XML 59 R48.htm IDEA: XBRL DOCUMENT v3.10.0.1
PENSION AND POSTRETIREMENT PLANS (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Defined Benefit Plan Disclosures [Line Items]        
Payment for Pension Benefits $ 25.3   $ 27.1  
Minimum non-elective contribution (NEC) % for the 401(K) plan (in hundredths) 3.00%      
Discretionary Contribution Percentage Mininum 1.00%      
Discretionary Contribution Percentage Maximum 3.00%      
Defined contribution retirement plan cost $ 17.3 $ 14.9 $ 49.1 $ 43.6
Defined Benefit Plan and Postretirement Plan Disclosure        
Schedule of Pensions and Postretirement Plans    
As a result of the Covance acquisition, the Company sponsors two defined benefit pension plans for the benefit of its employees at two U.K. subsidiaries and one defined benefit pension plan for the benefit of its employees at a German subsidiary, all of which are legacy plans of previously acquired companies. Benefit amounts for all three plans are based upon years of service and compensation. The German plan is unfunded while the U.K. pension plans are funded. The Company’s funding policy has been to contribute annually amounts at least equal to the local statutory funding requirements.
 
U.K. Plans
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Service cost for administrative expenses
$
0.9

 
$
1.0

 
$
2.7

 
$
2.8

Interest cost on benefit obligation
1.8

 
1.9

 
5.7

 
5.6

Expected return on plan assets
(3.1
)
 
(2.9
)
 
(9.7
)
 
(8.5
)
Net (gain) from prior periods
—

 
0.2

 
—

 
0.5

Defined benefit plan costs
$
(0.4
)
 
$
0.2

 
$
(1.3
)
 
$
0.4

 
 
 
 
 
 
 
 
Assumptions used to determine defined benefit plan cost
 
 
 
 
 
 
 
Discount rate
2.5
%
 
2.7
%
 
2.5
%
 
2.7
%
Expected return on assets
4.5
%
 
4.7
%
 
4.5
%
 
4.7
%
Salary increases
3.6
%
 
3.8
%
 
3.6
%
 
3.8
%
 
German Plan
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Service cost for administrative expenses
$
0.3

 
$
0.3

 
$
0.9

 
$
0.8

Interest cost on benefit obligation
0.1

 
0.1

 
0.5

 
0.4

Defined benefit plan costs
$
0.4

 
$
0.4

 
$
1.4

 
$
1.2

 
 
 
 
 
 
 
 
Assumptions used to determine defined benefit plan cost
 
 
 
 
 
 
 
Discount rate
1.7
%
 
1.7
%
 
1.7
%
 
1.7
%
Expected return on assets
N/A

 
N/A

 
N/A

 
N/A

Salary increases
2.0
%
 
2.0
%
 
2.0
%
 
2.0
%
The effect on operations for the Company Plan and the PEP is summarized as follows:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Service cost for administrative expenses
$
1.3

 
$
1.4

 
$
3.9

 
$
4.2

Interest cost on benefit obligation
3.3

 
3.6

 
9.8

 
10.8

Expected return on plan assets
(4.1
)
 
(4.1
)
 
(12.3
)
 
(12.3
)
Net amortization and deferral
2.9

 
2.8

 
8.8

 
8.3

Defined benefit plan costs
$
3.4

 
$
3.7

 
$
10.2

 
$
11.0

  
Pension And Postretirement Plans    
PENSION AND POST-RETIREMENT PLANS
The Company’s defined contribution retirement plan (401K Plan) covers substantially all legacy LabCorp employees. All employees eligible for the 401K Plan receive a minimum 3% non-elective contribution concurrent with each payroll period. The 401K Plan also permits discretionary contributions by the Company of up to 1% and up to 3% of pay for eligible employees based on years of service with the Company. The cost of this plan was $17.3 and $14.9 for the three months ended September 30, 2018, and 2017, respectively, and was $49.1 and $43.6 during the nine months ended September 30, 2018, and 2017, respectively. As a result of the Covance acquisition, the Company also incurred expense of $16.3 and $14.0 for the Covance 401K plan during the three months ended September 30, 2018, and 2017, respectively, and $51.6 and $42.6 during the nine months ended September 30, 2018, and 2017, respectively. All of the Covance U.S. employees, excluding legacy Chiltern employees, are eligible to participate in the Covance 401K plan, which features a maximum 4.5% Company match, based upon a percentage of the employee’s contributions. Chiltern employees are eligible to participate in the Chiltern 401K plan, which features a maximum 3.0% Company match, based upon a percentage of the employee's contributions.
The Company also maintains a frozen defined benefit retirement plan (Company Plan), which as of December 31, 2009, covered substantially all employees. The benefits to be paid under the Company Plan are based on years of credited service through December 31, 2009, and ongoing interest credits. Effective January 1, 2010, the Company Plan was closed to new participants. The Company’s policy is to fund the Company Plan with at least the minimum amount required by applicable regulations.
The Company maintains a second, unfunded, non-contributory, non-qualified defined benefit retirement plan (PEP), which as of December 31, 2009, covered substantially all of its senior management group. The PEP supplements the Company Plan and was closed to new participants effective January 1, 2010.     
The effect on operations for the Company Plan and the PEP is summarized as follows:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Service cost for administrative expenses
$
1.3

 
$
1.4

 
$
3.9

 
$
4.2

Interest cost on benefit obligation
3.3

 
3.6

 
9.8

 
10.8

Expected return on plan assets
(4.1
)
 
(4.1
)
 
(12.3
)
 
(12.3
)
Net amortization and deferral
2.9

 
2.8

 
8.8

 
8.3

Defined benefit plan costs
$
3.4

 
$
3.7

 
$
10.2

 
$
11.0


During the three and nine months ended September 30, 2018, the Company contributed $25.3 and $27.1, respectively, to the Company Plan.
As a result of the Covance acquisition, the Company also has a frozen non-qualified Supplemental Executive Retirement Plan (SERP). The SERP, which is not funded, is intended to provide retirement benefits for certain executive officers of the Company who were formerly employees of Covance. Benefit amounts are based upon years of service and compensation of the participating employees. The components of the net periodic pension cost for the three and nine months ended September 30, 2018, and 2017, are as follows:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Interest cost
$
0.1

 
$
0.1

 
$
0.1

 
$
0.2

Settlement gain
—

 
(0.1
)
 
—

 
(0.3
)
Net periodic pension cost
$
0.1

 
$
—

 
$
0.1

 
$
(0.1
)

The Company has assumed the obligations under a subsidiary’s post-retirement medical plan. Coverage under this plan is restricted to a limited number of employees/retirees of the subsidiary. The Company funds the plan through monthly contributions to a Health Reimbursement Arrangement, which can be used by eligible participants to purchase health care insurance through insurance exchanges. Effective January 1, 2017, Health Reimbursement Arrangement contributions for Medicare eligible participants ceased. The effect on operations of the post-retirement medical plan is shown in the following table:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Interest cost on benefit obligation
$
0.1

 
$
0.1

 
0.2

 
0.3

Net amortization and deferral
(0.4
)
 
(1.7
)
 
(1.0
)
 
(5.1
)
Post-retirement medical plan benefits
$
(0.3
)
 
$
(1.6
)
 
$
(0.8
)
 
$
(4.8
)

Also as a result of the Covance acquisition, the Company sponsors a post-employment retiree health and welfare plan for the benefit of eligible retirees at certain U.S. subsidiaries who retire after satisfying service and age requirements. Effective January 1, 2017, this plan ceased directly providing medical, prescription drug and dental coverage options previously available to eligible participants. Instead, the Company will fund the plan through monthly contributions to a Health Reimbursement Arrangement, which can be used by non-Medicare eligible participants to purchase health care insurance through insurance exchanges. The net periodic post-retirement benefit cost for the three months ended September 30, 2018, and 2017, was $(0.1) and $0.5, respectively, and was $(0.3) and $1.5 for the nine months ended September 30, 2018, and 2017, respectively.
As a result of the Covance acquisition, the Company sponsors two defined benefit pension plans for the benefit of its employees at two U.K. subsidiaries and one defined benefit pension plan for the benefit of its employees at a German subsidiary, all of which are legacy plans of previously acquired companies. Benefit amounts for all three plans are based upon years of service and compensation. The German plan is unfunded while the U.K. pension plans are funded. The Company’s funding policy has been to contribute annually amounts at least equal to the local statutory funding requirements.
 
U.K. Plans
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Service cost for administrative expenses
$
0.9

 
$
1.0

 
$
2.7

 
$
2.8

Interest cost on benefit obligation
1.8

 
1.9

 
5.7

 
5.6

Expected return on plan assets
(3.1
)
 
(2.9
)
 
(9.7
)
 
(8.5
)
Net (gain) from prior periods
—

 
0.2

 
—

 
0.5

Defined benefit plan costs
$
(0.4
)
 
$
0.2

 
$
(1.3
)
 
$
0.4

 
 
 
 
 
 
 
 
Assumptions used to determine defined benefit plan cost
 
 
 
 
 
 
 
Discount rate
2.5
%
 
2.7
%
 
2.5
%
 
2.7
%
Expected return on assets
4.5
%
 
4.7
%
 
4.5
%
 
4.7
%
Salary increases
3.6
%
 
3.8
%
 
3.6
%
 
3.8
%
 
German Plan
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Service cost for administrative expenses
$
0.3

 
$
0.3

 
$
0.9

 
$
0.8

Interest cost on benefit obligation
0.1

 
0.1

 
0.5

 
0.4

Defined benefit plan costs
$
0.4

 
$
0.4

 
$
1.4

 
$
1.2

 
 
 
 
 
 
 
 
Assumptions used to determine defined benefit plan cost
 
 
 
 
 
 
 
Discount rate
1.7
%
 
1.7
%
 
1.7
%
 
1.7
%
Expected return on assets
N/A

 
N/A

 
N/A

 
N/A

Salary increases
2.0
%
 
2.0
%
 
2.0
%
 
2.0
%
  
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement and Curtailment 0.0 (0.1) $ 0.0 (0.3)
Other Postretirement Benefits Plan [Member]        
Defined Benefit Plan and Postretirement Plan Disclosure        
Interest cost on benefit obligation 0.1 0.1 0.2 0.3
Net amortization and deferral (0.4) (1.7) (1.0) (5.1)
Defined benefit/postretirement plan costs (0.3) (1.6) (0.8) (4.8)
Pension Plan [Member]        
Defined Benefit Plan and Postretirement Plan Disclosure        
Service cost for benefits earned 1.3 1.4 3.9 4.2
Interest cost on benefit obligation 3.3 3.6 9.8 10.8
Expected return on plan assets (4.1) (4.1) (12.3) (12.3)
Net amortization and deferral 2.9 2.8 8.8 8.3
Defined benefit/postretirement plan costs 3.4 3.7 $ 10.2 11.0
Supplemental Employee Retirement Plan [Member]        
Defined Benefit Plan and Postretirement Plan Disclosure        
Schedule of Costs of Retirement Plans [Table Text Block]    
The components of the net periodic pension cost for the three and nine months ended September 30, 2018, and 2017, are as follows:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Interest cost
$
0.1

 
$
0.1

 
$
0.1

 
$
0.2

Settlement gain
—

 
(0.1
)
 
—

 
(0.3
)
Net periodic pension cost
$
0.1

 
$
—

 
$
0.1

 
$
(0.1
)
  
Interest cost on benefit obligation 0.1 0.1 $ 0.1 0.2
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Curtailment 0.1 0.0 $ 0.1 (0.1)
Postretirement Health Coverage [Member]        
Defined Benefit Plan and Postretirement Plan Disclosure        
Schedule of Costs of Retirement Plans [Table Text Block]    
The effect on operations of the post-retirement medical plan is shown in the following table:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Interest cost on benefit obligation
$
0.1

 
$
0.1

 
0.2

 
0.3

Net amortization and deferral
(0.4
)
 
(1.7
)
 
(1.0
)
 
(5.1
)
Post-retirement medical plan benefits
$
(0.3
)
 
$
(1.6
)
 
$
(0.8
)
 
$
(4.8
)
  
Defined benefit/postretirement plan costs (0.1) 0.5 $ (0.3) 1.5
Other Pension, Postretirement and Supplemental Plans [Member]        
Defined Benefit Plan and Postretirement Plan Disclosure        
Service cost for benefits earned 0.9 1.0 2.7 2.8
Interest cost on benefit obligation 1.8 1.9 5.7 5.6
Expected return on plan assets (3.1) (2.9) (9.7) (8.5)
Net amortization and deferral 0.0 0.2 0.0 0.5
Defined benefit/postretirement plan costs $ (0.4) $ 0.2 $ (1.3) $ 0.4
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate 2.50% 2.70% 2.50% 2.70%
Defined Benefit Plan Expected Rate Of Return On Assets Other Assets 4.50% 4.70% 4.50% 4.70%
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Rate of Compensation Increase 3.60% 3.80% 3.60% 3.80%
Other Pension Plan [Member]        
Defined Benefit Plan and Postretirement Plan Disclosure        
Service cost for benefits earned $ 0.3 $ 0.3 $ 0.9 $ 0.8
Interest cost on benefit obligation 0.1 0.1 0.5 0.4
Defined benefit/postretirement plan costs $ 0.4 $ 0.4 $ 1.4 $ 1.2
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate 1.70% 1.70% 1.70% 1.70%
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Rate of Compensation Increase 2.00% 2.00% 2.00% 2.00%
Covance [Member]        
Defined Benefit Plan Disclosures [Line Items]        
Defined contribution retirement plan cost $ 16.3 $ 14.0 $ 51.6 $ 42.6