Prior to May 2019, we provided non-contributory retirement benefits under both funded and unfunded plans to all U.S. employees and to certain non-U.S. employees in Germany. As discussed in more detail below, we terminated our qualified pension plan effective June 30, 2019 and replaced the benefits with an enhanced 401(k) defined contribution plan. Participation and benefits under the plans are based upon the employees’ date of hire. U.S. benefits accrued under the terminated pension plan was based on a final average pay formula or cash balance formula for salaried employees.

We froze qualified pension plan benefits as of May 31, 2019 and terminated the plan June 30, 2019. During 2019, all plan liabilities were settled by either a lump sum distribution or assumed by a third-party in exchange for a transfer of assets from the pension plan trust fund. After giving effect to these transactions, we recorded a $309.5 million reduction in both the projected benefit obligation and the plan assets. In addition, in accordance with pension plan settlement accounting, we recorded a $75.3 million settlement charge reflecting the recognition of amounts previously included in accumulated other comprehensive income.

As of December 31, 2019, $53.4 million of assets remain in the pension trust and is included in cash and cash equivalents in the accompanying consolidated balance sheet based on the nature of the underlying assets. In 2020, after a portion of the assets are transferred to a trust fund to be used to make contributions over the next seven years to the 401(k) plan and satisfying excise tax obligations, approximately $32 million is expected to revert to us and will be available for general corporate purposes.

In December 2019, our Board of Directors approved the freezing of benefit accruals in the non-qualified pension plan for active participants effective December 31, 2019. As of January 1, 2020, each active participant’s frozen non-qualified pension benefit will be transferred to a newly approved Deferred Compensation Plan non-qualified benefit plan and will earn interest credits going forward.

The Deferred Compensation Plan also provides for employer contributions and, in the future, the Plan may provide for elective employee deferrals. Under the Deferred Compensation Plan, participants will be eligible to receive annual Company contributions that such participants would have received under the P. H. Glatfelter 401(k) Savings Plan but for certain limitations imposed by the Internal Revenue Code on 401(k) plan contributions (“Company Contributions”). Unless otherwise determined by the Compensation Committee, Company Contributions under the Deferred Compensation Plan will not exceed 7% of a participant’s annual eligible compensation that is in excess of the Internal Revenue Code compensation limit for 401(k) plans.

As of December 31, 2019, the remaining non-contributory pension plans are unfunded non-qualified plans.

Non-U.S. benefits are based, in the case of certain plans, on average salary and years of service and, in the case of other plans, on a fixed amount for each year of service. U.S. plan provisions and funding meet the requirements of the Employee Retirement Income Security Act of 1974. We use a December 31-measurement date for all of our defined benefit plans.

We also provide certain health care benefits to eligible U.S.-based retired employees. Participation in the plan is closed to any salaried employees hired after December 31, 2006. These benefits include a comprehensive medical plan for retirees prior to age 65 and a fixed payment to certain retirees over age 65 to help defray the costs of Medicare. Claims are paid as reported.

In connection with the sale of the Specialty Papers business, the buyer assumed $210 million of pension liabilities for all employees active as of October 31, 2018, and we agreed to transfer pension assets of approximately $274 million. In addition, the buyers assumed $38 million of retiree healthcare liabilities related to employees active as of the October 31, 2018. We retained the pension retiree healthcare liabilities for all retired and deferred vested Specialty Paper employees.

All information presented in the following tables represents amounts attributable to continuing operations and all prior year data has been restated.

	Pension Benefits						Other Benefits
In millions	2019			2018			2019			2018
Change in Benefit Obligation
Balance at beginning of year	$	332.2		$	347.0		$	9.2		$	9.7
Service cost		1.3			2.3			—			0.1
Interest cost		11.5			13.3			0.3			0.5
Plan amendments		(0.2	)		0.1			—			—
Participant contributions		—			—			0.9			1.2
Transfers from Discontinued Operations		4.3			25.7			—			4.3
Actuarial (gain)/loss		29.2			(10.6	)		(0.3	)		(3.1	)
Special termination benefits		1.3			—			—			—
Benefits paid		(22.3	)		(45.1	)		(3.0	)		(3.5	)
Curtailment		(1.9	)		—			(0.6	)		—
Settlement/transfer		(309.5	)		—			—			—
Effect of currency rate changes		(0.2	)		(0.5	)		—			—
Balance at end of year	$	45.7		$	332.2		$	6.5		$	9.2

Change in Plan Assets
Fair value of plan assets at beginning of year	$	333.2		$	372.8		$	—		$	—
Actual return on plan assets		44.1			(22.4	)		—			—
Total contributions		2.2			2.2			3.0			3.5
Transfers from Discontinued Operations		5.7			25.7			—			—
Benefits paid		(22.3	)		(45.1	)		(3.0	)		(3.5	)
Settlement/transfer		(309.5	)		—			—			—
Fair value of plan assets at end of year		53.4			333.2			—			—
Funded status at end of year	$	7.7		$	1.0		$	(6.5	)	$	(9.2	)

Amounts presented under the caption “transfers from discontinued operations” represent the impact of employees changing their status from what was originally assumed for purposes of accounting for discontinued operations to the final determination in accordance with the sale agreement.

The fair value of plan assets presented above consist entirely of the amounts discussed above and remaining in the qualified plan trust account. The non-qualified plans have an unfunded projected benefit obligation of $45.7 million.

Amounts recognized in the consolidated balance sheets consist of the following as of December 31:

	Pension Benefits						Other Benefits
In millions	2019			2018			2019			2018
Cash and cash equivalents	$	53.4		$	—		$	—		$	—
Other assets		—			43.3			—			—
Current liabilities		(2.3	)		(2.1	)		(1.4	)		(2.4	)
Other long-term liabilities		(43.4	)		(40.2	)		(5.1	)		(6.8	)
Net amount recognized	$	7.7		$	1.0		$	(6.5	)	$	(9.2	)

The components of amounts recognized as “Accumulated other comprehensive income” consist of the following on a pre-tax basis:

The accumulated benefit obligation for all defined benefit pension plans was $45.7 million and $324.0 million at December 31, 2019 and 2018, respectively.

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

The discount rates set forth above were estimated based on the modeling of expected cash flows for each of our benefit plans and selecting a portfolio of high-quality debt instruments with maturities matching the respective cash flows of each plan. The resulting discount rates as of December 31, 2019 ranged from 1.22% to 3.25% for pension plans and from 2.93% to 3.25% for other benefit plans.

Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows:

	Year Ended December 31
In millions	2019			2018			2017
Pension Benefits
Service cost	$	1.3		$	2.3		$	2.0
Interest cost		11.5			13.3			13.7
Expected return on plan assets		(13.7	)		(21.1	)		(22.2	)
Amortization of prior service cost		0.2			—			—
Amortization of actuarial loss		2.8			7.1			7.1
Termination benefits		1.3			—			—
One-time settlement charge		75.3			—			—
Total net periodic benefit cost	$	78.7		$	1.6		$	0.6

Other Benefits
Service cost	$	—		$	0.1		$	0.1
Interest cost		0.3			0.5			0.4
Amortization of actuarial loss		(0.9	)		(0.3	)		—
Total net periodic benefit cost	$	(0.6	)	$	0.3		$	0.5

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) were as follows:

	Year Ended December 31
In millions	2019			2018
Pension Benefits
Actuarial (gain) loss	$	(5.2	)	$	32.9
Plan amendments		(0.2	)		0.1
Recognized prior service costs		(0.2	)		—
Recognized actuarial losses		(78.1	)		(7.1	)
Total recognized in other comprehensive (income) loss		(83.7	)		25.9
Total recognized in net periodic benefit cost and other comprehensive loss	$	(5.0	)	$	27.5
Other Benefits
Actuarial (gain) loss	$	(0.3	)	$	(3.1	)
Amortization of actuarial losses		0.9			0.3
Total recognized in other comprehensive (income) loss		0.6			(2.8	)
Total recognized in net periodic benefit cost and other comprehensive (income) loss	$	-		$	(2.5	)

The weighted-average assumptions used in computing the net periodic benefit cost information above were as follows:

	Year Ended December 31
	2019			2018			2017
Pension Benefits
Discount rate – benefit expense		4.34	%		3.85	%		4.44	%
Future compensation growth rate		2.50			3.00			3.00
Expected long-term rate of return on plan assets		4.50			7.25			7.25

Other Benefits
Discount rate – benefit expense		4.19	%		3.68	%		4.18	%

To develop the expected long-term rate of return assumption, we considered the historical returns and the future expected returns for each asset class, as well as the target asset allocation of the pension portfolio.

Assumed health care cost trend rates used to determine benefit obligations at December 31 were as follows:

At the end of 2019, assets held in the pension trust consisted entirely of $53.4 million of cash and cash equivalents and were primarily a Level 1 type. The table below presents the fair values of our benefit plan assets as of December 31, 2018 by level within the fair value hierarchy, as described in Note 2:

Cash Flow Benefit payments expected to be made in 2020 under our non-qualified pension plans and other benefit plans are summarized below:

The following benefit payments under all pension and other benefit plans are expected to be paid:

Defined Contribution Plans We maintain 401(k) plans for substantially all U.S. based employees. Employees may contribute up to 50% of their earnings, subject to certain restrictions. Through the end of May 2019, the Company matched a portion of the employees’ contribution in cash. Beginning June 1, 2019, the Company’s contribution approximated 7% of the employee’s eligible earnings. The expense associated with our 401(k) plan was $1.9 million, $0.4 million and $0.3 million in 2019, 2018 and 2017, respectively.