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Pensions and Other Postretirement Benefits
 12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Pensions and Other Postretirement Benefits PENSIONS AND OTHER POSTRETIREMENT BENEFITS
DEFINED BENEFIT PLANS

The Company maintains both defined benefit pension plans and postretirement health care plans that provide medical and life insurance coverage to eligible salaried and hourly retired employees in North America and their dependents. The Company maintains international defined benefit pension plans which are either noncontributory or contributory and are funded in accordance with applicable local laws. Pension or termination benefits are based primarily on years of service and the employees’ compensation.

Currently, the North American plans are closed to newly-hired employees except as noted below. Effective July 1, 2011, the North American plans were frozen for most salaried and non-union hourly employees and replaced with a defined contribution plan.

During the fourth quarter of 2017, the Company made an additional $75 million contribution to its U.S. defined benefit plan and also made an additional contribution of $6.8 million to its U.K. defined benefit plan.
 
During 2018, the Company began the process of terminating its largest U.S. pension plan (the "US Plan"). This included freezing the plan as of December 31, 2018 and spinning off the active participants to the plan established as part of the NACP Combination (the "NACP Plan"). The NACP Plan is open for union and non-union hourly employees of locations that were part of the NACP Combination. During the third quarter of 2019, the Company offered a lump-sum benefit option to certain participants in the US Plan. Lump sum payments of $150.2 million were paid in the fourth quarter of 2019 and the Company recognized a non-cash settlement charge of $39.2 million associated with the payouts. In the first quarter of 2020, the Company agreed to purchase a group annuity contract that will transfer the remaining pension benefit obligation under the US Plan of approximately $750 million to an insurance company and expects to incur an additional non-cash settlement charge of approximately $150 million related to this transfer. These non-cash settlement charges relate to Net Actuarial Loss recognized in Accumulated Other Comprehensive Loss.
Pension and Postretirement Expense

The pension and postretirement expenses related to the Company’s plans consisted of the following:
 
Pension BenefitsPostretirement Benefits
Year Ended December 31,
In millions201920182017201920182017
Components of Net Periodic Cost:
Service Cost
$14.0  $17.3  $8.2  $0.5  $0.6  $0.8  
Interest Cost
46.1  41.8  42.6  1.2  1.2  1.3  
Expected Return on Plan Assets
(54.9) (63.6) (64.1) —  —  —  
Amortization:
   Prior Service Cost (Credit)
0.2  0.4  0.5  (0.3) (0.3) (0.3) 
   Actuarial Loss (Gain)
10.0  5.9  6.5  (2.3) (1.8) (2.1) 
  Net Curtailment/Settlement Loss
39.2  1.0  —  —  —  —  
Other
0.3  0.5  0.8  —  —  —  
Net Periodic Cost (Benefit)
$54.9  $3.3  $(5.5) $(0.9) $(0.3) $(0.3) 

Certain assumptions used in determining the pension and postretirement expenses were as follows:

 Pension BenefitsPostretirement Benefits
Year Ended December 31,
201920182017201920182017
Weighted Average Assumptions:
Discount Rate
4.14 %3.49 %4.01 %4.29 %3.64 %4.10 %
Rate of Increase in Future Compensation Levels
2.37 %2.09 %1.45 %—  —  —  
Expected Long-Term Rate of Return on Plan Assets
4.74 %4.86 %5.79 %—  —  —  
Initial Health Care Cost Trend Rate
—  —  —  9.00 %9.00 %7.45 %
Ultimate Health Care Cost Trend Rate
—  —  —  4.50 %4.50 %4.50 %
Ultimate Year
—  —  —  202820272024

Funded Status

The following table sets forth the funded status of the Company’s pension and postretirement plans as of December 31:
 Pension BenefitsPostretirement Benefits
In millions2019201820192018
Change in Benefit Obligation:
Benefit Obligation at Beginning of Year
$1,245.2  $1,367.1  $34.1  $37.3  
Service Cost
14.0  17.3  0.5  0.6  
Interest Cost
46.1  41.8  1.2  1.2  
Actuarial Loss (Gain)
157.8  (101.9) 1.1  (3.0) 
Foreign Currency Exchange
9.2  (14.8) 0.1  (0.2) 
Settlements
(150.2) —  —  —  
Benefits Paid
(67.2) (65.4) (1.2) (1.9) 
Other
0.5  1.1  0.1  0.1  
Benefit Obligation at End of Year
$1,255.4  $1,245.2  $35.9  $34.1  
Change in Plan Assets:
Fair Value of Plan Assets at Beginning of Year
$1,186.5  $1,340.7  $—  $—  
Actual Return on Plan Assets
181.7  (79.6) —  —  
Employer Contributions
11.3  5.8  1.2  1.9  
Foreign Currency Exchange
10.3  (15.0) —  —  
Benefits Paid
(67.2) (65.4) (1.2) (1.9) 
Settlements
(150.2) —  —  —  
Fair Value of Plan Assets at End of Year
$1,172.4  $1,186.5  $—  $—  
Plan Assets Less than Projected Benefit Obligation
$(83.0) $(58.7) $(35.9) $(34.1) 
Amounts Recognized in the Consolidated Balance Sheets Consist of:
Pension Assets
$25.6  $19.0  $—  $—  
Accrued Pension and Postretirement Benefits Liability — Current
$(1.7) $(1.8) $(2.4) $(2.5) 
Accrued Pension and Postretirement Benefits Liability — Noncurrent
$(106.9) $(75.9) $(33.5) $(31.6) 
Accumulated Other Comprehensive Income:
Net Actuarial Loss (Gain)
$279.9  $297.3  $(0.8) $(1.6) 
Prior Service Cost (Credit)
$3.6  $3.6  $(17.3) $(20.2) 
Weighted Average Calculations:
Discount Rate
2.69 %4.14 %3.22 %4.29 %
Rates of Increase in Future Compensation Levels
2.36 %2.37 %—  —  
Initial Health Care Cost Trend Rate
—  —  6.65 %9.00 %
Ultimate Health Care Cost Trend Rate
—  —  4.50 %4.50 %
Ultimate Year
—  —  20282027
The Company determined pension expense using both the fair value of assets and a calculated value that averages gains and losses over a period of years. Investment gains or losses represent the difference between the expected and actual return on assets. As of December 31, 2019, the net actuarial loss was $279.9 million. These net losses may increase future pension expense if not offset by (i) actual investment returns that exceed the assumed investment returns, or (ii) other factors, including reduced pension liabilities arising from higher discount rates used to calculate pension obligations, or (iii) other actuarial gains, including whether such accumulated actuarial losses at each measurement date exceed the “corridor” determined under the Compensation — Retirement Benefits topic of the FASB Codification. For the largest plan, the actuarial loss is amortized over the average remaining life expectancy period of employees expected to receive benefits.

The discount rate used to determine the present value of future pension obligations at December 31, 2019 was based on a yield curve constructed from a portfolio of high-quality corporate debt securities with maturities ranging from 1 year to 30 years. Each year’s expected future benefit payments were discounted to their present value at the spot yield curve rate thereby generating the overall discount rate for the Company’s pension obligations. The weighted average discount rate used to determine the pension obligations was 2.69% and 4.14% in 2019 and 2018, respectively.

Accumulated Benefit Obligation

The accumulated benefit obligation, (“ABO”), for all defined benefit pension plans was $1,249.8 million and $1,240.2 million at December 31, 2019 and 2018, respectively. There are three plans where the ABO and projected benefit obligation ("PBO") exceed plan assets. The aggregate ABO, PBO and fair value of plan assets for these plans are $1,043.0 million, $1,048.6 million and $942.9 million, respectively.

Employer Contributions

The Company made contributions of $11.3 million and $5.8 million to its pension plans during 2019 and 2018, respectively. The Company also made postretirement health care benefit payments of $1.2 million and $1.9 million during 2019 and 2018, respectively. For 2020, the Company expects to make contributions in the range of $10 million to $20 million to its pension plans and approximately $3 million to its postretirement health care plans.

Pension Assets

The Company’s overall investment strategy is to achieve a mix of investments for long-term growth and near-term benefit payments through diversification of asset types, fund strategies and fund managers. Investment risk is measured on an on-going basis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews. The plans invest in the following major asset categories: cash, equity securities, fixed income securities, real estate and diversified growth funds. At December 31, 2019 and 2018, pension investments did not include any direct investments in the Company’s stock or the Company’s debt.

The Company implemented a de-risking or liability driven investment strategy for its U.S. and U.K. pension plans. This strategy moved assets from return seeking (equities) to investments that mirror the underlying benefit obligations (fixed income). 

The weighted average allocation of plan assets and the target allocation by asset category is as follows:
Target20192018
Cash
0.2 %13.6 %5.0 %
Equity Securities
8.4  7.7  8.1  
Fixed Income Securities
85.2  68.6  79.5  
Other Investments
6.2  10.1  7.4  
Total
100.0 %100.0 %100.0 %

The plans’ investment in equity securities primarily includes investments in U.S. and international companies of varying sizes and industries. The strategy of these investments is to 1) exceed the return of an appropriate benchmark for such equity classes and 2) through diversification, reduce volatility while enhancing long term real growth.
The plans’ investment in fixed income securities includes government bonds, investment grade bonds and non-investment grade bonds across a broad and diverse issuer base. The strategy of these investments is to provide income and stability and to diversify the fixed income exposure of the plan assets, thereby reducing volatility.

The Company’s approach to developing the expected long-term rate of return on pension plan assets is based on fair values and combines an analysis of historical investment performance by asset class, the Company’s investment guidelines and current and expected economic fundamentals.

The following tables set forth, by category and within the fair value hierarchy, the fair value of the Company’s pension assets at December 31, 2019 and 2018:

Fair Value Measurements at December 31, 2019
 



In millions		TotalQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Asset Category:
Cash (a)
$159.6  $0.3  $159.3  $—  
Equity Securities:
Domestic (a)
82.9  4.7  78.2  —  
Foreign (a)
7.0  7.0  —  —  
Fixed Income Securities (a)
852.5  17.0  835.3  0.2  
Other Investments:
Real estate
21.9  —  8.9  13.0  
Diversified growth fund (b)
48.5  —  48.5  —  
Total
$1,172.4  $29.0  $1,130.2  $13.2  


Fair Value Measurements at December 31, 2018
In millionsTotalQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Asset Category:
Cash (a)
$58.8  $0.3  $58.5  $—  
Equity Securities:
Domestic (a)
86.4  3.6  82.8  —  
Foreign (a)
9.2  5.3  3.8  —  
Fixed Income Securities (a)
980.1  15.0  962.3  2.8  
Other Investments:
Real estate
9.2  —  7.6  1.6  
Diversified growth fund (b)
42.8  —  41.5  1.4  
Total
$1,186.5  $24.2  $1,156.5  $5.8  
(a) The Level 2 investments are held in pooled funds and fair value is determined by net asset value, based on the underlying investments, as reported on the valuation date.
(b) The fund invests in a combination of traditional investments (equities, bonds, and foreign exchange), seeking to achieve returns through active asset allocation over a three to five-year horizon.
A reconciliation of fair value measurements of plan assets using significant unobservable inputs (Level 3) is as follows:

In millions20192018
Balance at January 1,
$5.8  $0.8  
Transfers In
7.4  5.0  
Return on Assets Held at December 31
—  —  
Balance at December 31,
$13.2  $5.8  

Postretirement Health Care Trend Rate Sensitivity

Assumed health care cost trend rates affect the amounts reported for postretirement health care benefit plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects on 2019 data:

One Percentage Point
In millionsIncreaseDecrease
Health Care Cost Trend Rate Sensitivity:
Effect on Total Interest and Service Cost Components
$0.1  $(0.1) 
Effect on Year-End Postretirement Benefit Obligation
$2.1  $(1.8) 

Estimated Future Benefit Payments

The following represents the Company’s estimated future pension and postretirement health care benefit payments through the year 2029:

In millionsPension PlansPostretirement Health Care Benefits
2020$71.4  $2.4  
202173.0  2.5  
202274.5  2.6  
202375.9  2.6  
202476.9  2.8  
2025— 2029384.5  11.4  

Amounts in Accumulated Other Comprehensive Loss Expected to Be Recognized in Net Periodic Benefit Costs in 2020

During 2020, amounts recorded in Accumulated Other Comprehensive Loss expected to be recognized in Net Periodic Benefit Costs are as follows:

 

In millions		Pension BenefitsPostretirement Health Care Benefits
Recognition of Prior Service Cost
$0.2  $(0.3) 
Recognition of Actuarial Loss (Gain)(a)
4.9  (2.1) 
(a) Estimate excludes approximately $150 million of expense that we expect to recognize in 2020 related to the settlement of $750 million of pension obligations through the purchase of a group annuity contract.
Multi-Employer Plans

Certain of the Company’s employees participate in multi-employer plans that provide both pension and other postretirement health care benefits to employees under union-employer organization agreements. Expense related to ongoing participation in these plans for the years ended December 31, 2019 and 2018 was $0.6 million and $3.4 million, respectively.

Estimated liabilities have been established related to the partial or complete withdrawal from certain multi-employment benefit plans for facilities which have been closed. At December 31, 2019, and December 31, 2018, the Company has $30.8 million and $32.4 million, respectively, recorded in Other Noncurrent Liabilities for these withdrawal liabilities which represents the Company's best estimate of the expected withdrawal liability.

In 2019, the Company made a complete withdrawal from the Graphic Communication Conference of the International Brotherhood of Teamster Pension Fund ("GCC/IBT") and the PACE Industry Union-Management Pension Fund ("PIUMPF"). Liabilities of $4.4 million were recorded associated with these withdrawals.

The Company's remaining participation in a multi-employer pension plan consists of contributions to one plan under the terms contained in collective bargaining agreements. The risks of participating in these multi-employer plans are different from single-employer plans in the following ways:

a. Assets contributed to the multi-employers plan by one employer may be used to provide benefits to employees of other participating employers.
b. If a participating employer stops contributing to the plan, the unfunded obligation of the plan may be borne by the remaining participating employers.
c. If a company chooses to stop participating in a multi-employer plan, a company may be required to pay that plan an amount based on the underfunded status of the plan, referred to as the withdrawal liability.

The Company's participation in these plans for the year ended December 31, 2019, 2018 and 2017 is shown in the table below:
Pension Protection Act Zone Status
Company Contributions (in millions)
Multi-employer Pension FundEIN/Pension Plan Number20192018FIP/RP Status Implemented  201920182017Surcharge Imposed  Expiration Date of Bargaining Agreement  
Central States Southeast and Southwest Areas Pension Fund
36-6044243/001RedRedYes$0.1  $0.1  $0.1  Yes7/31/2023
PIUMPF(a)
11-6166763/001  Red  Red  Yes  —  0.1  0.1  Yes  6/15/2022
GCC/IBT(a)
52-6118568/001  Red  Red  Yes  0.1  0.3  0.3  Yes  4/30/2022
Total$0.2  $0.5  $0.5  
(a) As noted above, the Company withdrew from these plans in 2019.

The EIN Number column provides the Employer Identification Number (EIN). Unless otherwise noted, the most recent Pension Protection Act (PPA) zone status available in 2019 and 2018 is for the plan's year-end at December 31, 2018 and December 31, 2017, respectively. The zone status is based on information that the Company receives from the plan and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The "FIP/RP Status Implemented" column indicates plans for which a Financial Improvement Plan (FIP) or Rehabilitation Plan (RP) has been implemented. The Company's share of the contributions to these plans did not exceed 5% of total plan contributions for the most recent plan year.
DEFINED CONTRIBUTION PLANS

The Company provides defined contribution plans for certain eligible employees. The Company’s contributions to the plans are based upon employee contributions, a percentage of eligible compensation, and the Company’s annual operating results. Contributions to these plans for the years ended December 31, 2019, 2018 and 2017 were $57.6 million, $54.6 million and $37.7 million, respectively. The increase of $16.9 million from 2017 to 2018 is due primarily to the NACP Combination.