Employee Benefit Plans

Defined Benefit Plan

The Company has a defined benefit pension plan which is frozen, that covers certain U.S. hourly and salary employees. The defined benefit plan provides benefits based primarily on the participants’ years of service and compensation.

The components of net periodic pension expense are as follows:



	Year Ended December 31,
	2013			2012			2011
Interest cost	$	2,112		$	2,206		$	2,409
Expected return on plan assets	(2,705		)	(2,648		)	(2,575		)
Amortization of net loss	1,348			974			365
Total net periodic pension expense	$	755		$	532		$	199

The changes in the projected benefit obligation and plan assets, the funded status of the plans and the amounts recognized in the consolidated balance sheets are as follows:



	December 31,
	2013			2012
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	57,268		$	49,925
Interest cost	2,112			2,206
Benefits paid	(1,813		)	(1,710		)
Actuarial (gains) losses	(6,883		)	6,847
Projected benefit obligation at year end	$	50,684		$	57,268
Change in plan assets:
Fair value of plan assets at beginning of year	$	37,941		$	34,020
Actual return (loss)	6,202			3,899
Employer contributions	635			1,732
Benefits paid	(1,813		)	(1,710		)
Fair value of plan assets at year end	$	42,965		$	37,941
Funded status (Accrued pension liabilities)	$	(7,719	)	$	(19,327	)

Unrecognized actuarial loss recognized in accumulated other comprehensive income	$	8,250		$	19,978

The estimated net loss for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $320.

The actuarial assumptions used in determining pension plan information are as follows:



	December 31,
	2013		2012		2011
Assumptions used to determine benefit obligation at year end:
Discount rate	4.75	%	3.75	%	4.50	%
Assumptions used to determine net periodic benefit cost:
Discount rate	3.75	%	4.50	%	5.50	%
Expected long-term weighted-average rate of return on plan assets	7.25	%	7.75	%	7.75	%

The discount rate reflects the current rate at which the pension liabilities could be effectively settled at year end. In estimating this rate, the Company looks to rates of return on high quality, fixed-income investments that receive one of the two highest ratings given by a recognized rating agency and the expected timing of benefit payments under the plan.

The expected return assumptions were developed using an averaging formula based upon the plans’ investment guidelines, mix of asset classes, historical returns of equities and bonds, and expected future returns. The Company employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of short and long-term plan liabilities, plan funded status and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value, and small and large capitalizations. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements and periodic asset/liability studies.

The target asset allocations and fair values by asset category at December 31 are as follows:



			Fair Value
			Total				Level 2				Level 3
Asset category:	Target		2013		2012		2013		2012		2013
Equity	55	%	$	26,668	$	21,265	$	26,668	$	21,265	$	—
Fixed income funds	43	%	12,527		16,650		12,527		16,650		—
Cash and cash equivalents	2	%	—		26		—		26		—
Other investments	—	%	3,770		—		1,609		—		2,161
Total	100	%	$	42,965	$	37,941	$	40,804	$	37,941	$	2,161

The plan assets are primarily invested in pooled separate accounts. The fair values of participation units held in pooled separate accounts are based on their net asset values, as reported by the managers of the pooled separate accounts as supported by the unit prices of actual purchase and sale transactions occurring as of or near to the financial statement date. These plan assets are valued using Level 2 inputs as defined in Note 11. Certain plan assets in the other investments asset category are invested in a general investment fund where the fair value is derived from the liquidation value based on an actuarial formula as defined under terms of the investment contract. These plan assets were valued using unobservable inputs and, accordingly, the valuation was performed using Level 3 inputs as defined in Note 11.

The following table represents changes in the fair value of plan assets categorized as Level 3 from the preceding table:



	December 31, 2013
Balance at beginning of year	$	—
Return on plan assets	30
Purchases, sales and settlements, net	(1,925		)
Transfers, net	4,056
Balance at end of year	$	2,161

The Company’s funding policy is to contribute at least the minimum funding amounts required by law. Based upon current actuarial estimates, the Company expects to contribute $1,729 to its defined benefit pension plan in 2014. The following benefit payments are expected to be paid by the plan in each of the next five years and in the aggregate for the subsequent five years:



2014	$	2,000
2015	2,100
2016	2,200
2017	2,400
2018	2,600
In aggregate during five years thereafter	15,000

Multi-Employer Plan

The Company contributes to a multi-employer plan for certain collective bargaining U.S. employees. The risks of participating in this multi-employer plan are different from a single employer plan in the following aspects:


(a)	Assets contributed to the multi-employer by one employer may be used to provide benefits to employees of other participating employers.


(b)	If a participating employer ceases contributing to the plan, the unfunded obligations of the plan may be inherited by the remaining participating employers.


(c)	If the Company chooses to stop participating in the multi-employer plan, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The Company has assessed and determined that the multi-employer plan to which it contributes is not significant to the Company's financial statements. The Company does not expect to incur a withdrawal liability or expect to significantly increase its contribution over the remainder of the current contract period which ends in February 2018. The Company made contributions to the bargaining unit supported multi-employer pension plan resulting in expense of $908, $760 and $518 for the years ended December 31, 2013, 2012 and 2011, respectively.

Defined Contribution Savings Plan

The Company has a defined contribution savings plan that covers most of its U.S. employees. Company contributions to the plan are based on employee contributions, and a Company match and discretionary contributions. Expenses under the plan totaled $9,814, $8,011 and $6,241 for the years ended December 31, 2013, 2012 and 2011, respectively.

Voluntary Deferred Income Plan

The Company provides additional retirement plan benefits to certain members of management under the Amended and Restated Chart Industries, Inc. Voluntary Deferred Income Plan; this is an unfunded plan. The Company recorded $276 and $507 of expense associated with this plan for the years ended December 31, 2013 and 2012, respectively.