Employee Benefit Plans

Pension Plans

Certain employees of the Company are covered by Company-sponsored pension plans and a supplemental pension plan (collectively, the “pension plans”). These pension plans are defined benefit, noncontributory plans. Benefits paid to retirees are based upon age at retirement, years of credited service and average earnings. The Company also has a supplemental pension plan, which is a non-qualified, unfunded plan. The Company uses a December 31 measurement date for the pension plans.

The Company-sponsored pension plans are frozen for all employees except for employees represented by the United Steelworkers of America. The assets of the Company-sponsored pension plans are maintained in a single trust account.

The Company’s funding policy is to satisfy the minimum funding requirements of the Employee Retirement Income Security Act of 1974, commonly called ERISA.

Components of net periodic pension plans cost (benefit) were as follows:



	2014			2013			2012
Service cost	$	453		$	699		$	608
Interest cost	6,885			6,327			6,832
Expected return on assets	(8,381		)	(9,278		)	(9,855		)
Amortization of prior service cost	282			322			324
Amortization of actuarial loss	1,717			1,942			594
Net periodic pension plans cost (benefit)	$	956		$	12		$	(1,497	)

The expected amortization of pension prior service cost and actuarial loss for the next fiscal year are $378 and $3,912, respectively.

The status of the pension plans at December 31, 2014 and 2013 were as follows:



	2014			2013
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	156,989		$	181,137
Service cost	453			699
Interest cost	6,885			6,327
Plan change	719			—
Benefit payments	(7,587		)	(7,097		)
Actuarial loss (gain)	35,863			(24,077		)
Projected benefit obligation at end of year	$	193,322		$	156,989
Change in plan assets:
Fair value of plan assets at beginning of year	$	168,408		$	187,150
Actual return (loss) on assets	22,521			(11,966		)
Employer contributions	329			321
Benefit payments	(7,587		)	(7,097		)
Fair value of plan assets at end of year	$	183,671		$	168,408
Funded status – net (liability) prepaid	$	(9,651	)	$	11,419
Amounts recognized in the consolidated balance sheets consist of:
Prepaid pension cost	$	7,092		$	16,515
Accrued liabilities	(322		)	(325		)
Pension benefit obligations	(16,421		)	(4,771		)
Net amount recognized	$	(9,651	)	$	11,419
Pre-tax components of accumulated other comprehensive loss:
Unrecognized actuarial loss	$	(45,009	)	$	(25,002	)
Unrecognized prior service cost	(1,731		)	(1,295		)
Total	$	(46,740	)	$	(26,297	)
Accumulated benefit obligation	$	192,638		$	156,474

For the plans with an accumulated benefit obligation in excess of plan assets, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets were $66,341, $65,657 and $49,598, respectively, at December 31, 2014 and $5,095, $5,095 and $0, respectively, at December 31, 2013.

The assumptions used to measure the projected benefit obligations for the Company’s defined benefit pension plans were as follows:



	2014	2013
Discount rate	3.75%	4.50%
Projected annual salary increases	0 - 3.00%	0 - 3.00%

The assumptions used to determine net periodic pension cost (benefit) were as follows:



	2014	2013	2012
Discount rate	4.50%	3.50 - 3.75%	4.25%
Expected long-term rate of return on plan assets	5.25%	5.25%	5.75%
Projected annual salary increases	0 - 3.00%	0 - 3.00%	0 - 3.00%

The Company’s expected return on plan assets is derived from reviews of asset allocation strategies and historical and anticipated future long-term performance of individual asset classes. The Company’s analysis gives consideration to historical returns and long-term, prospective rates of return.

The Company’s pension plan assets are allocated entirely to fixed income securities at December 31, 2014 and 2013.

The Company’s pension plans’ funds are managed in accordance with investment policies recommended by its investment advisor and approved by the Human Resources Committee of the Board of Directors. The overall target portfolio allocation is 100% fixed income securities. These funds’ conformance with style profiles and performance is monitored regularly by management, with the assistance of the Company’s investment advisor. Adjustments are typically made in the subsequent quarters when investment allocations deviate from the target range. The investment advisor provides quarterly reports to management and the Human Resources Committee of the Board of Directors.

The fair values of the Company’s pension plan assets fall within the following levels of the fair value hierarchy as of December 31, 2014:



	Level 1		Level 2		Level 3		Total
Fixed income securities ^(a)	$	15,839	$	167,882	$	—	$	183,721
Accounts payable – pending trades							(50		)
Total							$	183,671

^(a)Fixed income securities are comprised of corporate bonds (75%), government bonds (17%), government agencies securities (4%) and other fixed income securities (4%).

The fair values of the Company’s pension plan assets fall within the following levels of the fair value hierarchy as of December 31, 2013:



	Level 1		Level 2		Level 3		Total
Fixed income securities ^(b)	$	15,629	$	152,803	$	—	$	168,432
Accounts payable – pending trades							(24		)
Total							$	168,408

^(b) Fixed income securities are comprised of corporate bonds (71%), government bonds (20%), government agencies securities (5%) and other fixed income securities (4%).

The estimated future pension benefit payments are:



2015	$	7,990
2016	8,392
2017	8,859
2018	9,185
2019	9,597
2020 — 2024	52,697

The Company is party to a multi-employer pension plan in Ohio. If the Company elects to withdraw from the Ohio multi-employer pension plan in the future, it could potentially incur a withdrawal liability at that time. The Ohio multi-employer pension plan withdrawal liability was estimated to be $5,407 as of December 31, 2014. The Company was party to a multi-employer pension plan in California. In 2013, in connection with the January 2013 restructuring plan, the Company closed its facility in Gardena, California and elected to withdraw from the California multi-employer pension plan. The Company incurred a withdrawal liability of $720 which was charged to expense in 2013 within "Restructuring activity" in the Consolidated Statement of Operations.

Postretirement Plan

The Company also provides declining value life insurance to its retirees and a maximum of three years of medical coverage to qualified individuals who retire between the ages of 62 and 65. The Company does not fund these benefits in advance, and uses a December 31 measurement date.

Components of net periodic postretirement plan (benefit) cost for 2014, 2013 and 2012 were as follows:



	2014			2013			2012
Service cost	$	56		$	153		$	161
Interest cost	76			148			170
Amortization of prior service cost	—			—			—
Amortization of actuarial gain	(336		)	(23		)	—
Net periodic postretirement plan (benefit) cost	$	(204	)	$	278		$	331

The expected amortization of postretirement plan prior service cost and actuarial gain for the next fiscal year are insignificant.

The status of the postretirement plan at December 31, 2014 and 2013 was as follows:



	2014			2013
Change in accumulated postretirement benefit obligations:
Accumulated postretirement benefit obligation at beginning of year	$	1,977		$	4,379
Service cost	56			153
Interest cost	76			148
Benefit payments	(224		)	(201		)
Actuarial loss (gain)	667			(2,502		)
Accumulated postretirement benefit obligation at end of year	$	2,552		$	1,977
Funded status – net liability	$	(2,552	)	$	(1,977	)
Amounts recognized in the consolidated balance sheets consist of:
Accrued liabilities	$	(226	)	$	(139	)
Postretirement benefit obligations	(2,326		)	(1,838		)
Net amount recognized	$	(2,552	)	$	(1,977	)
Pre-tax components of accumulated other comprehensive loss:
Unrecognized actuarial gain	$	2,137		$	3,139
Total	$	2,137		$	3,139

The assumed health care cost trend rates for medical plans at December 31 were as follows:



	2014	2013	2012
Medical cost trend rate	7.00%	7.50%	8.00%
Ultimate medical cost trend rate	5.00%	5.00%	5.00%
Year ultimate medical cost trend rate will be reached	2019	2019	2019

A 1% increase in the health care cost trend rate assumptions would have increased the accumulated postretirement benefit obligation at December 31, 2014 by $114 with no significant impact on the annual periodic postretirement benefit cost. A 1% decrease in the health care cost trend rate assumptions would have decreased the accumulated postretirement benefit obligation at December 31, 2014 by $105 with no significant impact on the annual periodic postretirement benefit cost.

The weighted average discount rate used to determine the net periodic postretirement benefit costs and the accumulated postretirement benefit obligations were as follows:



	2014	2013	2012
Net periodic postretirement benefit costs	4.00%	3.50%	3.75%
Accumulated postretirement benefit obligations	3.25%	4.00%	3.50%

Retirement Savings Plans

The Company’s retirement savings plan for U.S. employees includes features under Section 401(k) of the Internal Revenue Code. The Company provides a 401(k) matching contribution of 100% of each dollar on eligible employee contributions up to the first 6% of the employee’s pre-tax compensation. Company contributions cliff vest after two years of employment.

Effective July 1, 2012, the Company's 401(k) plan was amended to include the U.S. employees of Tube Supply. Employees were eligible to participate in the Company's 401(k) plan immediately. Tube Supply's existing plan assets were rolled over into the Company's 401(k) plan during 2012 as a result of this amendment.

The amounts expensed by the Company relating to its 401(k) plan and other international retirement plans were $3,743, $4,265 and $5,260 for the years ended December 31, 2014, 2013 and 2012, respectively.