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Retirement benefits
 12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Compensation and Retirement Disclosure [Abstract]    
Retirement benefits

Note 3 – Retirement Benefits

 

Defined-benefit Pension Plans

 

Summary

We have various defined-benefit pension plans covering eligible current and former employees. Benefits under most plans are based on salary and years of service. There are limits to the amount of benefits which can be paid to participants from a U.S. qualified pension plan. We maintain a nonqualified U.S. plan to pay benefits for those eligible current and former employees in the U.S. whose benefits exceed the regulatory limits.

 

Components of Net Periodic Pension Cost

 

 (In millions) U.S. Plans Non-U.S. Plans Total 
 Years Ended December 31, 201120102009 201120102009 201120102009 
               
 Service cost$ - - -$ 10.2 6.6 6.1$ 10.2 6.6 6.1 
 Interest cost on projected benefit obligation  46.2 46.5 47.7  16.9 13.4 12.2  63.1 59.9 59.9 
 Return on assets – expected  (65.0) (66.8) (61.2)  (12.0) (10.6) (9.0)  (77.0) (77.4) (70.2) 
 Amortization of losses  28.2 19.5 9.1  4.3 3.2 3.5  32.5 22.7 12.6 
 Settlement loss   - - 0.3  2.2 0.1 -  2.2 0.1 0.3 
 Net periodic pension cost (credit)$ 9.4 (0.8) (4.1)$ 21.6 12.7 12.8$ 31.0 11.9 8.7 

Obligations and Funded Status

Changes in the projected benefit obligation (“PBO”) and plan assets for our pension plans are as follows:

 

 (In millions) U.S. Plans Non-U.S. Plans Total  
 Years Ended December 31, 2011 2010 2011 2010 2011 2010 
                
 Benefit obligation at beginning of year$ 890.1  810.5  289.6  223.4  1,179.7  1,033.9 
 Service cost  -  -  10.2  6.6  10.2  6.6 
 Interest cost  46.2  46.5  16.9  13.4  63.1  59.9 
 Plan participant contributions  -  -  3.5  2.9  3.5  2.9 
 Plan settlements  -  -  (2.8)  (0.5)  (2.8)  (0.5) 
 Acquisition  -  -  -  39.0  -  39.0 
 Benefits paid  (39.7)  (38.0)  (15.9)  (8.8)  (55.6)  (46.8) 
 Actuarial (gains) losses  94.1  71.1  15.9  15.7  110.0  86.8 
 Foreign currency exchange effects  -  -  (10.5)  (2.1)  (10.5)  (2.1) 
 Benefit obligation at end of year$ 990.7  890.1  306.9  289.6  1,297.6  1,179.7 
                
 Fair value of plan assets at beginning of year$ 698.4  658.2  218.6  188.9  917.0  847.1 
 Return on assets – actual  26.0  77.4  7.9  22.2  33.9  99.6 
 Plan participant contributions  -  -  3.5  2.9  3.5  2.9 
 Employer contributions:  0.7  0.8  25.7  15.3  26.4  16.1 
 Plan settlements  -  -  (2.8)  (0.5)  (2.8)  (0.5) 
 Acquisition  -  -  -  0.6  -  0.6 
 Benefits paid  (39.7)  (38.0)  (15.9)  (8.8)  (55.6)  (46.8) 
 Foreign currency effects  -  -  (6.5)  (2.0)  (6.5)  (2.0) 
 Fair value of plan assets at end of year$ 685.4  698.4  230.5  218.6  915.9  917.0 
                
  Funded status$ (305.3)  (191.7)  (76.4)  (71.0)  (381.7)  (262.7) 
                
 Included in:             
  Noncurrent asset$ -  -  (12.3)  (8.6)  (12.3)  (8.6) 
  Current liability, included in accrued liabilities  13.2  1.4  11.2  3.1  24.4  4.5 
  Noncurrent liability  292.1  190.3  77.5  76.5  369.6  266.8 
 Net pension liability $ 305.3  191.7  76.4  71.0  381.7  262.7 

 (In millions) U.S. Plans Non-U.S. Plans Total  
 Years Ended December 31, 2011 2010 2011 2010 2011 2010 
                  
                  
 Benefit plan experience loss recognized in              
  accumulated other comprehensive income (loss):             
   Beginning of year$ (408.4)  (367.4)  (19.6)  (17.4)  (428.0)  (384.8) 
   Net experience gains (losses) arising during the year  (133.1)  (60.5)  (20.0)  (4.1)  (153.1)  (64.6) 
   Reclassification adjustment for amortization of             
    experience losses included in net income  28.2  19.5  5.0  1.9  33.2  21.4 
   End of year$ (513.3)  (408.4)  (34.6)  (19.6)  (547.9)  (428.0) 
                  
 Benefit plan prior service (cost) credit recognized in             
  accumulated other comprehensive income (loss):             
   Beginning of year$ -  -  (7.6)  (8.9)  (7.6)  (8.9) 
   Reclassification adjustment for amortization of             
    prior service credit included in net income  -  -  1.5  1.3  1.5  1.3 
   End of year$ -  -  (6.1)  (7.6)  (6.1)  (7.6) 

Approximately $44.6 million of experience loss and $1.4 million of prior service cost are expected to be amortized from accumulated other comprehensive income (loss) into net periodic pension cost during 2012.

 

The net experience losses in 2011 were primarily due to the lower discount rate of the U.S. plans as well as the actual return on assets being lower than expected. The net experience losses in 2010 were primarily due to the lower discount rate of the U.S. plans, partially offset by the actual return on assets being higher than expected.

 

Information Comparing Plan Assets to Plan Obligations

Information comparing plan assets to plan obligations as of December 31, 2011 and 2010 are aggregated below. The accumulated benefit obligation (“ABO”) differs from the PBO in that the ABO is based on the benefit earned through the date noted. The PBO includes assumptions about future compensation levels for plans that have not been frozen.

 

 (In millions) U.S. Plans  Non-U.S. Plans  Total  
 December 31, 2011 2010 2011 2010 2011 2010 
                
 Pension plans with an accumulated benefit obligation in excess of plan assets:              
  Fair value of plan assets$ 685.4  698.4  117.5  24.1  802.9  722.5 
  Accumulated benefit obligation  990.7  890.1  179.8  78.1  1,170.5  968.2 
  Projected benefit obligation  990.7  890.1  206.4  95.0  1,197.1  985.1 

The ABO for our U.S. pension plans was $990.7 million in 2011 and $890.1 million in 2010. The ABO for our Non-U.S. pension plans was $278.8 million in 2011 and $259.8 million in 2010.

 

Assumptions

The weighted-average assumptions used in determining the net pension cost and benefit obligations for our pension plans were as follows:

 

   U.S. Plans Non-U.S. Plans 
   2011 2010 2009 2011 2010 2009 
               
 Discount rate:            
  Pension cost 5.3%  5.9%  6.6%  5.8%  6.2%  6.2% 
  Benefit obligation at year end 4.6%  5.3%  5.9%  5.4%  5.8%  6.2% 
               
 Expected return on assets – pension cost 8.75%  8.75%  8.75%  5.16%  5.54%  5.78% 
               
 Average rate of increase in salaries (a):            
  Pension cost N/A N/A N/A  3.3%  3.1%  4.0% 
  Benefit obligation at year endN/A N/A N/A  3.2%  3.3%  3.1% 

  • Salary scale assumptions are determined through historical experience and vary by age and industry. The U.S. plan benefits are frozen. Pension benefits will not increase due to future salary increases.

 

The RP-2000 Combined Healthy Blue Collar mortality table and the RP-2000 Combined Healthy White Collar mortality table were used to estimate the expected lives of participants in the U.S. pension plans. Expected lives of participants in non-U.S. pension plans were estimated using mortality tables in the country of operation.

 

Cash Flows

Estimated Contributions from the Company into Plan Assets

Our policy is to fund at least the minimum actuarially determined amounts required by applicable regulations. We expect to contribute $31.5 million to our primary U.S. pension plan, approximately $13.2 million to our nonqualified U.S. pension plan and $26.9 million to our non-U.S. pension plans in 2012.

 

On August 20, 2009, we made a voluntary $150 million contribution to our primary U.S. retirement plan to improve the funded status of the plan.  The contribution was comprised of $92.4 million of cash and 2,260,738 newly issued shares of our common stock valued for purposes of the contribution at $25.48 per share, or $57.6 million in the aggregate.   Because we considered the contribution to be a significant event for the plan, we remeasured our projected benefit obligation and plan assets related to our primary U.S. pension plan as of July 1, 2009. As part of the remeasurement we changed the discount rate from 6.2% to 6.8%.

 

At the time we made the voluntary $150 million contribution we changed the method of valuing assets for funding purposes from the fair-market-value basis to the asset-smoothing basis. We elected the asset-smoothing basis to reduce the volatility of future required contributions to the plan.

 

Estimated Future Benefit Payments from Plan Assets to Beneficiaries

Our projected benefit payments at December 31, 2011, for each of the next five years and the aggregate five years thereafter are as follows:

 (In millions) U.S. Plans Non-U.S. Plans Total  
            
 2012$ 55.6   18.7   74.3  
 2013  46.1   11.1   57.2  
 2014  46.0   12.8   58.8  
 2015  47.2   12.0   59.2  
 2016  48.7   13.4   62.1  
 2017 through 2021$ 272.7   85.6   358.3  

Retirement Benefits Other than Pensions

 

Summary

We provide retirement health care benefits for eligible current and former U.S. and Canadian employees, including former employees of our former U.S. coal operation. Retirement benefits related to our former coal operation include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for UMWA Represented Employees (the “UMWA plans”) as well as costs related to Black Lung obligations.

 

Components of Net Periodic Postretirement Cost

The components of net periodic postretirement cost related to retirement benefits other than pensions were as follows:

 

 

 (In millions) UMWA plans Black lung and other plans Total 
 Years Ended December 31, 201120102009 201120102009 201120102009 
               
 Interest cost on APBO$ 24.0 27.1 25.8$ 2.8 2.9 2.8$ 26.8 30.0 28.6 
 Return on assets – expected  (25.5) (25.3) (22.6)  - - -  (25.5) (25.3) (22.6) 
 Amortization of losses  14.7 16.0 16.7  2.6 1.8 0.1  17.3 17.8 16.8 
 Net periodic postretirement cost $ 13.2 17.8 19.9$ 5.4 4.7 2.9$ 18.6 22.5 22.8 

Obligations and Funded Status

Changes in the accumulated postretirement benefit obligation (“APBO') and plan assets related to retirement health care benefits are as follows:

 

        Black lung and other      
 (In millions) UMWA plans Plans Total  
 Years Ended December 31, 2011 2010 2011 2010 2011 2010 
                
 APBO at beginning of year$ 474.3  465.5  62.2  47.1  536.5  512.6 
 Interest cost  24.0  27.1  2.8  2.9  26.8  30.0 
 Plan amendments  -  -  -  19.3  -  19.3 
 Benefits paid  (39.1)  (37.8)  (7.0)  (5.9)  (46.1)  (43.7) 
 Medicare subsidy received  3.4  3.2  -  -  3.4  3.2 
 Actuarial (gains) losses, net  67.0  16.3  2.9  (1.3)  69.9  15.0 
 Foreign currency exchange effects and other  -  -  -  0.1  -  0.1 
 APBO at end of year$ 529.6  474.3  60.9  62.2  590.5  536.5 
                
 Fair value of plan assets at beginning of year$ 310.2  308.0  -  -  310.2  308.0 
 Employer contributions:  -  -  7.0  5.9  7.0  5.9 
 Return on assets – actual  (5.1)  37.1  -  -  (5.1)  37.1 
 Benefits paid  (40.5)  (38.1)  (7.0)  (5.9)  (47.5)  (44.0) 
 Medicare subsidy received  3.4  3.2  -  -  3.4  3.2 
 Fair value of plan assets at end of year$ 268.0  310.2  -  -  268.0  310.2 
                
 Funded status$ (261.6)  (164.1)  (60.9)  (62.2)  (322.5)  (226.3) 
                
 Included in:             
  Current, included in accrued liabilities$ -  -  7.1  7.7  7.1  7.7 
  Noncurrent  261.6  164.1  53.8  54.5  315.4  218.6 
 Retirement benefits other than pension liability $ 261.6  164.1  60.9  62.2  322.5  226.3 

          Black lung and other      
 (In millions) UMWA plans Plans Total  
 Years Ended December 31, 2011 2010 2011 2010 2011 2010 
                  
 Benefit plan experience gain (loss) recognized in              
  accumulated other comprehensive income (loss):             
   Beginning of year$ (240.1)  (251.6)  (7.6)  (9.3)  (247.7)  (260.9) 
   Net experience gains (losses) arising during the year  (97.6)  (4.5)  (2.9)  1.3  (100.5)  (3.2) 
   Reclassification adjustment for amortization of             
    experience losses included in net income  14.7  16.0  0.6  0.4  15.3  16.4 
   End of year$ (323.0)  (240.1)  (9.9)  (7.6)  (332.9)  (247.7) 
                  
 Benefit plan prior service cost recognized in             
  accumulated other comprehensive income (loss):             
   Beginning of year$ -  -  (15.3)  2.6  (15.3)  2.6 
   Prior service cost from plan amendments              
    during the year  -  -  -  (19.3)  -  (19.3) 
   Reclassification adjustment for amortization or curtailment              
    recognition of prior service credit included in net income  -  -  2.0  1.4  2.0  1.4 
   End of year$ -  -  (13.3)  (15.3)  (13.3)  (15.3) 

We estimate that $22.4 million of experience loss and $2.0 million of prior service cost will be amortized from accumulated other comprehensive income (loss) into net periodic postretirement cost during 2012.

 

We recognized net experience losses in 2011 associated with the UMWA obligations primarily related to lower discount rate, an excise tax on high-cost health plans, and the return on assets being lower than expected. We recognized net experience losses in 2010 associated with the UMWA obligations primarily related to the lower discount rate and mortality losses, partially offset by the return on assets being higher than expected.

 

Excise Tax on Administrators by Patient Protection and Affordable Care Act

A 40% excise tax will be imposed on high-cost health plans (“Cadillac plans”) beginning in 2018. The tax will apply to plan costs that exceed a certain threshold level for individuals and for families, which will be indexed to inflation. There will be higher limits for high-risk professions, among which is mining. Even though the tax is not assessed directly to an employer but rather to the benefits plan administrator, the cost is expected to be passed through to plan sponsors as higher premiums or higher claims administration fees, increasing the plan sponsor's obligations. We project that this excise tax will impact our UMWA plans and have accordingly included a 4.2% increase (approximately $21.3 million) to our UMWA plans' obligation. We are currently unable to reduce the benefit levels of our UMWA medical plans to avoid this excise tax because these benefit levels are required by the Coal Industry Retiree Health Benefit Act of 1992.

 

Assumptions

The APBO for each of the plans was determined using the unit credit method and an assumed discount rate as follows:

 

    2011 2010 2009 
             
 Weighted-average discount rate:         
  Postretirement cost:         
   UMWA plans 5.3%  5.9%  6.2% 
   Black lung 4.8%  5.3%  6.3% 
   Weighted-average 5.2%  5.8%  6.2% 
  Benefit obligation at year end:          
   UMWA plans 4.4%  5.3%  5.9% 
   Black lung 4.2%  4.8%  5.4% 
   Weighted-average 4.4%  5.2%  5.9% 
 Expected return on assets 8.75%  8.75%  8.75% 

The RP-2000 Separate, Healthy Blue Collar and Combined Annuitant/Non-Annuitant Blue Collar mortality tables are primarily used to estimate expected lives of participants.

 

2010 Health Care Reform

The Patient Protection and Affordable Care Act, which was enacted in March 2010, contains an amendment to the laws governing federal black lung benefits for coal miners. The amendment creates a presumption that benefits should be awarded to current or former coal miners that have accumulated 15 or more years of coal mine employment if they are able to prove that they have a disabling pulmonary disease. Previously, miners were required to demonstrate that their disabling pulmonary disease was caused by black lung disease, and not by some other cause such as smoking or old age. Under the amendment, the burden of proof becomes the employer's to establish that the disabling pulmonary disease is not black lung disease or that the miner's disease did not result from coal mine employment. We expect that the amendment may increase the approval rates for coal miners applying to receive black lung benefits, however, the rates have not been significantly affected to date.

 

We remeasured our black lung obligation as of March 31, 2010, to reflect an estimate of the increase in approval rates as a result of the amendment. The obligation increased $19.3 million as a result of the remeasurement, from $42.3 million before the remeasurement to $61.6 million. The liability could change in the future if the approval rates used in the estimates of the liabilities are either too high or too low. These estimated amounts will change in the future to reflect payments made, actuarial revaluations, and other changes in estimates. Actual amounts could differ materially from the currently estimated amounts.

 

Health Care Cost Trend Rates

For UMWA plans, the assumed health care cost trend rate used to compute the 2011 APBO is 7.0% for 2012, declining to 5.0% in 2018 and thereafter (in 2010: 7.0% for 2011 declining to 5.0% in 2017 and thereafter). For the black lung obligation, the assumed health care cost trend rate used to compute the 2011 APBO was 5.0%. Other plans in the U.S. provide for fixed-dollar value coverage for eligible participants and, accordingly, are not adjusted for inflation.

 

The table below shows the estimated effects of a one percentage-point change in the assumed health care cost trend rates for each future year.

 

   Effect of Change in Assumed Health Care Trend Rates
 (In millions) Increase 1% Decrease 1% 
          
 Higher (lower):       
  Service and interest cost in 2011$ 2.5   (2.1)  
  APBO at December 31, 2011  60.1   (51.1)  

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Medicare Act”) provides for a prescription drug benefit under Medicare as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare prescription drug benefits. Because of the broadness of coverage provided under our plan, we believe that the plan benefits are at least actuarially equivalent to the Medicare benefits. The estimated effect of the legislation has been recorded as a reduction to the APBO, as permitted by FSP 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, included in FASB ASC Topic 715, Compensation – Retirement Benefits. The estimated value of the projected federal subsidy assumes no changes in participation rates and assumes that the subsidy is received in the year after claims are paid. The estimated reduction in per capita claim costs for participants over 65 years old was 8.8%.

 

Our net periodic postretirement costs were approximately $4.5 million lower in 2011, $4.5 million lower in 2010 and $4.3 million lower in 2009 due to the Medicare Act as a result of lower interest cost and amortization of losses. The estimated net present value of the subsidy, reflected as a reduction to the APBO, was approximately $60.2 million at December 31, 2011, and $50.2 million at December 31, 2010.

 

Cash Flows

Estimated Contributions from the Company to Plan Assets

Based on the funded status and assumptions at December 31, 2011, we expect the Company to contribute cash to the plans to pay 2012 beneficiary payments for black lung and other plans. We do not expect to contribute cash to our UMWA plans since these plans have sufficient amounts held in trust to pay for beneficiary payments for 2012. Our UMWA plans are not covered by ERISA or other funding laws or regulations that require these plans to meet funding ratios.

 

Estimated Future Benefit Payments from Plan Assets to Beneficiaries

Our projected benefit payments at December 31, 2011, for each of the next five years and the aggregate five years thereafter are as follows:

 

   Before Medicare Subsidy    Medicare Net Projected 
 (In millions) UMWA plans Black lung and other plans Subtotal Subsidy Payments 
                  
 2012$ 40.2   7.2   47.4   (3.3)   44.1  
 2013  40.9   5.8   46.7   (3.4)   43.3  
 2014  40.9   5.5   46.4   (3.5)   42.9  
 2015  41.0   5.2   46.2   (3.5)   42.7  
 2016  40.5   5.0   45.5   (3.6)   41.9  
 2017 through 2021  191.9   20.7   212.6   (18.3)   194.3  

Retirement Plan Assets

 

U.S. Plans

The fair values of the investments of our U.S. pension plans have been estimated using quoted prices in active markets for all investments other than the hedge fund of funds, which is estimated using the net asset value per share of the investments. Except for the hedge fund of funds, which is categorized as a Level 3 valuation, the fair values of all investments of our U.S. pension plans are based on Level 1 valuation inputs.

 

    December 31, 2011 December 31, 2010 
      % %   % % 
    Total Fair Actual Target Total Fair Actual Target 
 (In millions, except percentages) Value Allocation Allocation Value Allocation Allocation 
                
 U.S. Pension Plans             
 Cash, cash equivalents and receivables$ 3.5  -  -  0.1  -  - 
 Equity securities:             
  U.S. large-cap (a)  209.9  31  30  210.7  30  30 
  U.S. small/mid-cap (a)  55.2  8  8  62.2  9  8 
  International (a)  79.8  12  12  85.9  12  12 
 Fixed-income securities:             
  Long duration (b)  158.0  23  23  156.4  23  23 
  High yield (c)  55.2  8  8  57.2  8  8 
  Emerging markets (d)  27.0  4  4  27.8  4  4 
 Other types of investments:             
  Hedge fund of funds (e)  96.8  14  15  98.1  14  15 
 Total$ 685.4  100  100  698.4  100  100 
                
 UMWA Plans             
 Equity securities:             
  U.S. large-cap (a)$ 101.8  38  37  117.0  38  37 
  U.S. small/mid-cap (a)  23.5  9  9  28.4  9  9 
  International (a)  33.5  13  14  44.7  15  14 
 Fixed-income securities:             
  Core fixed income (f)  -  -  -  41.4  13  13 
  High yield (c)  22.6  8  8  25.6  8  8 
  Emerging markets (d)  11.2  4  4  12.7  4  4 
  Multi asset real return (g)  35.5  13  13  -  -  - 
 Other types of investments:             
  Hedge fund of funds (e)  39.9  15  15  40.4  13  15 
 Total$ 268.0  100  100  310.2  100  100 

  • These categories include actively managed mutual funds that track various indices such as the S&P 500 Index, the Russell 2500 Index and the MSCI All Country World Ex-U.S. Index.
  • This category represents an actively managed mutual fund that seeks to duplicate the risk and return characteristics of a long-term fixed-income securities portfolio with an approximate duration of 10 to 13 years by using a long duration bond portfolio, including interest-rate swap agreements and Treasury futures contracts, for the purpose of managing the overall duration of this fund.
  • This category represents an actively managed mutual fund that invests primarily in fixed-income securities rated below investment grade, including corporate bonds and debentures, convertible and preferred securities and zero-coupon obligations. The fund's average weighted maturity may vary and will generally not exceed ten years.
  • This category represents an actively managed mutual fund that invests primarily in U.S.-dollar-denominated debt securities of government, government-related and corporate issuers in emerging market countries, as well as entities organized to restructure the outstanding debt of such issuers.
  • This category represents an actively managed mutual fund that invests in different hedge-fund investments, with various strategies. The fund holds approximately 40 separate hedge-fund investments. Strategies included (1) long-short equity, (2) event-driven and distressed-debt, (3) global macro, (4) credit hedging, (5) multi-strategy, and (6) fixed-income arbitrage. Its investment objective is to seek to achieve an attractive risk-adjusted return with moderate volatility and moderate directional market exposure over a full market cycle.
  • This category represents an actively managed mutual fund that invests in funds with investments in mortgage backed securities, corporate bonds and investment grade securities. The category seeks to provide returns and a risk profile of the Barclays Capital U.S. Aggregate Bond Index.
  • This category represents an actively managed mutual fund that invests primarily in fixed income and equity securities and commodity linked instruments. The category seeks total returns that exceed the rate of inflation over a full market cycle regardless of market conditions.

 

Assets of our U.S. plans are invested with an objective of maximizing the total return, taking into consideration the liabilities of the plan, and minimizing the risks that could create the need for excessive contributions. Plan assets are invested primarily using actively managed accounts with asset allocation targets listed in the tables below. Our policy does not permit the purchase of Brink's common stock if immediately after any such purchase the aggregate fair market value of the plan assets invested in Brink's common stock exceeds 10% of the aggregate fair market value of the assets of the plan, except as permitted by an exemption under ERISA. The plans rebalance their assets on a monthly basis if actual allocations of assets are outside predetermined ranges. Among other factors, the performance of asset groups and investment managers will affect the long-term rate of return.

 

All of the investments of our U.S. retirement plans can be redeemed daily, except for the hedge fund of funds, which can be redeemed quarterly, subject to any restrictions imposed by the underlying hedge funds.

 

Non-U.S. Plans       

Except for investments in our Netherlands pension plan, the fair values of the investments of our non-U.S. pension plans have been estimated using quoted prices in active markets and are therefore based on Level 1 valuation inputs. The fair values for the Netherlands plan investments have been estimated using the net asset value per share of the investments and are based on Level 2 valuation inputs.

 

 

     December 31, 2011 December 31, 2010 
       % %   % % 
     Total Fair Actual Target Total Fair Actual Target 
 (In millions, except percentages) Value Allocation Allocation Value Allocation Allocation 
                 
 Non-U.S. Pension Plans             
 Cash and cash equivalents $ 1.0  -  -  0.3  -  - 
 Equity securities:             
  U.S. equity funds (a)  21.8      28.1     
  Canadian equity funds (a)  26.5      28.2     
  European equity funds (a)  5.3      16.6     
  Asia-pacific equity funds (a)  1.1      3.0     
  Emerging markets (a)  3.2      5.7     
  Other non-U.S. equity funds (a)  28.7      11.7     
   Total equity securities  86.6  38  40  93.3  43  48 
 Fixed-income securities:             
  Global credit (b)  28.9      23.7     
  Canadian fixed-income funds (c)  17.9      17.5     
  European fixed-income funds (d)  5.9      3.7     
  High-yield (e)  9.9      8.2     
  Emerging markets (f)  5.5      4.5     
  Long-duration (g)  63.9      53.5     
   Total fixed-income securities  132.0  57  55  111.1  52  52 
 Other types of investments:             
  Convertible securities (h)  7.3      7.4     
  Other   3.6      6.5     
   Total other types of investments  10.9  5  5  13.9  5  - 
 Total$ 230.5  100  100  218.6  100  100 

  • These categories are comprised of equity index actively managed funds that track various indices such as S&P 500 Composite Total Return Index, Russell 1000 and 2000 Indices, MSCI Europe Ex-UK Index, S&P/TSX Total Return Index, MSCI EAFE Index and others.
  • This category represents investment-grade corporate bonds of U.S. and European issuers from diverse industries.
  • This category seeks to achieve a return that exceeds the Scotia Capital Markets Universe Bond Index.
  • This category is designed to generate income and exhibit volatility similar to that of the Sterling denominated bond market. This category primarily invests in investment grade or better securities.
  • This category consists of global high-yield bonds. This category invests in lower rated and unrated fixed income, floating rate and other debt securities issued by European and American companies.
  • This category consists of a diversified portfolio of listed and unlisted debt securities issued by governments, financial institutions, companies or other entities domiciled in emerging market countries.
  • This category is designed to achieve a return consistent with holding longer term debt instruments. This category invests in interest rate and inflation derivatives, government-issued bonds, real-return bonds, and futures contracts.
  • This category invests in convertible securities of global issuers from diverse industries.

 

Asset allocation strategies for our non-U.S. plans are designed to accumulate a diversified portfolio among markets and asset classes in order to reduce market risk and increase the likelihood that pension assets are available to pay benefits as they are due. Assets of non-U.S. pension plans are invested primarily using actively managed accounts. The weighted-average asset allocation targets are listed in the table above, and reflect limitations on types of investments held and allocations among assets classes, as required by local regulation or market practice of the country where the assets are invested. Most of the investments of our non-U.S. retirement plans can be redeemed at least monthly, except for a portion of “Other” in the above table, which can be redeemed quarterly or are in the process of liquidation.

 

Changes in 2010 and 2011 of plan assets measured at fair value using significant unobservable inputs (Level 3) for our retirement plans are as follows:

 

 (In millions)U.S. Pension Plans UMWA Plans Non-U.S. Pension Plans 
              
 Balance at December 31, 2009 $ 87.3   40.0   1.5  
  Actual return on plan assets:          
   Relating to assets still held at the reporting date  1.3   0.4   (0.4)  
   Relating to assets sold during the period  -   -   -  
  Purchases, sales and settlements, net  9.5   -   (0.3)  
  Transfers in and/or out of Level 3  -   -   -  
 Balance at December 31, 2010  98.1   40.4   0.8  
              
  Actual return on plan assets:          
   Relating to assets still held at the reporting date  (1.3)   (0.5)   -  
   Relating to assets sold during the period  -   -   (0.2)  
  Purchases, sales and settlements, net  -   -   -  
  Transfers in and/or out of Level 3  -   -   -  
 Balance at December 31, 2011$ 96.8   39.9   0.6  

Multi-employer Pension Plans

We contribute to multi-employer pension plans in a few of our non-U.S. subsidiaries. Due to the improvement in the funded status of the plans, we do not have any multi-employer pension expense for continuing operations in 2011. Multi-employer pension expense was $2.3 million in 2010 and $2.1 million in 2009

 

Savings Plans

We sponsor various defined contribution plans to help eligible employees provide for retirement. We record expense for amounts that we contribute on behalf of employees, usually in the form of matching contributions. Our expense related to these plans is as follows:

 

 (In millions)          
 Years Ended December 31, 2011 2010 2009 
            
 U.S. 401(K)$ 16.9   16.3   13.4  
 Other plans  3.9   4.0   3.4  
 Total$ 20.8   20.3   16.8  

Other Changes in Plan Assets and Benefit Recognized in Other Comprehensive Income

Changes in accumulated other comprehensive income (loss) of our retirement benefit plans other than pensions are as follows: