Pension and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2019

Pension and Other Post-retirement Benefits

Prior to the Rowan Transaction, Rowan established various defined-benefit pension plans and a post-retirement health and life insurance plan that provide benefits upon retirement for certain full-time employees. The defined-benefit pension plans include: (1) the Rowan Pension Plan; (2) the Rowan SERP; (3) the Norway Onshore Plan; and (4) the Norway Offshore Plan. The Retiree Medical Plan provides post-retirement health and life insurance benefits.

As a result of the Rowan Transaction, we assumed these plans, which were remeasured as of the Transaction Date. Each of the plans has a benefit obligation that exceeds the fair value of plan assets. As of the Transaction Date, the net projected benefit obligations totaled $239.3 million, of which $19.2 million was classified as current. The current and non-current portions of the net benefit obligations are included in accrued liabilities and other and other liabilities in our condensed consolidated balance sheet, respectively. The most significant of the assumed plans is the Rowan Pension Plan, which had a net projected benefit obligation of $202.1 million. Prior to the Transaction Date, Rowan amended the Rowan Pension Plan to freeze the plan as to any future benefit accruals. As a result, eligible employees no longer receive pay credits in the pension plan and newly hired employees will not be eligible to participate in the pension plan.

The components of net periodic pension cost were as follows (in millions):


	Three Months Ended September 30, 2019		April 11 to September 30, 2019
Service cost ⁽¹⁾	$	0.5	$	1.0
Interest cost ⁽²⁾	7.7		13.9
Expected return on plan assets ⁽²⁾	(9.4)		(17.6)
Net periodic pension cost	$	(1.2)	$	(2.7)

⁽¹⁾Included in contract drilling and general and administrative expense in our condensed consolidated statements of operations.

⁽²⁾Included in other, net, in our condensed consolidated statements of operations.

From the Transaction Date through September 30, 2019, we contributed $8.0 million to our pension and other post-retirement benefit plans and expect to make additional contributions to such plans totaling approximately $6.6 million for the remainder of 2019, which represent the minimum contributions we are required to make under relevant statutes. We do not expect to make contributions in excess of the minimum required amounts.