Pension and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2012

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits

Note 6.  Pension and Other Postretirement Benefits

Pension Plans

Substantially all active employees of the Company’s U.S. operations participate in defined benefit pension plans and/or defined contribution retirement plans. Neenah Germany has defined benefit plans designed to provide a monthly pension upon retirement for substantially all its employees in Germany. In addition, the Company maintains a Supplemental Executive Retirement Plan (the “SERP”) which is a non-qualified defined benefit plan. The Company provides benefits under the SERP to the extent necessary to fulfill the intent of its defined benefit retirement plans without regard to the limitations set by the Internal Revenue Code on qualified defined benefit plans.

For the nine months ended September 30, 2012, SERP benefit payments of $7.0 million exceeded the sum of expected service cost and interest costs for the plan for calendar 2012. In accordance with ASC Topic 715, Compensation — Retirement Benefits (“ASC Topic 715”), the Company remeasured the liabilities of the SERP as of January 1, 2012 and recognized a settlement charge of $3.5 million.

The following table presents the components of net periodic benefit cost for defined benefit plans:

Components of Net Periodic Benefit Cost for Defined Benefit Plans

	Pension Benefits						Postretirement Benefits Other than Pensions
	Three Months Ended September 30,
	2012			2011			2012		2011
Service cost	$	1.1		$	1.0		$	0.5	$	0.4
Interest cost	3.5			3.6			0.5		0.5
Expected return on plan assets (a)	(3.8		)	(3.7		)	—		—
Recognized net actuarial loss	1.0			0.4			—		0.1
Amortization of prior service cost	0.1			0.1			—		0.1
Net periodic benefit cost	$	1.9		$	1.4		$	1.0	$	1.1

	Pension Benefits						Postretirement Benefits Other than Pensions
	Nine Months Ended September 30,
	2012			2011			2012		2011
Service cost	$	3.4		$	3.0		$	1.4	$	1.3
Interest cost	10.6			10.9			1.5		1.7
Expected return on plan assets (a)	(11.4		)	(11.2		)	—		—
Recognized net actuarial loss	3.1			1.2			0.2		0.2
Amortization of prior service cost	0.2			0.2			0.1		0.3
SERP settlement charge	3.5			—			—		—
Curtailment loss	—			—			0.3		—
Net periodic benefit cost	$	9.4		$	4.1		$	3.5	$	3.5

(a)The expected return on plan assets is determined by multiplying the fair value of plan assets at the prior year-end (adjusted for estimated current year cash benefit payments and contributions) by the expected long-term rate of return.

The Company expects to make aggregate contributions to qualified defined benefit pension trusts and pay pension benefits for unfunded pension plans (including a $6.9 million SERP payment) of approximately $20 million (based on exchange rates at September 30, 2012) in 2012.  For the nine months ended September 30, 2012, the Company made contributions to pension trusts and benefit payments of approximately $15.5 million.