Defined Contribution Plans, Pension and Other Post-Retirement Benefit Plans

Defined Contribution Plans — We sponsor various 401(k) employee savings plans covering all eligible employees. Eligible employees can contribute on a pre-tax basis to the plan. In accordance with the terms of the 401(k) plans, we elect to match a certain percentage of the participants’ contributions to the plans, as defined. We recognized expense associated with these plans of $2.7 million in 2016, $2.8 million in 2015 and $2.2 million in 2014.

Pension and Other Post-Retirement Benefit Plans — We sponsor pension and other post-retirement benefit plans that cover certain hourly and salaried employees in the U.S. and United Kingdom. Each of the plans are frozen to new participants. All of the plans, except for the Shadyside pension plan, are frozen to additional service credits earned. Our policy is to make annual contributions to the plans to fund the minimum contributions as required by local regulations.

The change in benefit obligation, plan assets and funded status as of December 31 consisted of the following (in thousands):



	U.S. Pension and Other Post-Retirement Benefit Plans						Non-U.S. Pension Plans
	2016			2015			2016			2015
Change in benefit obligation:
Benefit obligation — Beginning of year	$	47,795		$	51,279		$	39,186		$	43,569
Service cost	126			135			—			—
Interest cost	1,878			1,864			1,370			1,470
Participant contributions	7			11			—			—
Benefits paid	(2,161		)	(2,179		)	(1,454		)	(1,676		)
Actuarial loss (gain)	(133		)	(3,315		)	9,234			(2,263		)
Exchange rate changes	—			—			(7,516		)	(1,914		)
Benefit obligation at end of year	47,512			47,795			40,820			39,186
Change in plan assets:
Fair value of plan assets — Beginning of year	36,270			35,660			33,608			35,752
Actual return on plan assets	2,035			532			4,214			328
Employer contributions	2,239			2,246			756			818
Participant contributions	7			11			—			—
Benefits paid	(2,161		)	(2,179		)	(1,454		)	(1,676		)
Exchange rate changes	—			—			(6,044		)	(1,614		)
Fair value of plan assets at end of year	38,390			36,270			31,080			33,608
Funded status	$	(9,122	)	$	(11,525	)	$	(9,740	)	$	(5,578	)

Amounts recognized in the consolidated balance sheets at December 31 consist of (in thousands):



	U.S. Pension and Other Post-Retirement Benefit Plans				Non-U.S. Pension Plans
	2016		2015		2016		2015
Current liabilities	$	64	$	74	$	—	$	—
Noncurrent liabilities	9,058		11,451		9,740		5,578
Net amount recognized	$	9,122	$	11,525	$	9,740	$	5,578

The components of net periodic benefit cost for the years ended December 31 are as follows (in thousands):



	U.S. Pension and Other Post-Retirement Benefit Plans									Non-U.S. Pension Plans
	2016			2015			2014			2016			2015			2014
Service cost	$	126		$	135		$	84		$	—		$	—		$	—
Interest cost	1,878			1,864			1,915			1,370			1,470			1,758
Expected return on plan assets	(2,719		)	(2,673		)	(2,514		)	(1,520		)	(1,597		)	(1,891		)
Amortization of prior service cost	6			6			6			—			—			—
Recognized actuarial loss (gain)	308			336			1			210			275			249
Net periodic (benefit) cost	$	(401	)	$	(332	)	$	(508	)	$	60		$	148		$	116

Amounts Recognized in Accumulated Other Comprehensive (Loss) Income — Amounts recognized in accumulated other comprehensive income (loss), before taking into account income tax effects, at December 31 are as follows (in thousands):



	U.S. Pension and Other Post-Retirement Benefit Plans						Non-U.S. Pension Plans
	2016		2015		2014		2016		2015		2014
Net actuarial loss (gain)	$	15,219	$	14,974	$	16,485	$	14,134	$	8,784	$	10,227
Prior service cost	63		69		75		—		—		—
	$	15,282	$	15,043	$	16,560	$	14,134	$	8,784	$	10,227

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income — Amounts recognized as other changes in plan assets and benefit obligations in other comprehensive income, before taking into account income tax effects, for the year ended December 31 are as follows (in thousands):



	U.S. Pension and Other Post-Retirement Plans						Non-U.S. Pension Plans
	2016			2015			2016			2015
Actuarial loss (gain)	$	551		$	(1,172	)	$	6,001		$	(994	)
Amortization of actuarial (gain) loss	(308		)	(336		)	(193		)	(275		)
Prior Service credit	(6		)	(6		)	—			—
Total recognized in other comprehensive income (loss)	$	237		$	(1,514	)	$	5,808		$	(1,269	)

The estimated actuarial loss will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $0.4 million.

Weighted-average assumptions used to determine benefit obligations at December 31 are as follows:



	U.S. Pension and Other Post-Retirement Benefit Plans				Non-U.S. Pension Plans
	2016		2015		2016		2015
Discount rate	3.87	%	4.05	%	2.70	%	3.90	%

Weighted-average assumptions used to determine net periodic benefit cost at December 31 are as follows:



	U.S. Pension and Other Post-Retirement Plans						Non-U.S. Pension Plans
	2016		2015		2014		2016		2015		2014
Discount rate	4.05	%	3.73	%	4.57	%	3.90	%	3.50	%	4.40	%
Expected return on plan assets	7.50	%	7.50	%	7.50	%	5.00	%	4.60	%	5.80	%

The rate of return assumptions are based on projected long-term market returns for the various asset classes in which the plans are invested, weighted by the target asset allocations. An incremental amount for active plan asset management and diversification, where appropriate, is included in the rate of return assumption. Our pension plan investment strategy is reviewed annually.

We employ a total return investment approach whereby a mix of equities, fixed income and real estate investments are used to maximize the long-term return of plan assets taking into consideration a prudent level of risk. The intent of this strategy is to minimize plan expenses by outperforming plan liabilities over the long run. Risk tolerance is established through careful consideration of plan liabilities, plan funded status and corporate financial condition. The investment portfolio contains a diversified blend of equity, balanced, fixed income and real estate investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value and large capitalizations. Other assets such as real estate are used judiciously to enhance long-term returns while improving portfolio diversification. Derivatives may be used to gain market exposure in an efficient and timely manner; however, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews. We expect to contribute approximately $3.7 million to our pension plans and our other post-retirement benefit plans in 2017.

Our current investment allocation target for our pension plans for 2016 and our weighted-average asset allocations of our pension assets for the years ended December 31, by asset category, are as follows:



	Target Allocation				Actual Allocations as of December 31,
	2016		2015		U.S. Pension Plans		Non-U.S. Pension Plans
	U.S.	Non-U.S.	U.S.	Non-U.S.	2016	2015	2016	2015
Cash and cash equivalents	—	—	—	—	0.1	1.2	—	0.4
Equity/balanced securities	55	55	55	60	52.1	51.0	55.2	61.1
Fixed income securities	25	45	25	40	23.3	24.0	44.8	38.5
Real estate	20	—	20	—	24.5	23.8	—	—
	100%	100%	100%	100%	100%	100%	100%	100%

The following descriptions relate to our plan assets:

Equity Securities — The equity category includes common stocks issued by U.S., United Kingdom and other international companies, equity funds that invest in common stocks and unit linked insurance policies. All equity investments generally allow near-term (within 90 days of the measurement date) liquidity and are held in issues that are actively traded to facilitate transactions at minimum cost.

Balanced — The balanced category includes funds primarily invested in a mix of equity and fixed income securities where the allocations are at the discretion of the investment manager. All investments generally allow near-term (within 90 days of the measurement date) liquidity and are held in issues that are actively traded to facilitate transactions at minimum cost.

Fixed Income Securities — The fixed income category includes U.S. dollar-denominated and United Kingdom and other international marketable bonds and convertible debt securities as well as fixed income funds that invest in these instruments. All investments generally allow near-term liquidity and are held in issues that are actively traded to facilitate transactions as minimum cost.

The fair value of fixed income securities is determined by either direct or indirect quoted market prices. When the value of assets held in separate accounts is not published, the value is based on the underlying holdings, which are primarily direct quoted market prices on regulated financial exchanges.

Real Estate — Real estate provides an indirect investment into a diversified and multi-sector portfolio of property assets. The fair value of real estate investments is valued by the fund managers. The fund managers value the real estate investments via independent third-party appraisals on a periodic basis. Assumptions used to revalue the properties are updated every quarter.

The fair values of our pension plan assets by asset category and by level as described in Note 2 for the years ended December 31, 2016 and 2015 are as follows (in thousands):



	December 31, 2016
			Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs		Significant Unobservable Inputs
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	174	$	174	$	—	$	—
Equities:
U.S. large value	4,800		4,800		—		—
U.S. large growth	4,805		4,805		—		—
International blend	7,954		—		7,954		—
Emerging markets	2,464		2,464		—		—
Balanced	18,486		—		18,486		—
Fixed income securities:
Government bonds	8,402		—		8,402		—
Corporate bonds	12,976		—		12,976		—
Real Estate:
U.S. property	9,409		—		—		9,409
Total pension fund assets	$	69,470	$	12,243	$	47,818	$	9,409

	December 31, 2015
			Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs		Significant Unobservable Inputs
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	551	$	551	$	—	$	—
Equities:
U.S. large value	4,222		4,222		—		—
U.S. large growth	3,961		3,961		—		—
International blend	7,874		—		7,874		—
Emerging markets	2,429		2,429		—		—
Balanced	20,528		—		20,528		—
Fixed income securities:
Government bonds	4,298		—		4,298		—
Corporate bonds	17,368		—		17,368		—
Real Estate:
U.S. property	8,645		—		—		8,645
Total pension fund assets	$	69,876	$	11,163	$	50,068	$	8,645

The fair value of our pension plan assets measured using significant unobservable inputs (Level 3) at December 31 are as follows (in thousands):



	2016		2015
Beginning balance	$	8,645	$	7,957
Actual return on plan assets:
Relating to assets held at reporting date	764		1,018
Relating to assets sold during the period	—		2
Purchases, sales and settlements, net	—		(322		)
Foreign currency translation adjustment	—		(10		)
Ending balance	$	9,409	$	8,645

The following table summarizes our expected future benefit payments of our pension and other post-retirement benefit plans (in thousands):



Year	Pension Plans
2017	$	3,698
2018	3,902
2019	4,095
2020	4,279
2021	4,326
2022 to 2026	22,372