
10.	EMPLOYEE BENEFIT PLANS

In 2017, the FASB issued ASU 2017-07 - Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this update require that an employer disaggregate the service cost component from the other components of defined benefit pension cost and postretirement benefit cost (net benefit cost). The amendments also provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allow only the service cost component of net benefit cost to be eligible for capitalization. This guidance became effective January 1, 2018 and requires a retrospective transition method for the income statement classification of the net benefit cost components and a prospective transition method for the capitalization of the service cost component in assets.

Upon adoption of this guidance, we now include the components of net benefit cost other than service cost in Other income (expense) in our Condensed Consolidated Statements of Income. We have not retrospectively restated the Condensed Consolidated Statements of Income for the three or nine months ended September 30, 2017 as the total of the components of net benefit cost other than service cost were immaterial for these periods. For the three and nine months ended September 30, 2018, the total of the components of net benefit cost other than service cost included in Other income (expense) was expense of $0.3 million and $0.8 million respectively, which excludes the curtailment shown in the table below. This curtailment was associated with a recent restructuring of certain benefit plans as a result of our integration of MPG and has been presented in the Restructuring and acquisition-related costs line item in our Condensed Consolidated Statement of Income for the nine months ended September 30, 2018.

The components of net periodic benefit cost (credit) are as follows:



	Pension Benefits
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
	(in millions)

Service cost	$	1.1		$	0.7		$	3.2		$	2.6
Interest cost	6.9			7.2			20.6			21.4
Expected asset return	(11.4		)	(11.1		)	(34.4		)	(32.7		)
Amortized loss	2.2			1.9			6.6			5.4
Amortized prior service cost (credit)	—			(0.1		)	0.1			(0.1		)
Curtailment	—			—			3.2			—
Settlement	—			2.9			—			2.9
Net periodic benefit cost (credit)	$	(1.2	)	$	1.5		$	(0.7	)	$	(0.5	)

	Other Postretirement Benefits
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
	(in millions)

Service cost	$	0.1		$	0.1		$	0.3		$	0.3
Interest cost	3.1			3.3			9.3			9.9
Amortized loss	0.2			0.2			0.6			0.5
Amortized prior service credit	(0.7		)	(0.8		)	(2.0		)	(2.1		)
Net periodic benefit cost	$	2.7		$	2.8		$	8.2		$	8.6

The noncurrent liabilities associated with our pension and other postretirement benefit plans are classified as Postretirement benefits and other long-term liabilities on our Condensed Consolidated Balance Sheets. As of September 30, 2018 and December 31, 2017, we have a noncurrent pension liability of $110.7 million and $134.7 million, respectively. In the first nine months of 2018, our AAM Supplemental Executive Retirement Plan (SERP) was amended and restated to freeze further benefit accruals and the vesting of benefits, as well as new eligibility to participate in the SERP. As a result, we recorded a reduction of our noncurrent pension liability, as well as a reduction of the accumulated other comprehensive loss associated with the SERP, of $11.6 million in the first nine months of 2018.

As of September 30, 2018 and December 31, 2017, we have a noncurrent other postretirement benefits liability of $578.8 million and $583.0 million, respectively.

Due to the availability of our pre-funded pension balances (previous contributions in excess of prior required pension contributions) related to certain of our U.S. pension plans, we expect our regulatory pension funding requirements in 2018 to be approximately $2 million. We expect our cash payments for other postretirement benefit obligations in 2018, net of GM cost sharing, to be approximately $17 million.