PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS

We sponsor a number of defined benefit pension plans. Our policy is to fund domestic pension liabilities in accordance with the limits imposed by the Employee Retirement Income Security Act of 1974 (“ERISA”), federal income tax laws and the funding requirements of the Pension Protection Act of 2006. We fund non-domestic pension liabilities in accordance with laws and regulations applicable to those plans.

We have two post-retirement benefit plans: health care and life insurance. The health care plan is contributory, with participants’ contributions adjusted annually. The life insurance plan is non-contributory.

Obligations and Funded Status

A summary of the changes in benefit obligations and plan assets is as follows:



	Pension Benefits						Other Benefits
December 31,	2013			2012			2013			2012
In thousands of dollars

Change in benefit obligation
Projected benefits obligation at beginning of year	$	1,237,778		$	1,156,756		$	318,415		$	318,536
Service cost	31,339			30,823			1,094			1,172
Interest cost	43,962			49,909			10,747			13,258
Plan amendments	55			2			—			—
Actuarial (gain) loss	(100,872		)	112,700			(33,412		)	7,916
Curtailment	(8,833		)	—			—			—
Settlement	(319		)	(49,876		)	—			—
Currency translation and other	(5,976		)	1,903			(1,030		)	370
Benefits paid	(76,642		)	(64,439		)	(24,877		)	(22,837		)

Projected benefits obligation at end of year	1,120,492			1,237,778			270,937			318,415

Change in plan assets
Fair value of plan assets at beginning of year	988,167			961,421			—			—
Actual return on plan assets	152,976			118,073			—			—
Employer contribution	32,336			21,371			24,877			22,837
Settlement	(319		)	(49,876		)	—			—
Currency translation and other	(4,533		)	1,617			—			—
Benefits paid	(76,642		)	(64,439		)	(24,877		)	(22,837		)

Fair value of plan assets at end of year	1,091,985			988,167			—			—

Funded status at end of year	$	(28,507	)	$	(249,611	)	$	(270,937	)	$	(318,415	)

The accumulated benefit obligation for all defined benefit pension plans was $1.1 billion as of December 31, 2013 and $1.2 billion as of December 31, 2012.

We made total contributions to the pension plans of $32.3 million during 2013, including contributions of $25.0 million to improve the funded status of our domestic plans. In 2012, we made total contributions of $21.4 million to the pension plans. For 2014, minimum funding requirements for our pension plans are approximately $3.6 million and we expect to make additional contributions of approximately $22.0 million to improve the funded status of our domestic plans.

Amounts recognized in the Consolidated Balance Sheets consisted of the following:



	Pension Benefits						Other Benefits
December 31,	2013			2012			2013			2012
In thousands of dollars

Other assets	$	32,533		$	—		$	—		$	—
Accrued liabilities	(10,198		)	(9,396		)	(25,477		)	(26,181		)
Other long-term liabilities	(50,842		)	(240,215		)	(245,460		)	(292,234		)

Total	$	(28,507	)	$	(249,611	)	$	(270,937	)	$	(318,415	)

Amounts recognized in accumulated other comprehensive loss, net of tax, consisted of the following:



	Pension Benefits						Other Benefits
December 31,	2013			2012			2013			2012
In thousands of dollars

Actuarial net (loss) gain	$	(215,702	)	$	(362,039	)	$	13,107		$	(6,320	)
Net prior service credit (cost)	5,698			5,539			(2,737		)	(3,217		)

Total	$	(210,004	)	$	(356,500	)	$	10,370		$	(9,537	)

Plans with accumulated benefit obligations in excess of plan assets were as follows:



December 31,	2013		2012
In thousands of dollars

Projected benefit obligation	$	76,801	$	1,237,238
Accumulated benefit obligation	64,340		1,185,214
Fair value of plan assets	15,760		987,643

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income

Net periodic benefit cost for our pension and other post-retirement plans consisted of the following:



	Pension Benefits									Other Benefits
For the years ended December 31,	2013			2012			2011			2013			2012			2011
In thousands of dollars

Service cost	$	31,339		$	30,823		$	30,059		$	1,094		$	1,172		$	1,333
Interest cost	43,962			49,909			52,960			10,747			13,258			14,967
Expected return on plan assets	(73,128		)	(72,949		)	(78,161		)	—			—			—
Amortization of prior service cost (credit)	422			731			1,002			618			619			(255		)
Amortization of net loss (gain)	40,397			39,723			28,004			(73		)	(101		)	(71		)
Administrative expenses	692			545			653			75			120			244

Net periodic benefit cost	43,684			48,782			34,517			12,461			15,068			16,218
Curtailment (credit) loss	(364		)	—			1,826			—			—			(174		)
Settlement loss	18			19,676			46			—			—			—

Total amount reflected in earnings	$	43,338		$	68,458		$	36,389		$	12,461		$	15,068		$	16,044

A portion of the pension settlement loss recorded in 2012, totaling approximately $15.8 million, and the curtailment loss recorded in 2011 were associated with the Next Century program. The settlement losses recorded in 2011 were associated with one of our international businesses. We discuss the Next Century program in Note 3, Business Realignment and Impairment Charges.

Amounts recognized in other comprehensive loss (income) and net periodic benefit cost before tax for our pension and other post-retirement plans consisted of the following:



	Pension Benefits									Other Benefits
For the years ended December 31,	2013			2012			2011			2013			2012			2011
In thousands of dollars
Actuarial net (gain) loss	$	(230,605	)	$	8,536		$	120,401		$	(33,165	)	$	7,952		$	11,216
Prior service (credit) cost	(613		)	(716		)	(1,313		)	(632		)	(613		)	7,614

Total recognized in other comprehensive (income) loss	$	(231,218	)	$	7,820		$	119,088		$	(33,797	)	$	7,339		$	18,830

Total recognized in net periodic benefit cost and other comprehensive (income) loss	$	(187,534	)	$	56,602		$	153,605		$	(21,336	)	$	22,407		$	35,048

The estimated amounts for the defined benefit pension plans and the post-retirement benefit plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year are as follows (in thousands):



	Pension Plans			Post-Retirement Benefit Plans
Amortization of net actuarial loss (gain)	$	22,952		$	(109	)

Amortization of prior service (credit) cost	$	(668	)	$	618

Assumptions

Certain weighted-average assumptions used in computing the benefit obligations as of December 31, 2013 and 2012 were as follows:



	Pension Benefits				Other Benefits
	2013		2012		2013		2012
Discount rate	4.5	%	3.7	%	4.5	%	3.7	%
Rate of increase in compensation levels	4.0	%	4.0	%	N/A		N/A

For measurement purposes as of December 31, 2013, we assumed an 8.5% annual rate of increase in the per capita cost of covered health care benefits for 2014, grading down to 5.0% by 2019.

For measurement purposes as of December 31, 2012, we assumed a 9.1% annual rate of increase in the per capita cost of covered health care benefits for 2013, grading down to 5.0% by 2019.

Certain weighted-average assumptions used in computing net periodic benefit cost were as follows:



	Pension Benefits						Other Benefits
For the years ended December 31,	2013		2012		2011		2013		2012		2011

Discount rate	3.7	%	4.5	%	5.2	%	3.7	%	4.5	%	5.2	%
Expected long-term return on plan assets	7.75	%	8.0	%	8.0	%	N/A		N/A		N/A
Rate of compensation increase	4.0	%	4.1	%	4.1	%	N/A		N/A		N/A

We based the asset return assumption of 7.75% for 2013, 8.0% for 2012 and 8.0% for 2011 on current and expected asset allocations, as well as historical and expected returns on the plan asset categories. For 2014, we reduced the expected return on plan assets assumption to 7.0% from the 7.75% assumption used during 2013, reflecting lower expected future returns on plan assets resulting from a reduction of the pension plan asset allocation to equity securities. The historical geometric average return over the 26 years prior to December 31, 2013, was approximately 8.7%.

Assumed health care cost trend rates have a significant effect on the amounts reported for the post-retirement health care plans. A one-percentage point change in assumed health care cost trend rates would have the following effects:



Impact of assumed health care cost trend rates	One-Percentage Point Increase		One-Percentage Point (Decrease)
In thousands of dollars

Effect on total service and interest cost components	$	172	$	(152	)
Effect on post-retirement benefit obligation	4,132		(3,697		)

Plan Assets

We broadly diversify our pension plan assets across domestic and international common stock and fixed income asset classes. Our asset investment policies specify ranges of asset allocation percentages for each asset class. The ranges for the domestic pension plans were as follows:



Asset Class	Target Allocation 2013
Equity securities	55	%	-	75%
Debt securities	25	%	-	45%
Cash and certain other investments	0	%	-	5%

As of December 31, 2013, actual allocations were within the specified ranges. We expect the level of volatility in pension plan asset returns to be in line with the overall volatility of the markets within each asset class.

The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair value as of December 31, 2013:



In thousands of dollars	Quoted prices in active markets of identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant other unobservable inputs (Level 3)		Total assets measured at fair value as of December 31, 2013

Cash and cash equivalents	$	657	$	22,998	$	—	$	23,655
Equity securities:
U.S. all-cap (a)	64,949		137,385		—		202,334
U.S. large-cap (b)	144,254		—		—		144,254
U.S. small/mid-cap	33,145		—		—		33,145
International all-cap (c)	136,892		3,062		—		139,954
Global all-cap (d)	181,702		—		—		181,702
Fixed income securities:
U.S. government/agency	109,995		34,907		—		144,902
Corporate bonds (e)	57,735		34,616		—		92,351
Collateralized obligations (f)	56,016		22,350		—		78,366
International government/ corporate bonds (g)	14,018		37,304		—		51,322

Total Investments	$	799,363	$	292,622	$	—	$	1,091,985

The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair value as of December 31, 2012:



In thousands of dollars	Quoted prices in active markets of identical assets (Level 1)		Significant other observable inputs(Level 2)		Significant other unobservable inputs (Level 3)		Total assets measured at fair value as of December 31, 2012

Cash and cash equivalents	$	933	$	34,027	$	—	$	34,960
Equity securities:
U.S. all-cap (a)	50,596		104,102		—		154,698
U.S. large-cap (b)	107,934		—		—		107,934
U.S. small/mid-cap	24,816		—		—		24,816
International all-cap (c)	111,834		2,938		—		114,772
Global all-cap (d)	229,044		—		—		229,044
Domestic real estate	24,892		—		—		24,892
Fixed income securities:
U.S. government/agency	76,009		27,984		—		103,993
Corporate bonds (e)	38,001		19,691		—		57,692
Collateralized obligations (f)	61,853		27,012		—		88,865
International government/corporate bonds (g)	13,432		33,069		—		46,501

Total Investments	$	739,344	$	248,823	$	—	$	988,167



(a)	This category comprises equity funds that track the Russell 3000 index.
(b)	This category comprises equity funds that track the S&P 500 and/or Russell 1000 indices.
(c)	This category comprises equity funds that track the MSCI World Ex-US index.
(d)	This category comprises equity funds that track the MSCI World index.
(e)	This category comprises fixed income funds primarily invested in investment grade bonds.
(f)	This category comprises fixed income funds primarily invested in high quality mortgage-backed securities and other asset-backed obligations.
(g)	This category comprises fixed income funds invested in Canadian and other international bonds.

The fair value of the Level 1 assets was based on quoted market prices in active markets for the identical assets. The fair value of the Level 2 assets was determined by management based on an assessment of valuations provided by asset management entities and was calculated by aggregating market prices for all underlying securities.

Investment objectives for our domestic plan assets are:



l	To optimize the long-term return on plan assets at an acceptable level of risk;
l	To maintain a broad diversification across asset classes;
l	To maintain careful control of the risk level within each asset class; and
l	To focus on a long-term return objective.

We believe that there are no significant concentrations of risk within our plan assets as of December 31, 2013. We comply with ERISA rules and regulations and we prohibit investments and investment strategies not allowed by ERISA. We do not permit direct purchases of our Company’s securities or the use of derivatives for the purpose of speculation. We invest the assets of non-domestic plans in compliance with laws and regulations applicable to those plans.

Cash Flows

Information about the expected cash flows for our pension and other post-retirement benefit plans is as follows:



	Expected Benefit Payments
	2014		2015		2016		2017		2018		2019-2023
In thousands of dollars

Pension Benefits	$	67,617	$	64,641	$	69,085	$	101,765	$	83,559	$	544,322
Other Benefits	25,491		24,690		23,796		22,411		20,843		85,699

Multiemployer Pension Plan

With the acquisition of Brookside Foods Ltd. in January 2012, we began participation in the Bakery and Confectionery Union and Industry Canadian Pension Fund, a trustee-managed multiemployer defined benefit pension plan. We currently have approximately 110 employees participating in the plan and contributions were not significant in 2013 and 2012. Our obligation during the term of the collective bargaining agreement is limited to remitting the required contributions to the plan.