PENSION AND OTHER POST-RETIREMENT PLANS (Tables)

12 Months Ended

Dec. 31, 2017

PENSION AND OTHER POST-RETIREMENT PLANS

Schedule of the Company's target and actual asset allocations


Asset Categories	Target		2017		2016
Domestic equity securities	53	%	59	%	62	%
International equity securities	15	%	17	%	13	%
Debt securities	22	%	17	%	17	%
Real estate	5	%	6	%	6	%
Other and cash	5	%	1	%	2	%
Total	100	%	100	%	100	%

Schedule of the Company's actual return on plan assets


Actual Return on Plan Assets	Returns
One-year return	14.6	%
Three-year return	6.7	%
Five-year return	9.3	%
Long-term average return (since plan inception in 1989)	8.5	%

Schedule of the fair values of the Company's pension plan assets, by asset category

The fair values of the Company’s pension plan assets at December 31, 2017 and 2016 by asset category, were as follows:


	Fair Value Measurements at December 31, 2017
			Quoted Prices in		Significant		Significant
			Active Markets		Observable		Unobservable
Asset Category (in millions)	Total		(Level 1)		Inputs (Level 2)		Inputs (Level 3)
Cash	$	6.6	$	6.6	$	—	$	—
Equity securities:
U.S. large-cap		66.0		28.1		37.9		—
U.S. mid- and small-cap		42.6		28.3		14.3		—
International large-cap		21.6		—		21.6		—
International small-cap		9.5		—		9.5		—
Fixed income securities:
U.S. Treasuries		8.0		—		8.0		—
Municipal bonds		0.1		—		0.1		—
Investment grade U.S. corporate bonds		17.5		—		17.5		—
High-yield U.S. corporate bonds		3.6		—		3.6		—
Emerging markets fixed income		—		—		—		—
Other types of investments:
Real estate partnership interests		11.1		—		—		11.1
Private equity partnership interests		0.1		—		—		0.1
Total	$	186.7	$	63.0	$	112.5	$	11.2


	Fair Value Measurements at December 31, 2016
			Quoted Prices in		Significant		Significant
			Active Markets		Observable		Unobservable
Asset Category (in millions)	Total		(Level 1)		Inputs (Level 2)		Inputs (Level 3)
Cash	$	7.8	$	7.8	$	—	$	—
Equity securities:
U.S. large-cap		67.1		31.6		35.5		—
U.S. mid- and small-cap		38.9		31.7		7.2		—
International large-cap		16.9		—		16.9		—
International small-cap		6.9		—		6.9		—
Fixed income securities:
U.S. Treasuries		8.9		—		8.9		—
Municipal bonds		9.3		—		9.3		—
Investment grade U.S. corporate bonds		5.3		—		5.3		—
High-yield U.S. corporate bonds		6.3		—		6.3		—
Emerging markets fixed income		0.5		0.5		—		—
Other types of investments:
Real estate partnership interests		10.8		—		—		10.8
Private equity partnership interests		0.1		—		—		0.1
Total	$	178.8	$	71.6	$	96.3	$	10.9

Reconciliation of all pension plan fair value measurements using significant unobservable inputs (level 3)

The table below presents a reconciliation of all pension plan investments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2017 and 2016:


	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
(In millions)	Real Estate		Private Equity		Total
Balance at December 31, 2015	$	10.3	$	0.2	$	10.5
Actual return (loss) on plan assets:
Assets held at the reporting date		0.6		(0.1)		0.5
Assets sold during the period		0.5		0.1		0.6
Purchases, sales and settlements, net		(0.6)		(0.1)		(0.7)
Balance at December 31, 2016		10.8		0.1		10.9
Actual return (loss) on plan assets:
Assets held at the reporting date		0.3		0.1		0.4
Assets sold during the period		0.5		(0.1)		0.4
Purchases, sales and settlements, net		(0.5)		—		(0.5)
Balance at December 31, 2017	$	11.1	$	0.1	$	11.2

Schedule of change in benefit obligation and plan assets

The status of the funded qualified defined benefit pension plans and the unfunded post-retirement benefit plans at December 31, 2017 and 2016 are shown below:


					Post-retirement
	Pension Benefits				Benefits
	December 31,				December 31,
(In millions)	2017		2016		2017		2016
Change in Benefit Obligation:
Benefit obligation at beginning of year	$	225.4	$	220.2	$	25.2	$	60.5
Service cost		4.0		3.9		0.5		1.5
Interest cost		9.7		9.7		1.1		2.7
Plan amendments		—		—		—		(38.4)
Plan participants’ contributions		—		—		1.1		1.0
Plan settlements		(0.3)		—		—		—
Actuarial losses		13.9		4.2		1.9		1.9
Benefits paid, net of subsidies received		(18.9)		(11.1)		(2.1)		(4.0)
Expenses paid		(1.7)		(1.5)		—		—
Benefit obligation at end of year		232.1		225.4		27.7		25.2

Change in Plan Assets:
Fair value of plan assets at beginning of year		178.8		168.9		—		—
Actual return on plan assets		25.8		15.0		—		—
Plan participants’ contributions		—		—		1.1		1.0
Plan settlements		(0.3)		—		—		—
Employer contributions		3.0		7.5		1.0		3.0
Benefits paid, net of subsidies received		(18.9)		(11.1)		(2.1)		(4.0)
Expenses paid		(1.7)		(1.5)		—		—
Fair value of plan assets at end of year		186.7		178.8		—		—
Funded Status and Recognized Liability	$	(45.4)	$	(46.6)	$	(27.7)	$	(25.2)

Schedule of amounts recognized on the consolidated balance sheets and in accumulated other comprehensive loss

Qualified pension and post-retirement benefits plans liabilities recognized in the Consolidated Balance Sheets and expenses recognized in accumulated other comprehensive income (loss) at December 31, 2017 and 2016 were as follows:


					Post-retirement
	Pension Benefits				Benefits
	December 31,				December 31,
(In millions)	2017		2016		2017		2016
Non-current assets	$	0.5	$	1.0	$	—	$	—
Current liabilities		—		—		(1.2)		(1.1)
Non-current liabilities, net		(45.9)		(47.6)		(26.5)		(24.1)
Total	$	(45.4)	$	(46.6)	$	(27.7)	$	(25.2)

Net loss, net of taxes	$	(46.9)	$	(49.1)	$	(4.6)	$	(4.4)
Prior service credit, net of taxes		6.3		7.7		20.2		22.5
Total	$	(40.6)	$	(41.4)	$	15.6	$	18.1

Schedule of information for qualified pension plans with an accumulated benefit obligation in excess of plan assets

The information for qualified defined benefit pension plans with an accumulated benefit obligation in excess of plan assets at December 31, 2017 and 2016 is shown below:


(In millions)	2017		2016
Projected benefit obligation	$	229.9	$	223.2
Accumulated benefit obligation	$	229.6	$	222.9
Fair value of plan assets	$	184.7	$	175.9

Schedule of components of the net periodic benefit cost and other changes in plan assets and benefit obligations recognized in other comprehensive income

Components of the net periodic benefit cost and other amounts recognized in other comprehensive income (loss) for the qualified pension plans and the post-retirement benefit plans during 2017, 2016, and 2015 were as follows:


	Pension Benefits						Post-retirement Benefits
	December 31,						December 31,
(In millions)	2017		2016		2015		2017		2016		2015
Components of Net Periodic Benefit Cost (Benefit):
Service cost	$	4.0	$	3.9	$	3.3	$	0.5	$	1.5	$	1.5
Interest cost		9.7		9.7		9.5		1.1		2.7		2.5
Expected return on plan assets		(13.5)		(13.4)		(14.0)		—		—		—
Amortization of net loss		5.1		5.5		6.4		1.2		1.2		2.2
Amortization of prior service credit		(2.3)		(2.3)		(2.3)		(3.8)		(1.4)		—
Net periodic benefit cost	$	3.0	$	3.4	$	2.9	$	(1.0)	$	4.0	$	6.2

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income, net of tax:
Net loss (gain)	$	0.8	$	1.6	$	(1.0)	$	1.1	$	1.2	$	(1.9)
New prior service cost (credit)		—		—		0.1		—		(23.4)		—
Amortization of net loss		(3.1)		(3.3)		(3.9)		(0.7)		(0.8)		(1.3)
Amortization of prior service credit		1.4		1.4		1.4		2.3		0.9		—
Total recognized in other comprehensive (income) loss	$	(0.9)	$	(0.3)	$	(3.4)	$	2.7	$	(22.1)	$	(3.2)
Total recognized in net periodic benefit cost and other comprehensive (income) loss	$	2.1	$	3.1	$	(0.5)	$	1.7	$	(18.1)	$	3.0

Schedule of weighted average assumptions used to determine benefit information


	Pension Benefits						Post-retirement Benefits
	December 31,						December 31,
	2017		2016		2015		2017		2016		2015
Discount rate (1)	3.80	%	4.40	%	4.50	%	3.90	%	4.60	%	4.60	%
Expected return on plan assets	7.75	%	8.00	%	8.00	%
Rate of compensation increase	3.00	%	3.00	%	3.00	%	3.00	%	3.00	%	3.00	%
Initial health care cost trend rate:
Pre-65 group							6.30	%	6.60	%	6.80	%
Post-65 group							6.80	%	7.20	%	7.60	%
Ultimate health care cost trend rate							4.40	%	4.40	%	4.40	%
Year ultimate health care cost trend rate is reached:
Pre-65 group							2037		2037		2037
Post-65 group							2036		2036		2036

(1)

The Company derives a single equivalent rate utilizing a yield curve constructed from a portfolio of high-quality corporate bonds with various maturities.

Schedule of effect of one percentage point increase or decrease in other post-retirement benefits


	Post-retirement Benefits
	One Percentage Point
	Increase						Decrease
(In millions)	2017		2016		2015		2017		2016		2015
Effect on total of service cost and interest cost components	$	0.3	$	0.9	$	0.9	$	(0.2)	$	(0.7)	$	(0.7)
Effect on post-retirement benefit obligation	$	4.0	$	11.5	$	9.4	$	(3.0)	$	(8.3)	$	(7.4)

Schedule of amounts recognized on balance sheet and accumulated comprehensive income

Non-qualified pension plan liabilities recognized in the Consolidated Balance Sheets and expenses recognized in accumulated other comprehensive income (loss) at December 31, 2017 and 2016 are as follows (in millions):


	Non-qualified
	Pension Benefits
	December 31,
(In millions)	2017		2016
Current liabilities	$	(1.8)	$	(1.0)
Non-current liabilities, net		(2.7)		(3.3)
Total	$	(4.5)	$	(4.3)

Net loss, net of taxes	$	(0.6)	$	(0.8)
Prior service credit, net of taxes		0.3		0.4
Total	$	(0.3)	$	(0.4)

Schedule of estimated benefit payments

The estimated future benefit payments for the next ten years were as follows:



			Non-qualified
	Pension		Pension		Post-retirement
Year (in millions)	Benefits		Benefits		Benefits (1)
2018	$	12.7	$	1.8	$	1.2
2019		13.0		0.2		1.2
2020		13.4		0.5		1.2
2021		13.7		—		1.2
2022		14.0		0.3		1.2
2023-2027		73.3		2.5		7.0
Total	$	140.1	$	5.3	$	13.0

(1)

Net of plan participants’ contributions and Medicare Part D subsidies.

Schedule of information regarding the entity's participation in the multi-employer pension plans

Pension

Protection Act

Zone as of

FIP/RP Status

Contributions of Matson

EIN/Pension

December 31,

Pending/

(In millions)

Surcharge

Expiration

Pension Funds

Plan Number

Notes

2017

2016

Implemented

Contributor

2017

2016

2015

Imposed

Date (5)

American Radio Association Pension Fund

13-6161999-001

Green

Yellow

Implemented

Yes

1.0

—

8/15/2021

Hawaii Terminals Multiemployer Pension Plan

20-0389370-001

Yellow

Implemented

Yes

5.7

5.3

4.9

6/30/2019

Hawaii Stevedoring Multiemployer Retirement Plan

99-0314293-001

Yellow

Implemented

Yes

3.8

3.5

2.8

6/30/2019

Master, Mates and Pilots Pension Plan

13-6372630-001

Green

Yes

3.0

3.1

2.2

6/15/2023,

6/15/2027

Masters, Mates and Pilots Adjustable Pension Plan

37-1719247-001

(1)

Yes

1.7

1.8

1.7

6/15/2023,

6/15/2027

MEBA Pension Trust - Defined Benefit Plan

51-6029896-001

(2)

Green

Yes

4.4

4.1

3.2

8/15/2018,

6/15/2022

OCU Trust Pension Plan

26-1574440-001

Green

0.2

0.1

6/30/2023

MFOW Supplementary Pension Plan

94-6201677-001

Green

Yes

—

6/30/2021

SIU Pacific District Pension Plan

94-6061923-001

Green

Yes

0.7

0.6

—

6/30/2021

Alaska Teamster - Employer Pension Plan

92-6003463-024

(3)

Red

Implemented

Yes

2.4

2.6

1.5

Yes

6/30/2018,

6/30/2019,

6/30/2020

All Alaska Longshore Pension Plan

91-6085352-001

(3)

Green

Yes

0.1

0.5

6/30/2020

Western Conference of Teamsters Pension Plan

91-6145047-001

(3)

Green

1.3

0.8

3/31/2018

Western Conference of Teamsters Supplemental Benefit Trust

95-3746907-001

(3)

Green

—

3/31/2018

OPEIU Local 153 Pension Plan

13-2864289-001

(3)

Red

Implemented

0.1

11/09/2020

Seafarers Pension Trust

13-6100329-001

(3) (4)

Green

—

6/30/2022

Total

24.4

22.7

17.8

(1)

The Plan is not subject to the PPA funding requirements under IRS Section 432 as the Plan was not in effect on July 16, 2006.

(2)

In 2012, the Company agreed to contribute at least 11.7 percent of total wages paid to employees in covered Marine Engineer Benefits Association (“MEBA”) employment to the MEBA Pension Trust by a reallocation of the total labor cost under the collective bargaining agreement. The pension contribution rate was determined by the plan’s actuary to be necessary to maintain full funding of the pension plan and is fully offset by a reallocation of wages and other benefits.

(3)

Matson's contributions to these plans commenced after the Horizon Acquisition on May 29, 2015.

(4)

The Company does not make contributions directly to the Seafarers Pension Plan. Instead, contributions are made to the Seafarers Health and Benefits Plan, and are subsequently re-allocated to the Seafarers Pension Plan at the discretion of the plan Trustee.

(5)

Represents the expiration date of the collective bargaining agreement.