11.	Pension and Other Postretirement Benefits

Pension Benefits

We maintain noncontributory defined benefit pension plans for all of our domestic hourly and salaried employees. For the domestic salaried employees, plan benefits are based primarily on years of service and average compensation during the later years of employment. For hourly employees at Ravenswood, plan benefits are based primarily on a formula that provides a specific benefit for each year of service. Our funding policy is to contribute amounts based upon actuarial and economic assumptions designed to achieve adequate funding of the projected benefit obligations and to meet the minimum funding requirements of the Employee Retirement Income Security Act 1974 (“ERISA”). Plan assets consist principally of U.S. and international equities and fixed income securities. In addition, we provide supplemental executive retirement benefits (“SERB”) for certain current and former executive officers. We account for these plans in accordance with ASC 715-30. We use a measurement date of December 31st to determine the pension and OPEB liabilities.

Employer contributions

In June 2011, at the time three directors designated for nomination to our Board of Directors were elected, it was determined a “change of control” occurred under the terms of our non-qualified SERB plan. As a result, we were required to make an approximately $16,700 contribution to a Rabbi trust to fully fund the non-qualified SERB benefit obligation. In addition, through December 31, 2011, we have made contributions of approximately $17,700 to the qualified defined benefit plans we sponsor for a total of approximately $34,400 in qualified defined benefit plan and non-qualified SERB contributions during the year.

Other Postretirement Benefits (OPEB)

In addition to providing pension benefits, we provide certain healthcare and life insurance benefits for certain domestic retired employees. We account for these plans in accordance with ASC 715-60. ASC 715-60 requires companies to accrue the estimated cost of providing postretirement benefits during the working careers of those employees who could become eligible for such benefits when they retire. We fund these benefits as the retirees submit claims.

Retiree Medical Benefits changes

In 2009 and 2010, Century Aluminum of West Virginia, Inc. (“CAWV”) amended its postretirement medical benefit plan for all current and former salaried employees, their dependents and all bargaining unit employees who retired before June 1, 2006, and their dependents. Effective January 1, 2011, CAWV no longer provided retiree medical benefits to active salaried CAWV personnel or any other personnel who retired prior to November 1, 2010. CAWV has made no commitments as to the future status of retiree medical benefits for hourly personnel who are currently covered by an active medical program. For those retirees impacted by the changes and who have elected COBRA coverage, CAWV waived COBRA premiums through June 30, 2011.

The November 1, 2010 plan amendments resulted in the immediate recognition of any unamortized prior service cost benefits that were accrued in other comprehensive income as of the date of the amendments. In addition, the November 1, 2010 plan amendments resulted in a reduction in OPEB liability and a credit to other comprehensive income. The newly established prior service benefit and actuarial losses were amortized ratably into income over the period November 1, 2010 to June 30, 2011 at which time the CAWV OPEB plan terminated.

With the ratification of the Hawesville labor agreement in December 2010, changes were made to the retiree medical benefits program for employees who retire during the term of the labor agreement. Such retirees have been divided into sub-groups based on attributes such as Medicare eligibility, hire date, age and years of service. Levels of benefits are defined for the sub-groups and range from no substantive change from the benefits provided under the previous labor agreement to replacement of the defined retiree medical benefit program with individual health reimbursement accounts for each eligible participant. The health reimbursement accounts will be funded by CAKY based at established rates per hour worked by each eligible participant. Eligible participants will be able to withdraw from their health reimbursement accounts to fund their own retiree medical coverage.

Obligations and Funded Status

The change in benefit obligations and change in plan assets as of December 31 are as follows:

	Pension						OPEB
	2011			2010			2011			2010
Change in benefit obligation:
Benefit obligation at beginning of year	$	130,427		$	114,181		$	109,717		$	186,384
Service cost		3,133			2,979			1,668			3,534
Interest cost		6,976			6,407			5,728			10,402
Plan changes		-			-			-			(112,487	)
Medicare Part D		-			-			160			538
Actuarial loss		30,490			8,762			24,786			26,996
Benefits paid		(7,608	)		(6,458	)		(7,770	)		(6,038	)
Curtailment/special termination benefits		1,147			4,556			-			388
Benefit obligation at end of year	$	164,565		$	130,427		$	134,289		$	109,717

	Pension						OPEB
	2011			2010			2011			2010
Change in plan assets:
Fair value of plan assets at beginning of year	$	73,878		$	69,626		$	-		$	-
Actual return on plan assets		(307	)		8,815			-			-
Employer contributions		19,004			1,895			7,770			6,038
Benefits paid		(7,608	)		(6,458	)		(7,770	)		(6,038	)
Fair value of assets at end of year	$	84,967		$	73,878		$	-		$	-

	Pension						OPEB
	2011			2010			2011			2010
Funded status of plans:
Funded status	$	(79,598	)	$	(56,549	)	$	(134,289	)	$	(109,717	)
Amounts recognized in the Statement of Financial Position:
Current liabilities	$	(8,699	)	$	(18,754	)	$	(6,211	)	$	(6,409	)
Non-current liabilities		(70,899	)		(37,795	)		(128,078	)		(103,308	)
Net amount recognized	$	(79,598	)	$	(56,549	)	$	(134,289	)	$	(109,717	)
Amounts recognized in accumulated other comprehensive loss (pre-tax):
Net loss	$	80,092		$	44,527		$	89,420		$	79,697
Prior service cost (benefit)		608			746			(27,861	)		(60,674	)
	$	80,700		$	45,273		$	61,559		$	19,023

Our pension plans' projected benefit obligation, accumulated benefit obligation, and fair value of plan assets as of December 31 are as follows:

	Projected Benefit Obligation				Accumulated Benefit Obligation				Fair Value of Plan assets
	2011		2010		2011		2010		2011		2010
Hourly pension plan	$	75,216	$	61,291	$	74,545	$	61,276	$	47,984	$	40,940
Salaried pension plan		64,655		49,478		58,742		45,633		36,982		32,938
Supplemental executive benefits pension (“SERB”) plan		24,694		19,658		23,461		19,143		-		-
Total	$	164,565	$	130,427	$	156,748	$	126,052	$	84,966	$	73,878

The assets held in the Rabbi trust are restricted to funding the SERB plan. However, the Rabbi trust is classified as a general asset of the company (not plan assets) and therefore, the SERB plan is considered unfunded.

Components of Net periodic benefit cost and other amounts recognized in other comprehensive income:

Net Periodic Benefit Cost:
	Year Ended December 31,
	Pension									OPEB
	2011			2010			2009			2011			2010			2009
Service cost	$	3,133		$	2,979		$	2,784		$	1,668		$	3,534		$	3,542
Interest cost		6,976			6,407			6,482			5,728			10,402			11,007
Expected return on plan assets		(6,631	)		(5,376	)		(4,336	)		-			-			-
Amortization of prior service costs		137			137			162			(32,814	)		(10,879	)		(1,144	)
Amortization of net loss		1,863			1,660			2,105			15,063			6,454			2,485
Net periodic benefit cost		5,478			5,807			7,197			(10,355	)		9,511			15,890
Special termination benefits		1,147			4,556			-			-			388			-
Effect of plan amendments		-			-			-			-			(50,474	)		-
Curtailment cost		-			-			2,576			-			-			(14,975	)
Total net periodic benefit cost	$	6,625		$	10,363		$	9,773		$	(10,355	)	$	(40,575	)	$	915

Other changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss (pre-tax):
	Year Ended December 31,
	Pension						OPEB
	2011			2010			2011			2010
Net loss	$	37,427		$	5,322		$	24,785		$	26,996
Prior service benefit arising during the period		-			-			-			(112,488	)
Amortization of net loss		(1,863	)		(1,660	)		(15,063	)		(6,455	)
Amortization of prior service benefit (cost)		(137	)		(137	)		32,814			10,879
Prior service cost (benefit) recognized due to plan amendments		-			-			-			50,475
Total amount recognized in other comprehensive loss		35,427			3,525			42,536			(30,593	)
Net periodic benefit cost		6,625			10,363			(10,355	)		(40,575	)
Total recognized in net periodic benefit cost and other comprehensive loss	$	42,052		$	13,888		$	32,181		$	(71,168	)

Amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost during 2012:
	Pension		OPEB
Amortization of net loss	$	3,521	$	6,426
Amortization of prior service benefit (cost)		137		(4,250	)

Weighted average assumptions were used to determine benefit obligations at December 31:

	Pension		OPEB
	2011	2010	2011	2010
Discount rate	4.25%	5.38%	4.25%	5.26%
Rate of compensation increase (1)	3%/4%/4%	3%/3%/4%	3%/4%/4%	3%/3%/4%
Measurement date	12/31/2011	12/31/2010	12/31/2011	12/31/2010

(1)	Rate of compensation increase is for year 1/year 2/year 3 and thereafter.

Weighted average assumptions were used to determine net periodic benefit cost for the years ended December 31:

	Pension									OPEB
	2011			2010			2009			2011			2010			2009
Measurement date	12/31/2010			12/31/2009			12/31/2008			12/31/2010			12/31/2009			12/31/2008
Fiscal year end	12/31/2011			12/31/2010			12/31/2009			12/31/2011			12/31/2010			12/31/2009
Discount rate		5.49	%		5.75	%		6.54	%		5.23	%		5.89	%		6.31	%
Rate of compensation increase	3%/3%/4%			2%/3%/4%				4.00	%	3%/3%/4%			2%/3%/4%				4.00	%
Expected return on plan assets		8.00	%		8.00	%		8.00	%		-			-			-

Effect of Medicare Part D

Century's prescription drug programs are assumed to be actuarially equivalent and eligible for Medicare Part D subsidy as written into law in December 2003. The approach used to measure this impact is based on our understanding of ASC 715-60. We recognized the impact of these changes on a prospective basis. As of December 31, 2011, the effect of the Medicare Part D subsidy reduced the accumulated projected benefit obligation of our OPEB plans by $15,364, which is an approximate 11% decrease for our OPEB plans.

For measurement purposes, medical cost inflation is initially estimated to be 10%, declining to 5% over six years and thereafter.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care benefit obligations. A one-percentage-point change in the assumed health care cost trend rates would have had the following effects in 2011:

	1% Increase		1% Decrease
Effect on total of service and interest cost	$	1,198	$	(977	)
Effect on accumulated postretirement benefit obligation		21,099		(17,296	)

Century 401(k) Plans

We sponsor a tax-deferred savings plan under which eligible domestic employees may elect to contribute specified percentages of their compensation with Century. In 2011, for our eligible employees, we reinstituted company matching for participants contributions to the savings plan. We suspended our company matching contributions to the 401(k) plan for 2010 and 2009. Employees are considered fully vested immediately upon participation in the plan.

		2011				2010				2009
Company matching contribution to defined contribution (401(k)) plans		$	640			$	-			$	-

Benefit Plan Assets

Pension Plan Investment Policy and Strategy

We have established the defined benefit pension plans (the “Pension Plans”) as a retirement vehicle for the plan participant employees and as a funding vehicle to secure promised benefits. The Pension Plans' assets are invested in a prudent manner for the exclusive purpose of providing benefits to participants. Other objectives are to:

Provide a total return that, over long term, provides sufficient assets to fund the pension plan liabilities.

Maximize the return on assets, over the long term, by investing a majority of the Pension Plans' assets in equities. The inclusion of additional asset classes with differing rates of return, volatility and correlation are utilized to reduce risk by providing diversification relative to equities.

Diversify investments within asset classes to reduce the impact of losses in single investments.

The assets of the Pension Plans are invested in compliance with ERISA, as amended, and any subsequent applicable regulations and laws.

Performance

Our performance objective is to outperform the return on a weighted hypothetical portfolio return (the “Policy Portfolio”) after fees at a comparable level of risk. This investment objective is expected to be achieved over the long term and is measured over rolling multi-year periods. Peer-relative performance comparisons will also be considered especially when performance deviates meaningfully from market indexes. Investment objectives for each asset class are included below.

Policy Portfolio

Asset allocation policy is the principal method for achieving the Pension Plans and investment objectives stated above. The Plans' long-term strategic asset allocation policy targets are as follows:

	Pension Plan Asset Allocation
	Policy Target			December 31, 2011			December 31, 2010
Equities:
U.S. equities		50	%		51	%		50	%
International equities		15	%		14	%		15	%
Fixed income		35	%		35	%		35	%
					100	%		100	%

U.S. and international equities are held for their long-term expected return premium over fixed income investments and inflation. Fixed income is held for diversification relative to equities.

The strategic role of U.S. and international equities is to:

Provide higher expected returns of the major asset classes.

Maintain a diversified exposure within the U.S. and international stock markets through the use of multi-manager portfolio strategies.

Achieve returns in excess of passive indexes through the use of active investment managers and strategies.

The strategic role of fixed income is to:

Diversify the Pension Plans' equity exposure by investing in fixed income securities that exhibit a low correlation to equities, thereby lowering the overall return volatility of the entire investment portfolio.

Maintain a diversified exposure within the U.S. fixed income market through the use of multi-manager portfolio strategies.

Achieve returns in excess of passive indexes through the use of active investment managers and strategies.

The long-term strategic asset allocation policy is reviewed regularly or whenever significant changes occur to Century's or the Pension Plans financial position and liabilities.

Expected rate-of-return assumption

We are currently using an 8.0% long-term rate of return on plan assets for the development of the net periodic cost for the defined benefit pension plans. The rate was selected by taking into account our expected asset mix and is based on historical performance as well as expected future rates of return on plan assets.

Fair Value Measurements of Pension Plan Assets

ASC 820, “Fair Value Measurements, and Disclosures,” defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This pronouncement applies to a broad range of other existing accounting pronouncements that require or permit fair value measurements. We measured the fair value of our Pension Plans' assets in accordance with ASC 820. For additional information about fair value measurement, see Note 4 Fair Value Measurements.

The following table sets forth by level within the ASC 820 fair value hierarchy our Pension Plan assets. As required by generally accepted accounting principles for fair value measurements and disclosures, these assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and the placement within the fair value hierarchy levels. For additional information, see Note 4 Fair Value Measurements.

Fair Value of Pension Plans' assets by category under the fair value hierarchy:

As of December 31, 2011	Level 1		Level 2		Level 3		Total
Equities:
U.S. equities	$	-	$	43,058	$	-	$	43,058
International equities		-		12,243		-		12,243
Fixed income		-		29,666		-		29,666
Total	$	-	$	84,967	$	-	$	84,967

As of December 31, 2010
Equities:
U.S. equities	$	-	$	36,848	$	-	$	36,848
International equities		-		11,095		-		11,095
Fixed income		-		25,935		-		25,935
Total	$	-	$	73,878	$	-	$	73,878

Our Pension Plans' assets are held in certain investment fund trusts. The fair value of the fund trusts is based on the fair value of the underlying securities as determined as follows:

U.S. listed equities; equity and fixed income options: Last sale price; last bid price if no last sale price;

U.S. over-the-counter equities: Official closing price; last bid price if no closing price;

Foreign equities: Official closing price, where available, or last sale price; last bid price if no official closing price; and

Municipal bonds, US bonds, Eurobonds/foreign bonds: Evaluated bid price; broker quote if no evaluated bid price.

Our other postretirement benefit plans are unfunded. We fund these benefits as the retirees submit claims.

Pension and OPEB Cash Flows

Contributions

We expect to make the following contributions for 2012:

	2012
Expected pension plan contributions	$	8,699
Expected OPEB benefits payments		6,211

Estimated Future Benefit Payments

The following table provides the estimated future benefit payments for the pension and other postretirement benefit plans.

	Pension Benefits		OPEB Benefits
2012	$	7,682	$	6,211
2013		7,737		5,402
2014		8,212		5,980
2015		8,373		6,510
2016		8,464		6,832
2017– 2021		49,922		39,042

Participation in Multi-Employer Pension Plans

We contribute to one multiemployer defined benefit pension plan under the terms of a collective-bargaining agreement that covers our union-represented employees at Hawesville. Currently, we do not have any plans to withdraw from or curtail participation in this plan. The risks of participating in a multiemployer plan are different from single-employer plans in the following aspects:

Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.

If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

If a participating employer chooses to stop participating in a multiemployer plan, the employer may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The union-represented employees at Hawesville are part of a United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (“USWA”) sponsored multi-employer plan. Our contributions to the plan are determined at a fixed rate per hour worked.

Century's participation in the plan for the year ended December 31, 2011, is outlined in the table below.

Fund	Steelworkers Pension Trust
EIN / PN	23-6648508/499
Pension Protection Act Zone Status 2011 (1)	Green
Pension Protection Act Zone Status 2010 (1)	Yellow
Subject to Financial Improvement/Rehabilitation Plan	No
Contributions of Century Aluminum 2011 (2)(3)	$2,117
Contributions of Century Aluminum 2010 (3)	$1,306
Contributions of Century Aluminum 2009 (3)	$1,352
Withdrawal from Plan Probable	No
Surcharge Imposed	No
Expiration Date of Collective Bargaining Agreement	April 1, 2015

(1)	The most recent Pension Protection Act zone status available in 2011 and 2010 is for the plans' year-end December 31, 2010 and December 31, 2009, respectively. The zone status is based on information that Century received from the plan as well as publicly available information per the Department of Labor and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded.
(2)	The number of union-represented employees at Hawesville increased approximately 10% due to the restart of curtailed operations.
(3)	Our contributions to the Steelworkers Pension Trust are not 5% or more of the total contributions to the plan.