non-U.S. Total U.S. Non-U.S. Total Projected benefit obligation $ 389,613 $ 61,014 $ 450,627 $ 271,459 $ 30,560 $ 302,019 Accumulated benefit obligation 378,431 59,568 437,999 262,172 26,998 289,170 Fair value of plan assets 331,260 39,356 370,616 204,270 19,256 223,526 The accumulated benefit obligation for all defined benefit pension plans was $481,241 and $447,591 at December 31, 2016 and 2015 , respectively. Amounts related to pensions recognized in the accompanying balance sheets consist of: 2016 2015 U.S. Non-U.S. Total U.S. Non-U.S. Total Other assets $ — $ 3,017 $ 3,017 $ 8,389 $ 4,561 $ 12,950 Accrued liabilities 2,813 367 3,180 2,806 379 3,185 Accrued retirement benefits 55,540 21,337 76,877 64,383 11,035 75,418 Accumulated other non-owner changes to equity, net (91,530 ) (19,458 ) (110,988 ) (83,014 ) (16,812 ) (99,826 ) Amounts related to pensions recognized in accumulated other non-owner changes to equity, net of tax, at December 31, 2016 and 2015 , respectively, consist of: 2016 2015 U.S. Non-U.S. Total U.S. Non-U.S. Total Net actuarial loss $ (89,772 ) $ (19,822 ) $ (109,594 ) $ (82,643 ) $ (16,999 ) $ (99,642 ) Prior service costs (1,758 ) 364 (1,394 ) (371 ) 187 (184 ) $ (91,530 ) $ (19,458 ) $ (110,988 ) $ (83,014 ) $ (16,812 ) $ (99,826 ) The accompanying balance sheets reflect the underfunded status of the Company’s other postretirement benefit plans at December 31, 2016 and 2015 . Reconciliations of the obligations and underfunded status of the plans follow: 2016 2015 Benefit obligation, January 1 $ 41,706 $ 46,814 Service cost 122 145 Interest cost 1,766 1,836 Actuarial gain (3,495 ) (2,521 ) Benefits paid (5,621 ) (6,970 ) Participant contributions 2,281 2,486 Foreign exchange rate changes 94 (84 ) Benefit obligation, December 31 36,853 41,706 Fair value of plan assets, January 1 — — Company contributions 3,340 4,484 Participant contributions 2,281 2,486 Benefits paid (5,621 ) (6,970 ) Fair value of plan assets, December 31 — — Underfunded status, December 31 $ 36,853 $ 41,706 Amounts related to other postretirement benefits recognized in the accompanying balance sheets consist of: 2016 2015 Accrued liabilities $ 5,081 $ 5,259 Accrued retirement benefits 31,772 36,447 Accumulated other non-owner changes to equity, net (3,582 ) (5,877 ) Amounts related to other postretirement benefits recognized in accumulated other non-owner changes to equity, net of tax, at December 31, 2016 and 2015 consist of: 2016 2015 Net actuarial loss $ (3,532 ) $ (6,061 ) Prior service credits (50 ) 184 $ (3,582 ) $ (5,877 ) The sources of changes in accumulated other non-owner changes to equity, net, during 2016 were: Pension Other Postretirement Benefits Prior service cost $ (1,334 ) $ — Net (loss) gain (18,378 ) 2,194 Amortization of prior service costs (credits) 142 (234 ) Amortization of actuarial loss 7,030 332 Foreign exchange rate changes 1,378 3 $ (11,162 ) $ 2,295 Weighted-average assumptions used to determine benefit obligations at December 31, are: 2016 2015 U.S. plans: Discount rate 4.50 % 4.65 % Increase in compensation 2.56 % 3.71 % Non-U.S. plans: Discount rate 1.60 % 2.80 % Increase in compensation 2.29 % 2.71 % 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 2016: 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, 2016 and 2015 , 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, 2016 Cash and short-term investments $ 3,207 $ 3,207 $ — $ — Equity securities: U.S. large-cap 39,162 — 39,162 — U.S. mid-cap 12,724 12,724 — — U.S. small-cap 19,551 19,551 — — International equities 135,514 — 135,514 — Global equity 47,445 47,445 — — Fixed income securities: U.S. bond funds 103,399 — 103,399 — International bonds 53,783 — 53,783 — Other 2,127 — — 2,127 $ 416,912 $ 82,927 $ 331,858 $ 2,127 December 31, 2015 Cash and short-term investments 18,795 18,795 — — Equity securities: U.S. large-cap 67,274 28,190 39,084 — U.S. mid-cap 38,790 38,790 — — U.S. small-cap 38,248 38,248 — — International equities 91,563 — 91,563 — Global equity 17,928 17,928 Fixed income securities: U.S. bond funds 84,645 — 84,645 — International bonds 36,282 — 36,282 — Other 1,857 — — 1,857 $ 395,382 $ 141,951 $ 251,574 $ 1,857 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 at the Synventive business. 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 $4,935 to the pension plans in 2017 . The following are the estimated future net benefit payments, which include future service, over the next 10 years: Pensions Other Postretirement Benefits 2017 $ 28,703 $ 3,983 2018 28,577 3,352 2019 28,878 3,176 2020 28,810 3,294 2021 28,994 3,095 Years 2022-2026 144,566 12,906 Total $ 288,528 $ 29,806 Pension and other postretirement benefit expenses consist of the following: Pensions Other Postretirement Benefits 2016 2015 2014 2016 2015 2014 Service cost $ 5,395 $ 5,508 $ 4,546 $ 122 $ 145 $ 139 Interest cost 19,494 20,019 22,026 1,766 1,836 2,179 Expected return on plan assets (30,302 ) (32,404 ) (34,232 ) — — — Amortization of prior service cost (credit) 210 305 648 (373 ) (564 ) (871 ) Recognized losses 10,791 15,004 8,617 535 1,011 1,017 Curtailment loss (gain) — — 219 — — 4 Settlement loss — 9,939 871 — — — Special termination benefits — — 715 — — — Net periodic benefit cost $ 5,588 $ 18,371 $ 3,410 $ 2,050 $ 2,428 $ 2,468 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 2017 are $9,997 and $441 , 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 2017 are $276 and $(68) , respectively. Weighted-average assumptions used to determine net benefit expense for years ended December 31, are: 2016 2015 2014 U.S. plans: Discount rate 4.65 % 4.25 % 5.20 % Long-term rate of return 8.25 % 8.25 % 9.00 % Increase in compensation 3.71 % 3.71 % 3.72 % Non-U.S. plans: Discount rate 2.80 % 2.74 % 3.93 % Long-term rate of return 4.73 % 5.00 % 5.07 % Increase in compensation 2.71 % 2.72 % 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 6.44% and 6.65% at December 31, 2016 and 2015 , 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 $ 319 $ (295 ) Effect on postretirement benefit cost 14 (13 ) 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: 2016 2015 2014 Swedish Pension Plan (ITP2) 673 $ 343 $ 379 Total Contributions $ 673 $ 343 $ 379 |