9. Employee Benefit Plans

Pension and Other Postretirement Benefits

The Company sponsors a defined benefit pension plan, with benefits frozen as of March 1, 2012, and postretirement health and life insurance benefits for union employees. The Company also sponsors a cash balance pension plan for nonunion employees, with benefits frozen as of April 1, 2007, and certain management employees receive postretirement health and life insurance under grandfathered provisions of a terminated plan.

The Company amended its union pension plan on January 24, 2012 for the freeze of benefits effective March 1, 2012. This resulted in a reduction of the projected benefit obligation by $30.2 million which is the difference between the accumulated benefit obligation and projected benefit obligation at that date. The liability as of January 24, 2012 was measured using a discount rate of 4.54%. The union pension trust assets were also measured as of this date. The reduction in the net recorded liability of $33.4 million was used to offset actuarial losses previously recognized in accumulated other comprehensive loss. In addition, the periodic benefit cost was reduced to reflect that there is no future service cost for the union pension plan beginning March 1, 2012.

The change in projected benefit obligation, change in plan assets, funded status and weighted average actuarial assumptions were as follows (dollars in thousands):

	Pension Benefits December 31,						Other Postretirement Benefits December 31,
	2014			2013			2014			2013
Change in projected benefit obligation:
Obligation at beginning of period	$	220,330		$	245,211		$	50,988		$	53,630
Service cost		—			—			897			1,047
Interest cost		8,844			8,344			2,384			2,089
Actuarial (gain) loss		26,643			(16,236	)		7,239			(4,044	)
Benefits paid		(7,312	)		(16,989	)		(1,678	)		(1,734	)

Obligation at end of period		248,505			220,330			59,830			50,988

Change in plan assets:
Fair value of plan assets at beginning of period		188,386			164,426			—			—
Actual return on plan assets		15,562			29,056			—			—
Employer contributions		9,673			11,893			1,678			1,734
Benefits paid		(7,312	)		(16,989	)		(1,678	)		(1,734	)

Fair value of plan assets at end of period		206,309			188,386			—			—

Funded status:
Plan assets less than projected benefit obligation	$	(42,196	)	$	(31,944	)	$	(59,830	)	$	(50,988	)


Amounts recognized on balance sheet:
Other current liabilities	$	—		$	—		$	(2,660	)	$	(2,611	)
Employee benefit obligation, noncurrent		(42,196	)		(31,944	)		(57,170	)		(48,377	)

Net amount recognized	$	(42,196	)	$	(31,944	)	$	(59,830	)	$	(50,988	)


Actuarial gain (loss) recognized in accumulated other comprehensive income (loss)	$	(27,728	)	$	(3,783	)	$	(10,931	)	$	(3,752	)


Actuarial assumptions:
Measurement date		12/31/2014			12/31/2013			12/31/2014			12/31/2013
Discount rate		3.70% to 3.74	%		4.40% to 4.62	%		3.97% to 4.15	%		4.75% to 5.01	%
Assumed health care cost trend rate, current		NA			NA			6.75	%		7.00	%
Assumed health care cost trend rate, ultimate		NA			NA			5.00	%		5.00	%
Assumed health care cost trend rate, ultimate year		NA			NA			2022			2022

The actuarial loss for the year ended December 31, 2014 for both the pension and other postretirement benefits was caused, in part, by the decline in the discount rates and the use of a revised mortality table reflecting longer lives. In addition, for the pension plans, the interest rate used to convert fixed annuities to lump sum benefits per the plan terms also declined. The estimated amount of the actuarial loss to be amortized from accumulated other comprehensive income (loss) during 2015 is $0.1 million for pension benefits and $0.6 million for other postretirement benefits.

The Company accrues the costs of pension and postretirement benefits over the period from the date of hire until the date the employee becomes fully eligible for benefits. The following provides the components of benefit costs and weighted average actuarial assumptions for the years ended December 31, 2014, 2013 and 2012 (dollars in thousands):

Pension Benefits

	For the Year Ended December 31,
	2014			2013			2012
Service cost	$	—		$	—		$	1,488
Interest cost		8,844			8,344			10,008
Expected asset return		(12,664	)		(11,860	)		(11,491	)
Amortization of net (gain) loss		135			628			429

Total benefit cost (income)	$	(3,685	)	$	(2,888	)	$	434


Actuarial assumptions:
Discount rate		4.40% to 4.62	%		3.55% to 3.80	%		4.44% to 4.59	%
Expected return on plan assets		7.25	%		7.50	%		7.75	%
Long-term rate of compensation increase		NA			NA			3.50% to 5.00	%

Other Postretirement Benefits

	For the Year Ended December 31,
	2014			2013			2012
Service cost	$	897		$	1,047		$	965
Interest cost		2,384			2,089			2,362
Amortization of net (gain) loss		60			356			118

Total benefit cost	$	3,341		$	3,492		$	3,445


Actuarial assumptions:
Discount rate		4.75% to 5.01	%		3.85% to 4.10	%		4.85% to 5.09	%
Assumed health care cost trend rate, current		7.00	%		7.50	%		7.50	%
Assumed health care cost trend rate, ultimate		5.00	%		5.00	%		5.00	%
Assumed health care cost trend rate, ultimate year		2022			2018			2018

The measurement date for all plans was December 31, 2014, 2013 and 2012. At December 31, 2014 and 2013, the accumulated benefit obligation was the same as the projected benefit obligation.

The Company based its selection of an assumed discount rate for 2015 net periodic benefit cost and December 31, 2014 disclosure on a cash flow matching analysis that utilized bond information provided from a published bond index for all non-callable, high quality bonds (i.e., rated AA– or better) as of December 31, 2014. The matching of bond income to anticipated benefit cash flows and the basic methods of selecting the assumed discount rate and expected return on plan assets at December 31, 2014 did not change from December 31, 2013.

In selecting the expected rate of return on plan assets of 7.25% for 2015 net periodic benefit cost, the Company considered economic forecasts for the types of investments held by the plans (primarily equity and fixed income investments), the plans' asset allocations and the past performance of the plans' assets. The expected rate of return on plan assets was based on various factors including historical experience and long-term inflation assumptions. The Company's expected long-term rate of return on plan assets is determined using the target allocation of assets which is based on the goal of earning the highest rate of return while maintaining risk at acceptable levels. The plan strives to have assets sufficiently diversified so that adverse or unexpected results from a security class will not have a significant adverse impact on the entire portfolio.

The Company's overall investment strategy is to primarily invest for long-term growth with sufficient investments available to fund near-term benefit payments. The Company aims for diversification of asset types, fund strategies and fund managers. The target allocations for plan assets are 65 percent equity securities and 35 percent fixed income securities. Equity securities primarily include investments in equity funds and common stock of individual companies. Together these investments are diversified in both large and small cap companies located in the United States and internationally. Fixed income securities are in funds that invest in bonds of companies from diversified industries, mortgage-backed securities and U.S. Treasuries.

Accounting standards establish a fair value hierarchy when measuring the fair value of pension plan assets. The three levels of inputs within the hierarchy are defined as follows. Level 1 is quoted prices for identical assets or liabilities in active markets. Level 2 is significant other observable inputs other than level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 is significant unobservable inputs that reflect the Company's own assumptions as to how market participants would price an asset.

The fair values of the Company's pension plan assets at December 31, 2014 and 2013, based on trading values or fund net asset value, by asset category and basis of valuation, are as follows (dollars in thousands):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
2014
Common stocks—domestic large cap	$	18,752	$	—	$	—	$	18,752
Equity funds—large cap index		—		108,189		—		108,189
Fixed income funds—diversified bond		—		78,503		—		78,503
Short term investment funds		—		865		—		865

	$	18,752	$	187,557	$	—	$	206,309


2013
Common stocks—domestic large cap	$	18,658	$	—	$	—	$	18,658
Equity funds—large cap index		—		100,478		—		100,478
Fixed income funds—diversified bond		—		68,242		—		68,242
Short term investment funds		—		1,008		—		1,008

	$	18,658	$	169,728	$	—	$	188,386

The fair values of the financial instruments shown in the table above represent the Company's best estimates of the amounts that would be received upon sale of those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants at that date. Those fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company's judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by the Company based on the best information available in the circumstances.

The Company used the following valuation methodologies for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2014 and 2013.

Equity securities (Level 1) were valued at the closing price reported on the active market on which the individual securities are traded.

Fixed income securities, equity funds, and mutual funds (Level 2) were valued as follows. Fixed income securities are valued based on yields currently available on comparable securities of issuers with similar credit ratings. Equity funds and mutual funds include commingled equity funds that are not open to public investment and are valued at the net asset value per share.

All contributions made were as required by law. The Company expects to contribute $10.0 million to its defined benefit pension plans in 2015. The Company expects to contribute $2.7 million to its other postretirement benefit plans in 2015.

The Company projects that its plans will make the following benefit payments for the years ended December 31 (dollars in thousands):

	Pension Plans Benefits Paid		Other Postretirement Benefits Paid
2015	$	48,966	$	2,712
2016		23,343		2,831
2017		18,827		3,058
2018		18,601		3,324
2019		15,307		3,428
2020 through 2024		68,611		17,777

	$	193,655	$	33,130

Assumed health care costs trend rates have a significant impact on the amounts reported for other postretirement benefits. A one-percentage point change in the assumed health care cost trend rates would have the following annual effects (dollars in thousands):

	1-Percentage Point Increase		1-Percentage Point Decrease
Effect on total of service and interest costs components	$	205	$	(169	)
Effect on postretirement benefit obligation		3,840		(3,070	)

401(k) Plan

The Company participates in two 401(k) employee savings plans that allow for voluntary contributions into designated investment funds by eligible employees with the Company matching employee contributions, up to a maximum of 10% of compensation for union employees and 6% of compensation for non-union employees. Company contributions were $5.1 million, $4.9 million and $4.7 million for the years ended December 31, 2014, 2013 and 2012, respectively.