Employee Benefit Plans

Prior to January 1, 1999, we maintained a defined benefit pension plan for which most of our employees were eligible (the Qualified Pension Plan). In conjunction with significant enhancements to our 401(k) plan, we elected to freeze benefits under the Qualified Pension Plan as of December 31, 1998.

In 1994, we adopted a non-qualified, unfunded, supplemental pension plan (Restoration Pension Plan) covering certain employees, which provides for incremental pension payments so that total pension payments equal those amounts that would have been payable from the principal pension plan were it not for limitations imposed by income tax regulation. The benefits under the Restoration Pension Plan were intended to provide benefits equivalent to our Qualified Pension Plan as if such plan had not been frozen.

Effective April 1, 2014, we froze benefits under our Restoration Pension Plan, which was accounted for as a curtailment of the plan in the second quarter of 2014. The curtailment resulted in a reduction of plan expense of $0.4 million during 2014 and a reduction in the projected benefit obligation of $1.1 million. This curtailment gain offsets the unrecognized loss held by the Restoration Pension Plan. The remaining portion of the unrecognized loss will then be amortized over the average life expectancy of all participants.

The overfunded or underfunded status of our defined benefit post-retirement plans is recorded as an asset or liability on our balance sheet. The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation. Periodic changes in the funded status are recognized through other comprehensive income. We currently measure the funded status of our defined benefit plans as of December 31, the date of our year-end consolidated balance sheets.

The status of the defined benefit pension plans at year-end was as follows:



	Year Ended December 31,
In thousands	2015			2014
Change in benefit obligation
Benefit obligation at beginning of year	$	191,065		$	161,370
Service cost	—			100
Interest cost	7,724			7,698
Actuarial (gain) loss	(10,861		)	32,018
Benefits paid	(9,213		)	(9,051		)
Curtailments	—			(1,070		)
Benefit obligation at end of year	$	178,715		$	191,065

Change in plan assets
Fair value of plan assets at beginning of year	124,372			120,604
Actual return on plan assets	982			6,887
Contributions	5,541			5,932
Benefits paid	(9,213		)	(9,051		)
Fair value of plan assets at end of year	$	121,682		$	124,372

Funded status at end of year	$	(57,033	)	$	(66,693	)

The following amounts have been recognized in the Consolidated Balance Sheets at December 31:



In thousands	2015		2014
Other current liabilities	$	1,542	$	1,537
Pensions	55,491		65,156
	$	57,033	$	66,693

The following amounts have been recognized in accumulated other comprehensive loss, net of tax, at December 31:



In thousands	2015		2014
Net loss	$	43,915	$	49,560
Prior service cost	—		—
	$	43,915	$	49,560

We are not required to make and do not intend to make any contributions to our Qualified Pension Plan in 2016. Based on current estimates we will not be required to make any contributions to our Qualified Pension Plan until 2018.

We are not required to make and do not intend to make any contributions to our Restoration Pension Plan in 2016 other than to the extent needed to cover benefit payments. We expect benefit payments under this supplemental pension plan to total approximately $1.5 million in 2016. In the event of a change of control, as defined in the plan document, the Restoration Pension Plan is required to be fully funded.

The following information is presented for pension plans with an accumulated benefit obligation in excess of plan assets:



In thousands	2015		2014
Projected benefit obligation	$	178,715	$	191,065
Accumulated benefit obligation	$	178,715	$	191,065
Fair value of plan assets	$	121,682	$	124,372

The Restoration Pension Plan had an accumulated benefit obligation of $26.4 million and $28.2 million at December 31, 2015 and 2014, respectively.

The following table presents the components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) for both plans:



	Year Ended December 31,
In thousands	2015			2014			2013
Net Periodic Benefit Cost (Pre-Tax)
Service cost	$	—		$	100		$	343
Interest cost	7,724			7,698			7,237
Expected return on plan assets	(8,637		)	(8,418		)	(7,383		)
Amortization of prior service cost	—			—			—
Recognized actuarial loss	6,228			3,654			6,687
Net periodic benefit cost	$	5,315		$	3,034		$	6,884

Amounts Recognized in Other Comprehensive Income (Loss) (Pre-Tax)
Net (gain) loss	$	(9,408	)	$	28,802		$	(36,920	)
Prior service cost	—			—			—
Total (benefit) cost recognized in other comprehensive loss	$	(9,408	)	$	28,802		$	(36,920	)

Net (benefit) cost recognized in net periodic benefit cost and other comprehensive (income) loss	$	(4,093	)	$	31,836		$	(30,036	)

The estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2016 is $2.3 million. The period over which the net loss from the Qualified Pension Plan is amortized into net periodic benefit cost has been changed effective in 2016 from the average future service of active participants (approximately 9 years) to the average future lifetime of all participants (approximately 24 years). This change reflects that the Qualified Pension Plan is frozen and that almost all of the plan's participants are not active employees.

The weighted-average assumptions used for measurement of the defined pension plans were as follows:



	Year Ended December 31,
	2015		2014		2013
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate	4.13	%	4.94	%	4.15	%
Expected return on plan assets	7.00	%	7.00	%	7.25	%
Rate of compensation increase	N/A		N/A		3.00	%



	December 31,
	2015		2014
Weighted-average assumptions used to determine benefit obligations
Discount rate	4.49	%	4.13	%
Rate of compensation increase	N/A		N/A

The discount rate assumptions are based on current yields of investment-grade corporate long-term bonds. The expected long-term return on plan assets is based on the expected future average annual return for each major asset class within the plan’s portfolio (which is principally comprised of equity investments) over a long-term horizon. In determining the expected long-term rate of return on plan assets, we evaluated input from our investment consultants, actuaries, and investment management firms, including their review of asset class return expectations, as well as long-term historical asset class returns. Projected returns by such consultants and economists are based on broad equity and bond indices. Additionally, we considered our historical 15-year compounded returns, which have been in excess of the forward-looking return expectations.

The funded pension plan assets as of December 31, 2015 and 2014, by asset category, are as follows:



In thousands	2015		%		2014		%
Equity securities	$	83,185	68	%	$	82,010	66	%
Debt securities	32,726		27	%	32,381		26	%
Other	5,771		5	%	9,981		8	%
Total plan assets	$	121,682	100	%	$	124,372	100	%

The current economic environment presents employee benefit plans with unprecedented circumstances and challenges, which, in some cases over the last several years, have resulted in large declines in the fair value of investments. The fair values presented have been prepared using values and information available as of December 31, 2015 and 2014.

The following tables present the fair value measurements of the assets in our funded pension plan:



In thousands	December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities	$	83,185	$	83,301	$	—	$	—
Debt securities	32,726		32,726		—		—
Other	5,771		—		5,771		—
Total	$	121,682	$	116,027	$	5,771	$	—



In thousands	December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities	$	82,010	$	82,010	$	—	$	—
Debt securities	32,381		32,381		—		—
Other	9,981		—		9,981		—
Total	$	124,372	$	114,391	$	9,981	$	—

The investment policy for the Qualified Pension Plan focuses on the preservation and enhancement of the corpus of the plan’s assets through prudent asset allocation, quarterly monitoring and evaluation of investment results, and periodic meetings with investment managers.

The investment policy’s goals and objectives are to meet or exceed the representative indices over a full market cycle (3-5 years). The policy establishes the following investment mix, which is intended to subject the principal to an acceptable level of volatility while still meeting the desired return objectives:



	Target		Acceptable Range				Benchmark Index
Domestic Equities	50.0	%	35	%	-	75%	S&P 500
Large Cap Growth	22.5	%	15	%	-	30%	Russell 1000 Growth
Large Cap Value	22.5	%	15	%	-	30%	Russell 1000 Value
Mid Cap Value	5.0	%	5	%	-	15%	Russell Mid Cap Value
Mid Cap Growth	0.0	%	0	%	-	10%	Russell Mid Cap Growth

Domestic Fixed Income	35.0	%	15	%	-	50%	LB Aggregate
International Equities	15.0	%	10	%	-	25%	MSC1 EAFE

The funded pension plan provides for investment in various investment types. Investments, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risk. Due to the level of risk associated with investments, it is reasonably possible that changes in the value of investments will occur in the near term and may impact the funded status of the plan. To address the issue of risk, the investment policy places high priority on the preservation of the value of capital (in real terms) over a market cycle. Investments are made in companies with a minimum five-year operating history and sufficient trading volume to facilitate, under most market conditions, prompt sale without severe market effect. Investments are diversified; reasonable concentration in any one issue, issuer, industry, or geographic area is allowed if the potential reward is worth the risk.

Investment managers are evaluated by the performance of the representative indices over a full market cycle for each class of assets. The Pension Plan Committee reviews, on a quarterly basis, the investment portfolio of each manager, which includes rates of return, performance comparisons with the most appropriate indices, and comparisons of each manager’s performance with a universe of other portfolio managers that employ the same investment style.

The expected future pension benefit payments for the next ten years as of December 31, 2015 are as follows:



In thousands
2016	$	9,418
2017	9,623
2018	9,801
2019	9,930
2020	10,296
2021-2025	56,274
	$	105,342

We also sponsor a 401(k) retirement plan in which we match a portion of employees’ voluntary before-tax contributions. Under this plan, both employee and matching contributions vest immediately. Total 401(k) expense recognized in 2015, 2014, and 2013 was $3.6 million, $3.8 million, and $3.9 million, respectively.