Retirement and Benefit Plans

Our plans consist of noncontributory defined benefit pension plans, contributory defined contribution savings plans, a deferred compensation plan, and a multiemployer health and welfare plan. On April 25, 2018, and August 10, 2018, we transferred $151.8 million and $124.8 million, respectively, of our qualified defined benefit pension plan (Pension Plan) assets to The Prudential Insurance Company of America (Prudential) for the purchase of group annuity contracts. Under the arrangements, Prudential assumed ongoing responsibility for administration and benefit payments for over 60%of our U.S. qualified pension plan projected benefit obligations.

As a result of the transfers of pension plan assets, we remeasured the Pension Plan on April 25, 2018, and August 10, 2018, and recorded settlement expense in second and third quarters 2018 of $12.0 million and $11.3 million, respectively. For the second quarter remeasurement, we recorded an actuarial gain of $13.3 million. The actuarial gain was the result of an increase in discount rate from 3.40% at December 31, 2017, to 4.05% at April 25, 2018, offset partially by lower than expected returns on plan assets through April 25, 2018, and a loss from the annuitization. For the third quarter remeasurement, we recorded an actuarial loss of $3.9 million. The actuarial loss was the result of a decrease in discount rate from 4.05% at April 25, 2018 to 3.95% at August 10, 2018 and a loss from the annuitization, offset partially by higher than expected returns on plan assets through August 10, 2018. In conjunction with the transactions, we also made a discretionary pension contribution of $20.0 million in third quarter 2018, for which we received a tax deduction at the 2017 federal income tax rate.

Due to the transfer of pension plan assets and the discretionary pension contribution, we have rebalanced our plan assets to invest mostly in long duration fixed income securities whose duration profile will closely match the Pension Plan’s remaining liability profile going forward. At the same time, we also updated our long-term asset return expectations for each asset class held by the pension plan. As a result of the asset allocation shift and updated view of asset return expectations, the weighted average expected return on plan assets we will use for the remainder of 2018 in our calculation of net periodic benefit cost is 3.85%, down from 4.50% used prior to the August 10, 2018 remeasurement and 4.75% used prior to the April 25, 2018, remeasurement.

The following table presents the pension benefit costs:



	Three Months Ended September 30						Nine Months Ended September 30
	2018			2017			2018			2017
	(thousands)
Service cost	$	196		$	301		$	598		$	903
Interest cost	2,278			4,392			9,602			13,150
Expected return on plan assets	(1,903		)	(4,743		)	(9,783		)	(14,224		)
Amortization of actuarial loss	151			441			1,328			1,245
Plan settlement loss	11,252			—			23,255			—
Net periodic benefit expense	$	11,974		$	391		$	25,000		$	1,074

Service cost is recorded in the same income statement line items as other employee compensation costs arising from services rendered, and the other components of net periodic benefit expense are recorded in "Pension expense (excluding service costs)" in our Consolidated Statements of Operations.

During the nine months ended September 30, 2018, we contributed $21.6 million in cash to the pension plans, of which $20.0 million was discretionary. For the remainder of 2018, we expect to make approximately $4.5 million in cash contributions to the pension plans, of which $4.0 million is to repurchase of one of the real property locations we contributed to our qualified defined benefit pension plan. For information related to the contribution of properties to our qualified defined benefit pension plan, see Note 9, Retirement and Benefit Plans, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2017 Form 10-K.