EMPLOYEE BENEFIT AND RETIREMENT PLANS

During the first quarters of 2018 and 2017, we made the following significant changes to our employee benefit and retirement plans:

First quarter of 2018

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On December 1, 2017, our Management Committee approved the freezing of benefits under our pension plans in Canada. The effective date of this freeze is November 30, 2019. Although those plans will be frozen, employees who are participants in the plans will retain benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plans.

First quarter of 2017

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On December 1, 2016, our Management Committee approved the freezing of benefits under the McCormick U.K. Pension and Life Assurance Scheme (the U.K. plan). The effective date of this freeze was December 31, 2016. Although the U.K. plan has been frozen, employees who are participants in that plan retained benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plan.

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On January 3, 2017, our Management Committee approved the freezing of benefits under the McCormick Pension Plan, the defined benefit pension plan available to U.S. employees hired on or prior to December 31, 2011. The effective date of this freeze is November 30, 2018. Although the U.S. Pension plan will be frozen, employees who are participants in that plan will retain benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plan.

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On January 3, 2017, the Compensation Committee of our Board of Directors approved the freezing of benefits under the McCormick Supplemental Executive Retirement Plan (the “SERP”). The effective date of this freeze was January 31, 2017. Although the SERP has been frozen, executives who are participants in the SERP as of the date of the freeze, including certain named executive officers, retained benefits accumulated up to that date, based on credited service and eligible earnings, in accordance with the SERP’s terms.

As a result of these changes, we remeasured pension assets and benefit obligations as of the dates of the approvals indicated above and: (i) in fiscal year 2018, we reduced the Canadian plan benefit obligations by $17.5 million; and (ii) in fiscal year 2017, we reduced the U.S. and U.K. plan benefit obligations by $69.9 million and $7.8 million, respectively. These remeasurements resulted in non-cash, pre-tax net actuarial gains of $17.5 million and $77.7 million for the six months ended May 31, 2018 and 2017, respectively. These net actuarial gains consist principally of curtailment gains of $18.0 million and $76.7 million, and are included in our Consolidated Statement of Comprehensive Income for the six months ended May 31, 2018 and 2017, respectively, as a component of Other comprehensive income (loss) on the line entitled Unrealized components of pension plans. Deferred taxes associated with these actuarial gains, together with other unrealized components of pension plans recognized during the six months ended May 31, 2018 and 2017, are also included in that statement as a component of Other comprehensive income (loss).

The following table presents the components of our pension expense of the defined benefit plans for the three months ended May 31, 2018 and 2017 (in millions):



	United States						International
	2018			2017			2018			2017
Defined benefit plans
Service cost	$	4.3		$	3.4		$	1.1		$	1.3
Interest costs	7.9			7.7			2.3			2.5
Expected return on plan assets	(10.8		)	(10.3		)	(4.2		)	(3.7		)
Amortization of prior service costs	—			—			—			0.1
Amortization of net actuarial losses	2.5			1.3			0.7			1.0
Total pension expense	$	3.9		$	2.1		$	(0.1	)	$	1.2

The following table presents the components of our pension expense of the defined benefit plans for the six months ended May 31, 2018 and 2017 (in millions):



	United States						International
	2018			2017			2018			2017
Defined benefit plans
Service cost	$	8.7		$	7.3		$	2.2		$	2.8
Interest costs	15.8			15.7			4.7			5.0
Expected return on plan assets	(21.6		)	(20.5		)	(8.4		)	(7.4		)
Amortization of prior service costs	—			—			0.5			0.6
Amortization of net actuarial losses	5.0			3.2			1.4			2.0
Total pension expense	$	7.9		$	5.7		$	0.4		$	3.0

During the six months ended May 31, 2018 and 2017, we contributed $7.7 million and $8.5 million, respectively, to our pension plans. Total contributions to our pension plans in fiscal year 2017 were $18.7 million.

The following table presents the components of our other postretirement benefits expense (in millions):



	Three months ended May 31,						Six months ended May 31,
	2018			2017			2018			2017
Other postretirement benefits
Service cost	$	0.6		$	0.7		$	1.2		$	1.4
Interest costs	0.6			0.9			1.2			1.8
Amortization of prior service credits	(2.1		)	—			(4.3		)	—
Amortization of gains	—			(0.1		)	—			(0.1		)
Total other postretirement benefits expense	$	(0.9	)	$	1.5		$	(1.9	)	$	3.1

The reduction in other postretirement benefits expense for the three and six months ended May 31, 2018 is primarily attributable to plan amendments that were approved by our Management Committee on August 23, 2017 and are more fully described in note 10 of the financial statements in our Annual Report on Form 10-K for the year ended November 30, 2017.