16. Employee Benefit Obligations


	December 31,
($ in millions)	2016		2015

Underfunded defined benefit pension liabilities	$	963	$	707
Less current portion		(25)		(19)
Long-term defined benefit pension liabilities		938		688
Retiree medical and other postemployment benefits		226		148
Deferred compensation plans		272		281
Other		61		30
	$	1,497	$	1,147

During 2016, Ball acquired 11 pension plans and two retiree medical plans as part of the Rexam acquisition and divested plans in certain foreign countries. The company’s pension plans cover U.S., Canadian and various European employees meeting certain eligibility requirements. The defined benefit plans for salaried employees, as well as those for hourly employees in Germany, Sweden, the U.K. and Ireland provide pension benefits based on employee compensation and years of service. Plans for North American hourly employees provide benefits based on fixed rates for each year of service. While the German, Swedish and certain U.S. plans are not funded, the company maintains book reserves, and annual additions to the reserves are generally tax deductible. With the exception of the unfunded German, Swedish and certain U.S. plans, our policy is to fund the defined benefit plans in amounts at least sufficient to satisfy statutory funding requirements taking into consideration deductibility under existing tax laws and regulations.

The company provides employees with statutory termination indemnity benefits in various countries. These indemnity benefits vary based on country specific requirements and criteria, such as years of service or age. At December 31, 2016, the amount of liability included in other above associated with these plans totaled $15 million.

The company also participates in three multi-employer defined benefit plans for which Ball is not the sponsor. The aggregated expense in 2016 for these plans of $2 million, which approximated the total annual funding, is included in the summary of net periodic benefit cost. The risks of participating in multi-employer pension plans are different from single-employer plans. Assets contributed to a multi-employer plan by one employer may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. In the event that Ball withdraws from participation in one of these plans, then applicable law could require the company to make additional lump-sum contributions to the plan. The company’s withdrawal liability for any multi-employer defined benefit pension plan would depend on the extent of the plan’s funding of vested benefits. Additionally, if a multi-employer defined benefit pension plan fails to satisfy certain minimum funding requirements, the IRS may impose a nondeductible excise tax of 5 percent on the amount of the accumulated funding deficiency for those employers contributing to the plan.

Defined Benefit Pension Plans

Amounts recognized in the consolidated balance sheets for the funded status consisted of:


	December 31,
	2016						2015
($ in millions)	U.S.		Foreign		Total		U.S.		Foreign		Total

Long-term pension asset	$	—	$	147	$	147	$	—	$	2	$	2
Defined benefit pension liabilities (a)		(679)		(284)		(963)		(374)		(333)		(707)
	$	(679)	$	(137)	$	(816)	$	(374)	$	(331)	$	(705)

(a)

As part of the Rexam acquisition, there is an unfunded, non-qualified U.S. plan obligation of $33 million that has been annuitized with a corresponding asset of $33 million recorded in other assets.

An analysis of the change in benefit accruals for 2016 and 2015 follows:


	December 31,
	2016							2015
($ in millions)	U.S.		Foreign			Total		U.S.		Foreign			Total

Change in projected benefit obligation:
Benefit obligation at prior year end	$	1,362	$	647		$	2,009	$	1,416	$	743		$	2,159
Service cost		58		14			72		52		15			67
Interest cost		96		58			154		57		18			75
Benefits paid		(161)		(94)			(255)		(100)		(28)			(128)
Net actuarial (gains) losses		(47)		344			297		(71)		(37)			(108)
Business acquisition		1,888		3,196			5,084		—		—			—
Business divestiture		—		(440)			(440)		—		—			—
Other		(10)		2			(8)		8		—			8
Effect of exchange rates		—		(290)			(290)		—		(64)			(64)
Benefit obligation at year end		3,186		3,437			6,623		1,362		647			2,009
Change in plan assets:
Fair value of assets at prior year end		988		316			1,304		1,098		337			1,435
Actual return on plan assets		(17)		163			146		(11)		10			(1)
Employer contributions		111		185			296		1		2			3
Contributions to unfunded plans (a)		4		18			22		—		18			18
Benefits paid		(161)		(94)			(255)		(100)		(28)			(128)
Business acquisition		1,592		3,296			4,888		—		—			—
Business divestiture		—		(303)			(303)		—		—			—
Other		(10)		2			(8)		—		—			—
Effect of exchange rates		—		(283)			(283)		—		(23)			(23)
Fair value of assets at end of year		2,507		3,300			5,807		988		316			1,304
Underfunded status	$	(679)	$	(137)	(a)	$	(816)	$	(374)	$	(331)	(a)	$	(705)

(a)

The company’s German, Swedish and certain U.S. plans are unfunded and the liabilities are included in the company’s consolidated balance sheets. Benefits are paid directly by the company to the participants. The unfunded German, Swedish and certain U.S. plans (all acquired as part of Rexam) represented $246 million, $20 million and $40 million of the total underfunded status at December 31, 2016, respectively. The German plans represented $317 million of the underfunded status at December 31, 2015.

Amounts recognized in accumulated other comprehensive (earnings) loss, including other post employment benefits, consisted of:


	December 31,
	2016						2015
($ in millions)	U.S.		Foreign		Total		U.S.		Foreign		Total

Net actuarial loss	$	585	$	272	$	857	$	587	$	129	$	716
Net prior service cost (credit)		11		—		11		11		(2)		9
Tax effect and currency exchange rates		(232)		(46)		(278)		(253)		(27)		(280)
	$	364	$	226	$	590	$	345	$	100	$	445

The accumulated benefit obligation for all U.S. defined benefit pension plans was $3,130 million and $1,302 million at December 31, 2016 and 2015, respectively. The accumulated benefit obligation for all foreign defined benefit pension plans was $3,433 million and $593 million at December 31, 2016 and 2015, respectively. Following is the information for defined benefit plans with an accumulated benefit obligation in excess of plan assets:


	December 31,
	2016						2015
($ in millions)	U.S.		Foreign		Total		U.S.		Foreign		Total

Projected benefit obligation	$	3,186	$	326	$	3,512	$	1,362	$	359	$	1,721
Accumulated benefit obligation		3,130		322		3,452		1,302		339		1,640
Fair value of plan assets (a)		2,507		43		2,550		988		35		1,023

(a)

The German, Swedish and certain U.S. plans are unfunded and, therefore, there is no fair value of plan assets associated with them.

Components of net periodic benefit cost were:


	Years Ended December 31,
	2016							2015						2014
($ in millions)	U.S.		Foreign			Total		U.S.		Foreign		Total		U.S.		Foreign		Total

Ball-sponsored plans:
Service cost	$	58	$	14		$	72	$	52	$	15	$	67	$	46	$	14	$	60
Interest cost		96		58			154		57		18		75		62		26		88
Expected return on plan assets		(106)		(70)			(176)		(79)		(20)		(99)		(83)		(17)		(100)
Amortization of prior service cost		(1)		—			(1)		(1)		—		(1)		—		(1)		(1)
Recognized net actuarial loss		32		6			38		39		9		48		30		8		38
Curtailment and settlement losses (gains) including special termination benefits (a)		—		80	(a)		80		5		—		5		45		—		45
Net periodic benefit cost for Ball sponsored plans		79		88			167		73		22		95		100		30		130

Net periodic benefit cost for multi-employer plans		2		—			2		1		—		1		2		—		2
Total net periodic benefit cost	$	81	$	88		$	169	$	74	$	22	$	96	$	102	$	30	$	132

(a)

In June 2016, as part of the sale of the Divestment Business, Ball divested plans in certain locations. The divestitures in certain locations resulted in a non-cash curtailment charge of $80 million.

In September 2014, the company executed a lump sum buyout offer to certain terminated vested pension plan participants in its U.S. defined benefit pension plans. The offer provided participants with a one-time election to receive a lump-sum payout in full settlement of their remaining pension benefit. The company recorded a non-cash charge of $45 million for the settlement of its pension benefit obligations in connection with this offer in 2014, based on pension asset values and liabilities at the time of the settlement.

The estimated actuarial net loss and net prior service cost for the defined benefit pension plans that will be amortized from accumulated other comprehensive earnings (loss) into net periodic benefit cost during 2017 are a loss of $38 million and a cost of $2 million, respectively.

Contributions to the company’s defined benefit pension plans, not including the unfunded German, Swedish and certain U.S. plans, are expected to be approximately $180 million for the U.S. and $10 million for the foreign plans in 2017. This estimate may change based on changes in the Pension Protection Act, actual plan asset performance and available company cash flow, among other factors. Benefit payments related to these U.S. plans are expected to be approximately $230 million for each of the years 2017 through 2021 and a total of $1,116 million for the years 2022 through 2026. Benefit payments for the foreign plans, excluding the German and Swedish plans, are expected to be $128 million, $132 million, $136 million, $140 million and $144 million for the years ending December 31, 2017 through 2021, respectively, and a total of $794 million for the years 2022 through 2026. Rexam agreed to establish and fund an escrow cash account in the amount of $171 million on behalf of the acquired Rexam U.K. pension plan which was subsequently contributed to the U.K. pension plan in July 2016 and is reflected as employer contributions in the change in plan assets.

Benefit payments to participants in the unfunded German, Swedish and certain U.S. plans are expected to be between $20 million to $22 million in each of the years 2017 through 2021 and a total of $87 million for the years 2022 through 2026.

Weighted average assumptions used to determine benefit obligations for the significant North American plans at December 31 were:


	U.S.						Canada
	2016	(a)	2015		2014		2016		2015		2014
Discount rate	4.26	%	4.60	%	4.15	%	3.50	%	3.50	%	3.50	%
Rate of compensation increase	4.14	%	4.80	%	4.80	%	NA		3.00	%	3.00	%

(a)

In 2016, the weighted average assumptions for U.S. pension plans include pension plans assumed as part of the Rexam acquisition.

Weighted average assumptions used to determine benefit obligations for the significant European plans at December 31 were:


	U.K.						Germany
	2016	(a)	2015		2014		2016	(a)	2015		2014
Discount rate	2.70	%	3.75	%	3.75	%	1.54	%	2.25	%	1.75	%
Rate of compensation increase	4.30	%	3.00	%	3.00	%	2.50	%	2.50	%	2.50	%
Pension increase	3.30	%	3.15	%	3.15	%	1.50	%	1.75	%	1.75	%

(a)

In 2016, the U.K. weighted average assumptions are for the acquired Rexam plan only, and the German assumptions include pension plans assumed as part of the Rexam acquisition and one legacy Ball plan.

The discount and compensation increase rates used above to determine the benefit obligations at December 31, 2016, will be used to determine net periodic benefit cost for 2017. A reduction of the expected return on pension assets assumption by one quarter of a percentage point would result in an approximate $15 million increase in 2017 pension expense, while a quarter of a percentage point reduction in the discount rate applied to the pension liability would result in an estimated reduction of pension expense of approximately $2 million in 2017.

Weighted average assumptions used to determine net periodic benefit cost for the significant North American plans for the years ended December 31 were:


	U.S. (a)						Canada
	2016		2015		2014		2016		2015		2014
Discount rate	4.60	%	4.15	%	5.00	%	3.50	%	3.50	%	4.25	%
Rate of compensation increase	4.98	%	4.80	%	4.80	%	NA		3.00	%	3.00	%
Expected long-term rate of return on assets	6.88	%	7.25	%	7.25	%	4.00	%	4.00	%	4.56	%

(a)

In 2016, the weighted average assumptions for U.S. pension plans include pension plans assumed as part of the Rexam acquisition.

Weighted average assumptions used to determine net periodic benefit cost for the significant European plans for the years ended December 31 were:


	U.K. (a)						Germany (a)
	2016		2015		2014		2016		2015		2014
Discount rate	2.90	%	3.75	%	4.50	%	1.29	%	1.75	%	3.25	%
Rate of compensation increase	3.80	%	3.00	%	4.25	%	2.00	%	2.50	%	2.75	%
Pension increase	2.80	%	3.15	%	3.40	%	1.50	%	1.75	%	1.75	%
Expected long-term rate of return on assets	3.40	%	6.50	%	6.50	%	N/A		N/A		N/A

(a)

In 2016, the U.K. assumption is for the Rexam plan acquired only and the German weighted average assumptions include pension plans assumed as part of the Rexam acquisition and one legacy Ball plan.

Current financial accounting standards require that the discount rates used to calculate the actuarial present value of pension and other postretirement benefit obligations reflect the time value of money as of the measurement date of the benefit obligation and reflect the rates of return currently available on high-quality, fixed-income securities whose cash flows (via coupons and maturities) match the timing and amount of future benefit payments of the plan. In addition, changes in the discount rate assumption should reflect changes in the general level of interest rates.

In selecting the discounts rates for the various pension plans at December 31, 2016, the expected or hypothetical payments were reviewed for each plan. The expected or hypothetical payments were discounted using the spot rates from the actuarial Yield Curve for each plan to obtain a single equivalent discount rate that is appropriate for the duration of each plan.

The assumption related to the expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested to provide for the benefits over the life of the plans. The assumption was based upon Ball’s pension plan asset allocations, investment strategies and the views of investment managers, consultants and other large pension plan sponsors. Some reliance was placed on the historical and expected asset returns of our plans. An asset-allocation optimization model was used to project future asset returns using simulation and asset class correlation. The analysis included expected future risk premiums, forward-looking return expectations derived from the yield on long-term bonds and the price earnings ratios of major stock market indexes, expected inflation and real risk-free interest rate assumptions and the fund’s expected asset allocation.

The expected long-term rates of return on assets were calculated by applying the expected rate of return to a market related value of plan assets at the beginning of the year, adjusted for the weighted average expected contributions and benefit payments. The market related value of plan assets used to calculate the expected return was $6,068 million for 2016, $1,395 million for 2015 and $1,471 million for 2014.

For pension plans, accumulated actuarial gains and losses in excess of a 10 percent corridor and the prior service cost are amortized over the average remaining service period of active participants or over the average life expectancy for plans with significant inactive participants.

Defined Benefit Pension Plan Assets

Policies and Allocation Information

Pension investment committees or scheme trustees of the company and its relevant subsidiaries establish investment policies and strategies for the plan assets. The investment policies and strategies include the following common themes to: (1) provide for long-term growth of principal without undue exposure to risk, (2) minimize contributions to the plans, (3) minimize and stabilize pension expense and (4) achieve a rate of return above the market average for each asset class over the long term. The pension investment committees are required to regularly, but no less frequently than once annually, review asset mix and asset performance, as well as the performance of the investment managers. Based on their reviews, which are generally conducted quarterly, investment policies and strategies are revised as appropriate.

Target asset allocations are set using a minimum and maximum range for each asset category as a percent of the total funds’ market value. Following are the target asset allocations established as of December 31, 2016:


	U.S.
	Legacy Ball		Legacy Rexam		Canada		Ireland		U.K.

Cash and cash equivalents	0-10	%	0-2	%	—	%	—	%	50-80	%(c)
Equity securities	10-75	%(a)	13-18	%	5	%	44-52	%	5-40	%
Fixed income securities	25-70	%(b)	75-95	%	95	%	37-47	%	50-80	%(c)
Completion	—	%	10-20	%(d)	—	%	—	%	—	%
Alternative investments	0-35	%	—	%	—	%	9-11	%	0-20	%

(a)

Equity securities may consist of: (1) up to 25 percent large cap equities, (2) up to 10 percent mid cap equities, (3) up to 10 percent small cap equities, (4) up to 35 percent foreign equities and (5) up to 35 percent special equities. Holdings in Ball Corporation common stock or Ball bonds cannot exceed 5 percent of the trust’s assets.

(b)

Debt securities may include up to 10 percent non-investment grade bonds, up to 10 percent bank loans and up to 15 percent international bonds.

(c)

The target allocation for fixed income securities and cash and cash equivalents combined is 50 to 80 percent.

(d)

Completion assets are fixed income derivatives to manage interest rate and credit exposure for the entire asset portfolio.

The actual weighted average asset allocations for Ball’s defined benefit pension plans, which individually were within the established targets for each country for that year, were as follows at December 31:


	2016		2015
Cash and cash equivalents	6	%	2	%
Equity securities	18	%	37	%
Fixed income securities	68	%	52	%
Alternative investments	8	%	9	%
	100	%	100	%

Fair Value Measurements of Pension Plan Assets

Following is a description of the valuation methodologies used for pension assets measured at fair value:

Cash and cash equivalents: Consist of cash on deposit with brokers and short-term U.S. Treasury money market funds and are net of receivables and payables for securities traded at the period end but not yet settled. All cash and cash equivalents are stated at cost, which approximates fair value.

Corporate equity securities: Valued at the closing price reported on the active market on which the individual security is traded.

U.S. government and agency securities: Valued using the pricing of similar agency issues, live trading feeds from several vendors and benchmark yields.

Corporate bonds and notes: Valued using market inputs including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data including market research publications. Inputs may be prioritized differently at certain times based on market conditions.

Commingled funds: The shares held are valued at the net asset value (NAV) at year end.

NAV practical expedient: Includes certain commingled fixed income and equity funds as well as limited partnership and other funds. Certain of the partnership investments receive fair market valuations on a quarterly basis. Certain other commingled funds and partnerships invest in market-traded securities, both on a long and short basis. These investments are valued using quoted market prices. For the partnership that invests in timber properties, a detailed valuation is performed by an independent appraisal firm every three years. In the interim years, the investment manager updates the independently prepared valuation for property value changes, timber growth, harvesting, etc.

The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The levels assigned to the defined benefit plan assets are summarized in the tables below:


	December 31, 2016
($ in millions)	Level 1		Level 2		Total

U.S. pension assets, at fair value (includes U.S. Rexam assets):
Cash and cash equivalents	$	—	$	185	$	185
Corporate equity securities:
Consumer discretionary		53		—		53
Financials		43		—		43
Healthcare		27		—		27
Industrials		47		—		47
Information technology		66		—		66
Other		39		—		39
U.S. government and agency securities:
FHLMC mortgage backed securities		—		17		17
FNMA mortgage backed securities		—		64		64
Municipal bonds		—		49		49
Treasury bonds		85		—		85
Other		8		18		26
Corporate bonds and notes:
Communications		—		58		58
Consumer discretionary		—		57		57
Consumer staples		—		64		64
Financials		—		280		280
Healthcare		—		98		98
Industrials		—		115		115
Information technology		—		84		84
Oil and gas		—		122		122
Private placement		—		76		76
Utilities		—		139		139
Other		—		71		71
Commingled funds
International		17		—		17
Total level 1 and level 2	$	385	$	1,497		1,882
Other investments measured at net asset value (a)						625
Total assets					$	2,507

(a)

In accordance with recently adopted accounting guidance, certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the change in plan assets reconciliation.


	December 31, 2015
	Level 1		Level 2		Total
($ in millions)

U.S. pension assets, at fair value:
Cash and cash equivalents	$	3	$	66	$	69
Corporate equity securities:
Consumer discretionary		47		—		47
Financials		37		—		37
Healthcare		26		—		26
Industrials		61		—		61
Information technology		53		—		53
Other		34		—		34
U.S. government and agency securities:
FHLMC mortgage backed securities		—		14		14
FNMA mortgage backed securities		—		56		56
Treasury bonds		32		—		32
Other		12		12		24
Corporate bonds and notes:
Financials		—		92		92
Industrials		—		21		21
Oil and gas		—		22		22
Private placement		—		37		37
Other		—		103		103
Commingled funds
International		16		—		16
Other		—		1		1
Total level 1 and level 2	$	321	$	424		745
Other investments measured at net asset value (a)						243
Total assets					$	988

(a)


		December 31,
($ in millions)		2016		2015
		Level 1		Level 2
U.K. pension assets, at fair value (a):
Cash and cash equivalents	$	279	$	11
Fixed income commingled funds		1,538		—
Other		31		—
Total level 1		1,848		11
Other investments measured at net asset value (b)		1,374		261
Total assets	$	3,222	$	272

(a) The 2016 assets include only acquired Rexam plan.

(b) In accordance with recently adopted accounting guidance, certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the change in plan assets reconciliation.

At December 31, 2016, the pension assets for Canada of $36 million and Ireland of $35 million were measured at fair value using the NAV per share (or its equivalent) practical expedient. The Canadian pension assets include commingled fixed income and equity funds. The Irish pension assets contain commingled fixed income, equity and alternative investment funds. At December 31, 2015, the Canadian pension assets of $37 million consisted of Level 2 $7 million fixed income securities and $30 million of other investments measured using the NAV practical expedient.

Other Postemployment Benefits

The company sponsors postretirement health care and life insurance plans for certain U.S. and Canadian employees. Also, post retirement health care and life insurance plans were acquired as part of the Rexam acquisition. Employees may also qualify for long-term disability, medical and life insurance continuation and other postemployment benefits upon termination of active employment prior to retirement. All of the Ball-sponsored postretirement health care and life insurance plans are unfunded and, with the exception of life insurance benefits, are self-insured.

In Canada, the company provides supplemental medical and other benefits in conjunction with Canadian provincial health care plans. Most U.S. salaried employees who retired prior to 1993 are covered by noncontributory defined benefit medical plans with capped lifetime benefits. Ball provides a fixed subsidy toward each retiree’s future purchase of medical insurance for U.S. salaried and substantially all nonunion hourly employees retiring after January 1, 1993. Life insurance benefits are noncontributory. Ball has no commitments to increase benefits provided by any of the postemployment benefit plans.

An analysis of the change in other postretirement benefit accruals for 2016 and 2015 follows:



($ in millions)	2016		2015

Change in benefit obligation:
Benefit obligation at prior year end	$	135	$	154
Service cost		3		2
Interest cost		8		6
Benefits paid		(16)		(9)
Net actuarial (gain) loss		(18)		(17)
Business acquisition		120		—
Special termination benefits		—		2
Effect of exchange rates and other		—		(3)
Benefit obligation at year end	$	232	$	135

Components of net periodic benefit cost were:


	Years Ended December 31,
($ in millions)	2016		2015		2014

Service cost	$	3	$	2	$	2
Interest cost		8		6		7
Amortization of prior service cost		(1)		(1)		(1)
Recognized net actuarial loss (gain)		(3)		(2)		(1)
Special termination benefits		—		2		—
Net periodic benefit cost	$	7	$	7	$	7

Approximately $4 million of estimated net actuarial gain and $1 million of prior service benefit will be amortized from accumulated other comprehensive earnings (loss) into net periodic benefit cost during 2017.

The assumptions for the U.S. and Canadian plans were based upon a long-term forecast of medical and direct trends and claims data projected forward using generally accepted actuarial methods. For other postretirement benefits, accumulated actuarial gains and losses and prior service cost are amortized over the average remaining service period of active participants.

Weighted average assumptions used to determine benefit obligations for the other postretirement benefit plans at December 31 were:


	U.S.						Canada
	2016	(a)	2015		2014		2016		2015		2014
Discount rate	4.16	%	4.60	%	4.15	%	3.50	%	3.50	%	3.50	%
Rate of compensation increase (b)	4.50	%	N/A		N/A		NA		NA		NA

(a)

In 2016, the weighted average assumptions for U.S. other postretirement benefit plans include plans assumed as part of the Rexam acquisition.

(b)

In 2016, the rate of compensation increase is not applicable for the U.S. Ball other postretirement benefit plans.

Weighted average assumptions used to determine net periodic benefit cost for the other postretirement benefit plans at December 31 were:


	U.S.						Canada
	2016	(a)	2015		2014		2016		2015		2014
Discount rate	4.04	%	4.15	%	5.00	%	3.50	%	3.50	%	4.25	%
Rate of compensation increase (b)	4.50	%	N/A		N/A		NA		NA		NA

(a)

In 2016, the weighted average assumptions for U.S. other postretirement benefit plans include plans assumed as part of the Rexam acquisition.

(b)

In 2016, the rate of compensation increase is not applicable for the U.S. Ball other postretirement benefit plans.

For the U.S. health care plans at December 31, 2016, a 7 percent health care cost trend rate was used for pre-65 and post-65 benefits, and trend rates were assumed to increase to 5 percent in 2021 and remain at that level thereafter. For the Canadian plans, a 4.75 percent health care cost trend rate was used, which was assumed to increase to 5 percent by 2018 and remain at that level in subsequent years. Benefit payment caps exist in many of the company’s health care plans.

Contributions to the company’s other postretirement plans are expected to be approximately $24 million in 2017. This estimate may change based on available company cash flow, among other factors. Benefit payments related to these plans are expected to be between $22 million and $24 million in each of the years ending December 31, 2017, through 2021 and a total of $94 million for the years 2022 through 2026.

Health care cost trend rates can have an effect on the amounts reported for the health care plan. A one-percentage point increase in assumed health care cost trend rates would increase the total of service and interest cost by less than $1 million and the postretirement benefit obligation by $8 million. A one-percentage point decrease would decrease the total of service and interest cost by less than $1 million and the postretirement benefit obligation by $6 million.

Deferred Compensation Plans

Certain management employees may elect to defer the payment of all or a portion of their annual incentive compensation into the company’s deferred compensation plan and/or the company’s deferred compensation stock plan. The employee becomes a general unsecured creditor of the company with respect to any amounts deferred. Amounts deferred into the deferred compensation stock plan receive a 20 percent company match with a maximum match of $20,000 per year. Amounts deferred into the deferred compensation stock plan are represented in the participant's account as stock units, with each unit having a value equivalent to one share of Ball’s common stock. Participants in the deferred compensation stock plan are generally allowed to reallocate a prescribed number of units to other notional investment funds subject to specified time constraints.

Other Benefit Plans

The company matches U.S. salaried employee contributions to the 401(k) plan with shares of Ball common stock up to 100 percent of the first 3 percent of a participant’s salary plus 50 percent of the next 2 percent. The expense associated with the company match amounted to $25 million in 2016 and $24 million in both 2015 and 2014.

In addition, substantially all employees within the company’s aerospace segment who participate in Ball’s 401(k) plan may receive a performance-based matching cash contribution of up to 4 percent of base salary. The company recognized no additional compensation expenses related to this program in 2016 and 2015 and $5 million of additional compensation expense in 2014.