PENSION AND POSTRETIREMENT HEALTH AND LIFE BENEFITS

The components of net benefit costs for pension and postretirement health and life benefit plans were as follows (in millions):



	Predecessor
	Defined Benefit Pension Plans												Postretirement Health and Life Benefit Plans
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013			2014			2013			2014			2013
Service costs	$	0.6		$	1.4		$	1.8		$	8.8		$	0.4		$	0.9		$	1.3		$	2.7
Interest costs	10.6			11.5			31.7			33.5			2.5			2.2			7.5			6.7
Expected returns on plan assets (gains)	(12.9		)	(12.8		)	(38.5		)	(38.3		)	(0.5		)	(0.5		)	(1.5		)	(1.7		)
Amortization of actuarial (gains) losses, net	0.4			2.0			1.0			14.2			—			0.6			—			2.0
Amortization of prior service costs (credits)	—			—			—			0.7			(0.1		)	—			(0.3		)	—
Curtailment (gains)	(2.2		)	—			(2.2		)	(0.7		)	—			—			—			—
Net benefit costs (credits)	$	(3.5	)	$	2.1		$	(6.2	)	$	18.2		$	2.3		$	3.2		$	7.0		$	9.7

Centrus expects to contribute $20.4 million to the defined benefit pension plans in 2014, including $20.1 million of contributions under ERISA and $0.3 million to non-qualified plans. The Company has contributed $20.3 million in the nine months ended September 30, 2014.

There is no required contribution for the postretirement health and life benefit plans under ERISA and Centrus does not expect to contribute in 2014. Centrus receives federal subsidy payments for sponsoring prescription drug benefits that are at least actuarially equivalent to Medicare Part D.

Historically, net periodic benefit costs related to continued operations are allocated to cost of sales, selling, general and administrative expense, and advanced technology costs.

The defined benefit pension plans were amended during 2013 to allow a lump sum payment option to active employees who are not covered by a collective bargaining agreement at the Paducah GDP and who are terminated as a result of participation in a reduction in force from August 5, 2013 through December 31, 2014. Any lump sum distributions in connection with this program would fully settle Centrus' long-term pension obligations related to those benefits. Total lump sum benefits paid in the nine months ended September 30, 2014 were $24.7 million. Settlement accounting, which requires immediate recognition of a portion of amounts deferred in accumulated other comprehensive income, need not be followed if the sum of the settlements for the year is less than the service cost and interest cost components of the net periodic benefit cost for the plan year, determined on a plan by plan basis. Total lump sum payments in the nine months ended September 30, 2014 fell below the minimum settlement accounting thresholds for the plans and therefore settlement accounting was not required.

In connection with Centrus' emergence from Chapter 11 bankruptcy, plan assets and benefit obligations were remeasured as of September 30, 2014. The net effect of the remeasurement was an increase of $85.5 million on the net pension liability (unfunded status) and an increase of $9.2 million in the postretirement health and life benefit plans liability. The increase in the pension and postretirement health and life benefit plans obligations are primarily a result of lower discount rates and revised mortality assumptions reflecting the Society of Actuaries’ RP-2014 and MP-2014 exposure draft mortality tables and mortality improvement scale. Discount rates for the pension plans as of September 30, 2014 are 4.44% for the Employees' Retirement Plan of Centrus Energy Corp., 4.33% for the Retirement Program Plan for Employees of United States Enrichment Corporation and 4.41% for the nonqualified supplemental executive pension plans. The discount rate for the United States Enrichment Corporation Health and Welfare Plan as of September 30, 2014 was 4.03%. Discount rates as of December 31, 2013 were 4.87% for all of the retirement and pension plans and 4.45% for the health and welfare plan.

The Company provides executive officers additional retirement benefits pursuant to the SERPs in excess of qualified plan limits imposed by tax law based on a targeted benefit objective. Centrus froze benefit accruals under the SERPs effective September 30, 2014. Curtailment accounting was reflected related to the freeze of SERP benefits for affected plan participants, resulting in a net credit to special charges of $2.2 million in the three months ended September 30, 2014.

Historically, the Company recognized the actuarial gains and losses as a component of stockholders’ equity on an annual basis and generally amortized them into operating results over the average future service period of the active employees of these plans (or the average future lifetime of plan participants for inactive plans), to the extent the unrecognized gain or loss is outside a corridor. As a result of fresh start accounting, the amount of Predecessor accumulated other comprehensive loss, net of tax of $121.7 million has been expensed as part of Reorganization Items, Net. The Successor Company has modified its accounting policy to immediately recognize these gains and losses on a prospective basis in the statement of operations in the period in which they arise.

Refer to Note 3, "Fresh Start Accounting", for additional information regarding effects of the Plan and fresh start accounting adjustments.