NOTE 13 - EMPLOYEE BENEFIT PLANS

Spectrum Defined Benefit Plans

The net periodic benefit cost for the Spectrum defined benefit plans for the three and nine month periods ended June 30, 2018 and 2017 are as follows:


	Three Month Periods Ended				Nine Month Periods Ended
(in millions)	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Service cost	$	0.5	$	0.7	$	1.5	$	2.0
Interest cost		0.5		0.4		1.4		1.1
Expected return on assets		(0.4)		(0.4)		(1.1)		(1.0)
Recognized net actuarial loss		0.3		0.5		0.8		1.6
Net periodic benefit cost	$	0.9	$	1.2	$	2.6	$	3.7
Weighted average assumptions
Discount rate	1.13 - 7.50%		1.00 - 8.68%		1.13 - 7.50%		1.00 - 8.68%
Expected return on plan assets	1.13 - 3.50%		1.00 - 3.50%		1.13 - 3.50%		1.00 - 3.50%
Rate of compensation increase	1.37 - 7.00%		2.25 - 7.00%		1.37 - 7.00%		2.25 - 7.00%

Amounts reclassified from AOCI associated with employee benefit plan costs and recognized on the Condensed Consolidated Statements of Income for the three and nine month periods ended June 30, 2018 and 2017 were as follows:


	Three Month Periods Ended				Nine Month Periods Ended
(in millions)	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Cost of goods sold	$	0.1	$	0.3	$	0.4	$	1.0
Selling expenses		0.1		0.2		0.3		0.5
General and administrative expenses		0.1		0.1		0.1		0.2
Amounts reclassified from AOCI to continuing operations	$	0.3	$	0.6	$	0.8	$	1.7
Amounts reclassified from AOCI to discontinued operations	$	0.5	$	0.8	$	1.6	$	2.3

Contributions to its pension and defined benefit plans, including discretionary amounts, for the three month periods ended June 30, 2018 and 2017 was $1.0 million, and for the nine month periods ended June 30, 2018 and 2017 were $2.8 million and $2.3 million, respectively.

HRG Defined Benefit Plans

HRG had a noncontributory defined benefit pension plan (the “HRG Pension Plan”) covering certain of its former U.S. employees. During the fiscal year ended September 30, 2016, the HRG Pension Plan was frozen which caused all existing participants to become fully vested in their benefits. On November 15, 2017, HRG’s Board of Directors approved the termination of the HRG Pension Plan. The HRG Pension Plan’s termination date was February 15, 2018. As of June 30, 2018 and September 30, 2017, the HRG Pension Plan’s unfunded projected benefit obligation was $4.5 million and $4.2 million, respectively. HRG recognized an accrual of $1.6 million for the estimated additional cost to settle above the unfunded benefit obligation. Spectrum is expected to purchase annuity contracts before the year ended September 30, 2018 to settle the obligation to HRG Pension Plan participants.

Additionally, HRG had an unfunded supplemental pension plan (the “Supplemental Plan”) which provides supplemental retirement payments to certain former senior executives of HRG. The amounts of such payments equal the difference between the amounts received under the HRG Pension Plan and the amounts that would otherwise be received if HRG Pension Plan payments were not reduced as the result of the limitations upon compensation and benefits imposed by Federal law. Effective December 1994, the Supplemental Plan was frozen.