PENSION AND POSTRETIREMENT PLANS

6 Months Ended

Jun. 30, 2020

PENSION AND POSTRETIREMENT PLANS

PENSION AND POSTRETIREMENT PLANS

14. 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)	2020		2019		2020		2019		2020		2019
Service cost (a)		$17.1		$18.2		$7.7		$7.5		$0.3		$0.3
Interest cost on benefit obligation		17.5		22.3		5.3		7.9		1.1		1.4
Expected return on plan assets		(38.2)		(37.4)		(15.4)		(15.2)		(0.1)		(0.1)
Recognition of net actuarial loss (gain)		13.0		5.9		6.3		4.2		-		(1.0)
Amortization of prior service benefit		(1.8)		(2.9)		-		(0.2)		(2.8)		(5.8)
Total expense (benefit)		$7.6		$6.1		$3.9		$4.2		$(1.5)		$(5.2)

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)	2020		2019		2020		2019		2020		2019
Service cost (a)		$34.2		$36.4		$15.3		$15.2		$0.6		$0.7
Interest cost on benefit obligation		35.0		44.5		10.6		15.8		2.1		2.8
Expected return on plan assets		(76.4)		(74.8)		(31.0)		(30.4)		(0.2)		(0.2)
Recognition of net actuarial (gain) loss		26.0		11.8		-		8.2		0.1		(2.0)
Amortization of prior service benefit		(3.8)		(5.7)		12.6		(0.5)		(5.5)		(11.6)
Total expense (benefit)		$15.0		$12.2		$7.5		$8.3		$(2.9)		$(10.3)

(a) Service cost includes discontinued operations of $1.0 million and $1.5 million in the second quarter of 2020 and 2019, respectively, and $2.5 million and $3.1 million for the first six months of 2020 and 2019, respectively.

Service cost is included with employee compensation cost within either cost of sales or selling, general and administrative expenses in the Consolidated Statement of Income based on employee roles, while non-service components are included in other (income) expense in the Consolidated Statement of Income.

As of June 30, 2020, the Company is in compliance with all funding requirements of its U.S. pension, International pension and U.S. postretirement health care plans.

During the first six months of 2020, the Company made contributions of $5 million to its U.S. non-contributory non-qualified defined benefit plans and estimates it will contribute an additional $7 million to such plans during the remainder of 2020.

During the first six months of 2020, the Company made contributions of $23 million to its international pension benefit plans and estimates it will contribute an additional $20 million to such plans during the remainder of 2020.

During the first six months of 2020, the Company made contributions of $6 million to its U.S. postretirement health care benefit plans and estimates it will contribute an additional $6 million to such plans during the remainder of 2020.