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Benefit Plans | 12 Months Ended
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Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract] |
Benefit Plans | Benefit Plans Certain of our U.S. and international subsidiaries sponsor defined benefit pension plans. In addition, we provide minimal death benefits for certain U.S. retirees and pay a portion of healthcare costs for retired U.S. salaried employees and their dependents. Benefits for participants are coordinated with Medicare and the plan mandates Medicare risk (“HMO”) coverage wherever possible and caps the total contribution for non-HMO coverage. We also sponsor a defined contribution plan for certain salaried and hourly U.S. employees. Our 401(k) plan contributions were $4.9 million for 2016, $4.8 million for 2015 and $4.3 million for 2014. Pension and Other Retirement Benefits The components of net periodic benefit cost and other amounts recognized in OCI were as follows:
| Pension benefits |  | Other retirement benefits
($ in millions) | 2016 |  | 2015 |  | 2014 |  |  | 2016 |  | 2015 |  | 2014 |
Net periodic benefit cost: |  |  |  |  |  |  |
Service cost | $ | 10.2 |  | $ | 10.6 |  | $ | 9.8 |  |  | $ | 0.5 |  | $ | 0.5 |  | $ | 0.4 |
Interest cost | 10.5 |  | 13.8 |  | 17.1 |  |  | 0.5 |  | 0.4 |  | 0.4 |
Expected return on assets | (12.6 | ) | (19.5 | ) | (19.3 | ) |  | — |  | — |  | — |
Amortization of prior service credit | (1.4 | ) | (1.3 | ) | (1.3 | ) |  | — |  | — |  | — |
Amortization of transition obligation | 0.1 |  | 0.1 |  | 0.1 |  |  | — |  | — |  | — |
Amortization of actuarial loss (gain) | 4.8 |  | 5.9 |  | 4.7 |  |  | (1.4 | ) | (1.4 | ) | (1.6 | )
Curtailment | (2.1 | ) | — |  | — |  |  | — |  | — |  | — |
Settlement effects | — |  | 50.4 |  | — |  |  | — |  | — |  | — |
Net periodic benefit cost | $ | 9.5 |  | $ | 60.0 |  | $ | 11.1 |  |  | $ | (0.4 | ) | $ | (0.5 | ) | $ | (0.8 | )
Other changes in plan assets and benefit obligations recognized in OCI, pre-tax: |  |  |  |  |  |  |
Net loss (gain) arising during period | $ | 19.2 |  | $ | 17.7 |  | $ | 31.5 |  |  | $ | (0.1 | ) | $ | (0.8 | ) | $ | 0.1 |
Prior service credit arising during period | — |  | (0.7 | ) | — |  |  | (3.0 | ) | — |  | — |
Amortization of prior service credit | 1.4 |  | 1.3 |  | 1.3 |  |  | — |  | — |  | — |
Amortization of transition obligation | (0.1 | ) | (0.1 | ) | (0.1 | ) |  | — |  | — |  | — |
Amortization of actuarial (loss) gain | (4.8 | ) | (5.9 | ) | (4.7 | ) |  | 1.4 |  | 1.4 |  | 1.6 |
Curtailment | (3.1 | ) | — |  | — |  |  | — |  | — |  | — |
Settlement effects | — |  | (50.4 | ) | — |  |  | — |  | — |  | — |
Foreign currency translation | (3.2 | ) | (1.6 | ) | (2.1 | ) |  | — |  | — |  | — |
Total recognized in OCI | $ | 9.4 |  | $ | (39.7 | ) | $ | 25.9 |  |  | $ | (1.7 | ) | $ | 0.6 |  | $ | 1.7 |
Total recognized in net periodic benefit cost and OCI | $ | 18.9 |  | $ | 20.3 |  | $ | 37.0 |  |  | $ | (2.1 | ) | $ | 0.1 |  | $ | 0.9 |
Net periodic benefit cost by geographic location is as follows:
| Pension benefits |  | Other retirement benefits
| 2016 |  | 2015 |  | 2014 |  |  | 2016 |  | 2015 |  | 2014 |
U.S. plans | $ | 7.1 |  | $ | 57.4 |  | $ | 8.1 |  |  | $ | (0.4 | ) | $ | (0.5 | ) | $ | (0.8 | )
International plans | 2.4 |  | 2.6 |  | 3.0 |  |  | — |  | — |  | — |
Net periodic benefit cost | $ | 9.5 |  | $ | 60.0 |  | $ | 11.1 |  |  | $ | (0.4 | ) | $ | (0.5 | ) | $ | (0.8 | )
During 2016, we recorded a pension curtailment gain of $2.1 million in connection with our decision to freeze both our U.S. qualified and non-qualified defined benefit pension plans as of January 1, 2019. During 2015, we recorded a $50.4 million pension settlement charge within other expense, of which $47.0 million related to our purchase of a group annuity contract from MetLife to settle $139.4 million of our $313.6 million outstanding pension benefit obligation under our U.S. qualified pension plan. MetLife assumed the obligation to pay future pension benefits and provide administrative services beginning November 1, 2015 for approximately 1,750 retirees and surviving beneficiaries who retired before January 1, 2015 and are currently receiving payments from this plan. The purchase was funded directly by plan assets. The remaining portion of the pension settlement charge related to lump-sum payouts made to terminated vested participants of our U.S. qualified pension plan. The following table presents the changes in the benefit obligation and the fair value of plan assets, as well as the funded status of the plans:
| Pension benefits |  | Other retirement benefits
($ in millions) | 2016 |  | 2015 |  |  | 2016 |  | 2015 |
Change in benefit obligation: |  |  |  |  |
Benefit obligation, January 1 | $ | (246.3 | ) | $ | (398.5 | ) |  | $ | (10.2 | ) | $ | (10.1 | )
Service cost | (10.2 | ) | (10.6 | ) |  | (0.5 | ) | (0.5 | )
Interest cost | (10.5 | ) | (13.8 | ) |  | (0.5 | ) | (0.4 | )
Participants' contributions | (0.6 | ) | (0.6 | ) |  | (0.5 | ) | (0.6 | )
Actuarial (loss) gain | (23.4 | ) | 7.8 |  |  | 0.1 |  | 0.8 |
Amendments/transfers in | — |  | 0.8 |  |  | 3.0 |  | — |
Benefits/expenses paid | 16.2 |  | 14.6 |  |  | 0.6 |  | 0.6 |
Curtailment | 5.2 |  | — |  |  | — |  | — |
Settlement | — |  | 149.7 |  |  | — |  | — |
Foreign currency translation | 7.4 |  | 4.3 |  |  | — |  | — |
Benefit obligation, December 31 | $ | (262.2 | ) | $ | (246.3 | ) |  | $ | (8.0 | ) | $ | (10.2 | )
Change in plan assets: |  |  |  |  |
Fair value of assets, January 1 | $ | 188.9 |  | $ | 322.3 |  |  | $ | — |  | $ | — |
Actual return on assets | 16.8 |  | (6.0 | ) |  | — |  | — |
Employer contribution | 6.8 |  | 38.0 |  |  | 0.1 |  | — |
Participants' contributions | 0.6 |  | 0.6 |  |  | 0.5 |  | 0.6 |
Benefits/expenses paid | (16.2 | ) | (14.6 | ) |  | (0.6 | ) | (0.6 | )
Settlement | — |  | (149.7 | ) |  | — |  | — |
Foreign currency translation | (4.5 | ) | (1.7 | ) |  | — |  | — |
Fair value of assets, December 31 | $ | 192.4 |  | $ | 188.9 |  |  | $ | — |  | $ | — |
Funded status at end of year | $ | (69.8 | ) | $ | (57.4 | ) |  | $ | (8.0 | ) | $ | (10.2 | )
International pension plan assets, at fair value, included in the preceding table were $28.8 million and $29.2 million at December 31, 2016 and 2015, respectively. Amounts recognized in the balance sheet were as follows:
| Pension benefits | Other retirement benefits
($ in millions) | 2016 |  | 2015 |  | 2016 |  | 2015 |
Current liabilities | $ | (1.5 | ) | $ | (5.0 | ) | $ | (0.7 | ) | $ | (0.6 | )
Noncurrent liabilities | (68.3 | ) | (52.4 | ) | (7.3 | ) | (9.6 | )
| $ | (69.8 | ) | $ | (57.4 | ) | $ | (8.0 | ) | $ | (10.2 | )
The amounts in accumulated other comprehensive loss, pre-tax, consisted of:
| Pension benefits | Other retirement benefits
($ in millions) | 2016 |  | 2015 |  | 2016 |  | 2015 |
Net actuarial loss (gain) | $ | 86.0 |  | $ | 79.9 |  | $ | (11.9 | ) | $ | (13.2 | )
Transition obligation | — |  | 0.1 |  | — |  | — |
Prior service credit | (2.3 | ) | (5.7 | ) | (3.0 | ) | — |
Total | $ | 83.7 |  | $ | 74.3 |  | $ | (14.9 | ) | $ | (13.2 | )
The net actuarial loss and prior service credit for the defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year are $4.7 million and $1.4 million, respectively. The net actuarial gain and prior service credit for the other retirement benefits plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $2.3 million and $0.7 million. The accumulated benefit obligation for all defined benefit pension plans was $258.4 million and $238.9 million at December 31, 2016 and 2015, respectively, including $60.6 million and $55.5 million, respectively, for international pension plans. All of the defined benefit pension plans have projected benefit obligations and accumulated benefit obligations in excess of plan assets as of December 31, 2016 and 2015. Benefit payments expected to be paid under our defined benefit pension and other retirement benefit plans in the next ten years are as follows:
($ in millions) | Domestic | International | Total
2017 | $ | 12.5 |  | $ | 1.5 |  | $ | 14.0 |
2018 | 13.4 |  | 1.7 |  | 15.1 |
2019 | 14.3 |  | 2.1 |  | 16.4 |
2020 | 15.3 |  | 2.7 |  | 18.0 |
2021 | 15.0 |  | 2.4 |  | 17.4 |
2022 to 2026 | 73.6 |  | 14.9 |  | 88.5 |
| $ | 144.1 |  | $ | 25.3 |  | $ | 169.4 |
In 2017, we expect to contribute $23.0 million to pension plans, of which $1.9 million is for international plans. Included in this amount is a $1.1 million contribution to our non-qualified defined benefit pension plan. In addition, we expect to contribute $0.7 million for other retirement benefits in 2017. We periodically consider additional, voluntary contributions depending on the investment returns generated by pension plan assets, changes in benefit obligation projections and other factors. Weighted average assumptions used to determine net periodic benefit cost were as follows:
| Pension benefits |  | Other retirement benefits
| 2016 |  | 2015 |  | 2014 |  |  | 2016 |  | 2015 |  | 2014 |
Discount rate | 3.99 | % | 4.08 | % | 4.50 | % |  | 4.30 | % | 3.90 | % | 4.55 | %
Rate of compensation increase | 4.04 | % | 4.07 | % | 4.29 | % |  | — |  | — |  | — |
Long-term rate of return on assets | 6.95 | % | 6.84 | % | 7.01 | % |  | — |  | — |  | — |
Weighted average assumptions used to determine the benefit obligations were as follows:
| Pension benefits |  | Other retirement benefits
| 2016 |  | 2015 |  |  | 2016 |  | 2015 |
Discount rate | 3.68 | % | 4.22 | % |  | 3.90 | % | 4.30 | %
Rate of compensation increase | 4.04 | % | 4.07 | % |  | — |  | — |
The discount rate used to determine the benefit obligations for U.S. pension plans was 4.15% and 4.55% as of December 31, 2016 and 2015, respectively. The weighted average discount rate used to determine the benefit obligations for all international plans was 2.25% and 3.19% as of December 31, 2016 and 2015, respectively. The rate of compensation increase for U.S. plans was 4.25% for 2016 and 2015, while the weighted average rate for all international plans was 2.59% for 2016 and 2.73% for 2015. Other retirement benefits were only available to U.S. employees. The long-term rate of return for U.S. plans, which accounts for 85% of global plan assets, was 7.25% for 2016, 2015 and 2014. The assumed healthcare cost trend rate used to determine benefit obligations was 6.60% for all participants in 2016, decreasing to 5.00% by 2021. A change in the assumed healthcare cost trend rate by one percentage point would result in a $0.2 million increase or decrease in the postretirement obligation. The assumed healthcare cost trend rate used to determine net periodic benefit cost was 7.00% for all participants in 2016, decreasing to 5.00% by 2021. The effect of a one percentage point increase in the rate would be a $0.1 million increase in the aggregate service and interest cost components, while a one percentage point decrease in the rate would have an immaterial impact. The weighted average asset allocations by asset category for our pension plans, at December 31, were as follows:
| 2016 |  | 2015 |
Equity securities | 60 | % | 62 | %
Debt securities | 30 | % | 35 | %
Other | 10 | % | 3 | %
| 100 | % | 100 | %
Our U.S. pension plan is managed as a balanced portfolio comprised of two components: equity and fixed income debt securities. Equity investments are used to maximize the long-term real growth of fund assets, while fixed income investments are used to generate current income, provide for a more stable periodic return, and to provide some protection against a prolonged decline in the market value of equity investments. Temporary funds may be held as cash. We maintain a long-term strategic asset allocation policy which provides guidelines for ensuring that the fund's investments are managed with the short-term and long-term financial goals of the fund, while allowing the flexibility to react to unexpected changes in capital markets. The following are the U.S. target asset allocations and acceptable allocation ranges:
| Target allocation | Allocation range
Equity securities | 65% | 60% - 70%
Debt securities | 35% | 30% - 40%
Other | —% | 0% - 5%
Diversification across and within asset classes is the primary means by which we mitigate risk. We maintain guidelines for all asset and sub-asset categories in order to avoid excessive investment concentrations. Fund assets are monitored on a regular basis. If at any time the fund asset allocation is not within the acceptable allocation range, funds will be reallocated. We also review the fund on a regular basis to ensure that the investment returns received are consistent with the short-term and long-term goals of the fund and with comparable market returns. We are prohibited from pledging fund securities and from investing pension fund assets in our own stock, securities on margin or derivative securities. The following tables present the fair value of our pension plan assets, utilizing the fair value hierarchy discussed in Note 10, Fair Value Measurements:
| Balance at |
| December 31, | Basis of Fair Value Measurements
($ in millions) | 2016 | Level 1 | Level 2 | Level 3
Cash | $ | 10.0 |  | $ | 10.0 |  | $ | — |  | $ | — |
Equity securities: |  |  |  |
Indexed mutual funds | 8.9 |  | 8.9 |  | — |  | — |
International mutual funds | 3.0 |  | 3.0 |  | — |  | — |
Fixed income securities: |  |  |  |
Mutual funds | 9.2 |  | 9.2 |  | — |  | — |
Insurance contract | 0.5 |  | — |  | 0.5 |  | — |
Balanced mutual fund | 6.3 |  | 6.3 |  | — |  | — |
Pension plan assets in the fair value hierarchy | $ | 37.9 |  | $ | 37.4 |  | $ | 0.5 |  | $ | — |
Pension plan assets measured at NAV | 154.5 |  |  |  |
Pension plan assets at fair value | $ | 192.4 |  |  |  |  |  |  |
In accordance with U.S. GAAP, certain pension plan assets measured at NAV have not been classified in the fair value hierarchy.
| Balance at |
| December 31, | Basis of Fair Value Measurements
($ in millions) | 2015 | Level 1 | Level 2 | Level 3
Cash | $ | 0.6 |  | $ | 0.6 |  | $ | — |  | $ | — |
Equity securities: |  |  |  |
Indexed mutual funds | 79.2 |  | 79.2 |  | — |  | — |
International mutual funds | 37.7 |  | 37.7 |  | — |  | — |
Fixed income securities: |  |  |  |
Mutual funds | 63.0 |  | 63.0 |  | — |  | — |
Insurance contract | 0.6 |  | — |  | 0.6 |  | — |
Balanced mutual fund | 7.8 |  | 7.8 |  | — |  | — |
Pension plan assets at fair value | $ | 188.9 |  | $ | 188.3 |  | $ | 0.6 |  | $ | — |

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