6.	EMPLOYEE BENEFIT PLANS AND OTHER POSTRETIREMENT BENEFITS

In connection with the acquisition from Pactiv, PCA and Pactiv entered into a human resources agreement which, among other items, granted PCA employees continued participation in the Pactiv pension plan for a period of up to five years following the closing of the acquisition for an agreed upon fee.

Effective January 1, 2003, PCA adopted a mirror-image pension plan for eligible hourly employees to succeed the Pactiv pension plan in which PCA hourly employees had participated though December 31, 2002. The PCA pension plan for hourly employees recognizes service earned under both the PCA plan and the prior Pactiv plan. Benefits earned under the PCA plan are reduced by retirement benefits earned under the Pactiv plan through December 31, 2002. All assets and liabilities associated with benefits earned through December 31, 2002 for hourly employees and retirees of PCA were retained by the Pactiv plan.

Effective May 1, 2004, PCA adopted a grandfathered pension plan for eligible salaried employees who had previously participated in the Pactiv pension plan. The benefit formula for the new PCA pension plan for salaried employees is comparable to that of the Pactiv plan except that the PCA plan uses career average base pay in the benefit formula in lieu of final average base pay. The PCA pension plan for salaried employees recognizes service earned under both the PCA plan and the prior Pactiv plan. Benefits earned under the PCA plan are reduced by retirement benefits earned under the Pactiv plan through April 30, 2004. All assets and liabilities associated with benefits earned through April 30, 2004 for salaried employees and retirees of PCA were retained by the Pactiv plan.

PCA maintains a supplemental executive retirement plan ("SERP"), which augments pension benefits for eligible executives earned under the PCA pension plan for salaried employees. Benefits are determined using the same formula as the PCA pension plan but in addition to counting career average base pay, the SERP also recognizes bonuses and any pay earned in excess of IRS qualified plan compensation limits. Benefits earned under the SERP are reduced by benefits paid from the PCA salaried pension plan and any prior qualified pension and SERP benefits earned under the Pactiv plan.

PCA previously maintained a separate SERP for its former CEO and current Executive Chairman which was paid out and terminated on March 15, 2009. The terminated plan was replaced by a lower cost deferred compensation benefit plan.

PCA provides certain medical benefits for retired salaried employees and certain medical and life insurance benefits for certain hourly employees. For salaried employees, the plan covers employees retiring from PCA on or after attaining age 58 who have had at least 10 years of full-time service with PCA after attaining age 48. For hourly employees, the postretirement medical coverage, where applicable, is available according to the eligibility provisions in effect at the employee's work location. Per the human resources agreement referred to above, Pactiv retained the liability relating to retiree medical and life benefits for PCA employees who had retired on or before April 12, 1999 or who were eligible to retire within two years of that date. On January 1, 2003, the Company adopted a new plan design for salaried employees incorporating annual dollar caps in determining the maximum amount of employer contributions made towards the total cost of postretirement medical coverage. Effective January 1, 2012 Pactiv curtailed the availability of retiree medical coverage to any of its salaried retirees, and their enrolled spouses, who were 65 or older. This affected approximately 50 PCA salaried retirees covered under Pactiv's retiree medical plan. PCA permitted these retirees and covered spouses to elect medical coverage under PCA's retiree medical plan effective January 1, 2012.

The following tables provide information related to the Company's pension and postretirement benefit plans.


	Pension Plans									Postretirement Plans
	2011			2010			2009			2011			2010			2009
	(In thousands)
Change in Benefit Obligation
Benefit obligation at beginning of period	$	246,985		$	203,292		$	178,455		$	23,215		$	20,080		$	17,300
Service cost		19,808			18,315			17,955			1,599			1,399			1,341
Interest cost		13,473			12,091			10,208			1,189			1,130			1,022
Plan amendments		1,827			837			7,168			—			—			—
Actuarial loss		35,399			15,153			701			755			1,931			987
Participant contributions		—			—			—			942			838			656
Benefits paid		(3,337	)		(2,703	)		(11,195	)		(1,763	)		(2,163	)		(1,226	)

Benefit obligation at plan year end	$	314,155		$	246,985		$	203,292		$	25,937		$	23,215		$	20,080

Accumulated benefit obligation portion of above	$	280,820		$	214,676		$	171,384

Change in Fair Value of Plan Assets
Plan assets at fair value at beginning of period	$	167,033		$	140,065		$	97,248		$	—		$	—		$	—
Actual return on plan assets		(732	)		14,457			18,590			—			—			—
Company contributions		22,158			15,214			35,422			821			1,325			570
Participant contributions		—			—			—			942			838			656
Benefits paid		(3,337	)		(2,703	)		(11,195	)		(1,763	)		(2,163	)		(1,226	)

Fair value of plan assets at plan year end	$	185,122		$	167,033		$	140,065		$	—		$	—		$	—


	Pension Plans						Postretirement Plans
	December 31, 2011			December 31, 2010			December 31, 2011			December 31, 2010
	(In thousands)
Development of Net Amount Recognized
Benefit obligation in excess of plan assets at December 31	$	(129,033	)	$	(79,952	)	$	(25,937	)	$	(23,215	)

Amounts Recognized in Statement of Financial Position
Current liabilities	$	(5,232	)	$	(4,107	)	$	(1,052	)	$	(1,146	)
Noncurrent liabilities		(123,801	)		(75,845	)		(24,885	)		(22,069	)

Accrued benefit recognized at December 31	$	(129,033	)	$	(79,952	)	$	(25,937	)	$	(23,215	)

Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Net of Tax
Prior service cost	$	23,573		$	25,957		$	(481	)	$	(734	)
Actuarial loss		45,791			15,714			5,193			5,001

Total	$	69,364		$	41,671		$	4,712		$	4,267


	Pension Plans									Postretirement Plans
	2011			2010			2009			2011			2010			2009
	(In thousands)
Components of Net Periodic Benefit Cost
Service cost for benefits earned during the year	$	19,808		$	18,315		$	17,955		$	1,599		$	1,399		$	1,341
Interest cost on accumulated benefit obligation		13,473			12,091			10,208			1,189			1,130			1,022
Expected return on plan assets		(13,544	)		(11,207	)		(8,573	)		—			—			—
Net amortization of unrecognized amounts
Prior service cost		5,782			5,685			4,903			(416	)		(416	)		(416	)
Actuarial loss		411			247			803			449			342			328
Other		—			—			(126	)		—			—			—

Net periodic benefit cost	$	25,930		$	25,131		$	25,170		$	2,821		$	2,455		$	2,275

For the year ended December 31, 2012, the Company expects to recognize in net periodic benefit cost $6.0 million ($3.7 million net of tax) and $(0.4) million ($0.3 million net of tax) of prior service cost for pension and postretirement plans, respectively, and $4.9 million ($3.0 million net of tax) and $0.5 million ($0.3 million net of tax) of actuarial loss for pension and postretirement plans, respectively, which is included in accumulated other comprehensive income (loss) at December 31, 2011.


	Pension Plans									Postretirement Plans
	2011			2010			2009			2011			2010			2009
Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31
Discount rate		4.75	%		5.50	%		6.00	%		4.50	%		5.25	%		5.75	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%		N/A			N/A			N/A
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for the Years Ended December 31
Discount rate		5.50	%		6.00	%		6.00	%		5.25	%		5.75	%		6.00	%
Expected return on plan assets		7.75	%		7.75	%		8.25	%		N/A			N/A			N/A
Rate of compensation increase		4.00	%		4.00	%		4.00	%		N/A			N/A			N/A

The expected return on pension plan assets reflects the expected long-term rates of return for the categories of investments currently held in the plan as well as anticipated returns for additional contributions made in the future. The expected long-term rate of return is adjusted when there are fundamental changes in expected returns on the plan investments.

The discount rate assumptions used to calculate the present value of pension and postretirement benefit obligations reflect the rates available on high-quality, fixed-income debt instruments on December 31^st. The rate of compensation increase is another significant assumption used for pension accounting and is determined by the Company based upon annual reviews.

In determining net pension and postretirement benefit costs, the Company elected to amortize prior service cost on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plans. A 10% corridor is used to determine the amount of the unrecognized net gain or loss to be amortized. The excess, if any, of the unrecognized net gain or loss over 10% of the greater of the projected benefit obligation or the market-related value of plan assets is amortized over the average remaining service period until retirement for active participants and included in the net periodic benefit cost.

The Company assumed health care cost trend rates for its postretirement benefits plans were as follows:


	2011			2010			2009
Health care cost trend rate assumed for next year		8.00	%		7.50	%		7.50	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.50	%		5.00	%		5.00	%
Year that the rate reaches the ultimate trend rate		2016			2016			2015

A one-percentage point change in assumed health care cost trend rates would have the following effects on the 2011 postretirement benefit obligation and the 2011 net post retirement benefit cost:


	1-Percentage Point Increase		1-Percentage Point Decrease
	(In thousands)
Effect on postretirement benefit obligation	$	662	$	(587	)
Effect on net postretirement benefit cost		65		(56	)

PCA has retained the services of a professional advisor to oversee pension investments and provide recommendations regarding investment strategy. PCA's overall strategy and related apportionments between equity and debt securities may change from time to time based on market conditions, external economic factors, and the funding status of the plans. Pension plans' assets were invested in the following classes of securities at December 31, 2011 and 2010:


	Percentage of Fair Value
	2011			2010
Equity securities		36	%		39	%
Debt securities		63	%		60	%
Other		1	%		1	%

The fair values of PCA's pension plans' assets at December 31, 2011 and 2010, measured on a recurring basis, by asset category are as follows:


	Fair Value Measurements at December 31, 2011
Asset Category	Total		Quoted Prices in Active Markets for identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Short-term investments	$	1,257	$	—	$	1,257	$	—
Equity securities:
U.S. large value		11,272		11,272
U.S. large growth		9,172		9,172
U.S. mid-cap value		1,914		1,914
U.S. mid-cap growth		3,684		3,684
U.S. small blend		3,784				3,784
Foreign large blend		27,164		27,164
Diversified emerging markets		5,306		5,306
Real estate		5,405		5,405
Debt securities:
Government bonds		24,372				24,372
Corporate bonds		91,792		36,929		54,863

Total	$	185,122	$	100,846	$	84,276	$	—


	Fair Value Measurements at December 31, 2010
Asset Category	Total		Quoted Prices in Active Markets for identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Short-term investments	$	1,320	$	—	$	1,320	$	—
Equity securities:
U.S. large value		10,594		10,594
U.S. large growth		8,519		8,519
U.S. mid-cap value		1,871		1,871
U.S. mid-cap growth		3,486		3,486
U.S. small blend		3,394				3,394
Foreign large blend		26,616		26,616
Diversified emerging markets		5,219		5,219
Real estate		5,095		5,095
Debt securities:
Government bonds		21,088				21,088
Corporate bonds		79,831		33,240		46,591

Total	$	167,033	$	94,640	$	72,393	$	—

The Company makes pension plan contributions that are sufficient to fund its actuarially determined costs, generally equal to the minimum amounts required by the Employee Retirement Income Security Act (ERISA). However, from time to time the Company may make discretionary contributions in excess of the required minimum amounts. PCA currently expects to make pension contributions of $32.6 million and record pension plan expense of $36.0 million in 2012.

The following are estimated benefit payments to be paid to current plan participants by year:


	Pension Plans		Postretirement Plans
	(In thousands)
2012	$	5,232	$	1,052
2013		6,655		1,139
2014		8,157		1,226
2015		9,813		1,380
2016		11,457		1,481
2017 — 2021		85,357		10,258

The Company has two defined contribution benefit plans that cover all full-time salaried employees and certain hourly employees at several of the Company's facilities. Employees can make voluntary contributions in accordance with the provisions of their respective plan. The Company made employer-matching contributions of $10.4 million, $9.6 million and $9.4 million during the years ended December 31, 2011, 2010 and 2009, respectively.

Effective January 1, 2011, PCA's Board of Directors adopted a resolution designating the portion of the defined contribution plan's investments held in the Company's stock, and any future employee or employer contribution invested in the Company's stock, as investments in an "Employee Stock Ownership Plan" ("ESOP"). The Company uses the ESOP to provide the Company's matching contribution in the form of the Company's stock to the plan participants (full-time salaried employees only). The Company expenses the employer-matching contributions and charges dividends on shares held by the ESOP to retained earnings. Any shares of Company stock held by the ESOP are included in basic shares for earnings-per-share computations. At December 31, 2011, the ESOP held 2.6 million shares of the Company's common stock.

Salaried employees who are not participants in the grandfathered pension plan (generally those hired on or after April 12, 1999) receive a service-related Company retirement contribution to their defined contribution plan account in addition to any employer matching contribution. This contribution increases with years of service and ranges from 3% to 5% of base pay. The Company expensed $3.9 million, $3.1 million and $2.8 million for this retirement contribution during the years ended December 31, 2011, 2010 and 2009, respectively.