PENSION, POST-RETIREMENT AND POST-EMPLOYMENT PLANS

The Company has multiple deferred compensation arrangements, as described below, which include defined benefit pension plans for certain domestic and foreign employees, a SERP for certain executive officers, and a post-employment benefits program for certain domestic employees. Aggregate (loss) income reported in net earnings for these plans by the Company for the years ended December 31, 2016, 2015 and 2014 totaled $(4.1) million, $1.0 million and $2.1 million, respectively.

Domestic Defined Benefit Pension Plan

This domestic pension plan, a non-contributory defined benefit pension plan, is closed to new participants. Pursuant to this plan, retirement benefits are provided based upon years of service and compensation levels. As of December 31, 2016 and 2015, the projected benefit obligation for this pension plan was $206 million and $217 million, respectively. In 2016, the Company offered to certain eligible terminated vested plan participants an option to take an one-time lump-sum distribution in lieu of future monthly pension payments, which reduced the pension benefit obligations by approximately $22.9 million and fully settled the liabilities with the participants electing to opt for a settlement. The decrease above was partially offset by the actuarial loss caused by lower a discount rate in 2016.

An investment committee, appointed by the Board, manages the plan and its assets in accordance with the plan’s investment policies. The Company’s investment policies incorporate an asset allocation strategy that emphasizes the long-term growth of capital and acceptable asset volatility as long as it is consistent with the volatility of the relevant market indexes. The investment policies attempt to achieve a mix of approximately 70% of plan investments for long-term growth and 30% for near-term benefit payments. The Company believes this strategy is consistent with the long-term nature of plan liabilities and ultimate cash needs of the plans. Plan assets consist primarily of limited partnership interests, listed stocks, equity security funds, and a short-term Treasury bond mutual fund. The listed stocks are investments in large-cap and mid-cap companies located in the United States. The limited partnership funds primarily include listed stocks located in the United States. The weighted average asset allocation of this pension plan was 21% equity securities, 35% limited partnership interests and managed equity funds, 20% collective investment funds, 19% bond mutual fund holdings, and 5% cash at December 31, 2016. As of December 31, 2015, the weighted average asset allocation of this pension plan was 17% equity securities, 40% limited partnership interests and managed equity funds, 21% collective investment funds, 18% bond mutual fund holdings, and 4% cash.

Actual pension expense and future contributions required to fund this pension plan will depend on future investment performance, changes in future discount rates, the level of Company contributions, and various other factors related to the populations participating in this pension plan. The Company evaluates the plan's actuarial assumptions on an annual basis, including the expected long-term rate of return on assets and discount rate, and adjusts the assumptions, as necessary, to ensure proper funding levels are maintained so that the plan can meet obligations as they become due.

Supplemental Executive Retirement Plan

The Company sponsors a SERP that entitles certain executive officers to the difference between the benefits actually paid to them and the benefits they would have received under the pension plan described above were it not for certain restrictions imposed by the Internal Revenue Service Code. Covered compensation under the SERP's includes an employee’s annual salary and bonus. As of December 31, 2016 and 2015, the projected benefit obligation under the SERP was $7.9 million and $13.5 million, respectively.

Foreign Pension Plans

The Company has a U.K. Pension Plan, which represents retirement and death benefit plans covering employees in the U.K. The U.K. Pension Plan is comprised of a defined benefit plan and a defined contribution plan. The defined benefit plan was closed to new entrants and, effective March 31, 2000, existing active members ceased accruing any further benefits exclusive of adjustments for an inflation factor. The defined contribution plan is structured whereby the Company contributes an amount equal to a specified percentage of each employee’s contribution up to an annual maximum contribution per participant.

The measurement date used to determine U.K. Pension Plan benefits is December 31. Effective October 13, 2014, the trustees of the U.K. Pension Plan entered into a “Buy-In” agreement with Pension Insurance Corporation plc, or PIC, to transfer the benefit obligation to PIC for approximately GBP 49.7 million. The “Buy-in” phase of the U.K. Pension Plan is expected to convert into a "Buy-out" during 2017, at which point the obligation will be settled and a gain or loss will be recorded.

The projected benefit obligation of the U.K. Pension Plan was $72.0 million and $85.8 million at December 31, 2016 and 2015, respectively. The decrease in 2016 was primarily driven by a declining value of the British Pound Sterling against the U.S. Dollar, partially offset by an increase in value due to changes in financial assumptions caused by declining interest rates and rising inflation expectations over the year. As of December 31, 2016, $10.0 million was included in "Accumulated other comprehensive loss" on the Consolidated Balance Sheets related to the U.K. Pension Plan, which is expected to be recognized in connection with the ”Buy-out” agreement once the benefit obligations are transferred and settled.

As of December 31, 2016, 92% of the U.K. Pension Plan portfolio is held as an insurance “buy-in” policy, with the remaining 6% being held in pooled bond funds, and 2% in cash. As of December 31, 2015, 90% of the U.K. Pension Plan portfolio was held as an insurance “buy-in” policy, 9% was held in pooled bond funds, and 1% was held in cash. An independent trustee committee, appointed by Company management and employees participating in the U.K. Pension Plan meet to assess risk factors, rates of return, and asset allocations prescribed by the committee’s investment policy statement. In addition, an annual review is conducted to ensure that proper funding levels are maintained so the U.K. Pension Plan can meet its obligations as they become due.

The Company also has retirement and death benefit plans covering employees in Taiwan and certain former employees in Germany, as well as longevity plans covering employees in France. These plans are not significant, individually or in the aggregate, to the consolidated financial position, results of operations or cash flows of Platform. Information for these plans, along with the U.K. Pension Plan, is included in the tables below. The Company also has certain foreign benefit plans that do not qualify for pension accounting and are recorded in "Long-term retirement benefits, less current portion" in the Consolidated Balance Sheets.

Certain other foreign subsidiaries maintain benefit plans that are consistent with statutory practices, but do not meet the criteria for pension or post-retirement accounting. These benefit plans had obligation balances of $5.1 million and $6.1 million as of December 31, 2016 and 2015, respectively, and are excluded from Retirement Benefits and from the accompanying tables of pension benefits.

Domestic Defined Benefit Post-Retirement Medical and Dental Plan

The Company sponsors defined benefit post-retirement medical and dental plans that covers all of its MacDermid domestic full-time employees, hired prior to April 1, 1997, who retire after age 55, with at least ten to twenty years of service (depending upon the date of hire).

Eligible employees receive a subsidy from the Company towards the purchase of their retiree medical benefits. The subsidy level is based on the date of retirement from MacDermid. The annual increase in the Company’s costs for post-retirement medical benefits is subject to a limit of 5% for those retiring prior to March 31, 1989 and 3% for those retiring after April 1, 1989. Retirees are required to contribute to the plan costs in excess of their respective Company limits in addition to their other required contributions. The projected benefit obligation for the post-retirement plan at December 31, 2016 comprised 31% retirees, 42% fully eligible active participants and 27% other participants. The actuarial determination of the Company's accumulated benefit obligation associated with the plan for post-retirement medical benefits assumes annual cost increases of 2% and 4%, based on the date of retirement. As a result of the above mentioned plan limits, the effect of an increase in the healthcare cost trend on the Company's accumulated benefit obligation and the service and interest costs associated therewith is limited to an immaterial amount.

The components of net periodic benefit cost of the Domestic and Foreign Pension Plans were as follows:



	Pension & SERP Benefits
	Year Ended December 31,
(amounts in millions)	2016						2015						2014
Net periodic benefit expense:	Domestic			Foreign			Domestic			Foreign			Domestic			Foreign
Service cost	$	—		$	1.8		$	—		$	1.4		$	—		$	0.8
Interest cost on the projected benefit obligation	10.1			3.1			6.8			2.8			6.9			3.0
Expected return on plan assets	(11.6		)	(2.6		)	(9.9		)	(2.7		)	(9.7		)	(3.5		)
Amortization of prior service cost	—			0.6			—			—			—			—
Amortization of actuarial net loss	—			0.2			—			—			—			—
Plan curtailments	—			(0.1		)	—			—			—			—
Plan settlements	1.7			0.2			—			—			—			—
Net periodic cost (benefit)	$	0.2		$	3.2		$	(3.1	)	$	1.5		$	(2.8	)	$	0.3



	Post-retirement Medical Benefits
	Year Ended December 31,
(amounts in millions)	2016				2015				2014
Net periodic benefit expense:	Domestic		Foreign		Domestic		Foreign		Domestic		Foreign
Service cost	$	—	$	0.1	$	0.1	$	0.1	$	0.1	$	—
Interest cost on the projected benefit obligation	0.4		0.2		0.3		0.1		0.3		—
Net periodic cost	$	0.4	$	0.3	$	0.4	$	0.2	$	0.4	$	—

The weighted average key assumptions used to determine the net periodic benefit cost of the Domestic and Foreign Pension Plan liabilities are as follows:



	Pension and SERP Benefits
	Year Ended December 31,
	2016				2015				2014
	Domestic		Foreign		Domestic		Foreign		Domestic		Foreign
Discount rate	4.6	%	2.8	%	4.2	%	2.5	%	5.2	%	4.2	%
Rate of compensation increase	3.5	%	3.3	%	3.5	%	2.9	%	4.0	%	3.4	%
Long-term rate of return on assets	6.5	%	2.9	%	7.4	%	2.5	%	7.8	%	4.2	%



	Post-retirement Medical Benefits
	Year Ended December 31,
	2016				2015				2014
	Domestic		Foreign		Domestic		Foreign		Domestic		Foreign
Discount rate	4.4	%	14.0	%	4.2	%	14.5	%	5.1	%	12.4	%

The expected long-term rate of return on assets assumption is developed with reference to historical returns, forward-looking return expectations, the Domestic and Foreign Pension Plans' investment allocations, and peer comparisons.

The following tables summarize changes in plan assets and funded status of the Company’s pension and SERP plans:



	Pension and SERP Benefits
	Year Ended December 31,
(amounts in millions)	2016						2015						2014
Change in Projected Benefit Obligation:	Domestic			Foreign			Domestic			Foreign			Domestic			Foreign
Beginning of period balance	$	230.5		$	112.7		$	157.6		$	88.3		$	137.4		$	73.1
Additions	—			2.7			—			—			—			—
Acquisitions	—			—			82.6			22.6			—			—
Service cost	—			1.8			—			1.4			—			0.8
Plan amendments	—			(6.9		)	—			8.9			—			—
Interest cost	10.1			3.1			6.8			2.8			6.9			3.0
Plan curtailment	—			(0.1		)	—			—			—			—
Actuarial loss (gain) due to assumption change	—			14.5			(11.4		)	0.3			18.1			20.2
Actuarial loss (gain) due to plan experience	5.0			(2.1		)	(0.1		)	1.1			(0.6		)	1.6
Benefits and expenses paid	(9.2		)	(6.6		)	(5.0		)	(6.6		)	(4.2		)	(4.3		)
Settlement	(22.9		)	(2.5		)	—			—			—			(0.5		)
Foreign currency translation	—			(13.6		)	—			(6.1		)	—			(5.6		)
End of period balance	$	213.5		$	103.0		$	230.5		$	112.7		$	157.6		$	88.3



	Pension and SERP Benefits
	Year Ended December 31,
(amounts in millions)	2016						2015						2014
Change in Fair Value of Plan Assets:	Domestic			Foreign			Domestic			Foreign			Domestic			Foreign
Beginning of period balance	$	184.5		$	93.7		$	134.0		$	94.5		$	127.0		$	88.1
Acquisitions	—			—			62.5			8.1			—			—
Actual return on plan assets, net of expenses	17.9			11.3			(7.0		)	3.1			11.2			16.0
Employer contributions	6.2			2.5			—			0.5			—			0.2
Benefits paid	(9.1		)	(6.6		)	(5.0		)	(6.6		)	(4.2		)	(3.5		)
Settlement	(22.9		)	(2.5		)	—			—			—			(0.5		)
Foreign currency translation	—			(13.4		)	—			(5.9		)	—			(5.8		)
End of period balance	176.6			85.0			184.5			93.7			134.0			94.5
Funded status of plan	$	(36.9	)	$	(18.0	)	$	(46.0	)	$	(19.0	)	$	(23.6	)	$	6.2

The aggregate accumulated benefit obligation for all defined benefit pension plans was $300 million and $327 million at December 31, 2016 and 2015, respectively. As of December 31, 2016, the aggregate accumulated benefit obligation and aggregate fair value of plan assets for plans with accumulated benefit obligations in excess of plan assets were $228 million and $186 million, respectively. As of December 31, 2015, the aggregate accumulated benefit obligation and aggregate fair value of plan assets for plans with accumulated benefit obligations in excess of plan assets were $327 million and $278 million, respectively.

The following table summarizes changes in the Company’s post-retirement medical benefit obligations:



	Post-retirement Medical Benefits
	Year Ended December 31,
(amounts in millions)	2016						2015						2014
Change in Accumulated Post-retirement Benefit:	Domestic			Foreign			Domestic			Foreign			Domestic			Foreign
Beginning of period balance	$	9.4		$	1.4		$	7.4		$	0.3		$	6.8		$	0.3
Acquisitions	—			—			2.3			1.5			—			—
Service cost	0.1			0.1			—			0.1			0.1			—
Interest cost	0.4			0.2			0.3			0.2			0.3			—
Employee contributions	0.3			—			0.2			—			—			—
Actuarial loss (gain) due to assumption change	—			0.5			(0.5		)	(0.2		)	0.5			—
Actuarial loss (gain) due to plan experience	0.2			0.6			0.3			(0.1		)	—			—
Other	—			0.4			—			(0.3		)	—			—
Benefits and expenses paid	(0.8		)	(0.1		)	(0.6		)	(0.1		)	(0.3		)	—
End of period balance	$	9.6		$	3.1		$	9.4		$	1.4		$	7.4		$	0.3

Amounts included in the Consolidated Balance Sheets consist of the following:



	December 31,
(amounts in millions)	2016		2015
Prepaid pension assets
Foreign pension	$	4.0	$	—
Total included in other assets	$	4.0	$	—
Other current liabilities
Domestic pension	$	0.7	$	6.7
Foreign pension	0.6		0.6
Domestic post-retirement medical benefits	0.6		0.6
Foreign post-retirement medical benefits	0.2		0.1
Total included in accrued expenses and other current liabilities	$	2.1	$	8.0
Retirement benefits, less current portion
Domestic pension and SERP	$	36.2	$	39.3
Foreign pensions	21.4		18.4
Domestic post-retirement medical benefits	9.0		8.8
Foreign post-retirement medical benefits	2.9		1.3
Total included in long-term retirement benefits, less current portion	$	69.5	$	67.8

Weighted average key assumptions used to determine the benefit obligations in the actuarial valuations of the pension and post-retirement benefit liabilities are as follows:



	Pension and SERP Benefits
	December 31, 2016				December 31, 2015
	Domestic		Foreign		Domestic		Foreign
Discount rate	4.2	%	2.3	%	4.6	%	2.8	%
Rate of compensation increase	3.5	%	3.0	%	3.5	%	3.4	%



	Post-retirement Medical Benefits
	December 31, 2016				December 31, 2015
	Domestic		Foreign		Domestic		Foreign
Discount rate	4.2	%	12.2	%	4.4	%	14.0	%

Amounts recognized in Accumulated Other Comprehensive Income (Loss) consist of the following:



	Pension and SERP Benefits
	Year Ended December 31,
(amounts in millions)	2016						2015						2014
	Domestic			Foreign			Domestic			Foreign			Domestic			Foreign
Net actuarial loss	$	(12.8	)	$	(12.3	)	$	(15.8	)	$	(10.5	)	$	(10.4	)	$	(10.1	)
Prior service costs	(0.1		)	(0.3		)	—			(8.5		)	—			—
Total	$	(12.9	)	$	(12.6	)	$	(15.8	)	$	(19.0	)	$	(10.4	)	$	(10.1	)



	Post-retirement Medical Benefits
	Year Ended December 31,
(amounts in millions)	2016						2015					2014
	Domestic			Foreign			Domestic			Foreign		Domestic			Foreign
Net actuarial (loss) gain	$	(0.6	)	$	(1.1	)	$	(0.4	)	$	0.2	$	(0.6	)	$	—

The major categories of assets in the Company’s various defined benefit pension plans as of December 31, 2016 and 2015 are presented in the tables that follow below. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy as explained in Note 11, Fair Value Measurements. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority, and Level 3 having the lowest. The Company’s domestic and foreign post-retirement plans are unfunded.

The amount of estimated prior service costs for the Company's Pension Plans and SERP plans that will be reclassified from "Accumulated other comprehensive loss" into net periodic cost over the next 12 months is immaterial.

The fair value of plan assets as of December 31, 2016 were classified in the fair value hierarchy as follows:



			Fair Value Measurements Using
(amounts in millions)	December 31, 2016		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Asset Category
Domestic equities	$	31.1	$	31.1	$	—	$	—
Mutual funds holding domestic securities	5.5		5.5		—		—
U.S. Treasuries	4.9		—		4.9		—
Mutual funds holding U.S. Treasury Securities	12.0		12.0		—		—
Mutual funds holding fixed income securities	14.6		14.6		—		—
Insurance "Buy-In" Policy ^(a)	70.2		—		—		70.2
Foreign public bonds	5.1		—		5.1		—
Corporate bonds	1.2		—		1.2		—
Cash and cash equivalents	15.1		15.1		—		—
Sub-Total	159.7		$	78.3	$	11.2	$	70.2
Assets using NAV as a practical expedient	101.9
Total	$	261.6

The fair value of plan assets as of December 31, 2015 were classified in the fair value hierarchy as follows:



			Fair Value Measurements Using
(amounts in millions)	December 31, 2015		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Asset Category
Domestic equities	$	26.3	$	26.3	$	—	$	—
Foreign equities	0.3		0.3		—		—
Mutual funds holding domestic securities	4.9		4.9		—		—
U.S. Treasuries	5.0		—		5.0		—
Mutual funds holding U.S. Treasury Securities	11.9		11.9		—		—
Mutual funds holding fixed income securities	16.1		16.1		—		—
Insurance "Buy-In" Policy ^(a)	77.2		—		—		77.2
Foreign public bonds	2.9		—		2.9		—
Corporate bonds	1.5		—		1.5		—
Designated benefit fund^(b)	1.3		—		1.3		—
Cash and cash equivalents	11.2		11.2		—		—
Sub-Total	158.6		$	70.7	$	10.7	$	77.2
Assets using NAV as a practical expedient	119.6
Total	$	278.2


^(a)	This category represents assets in the U.K. Pension Plan invested in insurance contract with PIC in connection with the “Buy-In” of the U.K. Pension Plan.


^(b)	This category includes assets held in a fund with the Bank of Taiwan as prescribed by the Taiwan government in accordance with local statutory rules.

The methods and assumptions used to estimate the fair value of each category of the Company’s plan assets were as follows:


•	Level 1 assets include investments in publicly traded equity securities and mutual funds. These securities are actively traded and valued using quoted prices for identical securities from the market exchanges.


•	Level 2 assets include global fixed-income securities. The fair value of plan assets invested in fixed-income securities is generally determined using market approach pricing methodology, where observable prices are obtained by market transactions involving identical or comparable securities of issuers with similar credit ratings.


•	Level 3 assets include investments in pooled funds holding real estate in the United Kingdom which were valued using discounted cash flow models that consider long-term lease estimates, future rental receipts and estimated residual values. The decrease in fair value is attributable to a change in the discount rate used in the valuation model and foreign currency effects.


•	Assets using NAV as a practical expedient include limited partnership interests and commingled funds that are not actively traded or whose underlying investments are valued using observable marketplace inputs.

The following table provides a reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3).



	December 31,
(amounts in millions)	2016			2015
Fair value measurements using significant unobservable inputs (Level 3)
Beginning balance	$	77.2		$	83.2
Changes in fair value	(7.0		)	(6.0		)
Purchases, sales and settlements⁽¹⁾	—			—
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Ending balance	$	70.2		$	77.2

⁽¹⁾ There were no purchases, sales, or settlements, on a gross basis, for the years ended December 31, 2016 and 2015.

As of December 31, 2016, expected future benefit payments related to the Company’s defined benefit plans were as follows:



	Pension and SERP Benefits				Post-retirement Medical Benefits		Total
(amounts in millions)	Domestic		Foreign		Post-retirement Medical Benefits		Total
2017	$	12.1	$	5.7	$	0.7	$	18.5
2018	11.2		1.5		0.8		13.5
2019	12.1		1.6		0.8		14.5
2020	12.0		1.7		0.8		14.5
2021	12.1		1.8		0.8		14.7
Subsequent five years	64.1		9.8		4.0		77.9
Total	$	123.6	$	22.1	$	7.9	$	153.6

The measurement date used to determine pension and other post-retirement medical benefits was December 31, 2016, at which time the minimum contribution level for the following year was determined. The Company's expected future contribution to the pension and other post-retirement plans is $2.9 million in 2017.