EMPLOYEE BENEFIT PLANS

Pensions

The Company sponsors a frozen defined benefit pension plan, which includes both a qualified and non-qualified portion, for all eligible employees (the Cash Balance Plan) in the U.S and unfunded defined benefit plans for certain eligible employees in the Philippines, Malaysia and France (together with the Cash Balance Plan, the defined benefit plans).The pension benefit formula for the Cash Balance Plan is determined by a combination of compensation and age-based credits and annual guaranteed interest credits. The qualified portion of the Cash Balance Plan has been funded through contributions made to a trust fund in accordance with the Pension Protection Act of 2006.

Components of pension cost and other amounts recognized in other comprehensive income for the Company’s defined benefit plans are as follows:



	Three Months Ended March 31,
	2016			2015
Service cost	$	1.7		$	1.9
Interest cost on projected benefit obligation	2.2			2.7
Expected return on plan assets	(2.5		)	(2.6		)
Amortization and deferrals—net	1.7			2.7
Total pension cost	$	3.1		$	4.7

The Company also sponsors a non-qualified, unfunded executive deferred compensation plan (the EDCP), which permits eligible participants, including executive officers, to defer receipt of certain income. The EDCP was frozen as of December 31, 2011 and reinstated, effective January 1, 2014. The Company matches up to 100% of the first 3% of a participant’s deferred amounts and 50% of a participant’s next 2% of deferred amounts. The Company match under the EDCP is reduced by the Company match eligible to be received under the Company’s Retirement and Savings Plan.

Components of pension cost and other amounts recognized in other comprehensive loss for the EDCP are as follows:



	Three Months Ended March 31,
	2016		2015
Service cost	$	0.3	$	0.4
Interest cost on projected benefit obligation	0.1		0.1
Total pension cost	$	0.4	$	0.5

Change in Applying Discount Rate to Measure Benefit Costs

At December 31, 2015, Convergys changed the method used to estimate the service and interest cost components of net periodic benefit cost for pension and other postretirement benefits. This change in methodology resulted in a decrease in the service and interest cost components for pension and other postretirement benefit costs during the three months ended March 31, 2016. Convergys historically estimated these service and interest cost components utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. Beginning in 2016, the Company has elected to utilize a full yield curve approach in the determination of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. Convergys elected to make this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. This change does not affect the measurement of Convergys’ total benefit obligations. Convergys has accounted for this change as a change in accounting estimate and accordingly has accounted for it prospectively.

The impact of this discount rate change compared to the previous method decreased pension and other postretirement benefits service and interest cost by $0.6 during the three months ended March 31, 2016 with substantially all of the decrease attributable to interest cost. The impact of the change is expected to be approximately $2.4 for the year ended December 31, 2016.