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Retirement Benefits | 12 Months Ended
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Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract] |
Retirement Benefits | Retirement Benefits The Company has defined contribution retirement plans or defined benefit pension plans covering substantially all employees. Company contributions to defined contribution retirement plans are generally based on a percentage of eligible pay or based on hours worked. Benefits under the defined benefit pension plans are generally based on years of service and/or final average pay. The Company funds the U.S. defined benefit pension plans in accordance with the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code (“Code”). The Company also sponsors several postretirement plans covering certain collectively-bargained salaried and hourly employees. The plans provide health care and life insurance benefits for eligible retirees. In most retiree health care plans, Company contributions towards premiums are capped based on the cost as of a certain date, thereby creating a defined contribution. In December 2014, the Company announced several significant changes to its retirement benefit programs. These changes are part of the Company’s ongoing initiatives to create an integrated and aligned business with a market competitive, cost competitive, and consistent health, welfare and retirement benefit structure across its operations. These changes included:
• | Freezing all future benefit accruals to the ATI Pension Plan, its U.S. qualified defined benefit pension plan, and to the Company’s non-qualified defined benefit pension plans, including the executive Supplemental Pension Plan, effective December 31, 2014.
• | Implementing a consistent defined contribution retirement plan with a base 6.5% company contribution and up to 3% in Company matching contributions across all U.S. operations effective January 1, 2015.
• | Ending Company-provided salaried retiree life insurance benefits effective January 1, 2015.
• | Ending all remaining Company-provided salaried retiree medical benefits on January 1, 2016. The salaried retiree medical benefit plan being ended was assumed as part of the 2011 Ladish acquisition. Certain participants in the retiree medical plan had transition provisions through the end of 2016.
• | These changes to pension, retiree life insurance and medical benefits do not affect benefits for those employees or retirees covered by collective bargaining contracts or other contractual employment agreements.
In 2016, additional changes to the Company’s retirement benefit programs were as follows:
• | On March 4, 2016, the Company announced that it had reached a four-year labor agreement with the USW covering USW-represented employees of its ATI Flat Rolled Products business unit and at two locations in the High Performance Materials & Components business segment. The new labor agreement included a freeze to new entrants to the ATI Pension Plan, the elimination of defined benefit retiree healthcare for new employees, and changes in the levels of profit-based contributions for retiree medical benefits. New hires covered by the new labor agreement participate in a defined contribution plan for both retirement savings and retiree medical benefits.
• | In 2016, ATI divested approximately 3,700 retirees from the ATI Pension Plan through an annuity buy-out of small pension balances, reducing future administrative costs to the Plan.
• | Closure of the U.K. pension plan to future accruals for service and pay (hard freeze) effective January 31, 2017.
Costs for defined contribution retirement plans were $34.5 million in 2016, $41.2 million in 2015, and $21.9 million in 2014. Company contributions to these defined contribution plans are funded with cash. The increases in Company contributions in 2016 and 2015 compared to 2014 were the result of the implementation of the Company’s defined contribution retirement plan across all U.S. operations in 2015 in conjunction with the freeze of the ATI Pension Plan. Other postretirement benefit costs for a defined contribution plan were $2.6 million for the fiscal year ended December 31, 2014. The components of pension and other postretirement benefit expense for the Company’s defined benefit plans included the following:
|  | Pension Benefits |  | Other Postretirement Benefits
(In millions) |  | 2016 |  | 2015 |  | 2014 |  | 2016 |  | 2015 |  | 2014
Service cost—benefits earned during the year |  | $ | 20.6 |  |  | $ | 22.8 |  |  | $ | 29.4 |  |  | $ | 2.6 |  |  | $ | 2.7 |  |  | $ | 2.9 |
Interest cost on benefits earned in prior years |  | 125.4 |  |  | 121.0 |  |  | 133.6 |  |  | 16.0 |  |  | 17.9 |  |  | 24.0 |
Expected return on plan assets |  | (148.7 | ) |  | (168.3 | ) |  | (184.2 | ) |  | (0.1 | ) |  | (0.1 | ) |  | (0.3 | )
Amortization of prior service cost (credit) |  | 1.3 |  |  | 1.3 |  |  | 2.3 |  |  | (1.7 | ) |  | 4.9 |  |  | (3.0 | )
Amortization of net actuarial loss |  | 65.4 |  |  | 60.4 |  |  | 74.0 |  |  | 9.6 |  |  | 14.6 |  |  | 14.1 |
Curtailment (gain) loss |  | — |  |  | — |  |  | 0.5 |  |  | — |  |  | — |  |  | (25.5 | )
Termination benefits |  | 1.1 |  |  | — |  |  | 0.3 |  |  | 2.3 |  |  | — |  |  | — |
Total retirement benefit expense |  | $ | 65.1 |  |  | $ | 37.2 |  |  | $ | 55.9 |  |  | $ | 28.7 |  |  | $ | 40.0 |  |  | $ | 12.2 |
The curtailment loss for pension benefits recorded in 2014 relates to unamortized prior service cost recognized as a result of the freezing of pension benefit accruals in the fourth quarter of 2014, as discussed above. The curtailment gain for other postretirement benefits recorded in 2014 relates to the changes to salaried retiree life insurance and medical benefits in the fourth quarter of 2014, as discussed above. Special termination benefits recorded in 2016 related to both pension and other postretirement benefits for USW-represented employees associated with the permanent idling of the Flat Rolled Products segment’s Midland, PA commodity stainless melt and finishing operations and Bagdad, PA GOES finishing facility that occurred in the fourth quarter of 2016, and these costs were reported in restructuring charges in the consolidated statement of operations and for segment reporting (see Notes 16 and 17). Special termination benefits recorded in 2014 relate to an early retirement benefit in the Forged Products business. Actuarial assumptions used to develop the components of defined benefit pension expense and other postretirement benefit expense were as follows:
|  | Pension Benefits |  | Other Postretirement Benefits
|  | 2016 |  | 2015 |  | 2014 |  | 2016 |  | 2015 |  | 2014
Discount rate (a) |  | 4.65 | % |  | 4.25 | % |  | 5.15 | % |  | 4.05 - 4.50% |  |  | 4.10 | % |  | 5.15 | %
Rate of increase in future compensation levels |  | 3.0 - 3.50% |  |  | 3.0 - 3.50% |  |  | 3.0 - 3.50% |  |  | — |  |  | — |  |  | — |
Expected long-term rate of return on assets |  | 8.00 | % |  | 8.00 | % |  | 8.25 | % |  | 4.0 | % |  | 4.0 | % |  | 8.3 | %
(a) | Other post-retirement benefits expense for 2016 was initially measured at a 4.50% discount rate. A portion of the obligation was remeasured using a 4.05% discount rate as of March 1, 2016, following the new USW labor agreement discussed above.
Actuarial assumptions used for the valuation of defined benefit pension and other postretirement benefit obligations at the end of the respective periods were as follows:
|  | Pension Benefits |  | Other Postretirement Benefits
|  | 2016 |  | 2015 |  | 2016 |  | 2015
Discount rate |  | 4.45 | % |  | 4.65 | % |  | 4.35 | % |  | 4.50 | %
Rate of increase in future compensation levels |  | 1.0 | % |  | 3.0 - 3.5% |  |  | — |  |  | — |
A reconciliation of the funded status for the Company’s defined benefit pension and other postretirement benefit plans at December 31, 2016 and 2015 was as follows:
|  | Pension Benefits |  | Other Postretirement Benefits
(In millions) |  | 2016 |  | 2015 |  | 2016 |  | 2015
Change in benefit obligations: |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 2,805.9 |  |  | $ | 2,953.9 |  |  | $ | 400.8 |  |  | $ | 466.1 |
Service cost |  | 20.6 |  |  | 22.8 |  |  | 2.6 |  |  | 2.7 |
Interest cost |  | 125.4 |  |  | 121.0 |  |  | 16.0 |  |  | 17.9 |
Benefits paid |  | (255.4 | ) |  | (207.4 | ) |  | (47.7 | ) |  | (53.4 | )
Subsidy paid |  | — |  |  | — |  |  | 0.8 |  |  | 0.7 |
Participant contributions |  | 0.2 |  |  | 0.3 |  |  | — |  |  | — |
Effect of currency rates |  | (17.3 | ) |  | (4.8 | ) |  | — |  |  | — |
Net actuarial (gains) losses – discount rate change |  | 57.8 |  |  | (124.4 | ) |  | 4.6 |  |  | (14.1 | )
– other |  | (3.9 | ) |  | 44.5 |  |  | (2.1 | ) |  | (19.1 | )
Plan curtailments |  | (6.7 | ) |  | — |  |  | — |  |  | — |
Plan amendments |  | — |  |  | — |  |  | (22.5 | ) |  | — |
Special termination benefits |  | 1.1 |  |  | — |  |  | 2.3 |  |  | — |
Benefit obligation at end of year |  | $ | 2,727.7 |  |  | $ | 2,805.9 |  |  | $ | 354.8 |  |  | $ | 400.8 |
A $6.7 million plan curtailment for pension benefits as a result of the hard freeze of the U.K. pension plan reduced the pension benefit obligation in 2016. Plan amendments as a result of changes to retirement benefit programs in the 2016 USW labor agreement reduced the other postretirement benefits obligation by $22.5 million in 2016.
|  | Pension Benefits |  | Other Postretirement Benefits
(In millions) |  | 2016 |  | 2015 |  | 2016 |  | 2015
Change in plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 1,962.3 |  |  | $ | 2,204.4 |  |  | $ | 1.8 |  |  | $ | 2.9 |
Actual returns on plan assets and plan expenses |  | 79.7 |  |  | (41.1 | ) |  | (0.8 | ) |  | (1.0 | )
Employer contributions |  | 125.1 |  |  | 10.3 |  |  | — |  |  | — |
Participant contributions |  | 0.2 |  |  | 0.3 |  |  | — |  |  | — |
Effect of currency rates |  | (17.3 | ) |  | (4.2 | ) |  | — |  |  | — |
Benefits paid |  | (255.4 | ) |  | (207.4 | ) |  | (0.3 | ) |  | (0.1 | )
Fair value of plan assets at end of year |  | $ | 1,894.6 |  |  | $ | 1,962.3 |  |  | $ | 0.7 |  |  | $ | 1.8 |
Benefits paid in 2016 include $47 million for the annuity buyout of small pension balances in the ATI Pension Plan.
Amounts recognized in the consolidated balance sheets: |  |  |  |  |  |
|  | Pension Benefits |  | Other Postretirement Benefits
|  | 2016 |  | 2015 |  | 2016 |  | 2015
Current liabilities |  | $ | (5.2 | ) |  | $ | (9.8 | ) |  | $ | (36.4 | ) |  | $ | (39.8 | )
Noncurrent liabilities |  | (827.9 | ) |  | (833.8 | ) |  | (317.7 | ) |  | (359.2 | )
Total amount recognized |  | $ | (833.1 | ) |  | $ | (843.6 | ) |  | $ | (354.1 | ) |  | $ | (399.0 | )
Changes to accumulated other comprehensive loss related to pension and other postretirement benefit plans in 2016 and 2015 were as follows:
|  | Pension Benefits |  | Other Postretirement Benefits
(In millions) |  | 2016 |  | 2015 |  | 2016 |  | 2015
Beginning of year accumulated other comprehensive loss |  | $ | (1,418.2 | ) |  | $ | (1,352.1 | ) |  | $ | (101.4 | ) |  | $ | (152.9 | )
Amortization of net actuarial loss |  | 65.4 |  |  | 60.4 |  |  | 9.6 |  |  | 14.6 |
Amortization of prior service cost (credit) |  | 1.3 |  |  | 1.3 |  |  | (1.7 | ) |  | 4.9 |
Remeasurements |  | (111.2 | ) |  | (127.8 | ) |  | 19.1 |  |  | 32.0 |
End of year accumulated other comprehensive loss |  | $ | (1,462.7 | ) |  | $ | (1,418.2 | ) |  | $ | (74.4 | ) |  | $ | (101.4 | )
Net change in accumulated other comprehensive loss |  | $ | (44.5 | ) |  | $ | (66.1 | ) |  | $ | 27.0 |  |  | $ | 51.5 |
Amounts included in accumulated other comprehensive loss at December 31, 2016 and 2015 were as follows:
|  | Pension Benefits |  | Other Postretirement Benefits
(In millions) |  | 2016 |  | 2015 |  | 2016 |  | 2015
Prior service (cost) credit |  | $ | (2.3 | ) |  | $ | (3.6 | ) |  | $ | 14.6 |  |  | $ | (6.9 | )
Net actuarial loss |  | (1,460.4 | ) |  | (1,414.6 | ) |  | (89.0 | ) |  | (94.5 | )
Accumulated other comprehensive loss |  | (1,462.7 | ) |  | (1,418.2 | ) |  | (74.4 | ) |  | (101.4 | )
Deferred tax effect |  | 543.4 |  |  | 529.9 |  |  | 28.2 |  |  | 38.5 |
Accumulated other comprehensive loss, net of tax |  | $ | (919.3 | ) |  | $ | (888.3 | ) |  | $ | (46.2 | ) |  | $ | (62.9 | )
Amounts in accumulated other comprehensive loss presented above do not include any effects of deferred tax asset valuation allowances. See Note 13 for further discussion on deferred tax asset valuation allowances. Retirement benefit expense for 2017 for defined benefit plans is estimated to be approximately $71 million, comprised of $48 million for pension expense and $23 million of expense for other postretirement benefits. Amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost in 2017 are:
(In millions) |  | Pension Benefits |  | Other Postretirement Benefits |  | Total
Amortization of prior service cost (credit) |  | $ | 1.3 |  |  | $ | (2.9 | ) |  | $ | (1.6 | )
Amortization of net actuarial loss |  | 62.6 |  |  | 9.0 |  |  | 71.6 |
Amortization of accumulated other comprehensive loss |  | $ | 63.9 |  |  | $ | 6.1 |  |  | $ | 70.0 |
The accumulated benefit obligation for all defined benefit pension plans was $2,710.7 million and $2,767.0 million at December 31, 2016 and 2015, respectively. Additional information for pension plans with accumulated benefit obligations in excess of plan assets:
|  | Pension Benefits
(In millions) |  | 2016 |  | 2015
Projected benefit obligation |  | $ | 2,727.7 |  |  | $ | 2,805.9 |
Accumulated benefit obligation |  | $ | 2,710.7 |  |  | $ | 2,767.0 |
Fair value of plan assets |  | $ | 1,894.6 |  |  | $ | 1,962.3 |
In July 2016, the Company made a $115 million contribution to the ATI Pension Plan to improve the plan’s funded position. Based upon current regulations and actuarial studies, the Company expects to be required to make a $135 million cash contribution to the ATI Pension Plan for 2017. In addition, for 2017, the Company expects to fund benefits of approximately $10 million for its U.S. nonqualified benefit pension plans and its U.K. defined benefit plan. The following table summarizes expected benefit payments from the Company’s various pension and other postretirement defined benefit plans through 2026, and also includes estimated Medicare Part D subsidies projected to be received during this period based on currently available information.
(In millions) |  | Pension Benefits |  | Other Postretirement Benefits |  | Medicare Part D Subsidy
2017 |  | $ | 194.7 |  |  | $ | 37.1 |  |  | $ | 1.0 |
2018 |  | 191.8 |  |  | 35.1 |  |  | 1.0 |
2019 |  | 189.6 |  |  | 32.6 |  |  | 0.9 |
2020 |  | 188.3 |  |  | 30.6 |  |  | 0.9 |
2021 |  | 186.5 |  |  | 29.1 |  |  | 0.8 |
2022 - 2026 |  | 901.5 |  |  | 121.8 |  |  | 3.5 |
The annual assumed rate of increase in the per capita cost of covered benefits (the health care cost trend rate) for health care plans was 7.2% in 2017 and is assumed to gradually decrease to 4.5% in the year 2038 and remain at that level thereafter. Assumed health care cost trend rates can have a significant effect on the amounts reported for the health care plans, however, the Company’s contributions for most of its’ retiree health plans are capped based on a fixed premium amount, which limits the impact of future health care cost increases. A one percentage point change in assumed health care cost trend rates would have the following effects:
(In millions) |  | One Percentage Point Increase |  | One Percentage Point Decrease
Effect on total of service and interest cost components for the year ended December 31, 2016 |  | $ | 0.3 |  |  | $ | (0.3 | )
Effect on other postretirement benefit obligation at December 31, 2016 |  | $ | 6.9 |  |  | $ | (6.1 | )
The plan assets for the ATI Pension Plan represent approximately 96% of total pension plan assets at December 31, 2016. The ATI Pension Plan invests in a diversified portfolio consisting of an array of asset classes that attempts to maximize returns while minimizing volatility. These asset classes include U.S. domestic equities, developed market equities, emerging market equities, private equity, global high quality and high yield fixed income, floating rate debt and real estate. The Company continually monitors the investment results of these asset classes and its fund managers, and explores other potential asset classes for possible future investment. ATI Pension Plan assets at December 31, 2016 and 2015 included 3.0 million shares of ATI common stock with a fair value of $47.1 million and $33.2 million, respectively. Dividends of $0.7 million and $1.8 million were received by the ATI Pension Plan in 2016 and 2015, respectively, on the ATI common stock held by this plan. The fair values of the Company’s pension plan assets are determined using net asset value (NAV) as a practical expedient, or by information categorized in the fair value hierarchy level based on the inputs used to determine fair value, as further discussed in Note 11. The fair values at December 31, 2016 were as follows:
(In millions) |  |  |  |  |  | Quoted Prices in Active Markets for Identical Assets |  | Significant Observable Inputs |  | Significant Unobservable Inputs
Asset category |  | Total |  | NAV |  | (Level 1) |  | (Level 2) |  | (Level 3)
Equity securities: |  |  |  |  |  |  |  |  |  |
ATI common stock |  | $ | 47.1 |  |  | $ | — |  |  | $ | 47.1 |  |  | $ | — |  |  | $ | — |
Other U.S. equities |  | 311.1 |  |  | 204.0 |  |  | 107.1 |  |  | — |  |  | — |
International equities |  | 375.7 |  |  | 339.2 |  |  | 36.5 |  |  | — |  |  | — |
Global debt securities and cash: |  |  |  |  |  |  |  |  |  |
Fixed income and cash equivalents |  | 412.2 |  |  | 82.3 |  |  | 0.5 |  |  | 329.2 |  |  | 0.2 |
Floating rate |  | 164.0 |  |  | 64.9 |  |  | — |  |  | — |  |  | 99.1 |
Private equity |  | 204.1 |  |  | 204.1 |  |  | — |  |  | — |  |  | — |
Hedge funds |  | 283.9 |  |  | 283.9 |  |  | — |  |  | — |  |  | — |
Real estate and other |  | 96.5 |  |  | 91.5 |  |  | — |  |  | 5.0 |  |  | — |
Total assets |  | $ | 1,894.6 |  |  | $ | 1,269.9 |  |  | $ | 191.2 |  |  | $ | 334.2 |  |  | $ | 99.3 |
The fair values of the Company’s pension plan assets at December 31, 2015 were as follows:
(In millions) |  |  |  |  |  | Quoted Prices in Active Markets for Identical Assets |  | Significant Observable Inputs |  | Significant Unobservable Inputs
Asset category |  | Total |  | NAV |  | (Level 1) |  | (Level 2) |  | (Level 3)
Equity securities: |  |  |  |  |  |  |  |  |  |
ATI common stock |  | $ | 33.2 |  |  | $ | — |  |  | $ | 33.2 |  |  | $ | — |  |  | $ | — |
Other U.S. equities |  | 522.0 |  |  | 267.9 |  |  | 254.1 |  |  | — |  |  | — |
International equities |  | 239.8 |  |  | 239.8 |  |  | — |  |  | — |  |  | — |
Global debt securities and cash: |  |  |  |  |  |  |  |  |  |
Fixed income and cash equivalents |  | 369.7 |  |  | 249.0 |  |  | 0.2 |  |  | 120.2 |  |  | 0.3 |
Floating rate |  | 358.0 |  |  | 52.7 |  |  | — |  |  | — |  |  | 305.3 |
Private equity |  | 201.2 |  |  | 201.2 |  |  | — |  |  | — |  |  | — |
Hedge funds |  | 51.9 |  |  | 51.9 |  |  | — |  |  | — |  |  | — |
Real estate and other |  | 186.5 |  |  | 180.6 |  |  | — |  |  | 5.9 |  |  | — |
Total assets |  | $ | 1,962.3 |  |  | $ | 1,243.1 |  |  | $ | 287.5 |  |  | $ | 126.1 |  |  | $ | 305.6 |
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Investments in U.S. and International equities, and Fixed Income are predominantly held in common/collective trust funds and registered investment companies. These investments are public investment vehicles valued using the net asset value (NAV) provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. These investments are not classified in the fair value hierarchy in accordance with the new accounting guidance effective in December 2016. In addition, some fixed income instruments are investments in debt instruments that are valued using external pricing vendors and are classified within Level 2 of the fair value hierarchy. Floating interest rate global debt instruments are both domestic and foreign and include first lien debt, second lien debt and structured finance obligations, among others. These instruments are generally illiquid and classified within Level 3 of the valuation hierarchy, as the valuations are based on significant unobservable inputs. In some cases, these instruments are valued using NAV and are not classified in the fair value hierarchy in accordance with the new accounting guidance effective in December 2016. Private equity investments include both Direct Funds and Fund-of-Funds. Direct Funds are investments in Limited Partnership (LP) interests. Fund-of-Funds are investments in private equity funds that invest in other private equity funds or LPs. Fair value of these investments is determined utilizing net asset values, and are not classified in the fair value hierarchy in accordance with the new accounting guidance effective in December 2016. Hedge fund investments are made either (1) as a limited partner in a portfolio of underlying hedge funds managed by a general partner or (2) through commingled institutional funds (CIFs) that in-turn invest in various portfolios of hedge funds whereby the allocation of the Plan’s investments to each CIF is managed by a third party Investment Manager. Fair value of these investments is determined utilizing net asset values, and are not classified in the fair value hierarchy in accordance with the new accounting guidance effective in December 2016. Real estate investments are made either (1) as a limited partner in a portfolio of properties managed by a general partner or (2) through a CIF that invests in a portfolio of real estate funds. Fair value of these investments is determined utilizing net asset values, and are not classified in the fair value hierarchy in accordance with the new accounting guidance effective in December 2016. For certain investments which have formal financial valuations reported on a one-quarter lag, fair value is determined utilizing net asset values adjusted for subsequent cash flows, estimated financial performance and other significant events. Changes in the fair value of Level 3 pension plan assets for the year ended December 31, 2016 were as follows:
(In millions) |  | January 1, 2016 Balance |  | Net Realized and Unrealized Gains (Losses) |  | Net Purchases, Issuances and Settlements |  | Net Transfers Into (Out Of) Level 3 |  | December 31, 2016 Balance
Global debt securities and cash: |  |  |  |  |  |  |  |  |  |
Fixed income and cash equivalents |  | $ | 0.3 |  |  | $ | — |  |  | $ | (0.1 | ) |  | $ | — |  |  | $ | 0.2 |
Floating rate debt |  | 305.3 |  |  | 12.1 |  |  | (218.3 | ) |  | — |  |  | 99.1 |
Total |  | $ | 305.6 |  |  | $ | 12.1 |  |  | $ | (218.4 | ) |  | $ | — |  |  | $ | 99.3 |
Changes in the fair value of Level 3 pension plan assets for the year ended December 31, 2015 were as follows:
(In millions) |  | January 1, 2015 Balance |  | Net Realized and Unrealized Gains (Losses) |  | Net Purchases, Issuances and Settlements |  | Net Transfers Into (Out Of) Level 3 |  | December 31, 2015 Balance
Global debt securities and cash: |  |  |  |  |  |  |  |  |  |
Fixed income and cash equivalents |  | $ | 0.3 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 0.3 |
Floating rate debt |  | 361.0 |  |  | 4.4 |  |  | (60.1 | ) |  | — |  |  | 305.3 |
Total |  | $ | 361.3 |  |  | $ | 4.4 |  |  | $ | (60.1 | ) |  | $ | — |  |  | $ | 305.6 |
For 2017, the expected long-term rate of returns on defined benefit pension assets will be 7.75%. In developing the expected long-term rate of return assumptions, the Company evaluated input from its third party pension plan asset managers and actuaries, including reviews of their asset class return expectations and long-term inflation assumptions. The expected long-term rate of return is based on expected asset allocations within ranges for each investment category, and includes consideration of both historical and projected annual compound returns, weighted on a 65%/35% basis, respectively. The Company’s actual returns on pension assets for the last five years have been 5.3% for 2016, (1.2)% for 2015, 6.5% for 2014, 14.3% for 2013, and 8.0% for 2012. The target asset allocations for pension plans for 2017, by major investment category, are:
Asset category |  | Target asset allocation range
Equity securities: |  |
U. S. equities |  | 18% - 40%
International equities |  | 10% - 30%
Global debt securities and cash |  | 15% - 40%
Private equity |  | 0% - 15%
Hedge funds |  | 10% - 20%
Real estate and other |  | 0% - 10%
As of December 31, 2016, the ATI Pension Plan has outstanding commitments to invest up to $124 million in global debt securities, $102 million in private equity investments, and $11 million in real estate investments. These commitments are expected to be satisfied through the reallocation of pension trust assets while maintaining investments within the target asset allocation ranges. At December 31, 2016, other postretirement benefit plan assets of $0.7 million are primarily invested in private equity investments, which are classified as Level 3 in the valuation hierarchy, as the valuations are substantially based upon unobservable information. For 2017, the expected long-term rate of returns on these other postretirement benefit assets will be 4.0%. The Company contributes to several multiemployer defined benefit pension plans under collective bargaining agreements that cover certain of its union-represented employees. The risks of participating in such plans are different from the risks of single-employer plans, in the following respects:
a. | Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
b. | If a participating employer ceases to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
c. | If the Company ceases to have an obligation to contribute to the multiemployer plan in which it had been a contributing employer, it may be required to pay to the plan an amount based on the underfunded status of the plan and on the history of the Company’s participation in the plan prior to the cessation of its obligation to contribute. The amount that an employer that has ceased to have an obligation to contribute to a multiemployer plan is required to pay to the plan is referred to as a withdrawal liability.
The Company’s participation in multiemployer plans for the years ended December 31, 2016, 2015 and 2014 is reported in the following table. The Company’s contributions to the Steelworkers Western Independent Shops Pension Plan exceed 5% of this plan’s total contributions for the plan year ended September 30, 2015, which is the most recent information available from the Plan Administrator.
|  |  |  | Pension Protection Act Zone Status (1) |  | FIP / RP Status Pending / Implemented (2) |  | in millions |  |  |  | Expiration Dates of Collective Bargaining Agreements
|  | EIN / Pension Plan Number |  |  |  | Company Contributions |  | Surcharge Imposed (3) |
Pension Fund |  |  | 2016 |  | 2015 |  |  | 2016 |  | 2015 |  | 2014 |  |
Steelworkers Western Independent Shops Pension Plan |  | 90-0169564 / 001 |  | Green |  | Green |  | N/A |  | $ | 1.2 |  |  | $ | 0.7 |  |  | $ | 1.1 |  |  | No |  | 2/29/2020
Boilermakers-Blacksmiths National Pension Trust |  | 48-6168020 / 001 |  | Yellow |  | Yellow |  | Yes |  | 1.8 |  |  | 1.8 |  |  | 2.0 |  |  | No |  | 9/30/2018
IAM National Pension Fund |  | 51-6031295 / 002 |  | Green |  | Green |  | N/A |  | 1.6 |  |  | 1.5 |  |  | 1.6 |  |  | No |  | Various between 2018-2022 (4)
Total contributions |  |  |  |  |  |  |  |  |  | $ | 4.6 |  |  | $ | 4.0 |  |  | $ | 4.7 |  |  |  |  |
(1) | The most recent Pension Protection Act Zone Status available for ATI’s fiscal years 2016 and 2015 is for plan years ending in calendar years 2015 and 2014, respectively. The zone status is based on information provided to ATI and other participating employers by each plan and is certified by the plan’s actuary. A plan in the “red” zone had been determined to be in “critical status”, based on criteria established by the Code, and is generally less than 65% funded. A plan in the “yellow” zone has been determined to be in “endangered status”, based on criteria established under the Code, and is generally less than 80% funded. A plan in the “green” zone has been determined to be neither in “critical status” nor in “endangered status”, and is generally at least 80% funded.
(2) | The “FIP / RP Status Pending / Implemented” column indicates whether a Funding Improvement Plan, as required under the Code by plans in the “yellow” zone, or a Rehabilitation Plan, as required under the Code to be adopted by plans in the “red” zone, is pending or has been implemented as of the end of the plan year that ended in 2016.
(3) | The “Surcharge Imposed” column indicates whether ATI’s contribution rate for 2016 included an amount in addition to the contribution rate specified in the applicable collective bargaining agreement, as imposed by a plan in “critical status”, in accordance with the requirements of the Code.
(4) | The Company is party to five separate bargaining agreements that require contributions to this plan. Expiration dates of these collective bargaining agreements range between April 22, 2018 and March 25, 2022.

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