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PENSION AND POSTRETIREMENT PLANS
 6 Months Ended
Jun. 30, 2016
PENSION AND POSTRETIREMENT PLANS  
PENSION AND POSTRETIREMENT PLANS

13. PENSION AND POSTRETIREMENT PLANS

 

The company has a non-contributory qualified defined benefit pension plan covering the majority of its U.S. employees. The company also has U.S. non-contributory non-qualified defined benefit plans, which provide for benefits to employees in excess of limits permitted under its U.S. pension plans. Various international subsidiaries also have defined benefit pension plans. The company provides postretirement health care benefits to certain U.S. employees and retirees.

 

The components of net periodic pension and postretirement health care benefit costs for the second quarter ended June 30 are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

International

 

U.S. Postretirement

 

 

 

Pension

 

Pension

 

Health Care

 

(millions)

    

2016

 

2015

    

2016

 

2015

    

2016

 

2015

 

Service cost

 

 
$
16.8

 

 

 
$
19.1

 

 
$
7.0

 

 

 
$
8.2

 

 
$
0.8

 

 

 
$
1.0

 

Interest cost on benefit obligation

 

 
20.4

 

 

 
22.8

 

 
8.1

 

 

 
9.9

 

 
2.0

 

 

 
2.4

 

Expected return on plan assets

 

 
(35.9)

 

 

 
(33.1)

 

 
(13.5)

 

 

 
(13.7)

 

 
(0.2)

 

 

 
(0.3)

 

Recognition of net actuarial (gain) loss

 

 
7.7

 

 

 
12.2

 

 
3.6

 

 

 
3.8

 

 
(0.4)

 

 

 
(1.5)

 

Amortization of prior service cost (benefit)

 

 
(1.7)

 

 

 
(1.8)

 

 
(0.2)

 

 

 
(0.1)

 

 
(0.1)

 

 

 
(0.1)

 

Total expense

 

 
$
7.3

 

 

 
$
19.2

 

 
$
5.0

 

 

 
$
8.1

 

 
$
2.1

 

 

 
$
1.5

 

 

The components of net periodic pension and postretirement health care benefit costs for the six months ended June 30 are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

International

 

U.S. Postretirement

 

 

 

Pension

 

Pension

 

Health Care

 

(millions)

    

2016

 

2015

    

2016

 

2015

    

2016

 

2015

 

Service cost

 

 
$
33.5

 

 

 
$
38.2

 

 
$
13.9

 

 

 
$
16.7

 

 
$
1.5

 

 

 
$
1.9

 

Interest cost on benefit obligation

 

 
40.8

 

 

 
45.6

 

 
16.2

 

 

 
20.2

 

 
4.1

 

 

 
4.8

 

Expected return on plan assets

 

 
(71.8)

 

 

 
(66.3)

 

 
(27.0)

 

 

 
(27.8)

 

 
(0.4)

 

 

 
(0.5)

 

Recognition of net actuarial (gain) loss

 

 
15.4

 

 

 
24.3

 

 
7.2

 

 

 
7.8

 

 
(0.8)

 

 

 
(3.1)

 

Amortization of prior service cost (benefit)

 

 
(3.5)

 

 

 
(3.5)

 

 
(0.4)

 

 

 
(0.1)

 

 
(0.1)

 

 

 
(0.1)

 

Total expense

 

 
$
14.4

 

 

 
$
38.3

 

 
$
9.9

 

 

 
$
16.8

 

 
$
4.3

 

 

 
$
3.0

 

 

As of June 30, 2016, the company is in compliance with all funding requirements of its U.S. pension and postretirement health care plans. In April of 2016, the company made a $150 million voluntary contribution to its non-contributory qualified U.S. pension plan. During the first six months of 2016, the company made payments of $8 million to its U.S. non-contributory non-qualified defined benefit plans and estimates that it will make payments of approximately an additional $6 million to such plans during the remainder of 2016.

 

The company contributed $25 million to its international pension benefit plans during the first six months of 2016. The company estimates that it will contribute approximately an additional $17 million to the international pension benefit plans during the remainder of 2016.

 

During the first six months of 2016, the company made payments of $9 million to its U.S. postretirement health care benefit plans and estimates that it will make payments of approximately an additional $9 million to such plans during the remainder of 2016.