PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company has a noncontributory defined benefit pension plan covering substantially all full-time employees. The plan provides retirement benefits based on an employee’s average earnings and years of service. Employees become one hundred percent (100%) vested after three years of service regardless of age. The Company’s plan funding policy is to make contributions provided that the total annual contributions will not be less than ERISA and the Pension Protection Act of 2006 minimums or greater than the maximum tax-deductible amount, to review contribution and funding strategy on a regular basis, and to allow discretionary contributions to be made by the Company from time to time. The assets of the defined benefit pension plan are invested primarily in fixed income and equity securities, money market funds, and other investments.

The Company provides certain postretirement health care and life insurance benefits to retired employees. Substantially all of the Company’s employees hired or rehired prior to 2014 may become eligible for postretirement medical benefits if they reach the age and service requirements of the retiree medical plan and retire on a service pension under the defined benefit pension plan. Medical benefits are self-insured and claims are paid through an insurance company. The cost of coverage is determined based on the annual projected plan costs. The participant's premium or cost is determined based on Company guidelines. Postretirement life insurance benefits are insured through an insurance company. The Company funds postretirement benefits as incurred, and accordingly, there were no assets held in the postretirement benefits plan at December 31, 2013 and 2012.

The following table sets forth information regarding the Company’s pension and other postretirement benefits as of December 31, 2013 and 2012:



	Pension Benefits						Postretirement Benefits
	2013			2012			2013			2012
Projected benefit obligation	$	(558,650	)	$	(598,917	)	$	(76,134	)	$	(83,836	)
Fair value of plan assets	423,167			430,894			—			—
Funded status	$	(135,483	)	$	(168,023	)	$	(76,134	)	$	(83,836	)

The accumulated benefit obligation for the Company’s defined benefit pension plan was $476,807 and $499,499 at December 31, 2013 and 2012, respectively.

Amounts recognized in the consolidated balance sheet for the years ended December 31 consist of the following:



	Pension Benefits						Postretirement Benefits
	2013			2012			2013			2012
Current accrued benefit cost	$	(2,900	)	$	(800	)	$	(8,600	)	$	(6,800	)
Non-current accrued benefit cost	(132,583		)	(167,223		)	(67,534		)	(77,036		)
Net amount recognized	$	(135,483	)	$	(168,023	)	$	(76,134	)	$	(83,836	)

Amounts recognized in accumulated other comprehensive loss for the years ended December 31, net of tax, consist of the following:



	Pension Benefits				Postretirement Benefits
	2013		2012		2013			2012
Net actuarial loss	$	138,186	$	164,064	$	13,780		$	20,233
Prior service cost (gain)	1,575		2,415		(6,525		)	(7,858		)
Accumulated other comprehensive loss	$	139,761	$	166,479	$	7,255		$	12,375

Amounts estimated to be amortized from accumulated other comprehensive loss into net periodic benefit costs in 2014, net of tax, consist of the following:



	Pension Benefits		Postretirement Benefits
Net actuarial loss	$	11,120	$	672
Prior service cost (gain)	611		(1,344		)
Accumulated other comprehensive loss	$	11,731	$	(672	)

Weighted-average assumptions used to determine the actuarial present value of the pension and postretirement benefit obligations as of December 31 are:



	Pension Benefits				Postretirement Benefits
	2013		2012		2013		2012
Discount rate	4.87	%	3.95	%	4.34	%	3.51	%
Rate of compensation increase	4.25	%	4.25	%	—		—
Health care cost trend on covered charges	—		—		7.5% / 5%		8% / 5%

For measurement of the postretirement benefit obligation, a 7.50% annual rate of increase in the per capita cost of covered health care benefits was assumed at December 31, 2013. This rate is assumed to decline to 5.00% at January 1, 2019 and remain at that level thereafter. A 1.0% increase or decrease in the assumed healthcare cost trend rate would not have had a material effect on the postretirement benefit obligations as of December 31, 2013 and 2012.

The following presents information regarding the plans for the years ended December 31:



	Pension Benefits						Postretirement Benefits
	2013			2012			2013			2012
Employer contributions	$	40,682		$	40,600		$	4,453		$	5,843
Participant contributions	$	—		$	—		$	1,402		$	1,107
Benefits paid	$	(47,204	)	$	(37,417	)	$	(5,855	)	$	(6,950	)

The Company expects to make contributions totaling $42,900 to its defined benefit pension plan during 2014.

Estimated future defined benefit pension and other postretirement benefit plan payments to plan participants for the years ending December 31 are as follows:



Year	Pension Benefits		Postretirement Benefits
2014	$	42,900	$	8,600
2015	40,400		9,400
2016	40,800		10,400
2017	40,400		11,500
2018	41,500		12,800
After 2018	234,100		88,000

The investment objective of the Company’s defined benefit pension plan is to ensure that there are sufficient assets to fund regular pension benefits payable to employees over the long-term life of the plan. The Company’s defined benefit pension plan seeks to allocate plan assets in a manner that is closely duration-matched with the actuarial projected cash flow liabilities, consistent with prudent standards for preservation of capital, tolerance of investment risk, and maintenance of liquidity.

The Company's defined benefit pension plan utilizes a liability-driven investment (“LDI”) approach to help meet these objectives. The LDI strategy employs a structured fixed-income portfolio designed to reduce volatility in the plan's future funding requirements and funding status. This is accomplished by using a blend of long duration government, quasi-governmental, and corporate fixed-income securities, as well as appropriate levels of equity and alternative investments designed to optimize the plan's liability hedge ratio. In practice, the value of an asset portfolio constructed primarily of fixed income securities is inversely correlated to changes in market interest rates, at least partially offsetting changes in the value of the pension benefit obligation caused by changes in the interest rate used to discount plan liabilities.

Asset allocation information for the defined benefit pension plan at December 31, 2013 and 2012 is as follows:



Investment	2013 Actual Allocation		2013 Target Allocation Range	2012 Actual Allocation		2012 Target Allocation Range
Equity securities-U.S.	10	%	3-15%	7	%	3-15%
Equity securities-International	9	%	3-15%	8	%	3-15%
Fixed income investments-U.S.	56	%	35-75%	57	%	35-75%
Fixed income investments-International	6	%	3-10%	12	%	3-10%
Absolute return	9	%	5-15%	9	%	5-15%
Real assets	5	%	3-10%	5	%	3-10%
Private equity	1	%	0-3%	1	%	0-3%
Short-term investments	4	%	0-3%	1	%	0-3%
Total	100	%	100%	100	%	100%

The following is a description of the valuation methodologies used for assets held by the defined benefit pension plan measured at fair value:

Equity securities - U.S.

Equity securities - U.S. consist of investments in U.S. corporate stocks and U.S. equity mutual funds. U.S. equity mutual funds include publicly traded mutual funds and a bank collective fund for ERISA plans. U.S. corporate stocks and U.S. equity mutual funds are primarily large-capitalization stocks (defined as companies with market capitalization of more than $10 billion). U.S. corporate stocks and publicly traded mutual funds are valued at the closing price reported on the active public market in which the individual securities are traded and are classified as Level 1. The bank collective fund for ERISA plans is valued at the net asset value ("NAV") of units of the fund. The NAV, as provided by the Trustee, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund. While the underlying assets of the bank collective fund are publicly available, the fund is not; thus, the bank collective fund investment is classified as Level 2.

Equity securities - International

Equity securities - International consist of investments in international corporate stocks and publicly traded mutual funds and are both primarily investments within developed and emerging markets. Both are valued at the closing price reported on the active public market in which the individual securities are traded and are classified as Level 1.

Fixed income investments - U.S.

Fixed income investments - U.S. consist of U.S. corporate bonds, government and government agency bonds, as well as a publicly traded mutual fund and a commingled fund, both of which invest in corporate and government debt securities within the U.S. U.S. corporate bonds, government and government agency bonds, and the publicly traded mutual fund are valued at the closing price reported on the active market in which they are traded and thus are classified as Level 1. The commingled fund is valued at the NAV of units of the fund. The NAV, as provided by the Trustee, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund. While the underlying assets of the commingled fund are publicly available, the fund is not; thus, the commingled fund is classified as Level 2.

Fixed income investments - International

Fixed income investments - International consist of international corporate bonds. International corporate bonds are valued at the closing price reported on the active market in which they are traded and thus are classified as Level 1.

In 2012, the commingled fund was in a group trust which invested in the debt of developed and developing markets. The commingled fund was valued at the NAV of units of the fund. The NAV, as provided by the Trustee, was used as a practical expedient to estimate fair value. The NAV was based on the fair value of the underlying investments held by the fund. The underlying assets of the commingled fund were not publicly available; thus, it was classified as Level 3. Audited financial statements are produced on an annual basis for the commingled fund.

Absolute return

Absolute return consists of investments in various hedge funds structured as fund-of-funds (defined as a single fund that invests in multiple funds). The hedge funds use various investment strategies in an attempt to generate positive returns. A fund-of-funds is designed to help diversify and reduce the risk of the overall portfolio. The hedge funds are valued at the NAV of units of the fund. The NAV, as provided by the Trustee, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund. The underlying assets of the hedge funds are not publicly available; thus they are classified as Level 3. Audited financial statements are produced on an annual basis for the hedge funds.

Real assets

Real assets consists of natural resource funds (oil, gas and forestry) and a real estate investment trust ("REIT"). The natural resource funds are comprised of a bank collective trust for ERISA plans and a limited partnership ("LP"). The bank collective fund for ERISA plans is valued at the NAV of units of the fund. The NAV, as provided by the Trustee, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund. While the underlying assets of the bank collective fund are publicly available, the fund is not; thus, the fund is classified as Level 2. The LP is generally characterized as requiring a long-term commitment with limited liquidity. The value of the LP is not publicly available and thus, is classified as Level 3. The REIT is a commingled trust. The commingled trust is valued at the NAV of units of the trust. The NAV, as provided by the Trustee, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund. The underlying assets of the commingled trust are not publicly available; thus they are classified as Level 3. Audited financial statements are produced on an annual basis for the LP and REIT.

Private equity

Private equity is an asset class that is generally characterized as requiring long-term commitments and where liquidity is typically limited. Private equity does not have an actively traded market with readily observables prices. The investments are limited partnerships structured as fund-of-funds. The investments are diversified across typical private equity strategies including: buyouts, co-investments, secondary offerings, venture capital, and special situations. Valuations are developed using a variety of proprietary model methodologies. Valuations may be derived from publicly available sources as well as information obtained from each fund's general partner based upon public market conditions and returns. All private equity investments are classified as Level 3. Audited financial statements are produced on an annual basis for the private equity investments.

Short-term investments

In 2013, short-term investments consist of cash and cash equivalents in a short-term fund which is valued at the NAV of units of the fund. The NAV, as provided by the Trustee, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund. The short-term fund classifies the underlying assets as Level 2 within the short-term fund's financial statements; thus, the fund is classified as Level 2.

In 2012, short-term investments consisted of cash and cash equivalents which were not traded on listed exchanges and the valuation methodology used significant assumptions that were not directly observable. These investments were carried at cost, which approximated fair value, and were classified as Level 3.

The methods described above may produce fair value calculations that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its defined benefit pension plan valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

There have been no changes in the methodologies used by the Company to determine fair value at December 31, 2013 or 2012.

The following tables set forth, by level within the fair value hierarchy, the defined benefit pension plan assets measured at fair value as of December 31, 2013 and 2012:



December 31, 2013
Investment	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities - U.S.
Corporate stocks	$	20,176	$	—	$	—	$	20,176
Mutual funds	11,169		11,754		—		22,923
Equity securities - International
Corporate stocks	1,101		—		—		1,101
Mutual funds	38,246		—		—		38,246
Fixed income investments - U.S.
Corporate debt	108,844		—		—		108,844
U.S. government debt	38,870		—		—		38,870
Mutual funds	22,756		63,916		—		86,672
Fixed income investments - International
Corporate debt	23,920		—		—		23,920
Absolute return	—		—		39,448		39,448
Real assets	—		8,455		14,737		23,192
Private equity	—		—		3,793		3,793
Short-term investments	—		15,982		—		15,982
Total	$	265,082	$	100,107	$	57,978	$	423,167



December 31, 2012
Investment	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities - U.S.
Corporate stocks	$	15,609	$	—	$	—	$	15,609
Mutual funds	6,505		8,871		—		15,376
Equity securities - International
Corporate stocks	544		—		—		544
Mutual funds	33,603		—		—		33,603
Fixed income investments - U.S.
Corporate debt	120,457		—		—		120,457
U.S. government debt	37,979		—		—		37,979
Mutual funds	17,988		68,017		—		86,005
Fixed income investments - International
Corporate debt	31,725		—		—		31,725
Commingled funds	—		—		22,063		22,063
Absolute return	—		—		37,289		37,289
Real assets	—		7,041		12,702		19,743
Private equity	—		—		3,807		3,807
Short-term investments	—		—		6,694		6,694
Total	$	264,410	$	83,929	$	82,555	$	430,894

The tables below set forth a summary of changes in the fair value of the defined benefit pension plan's Level 3 assets for the years ended December 31, 2013 and 2012:



December 31, 2013
	Fixed Income Investments – International			Absolute Return			Real Assets			Private Equity			Short-term investments			Total
Balance, beginning of year	$	22,063		$	37,289		$	12,702		$	3,807		$	6,694		$	82,555
Realized gains/(losses)	5,721			831			16			—			—			6,568
Unrealized gains/(losses)	(6,629		)	2,344			2,127			(14		)	—			(2,172		)
Purchases	—			30,900			—			—			—			30,900
Sales	(21,155		)	(31,916		)	(108		)	—			(6,694		)	(59,873		)
Balance, end of year	$	—		$	39,448		$	14,737		$	3,793		$	—		$	57,978



December 31, 2012
	Fixed Income Investments – International			Absolute Return			Real Assets			Private Equity			Short-term investments			Total
Balance, beginning of year	$	18,314		$	36,738		$	17,451		$	4,303		$	7,681		$	84,487
Realized gains/(losses)	35			1,125			54			231			—			1,445
Unrealized gains/(losses)	1,841			756			1,320			(347		)	—			3,570
Transfers	—			—			(7,041		)	—			—			(7,041		)
Purchases	2,000			3,505			1,239			183			95,694			102,621
Sales	(127		)	(4,835		)	(321		)	(563		)	(96,681		)	(102,527		)
Balance, end of year	$	22,063		$	37,289		$	12,702		$	3,807		$	6,694		$	82,555

The net periodic benefit cost for the years ended December 31, 2013, 2012, and 2011 included the following components:



	Pension Benefits									Postretirement Benefits
	2013			2012			2011			2013			2012			2011
Service cost	$	24,119		$	22,215		$	16,497		$	2,644		$	2,336		$	2,141
Interest cost	23,914			24,896			22,684			2,873			3,355			3,679
Expected return on plan assets	(23,909		)	(23,670		)	(21,883		)	—			—			—
Amortization of:
Net actuarial loss	26,371			21,116			14,104			1,794			1,719			1,971
Prior service cost (gain)	1,375			1,380			1,404			(2,181		)	(2,181		)	(2,181		)
Net periodic benefit cost	$	51,870		$	45,937		$	32,806		$	5,130		$	5,229		$	5,610

Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31 were:



	Pension Benefits						Postretirement Benefits
	2013		2012		2011		2013		2012		2011
Discount rate	3.95	%	4.75	%	5.50	%	3.51	%	4.25	%	4.75	%
Expected return on plan assets	6.00	%	6.25	%	6.25	%	—		—		—
Rate of compensation increase	4.25	%	4.50	%	4.25	%	—		—		—
Health care cost trend on covered charges	—		—		—		8% / 5%		8% / 5%		8% / 5%

The expected return on plan assets assumption for the defined benefit pension plan is a long-term assumption and was determined after evaluating input from both the plan’s actuary and pension fund investment advisors, consideration of historical rates of return on plan assets, and anticipated rates of return on the various classes of assets in which the plan invests.

For measurement of the postretirement benefits net periodic cost, an 8.00% annual rate of increase in per capita cost of covered health care benefits was assumed for 2013. The rate was assumed to decline to 5.00% in 2019 and to remain at that level thereafter. A 1.0% increase or decrease in the assumed healthcare cost trend rate would not have had a material effect on 2013, 2012 and 2011 net periodic benefit cost.