Employee Benefit Plans

12 Months Ended

Dec. 31, 2014

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Employee Benefit Plans

15. Employee Benefit Plans

The Company offers defined contribution retirement plans which cover the majority of its U.S. employees, as well as employees in certain other countries. The Company’s expense relating to defined contribution plans was $34,263, $25,645, and $25,805 for the years ended December 31, 2014, 2013, and 2012, respectively.

The Company sponsors qualified defined benefit pension plans covering certain employees of the Company and its subsidiaries. The plans’ benefits are generally based on years of service and employee compensation.  The Company also provides to certain management employees, through non-qualified plans, supplemental retirement benefits in excess of qualified plan limits imposed by federal tax law.

In July 2013, the Company announced that, after December 31, 2013, the U.S. qualified and non-qualified defined benefit plans will be closed to new employees. All pension-eligible employees as of December 31, 2013 will continue to earn a pension benefit through December 31, 2023 as long as they remain employed by an operating company participating in the plan. The Company also announced that effective, January 1, 2024, the plan would be frozen to any future benefit accruals.

In connection with the recent separation of Knowles, the Company offered one-time lump sum payments in 2014 to Knowles employees that participated in Dover's qualified defined benefit pension plan. In 2014, the Company made total lump sum payments to participants in this plan of $49,338. Based on the total of the lump sum payments made to both Knowles and other participants in the plan during the year, the Company recorded a settlement charge of approximately $10,279 in 2014.

The Company also maintains post retirement benefit plans which cover approximately 1,165 participants, approximately 1,143 of whom are eligible for medical benefits.  These plans are effectively closed to new entrants. The supplemental and post retirement benefit plans are supported by the general assets of the Company.

Obligations and Funded Status

The following tables summarize the balance sheet impact, including the benefit obligations, assets, and funded status associated with the Company's significant defined benefit and other postretirement plans at December 31, 2014 and 2013.

	Qualified Defined Benefits												Non-Qualified Supplemental Benefits						Post-Retirement Benefits
	U.S. Plan						Non-U.S. Plans
	2014			2013			2014			2013			2014			2013			2014			2013
Change in benefit obligation:
Benefit obligation at beginning of year	$	519,552		$	603,905		$	299,284		$	284,798		$	133,056		$	180,408		$	14,136		$	14,571
Benefits earned during the year	13,801			17,123			6,027			6,043			3,320			5,634			249			234
Interest cost	25,204			24,801			8,222			9,081			6,148			6,741			627			523
Plan participants' contributions	—			—			1,732			1,583			—			—			476			448
Benefits paid	(17,957		)	(35,266		)	(5,452		)	(11,237		)	(13,939		)	(20,686		)	(1,222		)	(1,163		)
Actuarial (gain) loss	84,314			(76,605		)	40,962			6,501			11,088			(34,831		)	(556		)	(618		)
Business dispositions	—			—			(60,164		)	—			(3,137		)	—			—			—
Amendments	—			1,913			—			—			1,463			3,004			—			65
Settlements and curtailments	(49,338		)	(16,818		)	(390		)	(3,036		)	—			(7,228		)	—			—
Currency translation and other	—			499			(25,198		)	5,551			—			14			233			76
Benefit obligation at end of year	575,576			519,552			265,023			299,284			137,999			133,056			13,943			14,136
Change in plan assets:
Fair value of plan assets at beginning of year	595,143			554,648			203,681			181,416			—			—			—			—
Actual return on plan assets	73,528			66,761			14,868			17,356			—			—			—			—
Company contributions	—			9,000			9,547			11,359			13,939			20,686			746			715
Plan participants' contributions	—			—			1,732			1,583			—			—			476			448
Benefits paid	(17,957		)	(35,266		)	(5,452		)	(11,237		)	(13,939		)	(20,686		)	(1,222		)	(1,163		)
Business dispositions	—			—			(46,334		)	—			—			—			—			—
Settlements and curtailments	(49,338		)	—			(390		)	—			—			—			—			—
Currency translation	—			—			(14,142		)	3,204			—			—			—			—
Fair value of plan assets at end of year	601,376			595,143			163,510			203,681			—			—			—			—
Funded status	$	25,800		$	75,591		$	(101,513	)	$	(95,603	)	$	(137,999	)	$	(133,056	)	$	(13,943	)	$	(14,136	)
Amounts recognized in the balance sheets consist of:
Assets and Liabilities:
Other assets and deferred charges	$	25,800		$	75,591		$	152		$	2,976		$	—		$	—		$	—		$	—
Accrued compensation and employee benefits	—			—			(1,575		)	(1,970		)	(21,978		)	(10,161		)	(926		)	(971		)
Other liabilities (deferred compensation)	—			—			(100,090		)	(96,609		)	(116,021		)	(122,895		)	(13,017		)	(13,165		)
Total Assets and Liabilities	$	25,800		$	75,591		$	(101,513	)	$	(95,603	)	$	(137,999	)	$	(133,056	)	$	(13,943	)	$	(14,136	)
Accumulated Other Comprehensive Loss (Earnings):
Net actuarial losses (gains)	$	119,919		$	86,108		$	61,813		$	38,596		$	(746	)	$	(12,520	)	$	192		$	799
Prior service cost (credit)	3,388			4,471			1,058			1,146			31,381			38,646			(615		)	(1,024		)
Net asset at transition, other	—			—			(48		)	(48		)	—			—			—			—
Deferred taxes	(43,158		)	(31,703		)	(15,312		)	(9,965		)	(10,725		)	(9,145		)	90			20
Total Accumulated Other Comprehensive Loss (Earnings), net of tax	80,149			58,876			47,511			29,729			19,910			16,981			(333		)	(205		)
Net amount recognized at December 31,	$	105,949		$	134,467		$	(54,002	)	$	(65,874	)	$	(118,089	)	$	(116,075	)	$	(14,276	)	$	(14,341	)
Accumulated benefit obligations	$	537,393		$	482,181		$	246,814		$	280,763		$	123,229		$	93,153

The Company’s net unfunded status at December 31, 2014 and 2013 includes net liabilities of $101,513 and $95,603, respectively, relating to the Company’s significant international plans, some in locations where it is not economically advantageous to pre-fund the plans due to local regulations. The majority of the international obligations relate to defined pension plans operated by the Company’s businesses in Germany, the United Kingdom, and Switzerland.

The accumulated benefit obligation for all defined benefit pension plans was $907,436 and $856,097 at December 31, 2014 and 2013, respectively.   Pension plans with accumulated benefit obligations in excess of plan assets consist of the following at December 31, 2014 and 2013:

	2014		2013
Projected benefit obligation (PBO)	$	372,931	$	369,289
Accumulated benefit obligation (ABO)	342,158		336,095
Fair value of plan assets	133,930		137,654

Net Periodic Benefit Cost

Components of the net periodic benefit cost were as follows: 

Defined Benefit Plans

	Qualified Defined Benefits																		Non-Qualified Supplemental Benefits
	U.S. Plan									Non-U.S. Plans (1)
	2014			2013			2012			2014			2013			2012			2014			2013			2012
Service cost	$	13,801		$	17,123		$	14,406		$	6,027		$	6,043		$	5,712		$	3,320		$	5,634		$	5,304
Interest cost	25,204			24,801			25,136			8,222			9,081			10,044			6,148			6,741			7,916
Expected return on plan assets	(41,594		)	(40,194		)	(38,978		)	(8,498		)	(9,608		)	(8,765		)	—			—			—
Amortization of:
Prior service cost	1,083			1,026			1,048			107			114			117			7,775			8,110			7,425
Recognized actuarial loss (gain)	8,289			17,654			13,515			903			1,492			579			(428		)	(16		)	138
Transition obligation	—			—			—			4			(14		)	(47		)	—			—			—
Settlement & curtailment (gain) loss (2)	10,279			187			—			(45		)	697			1,449			—			(4,411		)	—
Other	—			501			—			6			5			—			—			13			—
Total net periodic benefit cost	$	17,062		$	21,098		$	15,127		$	6,726		$	7,810		$	9,089		$	16,815		$	16,071		$	20,783

(1) Net periodic benefit cost for non-U.S. plans includes $55, $1,220, and $1,231 of expense for the years ended December 31, 2014, 2013, and 2012, respectively, relating to plans sponsored by Knowles that were distributed as part of the separation on February 28, 2014.

(2) $6,675 of the 2014 settlement loss on the U.S. Plan is attributable to Knowles participants in the Dover Defined Benefit Plan and has therefore, been reflected in the results of discontinued operations. The remaining $3,604 of this settlement loss has been reflected in the results of continuing operations. The curtailment gain of $4,411 was recognized in continuing operations in 2013 in connection with the freeze of the non-qualified supplemental benefit plan.

Post-Retirement Benefits

	2014			2013			2012
Service cost	$	249		$	234		$	248
Interest cost	627			523			593
Amortization of:
Prior service credit	(409		)	(416		)	(416		)
Recognized actuarial loss (gain)	54			134			(19		)
Settlement & curtailment gain	—			—			(1,493		)
Other	233			77			—
Total net periodic benefit cost	$	754		$	552		$	(1,087	)

Amounts expected to be amortized from Accumulated Other Comprehensive Earnings (Loss) into net periodic benefit cost during 2015 are as follows:

	Qualified Defined Benefits				Non-Qualified Supplemental Benefits		Post-Retirement Benefits
	U.S. Plan		Non-U.S. Plans
Amortization of:
Prior service cost (credit)	$	976	$	95	$	6,927	$	(372	)
Recognized actuarial loss (gain)	12,846		2,784		286		(30		)
Transition obligation	—		5		—		—
Total	$	13,822	$	2,884	$	7,213	$	(402	)

Assumptions

The Company determines actuarial assumptions on an annual basis.

The weighted-average assumptions used in determining the benefit obligations were as follows: 

	Qualified Defined Benefits								Non-Qualified Supplemental Benefits				Post-Retirement Benefits
	U.S. Plan				Non-U.S. Plans
	2014		2013		2014		2013		2014		2013		2014		2013
Discount rate	4.05	%	4.90	%	2.31	%	3.53	%	3.96	%	4.77	%	3.75	%	4.45	%
Average wage increase	4.00	%	4.00	%	2.50	%	2.86	%	4.50	%	4.50	%	na		na
Ultimate medical trend rate	na		na		na		na		na		na		5.00	%	5.00	%

The weighted average assumptions used in determining the net periodic cost were as follows:

	Qualified Defined Benefits												Non- Qualified Supplemental Benefits						Post-Retirement Benefits
	U.S. Plan						Non-U.S. Plans
	2014		2013		2012		2014		2013		2012		2014		2013		2012		2014		2013		2012
Discount rate	4.90	%	4.05	%	4.85	%	3.53	%	3.31	%	4.62	%	4.77	%	4.02	%	4.77	%	4.45	%	3.65	%	3.65	%
Average wage increase	4.00	%	4.00	%	4.00	%	2.86	%	2.74	%	3.14	%	4.50	%	4.50	%	4.50	%	na		na		na
Expected return on plan assets	7.75	%	7.75	%	7.75	%	5.35	%	5.32	%	5.90	%	na		na		na		na		na		na

The Company’s discount rate assumption is determined by developing a yield curve based on high quality corporate bonds with maturities matching the plans’ expected benefit payment streams. The plans’ expected cash flows are then discounted by the resulting year-by-year spot rates.

For post-retirement benefit measurement purposes, an 8.0% annual rate of increase in the per capita cost of covered benefits (i.e., health care cost trend rates) was assumed for 2015. The rate was assumed to decrease gradually to 5.0% by the year 2027 and remain at that level thereafter. The health care cost trend rate assumption can have an effect on the amounts reported. For example, increasing (decreasing) the assumed health care cost trend rates by one percentage point in each year would increase (decrease) the accumulated post-retirement benefit obligation as of December 31, 2014 by $234 and $(224), respectively, and would have a negligible impact on the net post-retirement benefit cost for 2014.

Plan Assets

The primary financial objective of the plans is to secure participant retirement benefits.  Accordingly, the key objective in the plans’ financial management is to promote stability and, to the extent appropriate, growth in the funded status.  Related and supporting financial objectives are established in conjunction with a review of current and projected plan financial requirements.

As it relates to the funded defined benefit pension plans, the Company’s funding policy is consistent with the funding requirements of the Employment Retirement Income Security Act ("ERISA") and applicable international laws.  The Company is responsible for overseeing the management of the investments of the plans’ assets and otherwise ensuring that the plans’ investment programs are in compliance with ERISA, other relevant legislation, and related plan documents.  Where relevant, the Company has retained professional investment managers to manage the plans’ assets and implement the investment process. The investment managers, in implementing their investment processes, have the authority and responsibility to select appropriate investments in the asset classes specified by the terms of their applicable prospectus or investment manager agreements with the plans.

The assets of the plans are invested to achieve an appropriate return for the plans consistent with a prudent level of risk. The asset return objective is to achieve, as a minimum over time, the passively managed return earned by market index funds, weighted in the proportions outlined by the asset class exposures identified in the plans’ strategic allocation.  The expected return on assets assumption used for pension expense is developed through analysis of historical market returns, statistical analysis, current market conditions, and the past experience of plan asset investments. Overall, it is projected that the investment of plan assets within Dover’s U.S. defined benefit plan will achieve a 7.75% net return over time from the asset allocation strategy.

The Company’s actual and target weighted-average asset allocation for our U.S. Corporate Pension Plan was as follows:

	2014		2013		Current Target
Equity securities	55	%	64	%	58	%
Fixed income	36	%	29	%	35	%
Real estate and other	9	%	7	%	7	%
Total	100	%	100	%	100	%

While the non-U.S. investment policies are different for each country, the long-term objectives are generally the same as for the U.S. pension assets. The Company's non-U.S. plans were expected to achieve rates of return on invested assets of 5.35% in 2014, 5.32% in 2013, and 5.90% in 2012.

The fair values of both U.S. and non-U.S. pension plan assets by asset category within the ASC 820 hierarchy (as defined in Note 11 Financial Instruments) are as follows at December 31, 2014 and 2013:

	U.S. Plan
	December 31, 2014								December 31, 2013
	Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3		Total Fair Value
Asset category:
Common stocks:
U.S. companies	$	164,006	$	—	$	—	$	164,006	$	180,038	$	—	$	—	$	180,038
Non-U.S. companies	3,874		—		—		3,874		5,526		—		—		5,526
Fixed income investments:
Corporate bonds	—		63,878		—		63,878		—		53,924		—		53,924
Private placements	—		6,865		—		6,865		—		3,374		—		3,374
Government securities	48,370		98,998		—		147,368		25,035		87,107		—		112,142
Common stock funds:
Mutual funds	44,610		—		—		44,610		59,387		—		—		59,387
Collective trusts	—		119,312		—		119,312		—		138,236		—		138,236
Real estate funds	—		37,145		—		37,145		—		33,749		—		33,749
Cash and equivalents	14,318		—		—		14,318		8,767		—		—		8,767
	$	275,178	$	326,198	$	—	$	601,376	$	278,753	$	316,390	$	—	$	595,143

	Non-U.S. Plans
	December 31, 2014								December 31, 2013
	Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3		Total Fair Value
Asset category:
Common stocks	$	40,960	$	—	$	—	$	40,960	$	35,010	$	—	$	—	$	35,010
Fixed income investments	—		59,791		—		59,791		—		75,574		—		75,574
Common stock funds	—		43,821		—		43,821		—		66,285		—		66,285
Real estate funds	—		—		9,976		9,976		—		—		14,937		14,937
Cash and equivalents	1,531		—		—		1,531		6,785		—		—		6,785
Other	—		7,431		—		7,431		—		5,090		—		5,090
	$	42,491	$	111,043	$	9,976	$	163,510	$	41,795	$	146,949	$	14,937	$	203,681

Common stocks represent investments in domestic and foreign equities which are publicly traded on active exchanges and are valued based on quoted market prices.

Fixed income investments include U.S. treasury bonds and notes, which are valued based on quoted market prices, as well as investments in other government and municipal securities and corporate bonds, which are valued based on yields currently available on comparable securities of issuers with similar credit ratings.

Common stock funds consist of mutual funds and collective trusts. Mutual funds are valued by obtaining quoted prices from nationally recognized securities exchanges. Collective trusts are valued using Net Asset Value (the "NAV") as of the last business day of the year. The NAV is based on the underlying value of the assets owned by the fund minus its liabilities, and then divided by the number of shares outstanding. The value of the underlying assets is based on quoted prices in active markets.

The real estate funds are valued on an annual basis using third-party appraisals, with adjustments estimated on a quarterly basis using discounted cash flow models which consider such inputs as revenue and expense growth rates, terminal capitalization rates, and discount rates. The Company believes this is an appropriate methodology to obtain the fair value of these assets.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  Furthermore, while the Company believes its 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.

The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2013 and 2014 due to the following:

	Real estate funds			Other			Total
Balance at December 31, 2012	$	10,116		$	1,456		$	11,572
Actual return on plan assets:
Relating to assets still held at December 31, 2013	2,958			—			2,958
Purchases	1,863			—			1,863
Sales	—			(1,456		)	(1,456		)
Balance at December 31, 2013	14,937			—			14,937
Actual return on plan assets:
Relating to assets still held at December 31, 2014	(4,527		)	—			(4,527		)
Business dispositions	(362		)	—			(362		)
Sales	(72		)	—			(72		)
Balance at December 31, 2014	$	9,976		$	—		$	9,976

 There were no significant transfers between Level 1 and Level 2 investments during 2014 or 2013.

Future Estimates

Benefit Payments

Estimated future benefit payments to retirees, which reflect expected future service, are as follows: 

	Qualified Defined Benefits				Non-Qualified Supplemental Benefits		Post-Retirement Benefits
	U.S. Plan		Non-U.S. Plans
2015	$	35,312	$	6,295	$	22,412	$	926
2016	36,702		6,841		7,968		940
2017	38,784		6,889		3,986		951
2018	40,120		7,196		5,206		959
2019	40,892		7,139		11,282		946
2020 - 2024	221,358		42,775		55,417		4,647

Contributions

In 2015, the Company expects to contribute approximately $6.5 million to its non-U.S. plans and none to its U.S. plans. Additionally, in 2015, the Company expects to fund benefit payments of approximately $22.4 million to plan participants of its unfunded, non-qualified, supplemental benefit plans.

Multiemployer Pension Plans

The Company, through its subsidiaries, participates in a few multiemployer pension plans covering approximately 100 employees working under U.S. collective bargaining agreements. None of these plans are considered individually significant to the Company.  Contributions to multiemployer plans totaled less than $2.0 million in each of the last three years.