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Other Postretirement Benefit Plans
 12 Months Ended
Dec. 31, 2020
Accrued postretirement liability  
Defined Benefit Plan Disclosure [Line Items]  
Other Postretirement Benefit Plans
Note 16 - Other Postretirement Benefit Plans
The Company and its subsidiaries sponsor several funded and unfunded postretirement plans that provide health care and life insurance benefits for eligible retirees and dependents. Depending on retirement date and employee classification, certain health care plans contain contribution and cost-sharing features such as deductibles, coinsurance and limitations on employer-provided subsidies. The remaining health care and life insurance plans are noncontributory.

The following tables summarize the net periodic benefit cost information and the related assumptions used to measure the net periodic benefit cost for the years ended December 31:
 202020192018
Components of net periodic benefit (credit) cost:
Service cost$0.2 $0.2 $0.2 
Interest cost2.1 5.9 7.6 
Expected return on plan assets(0.4)(3.2)(3.7)
Amortization of prior service credit(9.8)(5.4)(1.7)
Recognition of net actuarial losses (gains)1.4 (18.0)(16.7)
Net periodic benefit (credit) cost$(6.5)$(20.5)$(14.3)
Assumptions:202020192018
Discount rate3.43 %
3.48% to 4.30%
3.57 %
Rate of return3.00 %4.85 %4.50 %

The following table summarizes assumptions used to measure the benefit obligation for the other postretirement benefit plans at December 31:
Assumptions:20202019
Discount rate2.62 %3.43 %

The Company recognized actuarial losses of $1.4 million during 2020 primarily due to the impact of an 81 basis point decrease in the discount rate used to measure the Company's defined benefit postretirement obligations, which decreased from 3.43% in 2019 to 2.62% in 2020. The decrease in the discount rate resulted in a $3.9 million loss. This actuarial loss was partially offset by actuarial gains of $2.0 million due to the impact of a reduction in the rate for Medicare Advantage plans, $0.4 million due to higher than expected returns on plans assets and $0.1 million due to changes in other actuarial assumptions.

The Company recognized actuarial gains of $18.0 million during 2019 primarily due to the impact of a reduction in the rates for Medicare Advantage plans of $22.7 million. The change in the contractual rates for Medicare Advantage plans was due to a law change that repealed the tax on health care insurers after 2020.  In addition to the change in rates on Medicare Advantage plans, the Company recognized actuarial gains of $3.6 million due to higher than expected returns on plan assets and $5.2 million due to changes in other actuarial assumptions. These actuarial gains were partially offset by an 87 basis point decrease in the discount rate used to measure the Company's defined benefit postretirement obligations, which decreased from 4.30% to 3.43%. The decrease in the discount rate resulted in a $13.5 million loss.

During July 2019, the Company announced changes to the medical plan offerings for certain of its postretirement benefit plans, effective January 1, 2020, which will impact the benefits provided to certain retirees. This plan amendment resulted in a $92.8 million reduction in its postretirement benefit obligations and a corresponding pretax adjustment to accumulated other comprehensive loss. Starting with the three months ended September 30, 2019, the pretax adjustment of $92.8 million will be amortized from accumulated other comprehensive loss into net periodic benefit cost (as a benefit) until 2031.
Note 16 - Other Postretirement Benefit Plans (continued)
The Company recognized actuarial gains of $16.7 million during 2018 primarily due to the impact of a 73 basis point increase in the discount rate used to measure the Company's defined benefit postretirement obligations, which increased from 3.57% in 2017 to 4.30% in 2018, and due to a number of participants opting out of coverage from the plans in response to a financial incentive program offered to eligible participants of the Company's retiree health and life insurance plans. The Company recognized actuarial gains of $10.6 million as a result of the increase in the discount rate and $10.4 million as a result of the impact of the opt-out program. These actuarial gains were partially offset by lower than expected returns on plan assets of $4.0 million and by the impact of experience losses and other changes in valuation assumptions of $0.3 million.

The discount rate assumption is based on current rates of high-quality long-term corporate bonds over the same period that benefit payments will be required to be made. The expected rate of return on plan assets assumption is based on the weighted-average expected return on the various asset classes in the plans’ portfolio. The asset class return is developed using historical asset return performance as well as current market conditions such as inflation, interest rates and equity market performance.

For expense purposes in 2020, the Company applied a discount rate of 3.43% to its other postretirement benefit plans. For expense purposes in 2021, the Company will apply a discount rate of 2.62% to its other postretirement benefit plans.

For expense purposes in 2020, the Company applied an expected rate of return of 3.00% to the VEBA trust assets.

The following tables set forth the change in benefit obligation, change in plan assets, funded status and amounts recognized on the Consolidated Balance Sheets of the other postretirement benefit plans as of December 31, 2020 and 2019:
  
20202019
Change in benefit obligation:
Benefit obligation at beginning of year$63.4 $186.9 
Service cost0.2 0.2 
Interest cost2.1 5.9 
Plan amendments(3.1)(92.8)
Actuarial losses (gains)1.8 (14.4)
International plan exchange rate change— 0.2 
Benefits paid(6.8)(22.7)
Acquisitions— 0.1 
Benefit obligation at end of year$57.6 $63.4 
Change in plan assets:
Fair value of plan assets at beginning of year$64.4 $72.3 
Company contributions / payments2.7 8.0 
Transfer to VEBA trust for certain active employees' medical benefits(50.0)— 
Return on plan assets0.8 6.8 
Benefits paid(6.8)(22.7)
Fair value of plan assets at end of year11.1 64.4 
Funded status at end of year$(46.5)$1.0 
Note 16 - Other Postretirement Benefit Plans (continued)
Amounts recognized on the Consolidated Balance Sheets:20202019
Non-current assets$— $36.6 
Current liabilities(5.2)(3.8)
Non-current liabilities(41.3)(31.8)
 $(46.5)$1.0 
Amounts recognized in accumulated other comprehensive income:
Net prior service credit$(91.5)$(98.2)
Accumulated other comprehensive income$(91.5)$(98.2)
Changes to prior service credit recognized in accumulated other comprehensive (income) loss:
Accumulated other comprehensive income at beginning of year$(98.2)$(10.8)
Prior service credit(3.1)(92.8)
Recognized prior service credit9.8 5.4 
Total recognized in accumulated other comprehensive income at December 31$(91.5)$(98.2)

The presentation in the above tables for amounts recognized in accumulated other comprehensive (income) loss on the Consolidated Balance Sheets is before the effect of income taxes.

The current portion of accrued postretirement benefits, which was included in salaries, wages and benefits on the Consolidated Balance Sheets, was $5.2 million and $3.8 million at December 31, 2020 and 2019, respectively. In 2021, the current portion of accrued postretirement benefits related to unfunded plans and represented the actuarial present value of expected payments related to the plans to be made over the next 12 months.

For measurement purposes, the Company assumed a weighted-average annual rate of increase in the per capita cost (health care cost trend rate) for medical benefits of 5.5% for 2021, declining gradually to 5.0% in 2023 and thereafter for medical and prescription drug benefits. For Medicare Advantage benefits, actual contract rates have been set for 2021 and 2022, and are assumed to increase by 7.25% for 2022, declining gradually to 5.0% in 2031 and thereafter.

The assumed health care cost trend rate may have a significant effect on the amounts reported. A one percentage point increase in the assumed health care cost trend rate would have increased the 2020 total service and interest cost components by $0.1 million and would have increased the postretirement benefit obligation by $1.8 million. A one percentage point decrease would provide corresponding reductions of $0.1 million and $1.6 million, respectively.

Plan Assets:
The Company’s target allocation for the VEBA trust assets, as well as the actual VEBA trust asset allocation as of December 31, 2020 and 2019, was as follows:
 Current Target
Allocation		Percentage of VEBA Assets
at December 31,
Asset Category20202019
Equity securities——%18%
Fixed income securities100%100%82%
Total100%100%
Note 16 - Other Postretirement Benefit Plans (continued)

Preservation of capital is important; however, the Company also recognizes that appropriate levels of risk are necessary to allow its investment managers to achieve satisfactory long-term results consistent with the objectives and the fiduciary character of the postretirement funds. Asset allocations are established in a manner consistent with projected plan liabilities, benefit payments and expected rates of return for various asset classes. The expected rate of return for the investment portfolio is based on expected rates of return for various asset classes, as well as historical asset class and fund performance.

The following table presents those investments of the Company’s VEBA trust assets as of December 31, 2020 and 2019, respectively:
Balance at December 31, 2020
Assets:NAVLevel 1Level 2Level 3
Cash and cash equivalents $0.5 $— $— $— 
Mutual fund - fixed income— 10.6 — — 
Total Assets$0.5 $10.6 $— $— 

Balance at December 31, 2019
Assets:NAVLevel 1Level 2Level 3
Cash and cash equivalents $9.4 $— $— $— 
Common collective fund - U.S. equities 7.4 — — — 
Common collective fund - international equities 4.2 — — — 
Common collective fund - fixed income 43.4 — — — 
Total Assets$64.4 $— $— $— 

Cash and cash equivalents are valued at redemption value. Common collective funds are valued based on a net asset value per share, which is used as a practical expedient to fair value. When such prices are unavailable, the plan trustee determines a valuation from the market maker dealing in the particular security. Mutual funds are valued at the closing priced reported in the active market in which the individual funds are traded.

In January 2020, the Company established a second VEBA trust for certain active employees’ medical benefits. The Company transferred $50 million from the existing VEBA trust to fund the second VEBA trust. The $50 million that was transferred was primarily classified as other current assets based on the portfolio of the assets in the trust. The Company utilized all of the assets of the trust in 2020 for the payment of certain active employees’ medical benefits. In January 2021, the Company transferred the remaining $11.1 million in the existing VEBA trust to the second VEBA trust.

Cash Flows:
The Company did not make any employer contributions to the VEBA in 2020 and 2019. The Company does not expect to make any employer contributions in 2021.

Estimated future benefit payments to be funded by the Company are expected to be as follows:
Future Benefit Payments
2021$5 
20225 
20235 
20244 
20254 
2026-203018