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Pension Plans and Other Postretirement Benefit Plans
 12 Months Ended
Dec. 31, 2013
Pension and Other Postretirement Benefit Expense [Abstract]  
Pension Plans and Other Postretirement Benefit Plans
Pension Plans and Other Postretirement Benefit Plans
Pension Plans    
As discussed in Note 1, the Company elected to change its method of accounting for deferred actuarial gains and losses relating to its global defined benefit pension plans in 2013. The new accounting method, referred to as mark-to-market accounting, was adopted in the 2013 fourth quarter and retrospectively applied to the Company's financial results for all periods presented in this report. See Note 1 under the caption "Change in Accounting Principle Regarding Pension Benefits" for additional information.
The following table presents the funded status of Grace's fully-funded, underfunded, and unfunded pension plans:
(In millions)
December 31, 2013
 
December 31, 2012
Overfunded defined benefit pension plans
$
16.7

 
$
32.1

Underfunded defined benefit pension plans
(66.2
)
 
(175.1
)
Unfunded defined benefit pension plans
(233.4
)
 
(221.4
)
Total underfunded and unfunded defined benefit pension plans
(299.6
)
 
(396.5
)
Unfunded defined benefit pension plans included in liabilities subject to compromise
(123.6
)
 
(131.2
)
Pension liabilities included in other current liabilities
(15.0
)
 
(14.0
)
Net funded status
$
(421.5
)
 
$
(509.6
)

Fully-funded plans include several advance-funded plans where the fair value of the plan assets exceeds the projected benefit obligation ("PBO"). This group of plans was overfunded by $16.7 million as of December 31, 2013, and the overfunded status is reflected as "overfunded defined benefit pension plans" in the Consolidated Balance Sheets. Underfunded plans include a group of advance-funded plans that are underfunded on a PBO basis. Unfunded plans include several plans that are funded on a pay-as-you-go basis, and therefore, the entire PBO is unfunded. The combined balance of the underfunded and unfunded plans was $438.2 million as of December 31, 2013.
Grace maintains defined benefit pension plans covering current and former employees of certain business units and divested business units who meet age and service requirements. Benefits are generally based on final average salary and years of service. Grace funds its U.S. qualified pension plans ("U.S. qualified pension plans") in accordance with U.S. federal laws and regulations. Non-U.S. pension plans ("non-U.S. pension plans") are funded under a variety of methods, as required under local laws and customs.
Grace also provides, through nonqualified plans, supplemental pension benefits in excess of U.S. qualified pension plan limits imposed by federal tax law. These plans cover officers and higher-level employees and serve to increase the combined pension amount to the level that they otherwise would have received under the U.S. qualified pension plans in the absence of such limits. The nonqualified plans are unfunded and Grace pays the costs of benefits as they are due to the participants.
At the December 31, 2013, measurement date for Grace's defined benefit pension plans, the PBO was $1,873.2 million as measured under U.S. GAAP compared with $1,954.9 million as of December 31, 2012. The PBO basis reflects the present value (using a 4.76% discount rate for U.S. plans and a 4.25% weighted average discount rate for non-U.S. plans as of December 31, 2013) of vested and non-vested benefits earned from employee service to date, based upon current services and estimated future pay increases for active employees.
On an annual basis a full remeasurement of pension assets and pension liabilities is performed based on the Company's estimates and actuarial valuations. These valuations reflect the terms of the plan, and use participant-specific information as well as certain key assumptions provided by management.
Postretirement Benefits Other Than Pensions    Grace provides postretirement health care and life insurance benefits for retired employees of certain U.S. business units and certain divested business units. The postretirement medical plan provides various levels of benefits to employees hired before 1993 who retire from Grace after age 55 with at least 10 years of service. These plans are unfunded and Grace pays a portion of the costs of benefits under these plans as they are incurred. Grace applies ASC 715 to these plans, which requires that the future costs of postretirement health care and life insurance benefits be accrued over the employees' years of service. Actuarial gains and losses are recognized in the Consolidated Balance Sheets as a component of Shareholders’ Equity, with amortization of the net actuarial gains and losses that exceed 10 percent of the accumulated postretirement benefit obligation recognized each quarter in the Consolidated Statements of Operations over the average future service period of active employees.
Retirees and beneficiaries covered by the postretirement medical plan are required to contribute a minimum of 40% of the calculated premium for that coverage. During 2002, per capita costs under the retiree medical plans exceeded caps on the amount Grace was required to contribute under a 1993 amendment to the plan. As a result, for 2003 and future years, retirees will bear 100% of any increase in premium costs.
For 2013 measurement purposes, per capita costs, before retiree contributions, were assumed to initially increase at a rate of 8.25%. The rate of increase is assumed to decrease gradually to 5% through 2020 and remain at that level thereafter. A one percentage point increase or decrease in assumed health care medical cost trend rates would not materially change Grace's postretirement benefit obligations (impact of less than $1 million) and would have a negligible impact on the aggregate of the service and interest cost components of net periodic benefit cost.
Defined Contribution Retirement Plan    Grace sponsors a defined contribution retirement plan for its employees in the United States. This plan is qualified under section 401(k) of the U.S. tax code. Currently, Grace contributes an amount equal to 100% of employee contributions, up to 6% of an individual employee's salary or wages. Grace's cost related to this benefit plan was $13.2 million, $12.6 million, and $12.3 million for the years ended December 31, 2013, 2012, and 2011, respectively.
Analysis of Plan Accounting and Funded Status    The following table summarizes the changes in benefit obligations and fair values of retirement plan assets during 2013 and 2012:
 
Defined Benefit Pension Plans
 
Other Post-
Retirement Plans
Change in Financial Status of Retirement Plans
(In millions)
U.S.
 
Non-U.S.
 
Total
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
Change in Projected Benefit Obligation (PBO):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation at beginning of year
$
1,425.6

 
$
1,282.3

 
$
529.3

 
$
452.8

 
$
1,954.9

 
$
1,735.1

 
$
63.9

 
$
64.6

Service cost
25.2

 
21.5

 
11.1

 
8.9

 
36.3

 
30.4

 
0.2

 
0.2

Interest cost
51.9

 
55.9

 
20.6

 
21.4

 
72.5

 
77.3

 
2.2

 
2.5

Plan participants' contributions
—

 
—

 
0.6

 
0.6

 
0.6

 
0.6

 
—

 
—

Amendments
—

 
—

 
—

 
—

 
—

 
—

 
(1.7
)
 
—

Actuarial (gain) loss
(96.7
)
 
132.3

 
(2.4
)
 
58.2

 
(99.1
)
 
190.5

 
(4.3
)
 
(2.1
)
Medicare subsidy receipts
—

 
—

 
—

 
—

 
—

 
—

 
1.4

 
3.3

Benefits paid
(79.2
)
 
(66.4
)
 
(22.1
)
 
(23.1
)
 
(101.3
)
 
(89.5
)
 
(4.5
)
 
(4.6
)
Currency exchange translation adjustments
—

 
—

 
9.3

 
10.5

 
9.3

 
10.5

 
—

 
—

Benefit obligation at end of year
$
1,326.8

 
$
1,425.6

 
$
546.4

 
$
529.3

 
$
1,873.2

 
$
1,954.9

 
$
57.2

 
$
63.9

Change in Plan Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
$
1,131.7

 
$
955.3

 
$
313.6

 
$
295.1

 
$
1,445.3

 
$
1,250.4

 
$
—

 
$
—

Actual return on plan assets
37.1

 
127.9

 
0.8

 
20.8

 
37.9

 
148.7

 
—

 
—

Employer contributions
55.6

 
114.9

 
12.7

 
11.9

 
68.3

 
126.8

 
3.1

 
1.3

Plan participants' contributions
—

 
—

 
0.6

 
0.6

 
0.6

 
0.6

 
—

 
—

Medicare subsidy receipts
—

 
—

 
—

 
—

 
—

 
—

 
1.4

 
3.3

Benefits paid
(79.2
)
 
(66.4
)
 
(22.1
)
 
(23.1
)
 
(101.3
)
 
(89.5
)
 
(4.5
)
 
(4.6
)
Currency exchange translation adjustments
—

 
—

 
0.9

 
8.3

 
0.9

 
8.3

 
—

 
—

Fair value of plan assets at end of year
$
1,145.2

 
$
1,131.7

 
$
306.5

 
$
313.6

 
$
1,451.7

 
$
1,445.3

 
$
—

 
$
—

Funded status at end of year (PBO basis)
$
(181.6
)
 
$
(293.9
)
 
$
(239.9
)
 
$
(215.7
)
 
$
(421.5
)
 
$
(509.6
)
 
$
(57.2
)
 
$
(63.9
)
Amounts recognized in the Consolidated Balance Sheets consist of:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncurrent assets
$
—

 
$
—

 
$
16.7

 
$
32.1

 
$
16.7

 
$
32.1

 
$
—

 
$
—

Current liabilities
(5.8
)
 
(5.8
)
 
(9.2
)
 
(8.2
)
 
(15.0
)
 
(14.0
)
 
(4.5
)
 
(4.3
)
Noncurrent liabilities
(175.8
)
 
(288.1
)
 
(247.4
)
 
(239.6
)
 
(423.2
)
 
(527.7
)
 
(52.7
)
 
(59.6
)
Net amount recognized
$
(181.6
)
 
$
(293.9
)
 
$
(239.9
)
 
$
(215.7
)
 
$
(421.5
)
 
$
(509.6
)
 
$
(57.2
)
 
$
(63.9
)
Amounts recognized in Accumulated Other Comprehensive Income consist of:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated actuarial gain
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
(5.0
)
 
$
(0.3
)
Prior service cost (credit)
1.5

 
2.2

 
(0.3
)
 
(0.3
)
 
1.2

 
1.9

 
(1.7
)
 
—

Net amount recognized
$
1.5

 
$
2.2

 
$
(0.3
)
 
$
(0.3
)
 
$
1.2

 
$
1.9

 
$
(6.7
)
 
$
(0.3
)

 
Defined Benefit Pension Plans
 
Other Post-
Retirement Plans
Change in Financial Status of Retirement Plans
(In millions)
U.S.
 
Non-U.S.
 
Total
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
Weighted Average Assumptions Used to Determine Benefit Obligations as of December 31:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.76
%
 
3.75
%
 
4.25
%
 
4.06
%
 
NM
 
NM
 
4.26
%
 
3.50
%
Rate of compensation increase
4.70
%
 
4.30
%
 
3.41
%
 
3.37
%
 
NM
 
NM
 
NM

 
NM

Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discount rate
3.75
%
 
4.50
%
 
4.06
%
 
4.83
%
 
NM
 
NM
 
3.50
%
 
4.00
%
Expected return on plan assets
6.00
%
 
6.25
%
 
4.66
%
 
4.98
%
 
NM
 
NM
 
NM

 
NM

Rate of compensation increase
4.30
%
 
4.30
%
 
3.37
%
 
3.40
%
 
NM
 
NM
 
NM

 
NM


_______________________________________________________________________________
NM—Not meaningful
Components of Net Periodic Benefit (Income) Cost and Other Amounts Recognized in Other Comprehensive (Income) Loss
(In millions)
2013
 
2012
 
2011
U.S.
 
Non-U.S.
 
Other
 
U.S.
 
Non-U.S.
 
Other
 
U.S.
 
Non-U.S.
 
Other
Net Periodic Benefit (Income) Cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
25.2

 
$
11.1

 
$
0.2

 
$
21.5

 
$
8.9

 
$
0.2

 
$
18.2

 
$
8.7

 
$
0.3

Interest cost
51.9

 
20.6

 
2.2

 
55.9

 
21.4

 
2.5

 
60.3

 
22.7

 
3.2

Expected return on plan assets
(68.0
)
 
(14.0
)
 
—

 
(63.3
)
 
(14.8
)
 
—

 
(66.1
)
 
(16.2
)
 
—

Amortization of prior service cost (credit)
0.7

 
—

 
—

 
0.9

 
(0.1
)
 
—

 
1.1

 
—

 
—

Annual mark-to-market adjustment
(65.8
)
 
11.0

 
—

 
67.7

 
52.2

 
—

 
99.1

 
13.1

 
—

Amortization of net deferred actuarial loss
—

 
—

 
0.4

 
—

 
—

 
0.6

 
—

 
—

 
0.6

Net curtailment and settlement loss
—

 
(0.1
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Net periodic benefit (income) cost
$
(56.0
)
 
$
28.6

 
$
2.8

 
$
82.7

 
$
67.6

 
$
3.3

 
$
112.6

 
$
28.3

 
$
4.1

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Income) Loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net deferred actuarial gain
$
—

 
$
—

 
$
(4.3
)
 
$
—

 
$
—

 
$
(2.1
)
 
$
—

 
$
—

 
$
(7.3
)
Net prior service credit
—

 
—

 
(1.7
)
 
—

 
—

 
—

 
—

 
(0.4
)
 
—

Amortization of prior service cost (credit)
(0.7
)
 
—

 
—

 
(0.9
)
 
0.1

 
—

 
(1.1
)
 
—

 
—

Amortization of net deferred actuarial loss
—

 
—

 
(0.4
)
 
—

 
—

 
(0.6
)
 
—

 
—

 
(0.6
)
Total recognized in other comprehensive (income) loss
(0.7
)
 
—

 
(6.4
)
 
(0.9
)
 
0.1

 
(2.7
)
 
(1.1
)
 
(0.4
)
 
(7.9
)
Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss
$
(56.7
)
 
$
28.6

 
$
(3.6
)
 
$
81.8

 
$
67.7

 
$
0.6

 
$
111.5

 
$
27.9

 
$
(3.8
)

The estimated prior service cost for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit (income) cost over the next fiscal year is $0.7 million. The estimated net deferred actuarial gain and prior service credit for the other postretirement plans that will be amortized from accumulated other comprehensive income into net periodic benefit (income) cost over the next fiscal year are $0.9 million and $0.3 million, respectively.
Funded Status of U.S. Pension Plans
(In millions)
Fully-Funded U.S. Qualified
Pension Plans(1)
 
Underfunded U.S.
Qualified Pension Plans(1)
 
Unfunded Pay-As-You-Go
U.S. Nonqualified Plans(2)
2013

2012

2011

2013

2012

2011

2013

2012

2011
Projected benefit obligation
$
—

 
$
—

 
$
—

 
$
1,197.4

 
$
1,288.6

 
$
1,157.5

 
$
129.4

 
$
137.0

 
$
124.8

Fair value of plan assets
—

 
—

 
—

 
1,145.2

 
1,131.7

 
955.3

 
—

 
—

 
—

Funded status (PBO basis)
$
—

 
$
—

 
$
—

 
$
(52.2
)
 
$
(156.9
)
 
$
(202.2
)
 
$
(129.4
)
 
$
(137.0
)
 
$
(124.8
)
Benefits paid
$
—

 
$
—

 
$
—

 
$
(73.6
)
 
$
(60.7
)
 
$
(59.9
)
 
$
(5.6
)
 
$
(5.7
)
 
$
(5.6
)
Funded Status of Non-U.S. Pension Plans
(In millions)
Fully-Funded Non-U.S.
Pension Plans(1)
 
Underfunded Non-U.S.
Pension Plans(1)
 
Unfunded Pay-As-You-Go
Non-U.S. Pension Plans(2)
2013
 
2012
 
2011
 
2013
 
2012
 
2011
 
2013
 
2012
 
2011
Projected benefit obligation
$
247.3

 
$
237.1

 
$
213.3

 
$
56.5

 
$
62.6

 
$
53.1

 
$
242.6

 
$
229.6

 
$
186.4

Fair value of plan assets
264.0

 
269.2

 
255.8

 
42.5

 
44.4

 
39.3

 
—

 
—

 
—

Funded status (PBO basis)
$
16.7

 
$
32.1

 
$
42.5

 
$
(14.0
)
 
$
(18.2
)
 
$
(13.8
)
 
$
(242.6
)
 
$
(229.6
)
 
$
(186.4
)
Benefits paid
$
(10.0
)
 
$
(11.8
)
 
$
(10.2
)
 
$
(4.2
)
 
$
(3.6
)
 
$
(2.2
)
 
$
(7.9
)
 
$
(7.7
)
 
$
(8.8
)
_______________________________________________________________________________
(1)
Plans intended to be advance-funded.
(2)
Plans intended to be pay-as-you-go.
The accumulated benefit obligation for all defined benefit pension plans was approximately $1,772 million and $1,849 million as of December 31, 2013 and 2012, respectively.
Pension Plans with Underfunded or
Unfunded Accumulated Benefit Obligation
(In millions)
U.S.
 
Non-U.S.
 
Total
2013
 
2012
 
2013
 
2012
 
2013
 
2012
Projected benefit obligation
$
347.8

 
$
1,425.6

 
$
259.2

 
$
280.3

 
$
607.0

 
$
1,705.9

Accumulated benefit obligation
344.1

 
1,371.2

 
230.7

 
242.0

 
574.8

 
1,613.2

Fair value of plan assets
201.1

 
1,131.7

 
8.9

 
35.5

 
210.0

 
1,167.2


Estimated Expected Future Benefit Payments Reflecting Future Service and Medicare Subsidy Receipts for the Fiscal Years Ending
(In millions)
Pension Plans
 
Other
Postretirement Plans
 
Total
Payments
Net of
Subsidy
U.S.(1)
 
Non-U.S.(2)
 
Benefit
Payments
 
Medicare
Subsidy
Receipts
 
Benefit
Payments(3)
 
Benefit
Payments
 
 
 
2011 (actual)
$
65.5

 
$
21.2

 
$
3.6

 
$
(1.9
)
 
$
88.4

2012 (actual)
66.4

 
23.1

 
4.6

 
(3.3
)
 
90.8

2013 (actual)
79.2

 
22.1

 
4.5

 
(1.4
)
 
104.4

2014(3)
108.6

 
23.0

 
6.2

 
(1.7
)
 
136.1

2015
82.2

 
22.7

 
6.0

 
(0.5
)
 
110.4

2016
83.5

 
24.4

 
5.8

 
(0.1
)
 
113.6

2017
84.9

 
25.1

 
5.6

 
(0.1
)
 
115.5

2018
86.3

 
26.0

 
5.3

 
(0.1
)
 
117.5

2019 - 2023
446.5

 
146.7

 
22.1

 
(0.3
)
 
615.0


_______________________________________________________________________________
(1)
Effective January 1, 2008, lump sum distributions from certain U.S. qualified pension plans were restricted based on the provisions of the Pension Protection Act of 2006 (the "Act"). The Act prohibited the distribution of lump sums to retiring participants while the Company was operating under Chapter 11 of the U.S. Bankruptcy Code and when the plan was less than 100% funded. After emergence from Chapter 11, the plan is permitted to distribute lump sums to retiring participants under the Act when the plan is at least 80% funded.
(2)
Non-U.S. estimated benefit payments for 2014 and future periods have been translated at the applicable December 31, 2013, exchange rates.
(3)
Includes approximately $28 million of benefit payments from nonqualified plans that were previously restricted by the Bankruptcy Court while the Company was in Chapter 11 and are expected to be paid in 2014.
Discount Rate Assumption    The assumed discount rate for pension plans reflects the market rates for high-quality corporate bonds currently available and is subject to change based on changes in overall market interest rates. For the U.S. qualified pension plans, the assumed discount rate of 4.76% as of December 31, 2013, was selected by Grace, in consultation with its independent actuaries, based on a yield curve constructed from a portfolio of high quality bonds for which the timing and amount of cash outflows approximate the estimated payouts of the plan.
As of December 31, 2013 and 2012, the United Kingdom pension plan and German pension plans combined represented approximately 86% and 84%, respectively, of the benefit obligation of the non-U.S. pension plans. The assumed discount rates as of December 31, 2013, for the United Kingdom (4.34%) and Germany (3.76%) were selected by Grace, in consultation with its independent actuaries, based on yield curves constructed from a portfolio of sterling- and euro-denominated high quality bonds for which the timing and amount of cash outflows approximate the estimated payouts of the plans. The assumed discount rates for the remaining non-U.S. pension plans were determined based on the nature of the liabilities, local economic environments and available bond indices.
Investment Guidelines for Advance-Funded Pension Plans    The investment goal for the U.S. qualified pension plans subject to advance funding is to earn a long-term rate of return consistent with the related cash flow profile of the underlying benefit obligation. The plans are pursuing a well-defined risk management strategy designed to reduce investment risks as their funded status improves.
The U.S. qualified pension plans have adopted a diversified set of portfolio management strategies to optimize the risk reward profile of the plans:
•
Liability hedging portfolio: primarily invested in intermediate-term and long-term investment grade corporate bonds in actively managed strategies.
•
Growth portfolio: invested in a diversified set of assets designed to deliver performance in excess of the underlying liabilities with controls regarding the level of risk.
•
U.S. equity securities: the portfolio contains domestic equities that are passively managed to the S&P 500 and Russell 2000 benchmark and an allocation to an active portfolio benchmarked to the Russell 2000.
•
Non-U.S. equity securities: the portfolio contains non-U.S. equities in an actively managed strategy. Currency futures and forward contracts may be held for the sole purpose of hedging existing currency risk in the portfolio.
•
Other investments: may include (a) high yield bonds: fixed income portfolio of securities below investment grade including up to 30% of the portfolio in non-U.S. issuers; and (b) global real estate securities: portfolio of diversified REIT and other liquid real estate related securities. These portfolios combine income generation and capital appreciation opportunities from developed markets globally.
•
Liquidity portfolio: invested in short-term assets intended to pay periodic plan benefits and expenses.
For 2013, the expected long-term rate of return on assets for the U.S. qualified pension plans was 6.00%. Average annual returns over one-, three-, five-, and ten-year periods were approximately 4%, 8%, 11%, and 6%, respectively.
The expected return on plan assets for the U.S. qualified pension plans for 2013 was selected by Grace, in consultation with its independent actuaries, using an expected return model. The model determines the weighted average return for an investment portfolio based on the target asset allocation and expected future returns for each asset class, which were developed using a building block approach based on observable inflation, available interest rate information, current market characteristics, and historical results.
The target allocation of investment assets at December 31, 2013, and the actual allocation at December 31, 2013 and 2012, for Grace's U.S. qualified pension plans are as follows:
 
Target
Allocation
 
Percentage of Plan Assets
December 31,
U.S. Qualified Pension Plans Asset Category
2013
 
2013
 
2012
U.S. equity securities
10
%
 
10
%
 
16
%
Non-U.S. equity securities
6
%
 
6
%
 
7
%
Short-term debt securities
10
%
 
10
%
 
6
%
Intermediate-term debt securities
28
%
 
28
%
 
31
%
Long-term debt securities
44
%
 
44
%
 
35
%
Other investments
2
%
 
2
%
 
5
%
Total
100
%
 
100
%
 
100
%


The following tables present the fair value hierarchy for the U.S. qualified pension plan assets measured at fair value as of December 31, 2013 and 2012.
 
Fair Value Measurements at December 31, 2013 Using
Assets Measured at Fair Value—U.S. Qualified Pension Plans
(In millions)
Total
 
Quoted Prices in
Active Markets
for Identical
Assets or
Liabilities
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
U.S. equity group trust funds
$
111.5

 
$
—

 
$
111.5

 
$
—

Non-U.S. equity group trust funds
67.1

 
—

 
67.1

 
—

Corporate bond group trust funds—intermediate-term
322.6

 
—

 
322.6

 
—

Corporate bond group trust funds—long-term
502.3

 
—

 
502.3

 
—

Other fixed income group trust funds
22.9

 
—

 
22.9

 
—

Common/collective trust funds
102.3

 
—

 
102.3

 
—

Annuity and immediate participation contracts
16.5

 
—

 
16.5

 
—

Total Assets
$
1,145.2

 
$
—

 
$
1,145.2

 
$
—



 
Fair Value Measurements at December 31, 2012 Using
Assets Measured at Fair Value—U.S. Qualified Pension Plans
(In millions)
Total
 
Quoted Prices in
Active Markets
for Identical
Assets or
Liabilities
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
U.S. equity group trust funds
$
178.8

 
$
—

 
$
178.8

 
$
—

Non-U.S. equity group trust funds
79.2

 
—

 
79.2

 
—

Corporate bond group trust funds—intermediate-term
348.4

 
—

 
348.4

 
—

Corporate bond group trust funds—long-term
399.4

 
—

 
399.4

 
—

Other fixed income group trust funds
36.9

 
—

 
36.9

 
—

REIT group trust funds
15.0

 
—

 
15.0

 
—

Common/collective trust funds
58.1

 
—

 
58.1

 
—

Annuity and immediate participation contracts
15.9

 
—

 
15.9

 
—

Total Assets
$
1,131.7

 
$
—

 
$
1,131.7

 
$
—


Non-U.S. pension plans accounted for approximately 21% and 22% of total global pension assets at December 31, 2013 and 2012, respectively. Each of these plans, where applicable, follows local requirements and regulations. Some of the local requirements include the establishment of a local pension committee, a formal statement of investment policy and procedures, and routine valuations by plan actuaries.
The target allocation of investment assets for non-U.S. pension plans varies depending on the investment goals of the individual plans. The plan assets of the United Kingdom pension plan represent approximately 83% and 82% of the total non-U.S. pension plan assets at December 31, 2013 and 2012, respectively. In determining the expected rate of return for the U.K. pension plan, the trustees' strategic investment policy has been considered together with long-term historical returns and investment community forecasts for each asset class. The expected return by sector has been combined with the actual asset allocation to determine the 2013 expected long-term return assumption of 4.25%.
The target allocation of investment assets at December 31, 2013, and the actual allocation at December 31, 2013 and 2012, for the U.K. pension plan are as follows:
 
Target
Allocation
 
Percentage of Plan Assets
December 31,
United Kingdom Pension Plan Asset Category
2013
 
2013
 
2012
Diversified growth funds
12
%
 
13
%
 
12
%
U.K. gilts
41
%
 
40
%
 
41
%
U.K. corporate bonds
47
%
 
47
%
 
47
%
Total
100
%
 
100
%
 
100
%


The plan assets of the Canadian pension plan represent approximately 9% and 8% of the total non-U.S. pension plan assets at December 31, 2013 and 2012, respectively. The expected long-term rate of return on assets for the Canadian pension plan was 6.5% for 2013.
The target allocation of investment assets at December 31, 2013, and the actual allocation at December 31, 2013 and 2012, for the Canadian pension plan are as follows:
 
Target
Allocation
 
Percentage of Plan Assets
December 31,
Canadian Pension Plan Asset Category
2013
 
2013
 
2012
Equity securities
33
%
 
34
%
 
61
%
Bonds
49
%
 
48
%
 
39
%
Other investments
18
%
 
18
%
 
—
%
Total
100
%
 
100
%
 
100
%


The plan assets of the other country plans represent approximately 8% and 10% in the aggregate (with no country representing more than 3% individually) of total non-U.S. pension plan assets at December 31, 2013 and 2012, respectively.
The following tables present the fair value hierarchy for the non-U.S. pension plan assets measured at fair value as of December 31, 2013 and 2012.
 
Fair Value Measurements at December 31, 2013 Using
Assets Measured at Fair Value—Non-U.S. Pension Plans
(In millions)
Total
 
Quoted Prices
in Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Common/collective trust funds
$
294.8

 
$
—

 
$
294.8

 
$
—

Government and agency securities
2.4

 
—

 
2.4

 
—

Corporate bonds
1.3

 
—

 
1.3

 
—

Insurance contracts and other investments
6.3

 
—

 
6.3

 
—

Cash
1.7

 
1.7

 
—

 
—

Total Assets
$
306.5

 
$
1.7


$
304.8

 
$
—



 
Fair Value Measurements at December 31, 2012 Using
Assets Measured at Fair Value—Non-U.S. Pension Plans
(In millions)
Total
 
Quoted Prices
in Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Common/collective trust funds
$
301.3

 
$
—

 
$
301.3

 
$
—

Government and agency securities
2.4

 
—

 
2.4

 
—

Corporate bonds
1.2

 
—

 
1.2

 
—

Insurance contracts and other investments
8.0

 
—

 
8.0

 
—

Cash
0.7

 
0.7

 
—

 
—

Total Assets
$
313.6

 
$
0.7

 
$
312.9

 
$
—


Plan Contributions and Funding    Grace intends to satisfy its funding obligations under the U.S. qualified pension plans and to comply with all of the requirements of the Employee Retirement Income Security Act of 1974 ("ERISA"). For ERISA purposes, funded status is calculated on a different basis than under U.S. GAAP. In March 2013, Grace made an accelerated contribution to the trusts that hold assets of the U.S. qualified pension plans of approximately $50 million. Based on the U.S. qualified pension plans' status as of December 31, 2013, there are no minimum required payments under ERISA for 2014.
Grace intends to fund non-U.S. pension plans based on applicable legal requirements and actuarial and trustee recommendations. Grace expects to contribute approximately $18 million to its non-U.S. pension plans and approximately $6 million (excluding any Medicare subsidy receipts) to its other postretirement plans in 2014.
Grace plans to pay benefits as they become due under the pay-as-you-go plans and to maintain compliance with federal funding laws for its U.S. qualified pension plans.