PENSION AND POST-RETIREMENT AND OTHER BENEFIT PLANS

We sponsor qualified and nonqualified defined benefit pension plans that together cover many of our U.S. employees. The plans provide defined benefits based on years of service and final average salary. We also provide post-retirement medical and life insurance benefits to some of our U.S. employees. The post-retirement medical plan is contributory while the post-retirement life insurance plan is noncontributory. Foreign-based employees are eligible to participate in either Company-sponsored or government sponsored benefit plans to which we contribute. We also sponsor separate defined contribution plans that cover substantially all of our U.S. employees and some international employees.

Beginning in 2010, the domestic defined benefit plans were frozen to new entrants and future benefit accruals for non-union participants were discontinued.

On August 31, 2015, JBT amended the Retiree Welfare Benefits Plan to terminate future healthcare benefits effective January 1, 2016, which resulted in a release of $1.2 million of other post-retirement benefit liability into other comprehensive income. The resulting negative prior service cost of $1.8 million was amortized out of other comprehensive income into net income over the remaining life of the plan (through January 1, 2016).

The funded status of our pension and post-retirement benefit plans, together with the associated balances recognized in our consolidated financial statements as of December 31, 2015 and 2014, were as follows:



	Pensions						Other post-retirement benefits
(In millions)	2015			2014			2015			2014
Projected benefit obligation at January 1	$	350.6		$	306.3		$	5.5		$	6.9
Service cost	1.5			1.8			—			0.1
Interest cost	13.7			14.7			0.2			0.3
Actuarial (gain) loss	(20.9		)	53.4			(1.1		)	(1.5		)
Plan participants' contributions	0.1			0.2			—			—
Acquired pension obligation	2.4			—			—			—
Plan amendments	—			—			(1.1		)	—
Benefits paid	(27.4		)	(20.1		)	(0.3		)	(0.3		)
Currency translation adjustments	(3.7		)	(5.7		)	—			—
Projected benefit obligation at December 31	$	316.3		$	350.6		$	3.2		$	5.5
Fair value of plan assets at January 1	$	260.7		$	255.4		$	—		$	—
Company contributions	12.3			19.6			0.3			0.3
Actual return on plan assets	(17.4		)	7.3			—			—
Plan participants' contributions	0.1			0.2			—			—
Benefits paid	(27.4		)	(20.1		)	(0.3		)	(0.3		)
Currency translation adjustments	(1.0		)	(1.7		)	—			—
Fair value of plan assets at December 31	$	227.3		$	260.7		$	—		$	—
Funded status of the plans (liability) at December 31	$	(89.0	)	$	(89.9	)	$	(3.2	)	$	(5.5	)
Amounts recognized in the Consolidated Balance Sheets at December 31
Other current liabilities	$	(1.2	)	$	(2.0	)	$	(0.4	)	$	(0.3	)
Accrued pension and other post-retirement benefits, less current portion	(87.8		)	(87.9		)	(2.8		)	(5.2		)
Net amount recognized	$	(89.0	)	$	(89.9	)	$	(3.2	)	$	(5.5	)

Amounts recognized in accumulated other comprehensive loss at December 31, were as follows:



	Pensions				Other post-retirement benefits
(In millions)	2015		2014		2015			2014
Unrecognized actuarial (gain) loss	$	168.0	$	158.3	$	(0.5	)	$	(2.5	)
Unrecognized prior service cost	0.2		0.2		(0.1		)	—
Total recognized in accumulated other comprehensive (gain) loss	$	168.2	$	158.5	$	(0.6	)	$	(2.5	)

The accumulated benefit obligation for all pension plans was $307.7 million and $343.1 million at December 31, 2015 and 2014, respectively. Key information for our plans with accumulated benefit obligations in excess of plan assets as of December 31 was as follows:



(In millions)	2015		2014
Aggregate projected benefit obligation	$	316.3	$	350.6
Aggregate accumulated benefit obligation	307.7		343.1
Aggregate fair value of plan assets	227.3		260.7

Pension and other post-retirement benefit costs (income) for the years ended December 31, were as follows:



	Pensions									Other post-retirement benefits
(In millions)	2015			2014			2013			2015			2014			2013
Service cost	$	1.5		$	1.8		$	1.9		$	—		$	0.1		$	0.1
Interest cost	13.7			14.7			13.7			0.2			0.3			0.3
Expected return on plan assets	(19.1		)	(19.7		)	(18.2		)	—			—			—
Settlement charge	0.3			2.8			—			—			—			—
Amortization of prior service (credit) cost	—			0.1			0.2			(2.5		)	—			(0.3		)
Amortization of net actuarial (gain) loss	4.5			2.7			4.2			—			(0.1		)	—
Total (income) costs	$	0.9		$	2.4		$	1.8		$	(2.3	)	$	0.3		$	0.1

Pre-tax changes in projected benefit obligations and plan assets recognized in other comprehensive income during 2015 were as follows:

Changes recognized in OCI



(In millions)	Pensions			Other post-retirement benefits
Actuarial (gain) loss	$	15.6		$	(0.5	)
Prior service cost (credit)	—			(0.1		)
Amortization of net actuarial gain (loss)	(4.8		)	—
Amortization of prior service credit (cost)	—			2.5
Total (income) loss recognized in other comprehensive income	$	10.8		$	1.9
Total recognized in net periodic benefit cost and other comprehensive income	$	11.7		$	(0.4	)

The Company uses a corridor approach to recognize actuarial gains and losses that result from changes in actuarial assumptions. The corridor approach defers all actuarial gains and losses resulting from changes in assumptions in other accumulated comprehensive income (loss), such as those related to changes in the discount rate and differences between actual and expected returns on plan assets. These unrecognized gains and losses are amortized when the net gains and losses exceed 10% of the higher of the market-related value of the assets or the projected benefit obligation for each respective plan. The amortization is on a straight-line basis over the life expectancy of the plan’s participants for the frozen plans and the expected remaining service periods for the other plans. We expect to amortize $4.1 million of net actuarial loss from accumulated other comprehensive income (loss) into net periodic benefit cost in 2016.

The following weighted-average assumptions were used to determine the benefit obligations:

Weighted-average assumption to determine benefit obligation



	Pensions						Other post-retirement benefits
	2015		2014		2013		2015		2014		2013
Discount rate	4.40	%	4.00	%	4.92	%	4.60	%	4.25	%	5.10	%
Rate of compensation increase	3.19	%	3.23	%	3.45	%	—		—		—

The following weighted-average assumptions were used to determine net periodic benefit cost:



	Pensions						Other post-retirement benefits
	2015		2014		2013		2015		2014		2013
Discount rate	4.03	%	4.93	%	4.17	%	4.25	%	5.10	%	4.30	%
Rate of compensation increase	3.19	%	3.23	%	3.45	%	—		—		—
Expected rate of return on plan assets	7.08	%	7.77	%	7.81	%	—		—		—

The estimate of expected rate of return on plan assets is based primarily on the historical performance of plan assets, asset allocation, current market conditions and long-term growth expectations.

Plan assets

Our pension investment strategy balances the requirements to generate returns using higher-returning assets, such as equity securities, with the need to control risk in the pension plan with less volatile assets, such as fixed-income securities. Risks include, among others, the likelihood of the pension plans being underfunded, thereby increasing their dependence on Company contributions. The assets are managed by professional investment firms and performance is evaluated against specific benchmarks. Our target asset allocations and actual allocations as of December 31, 2015 and 2014 were as follows:



	Target	2015	2014
Equity	30% - 70%	48%	48%
Fixed income	20% - 40%	31%	24%
Real estate and other	10% - 30%	20%	27%
Cash	0% - 10%	1%	1%
	100%	100%	100%

Our actual pension plans’ asset holdings by category and level within the fair value hierarchy are presented in the following table:



	As of December 31, 2015								As of December 31, 2014
(In millions)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	3.9	$	3.9	$	—	$	—	$	2.4	$	2.4	$	—	$	—
Equity securities:
Large cap⁽¹⁾	42.5		—		42.5		—		45.5		—		45.5		—
Small cap⁽²⁾	66.8		66.8		—		—		79.1		79.1		—		—
Fixed income securities:
Government securities⁽³⁾	12.7		—		12.7		—		17.6		—		17.6		—
Corporate bonds⁽⁴⁾	57.8		45.6		12.2		—		46.4		15.2		31.2		—
Real estate and other investments⁽⁵⁾	43.6		16.8		26.8		—		69.7		26.6		43.1		—
Total assets at fair value	$	227.3	$	133.1	$	94.2	$	—	$	260.7	$	123.3	$	137.4	$	—


(1)	Includes funds that invest primarily in large cap equity securities.


(2)	Includes small cap equity securities and funds that invest primarily in small cap equity securities.


(3)	Includes U.S. government securities and funds that invest primarily in U.S. government bonds, including treasury inflation protected securities.


(4)	Includes investment grade bonds, high yield bonds and mortgage-backed fixed income securities and funds that invest in such securities.


(5)	Includes funds that invest primarily in REITs, funds that invest in commodities and investments in insurance contracts held by our foreign pension plans.

The fair value of assets classified as Level 1 is based on unadjusted quoted prices in active markets for identical assets. The fair value of assets classified as Level 2 is based on quoted prices for similar assets or based on valuations made using inputs that are either directly or indirectly observable as of the reporting date. Such inputs include net asset values reported at a minimum on a monthly basis by investment funds or contract values provided by the issuing insurance company. We are able to sell any of our investment funds with notice of no more than 30 days. For more information on the fair value hierarchy, see Note 14.

Contributions

We expect to contribute $14.3 million to our pension and other post-retirement benefit plans in 2016. The pension contributions will be primarily for the U.S. qualified pension plan. All of the contributions are expected to be in the form of cash.

Estimated future benefit payments

The following table summarizes expected benefit payments from our various pension and post-retirement benefit plans through 2025. Actual benefit payments may differ from expected benefit payments.



(In millions)	Pensions		Other post-retirement benefits
2016	$	13.5	$	0.2
2017	15.2		0.2
2018	15.4		0.2
2019	15.5		0.2
2020	16.7		0.2
2021-2025	92.0		1.0

Savings Plans

Our U.S. and some international employees participate in defined contribution savings plans that we sponsor. These plans generally provide company matching contributions on participants’ voluntary contributions and/or company non-elective contributions. Additionally, certain highly compensated employees participate in a non-qualified deferred compensation plan, which also allows for company matching contributions and company non-elective contributions on compensation in excess of the Internal Revenue Code Section 401(a) (17) limit. The expense for matching contributions was $9.0 million, $9.6 million and $9.4 million in 2015, 2014 and 2013, respectively.