Employee Benefit Plans

Prior to January 1, 1999, we provided a defined benefit pension plan in which most of our employees were eligible to participate (the "Qualified Pension Plan"). In conjunction with significant enhancements to our 401(k) plan, we elected to freeze benefits under the Qualified Pension Plan as of December 31, 1998.

In 1994, we adopted a non-qualified, unfunded, supplemental pension plan (the "Restoration Pension Plan") covering certain employees, which provides for incremental pension payments so that total pension payments equal those amounts that would have been payable from the principal pension plan were it not for limitations imposed by income tax regulation. The benefits under the Restoration Pension Plan were intended to provide benefits equivalent to our Qualified Pension Plan as if such plan had not been frozen. We elected to freeze benefits under the Restoration Pension Plan as of April 1, 2014.

The overfunded or underfunded status of our defined benefit post-retirement plans is recorded as an asset or liability on our balance sheet. The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation. Periodic changes in the funded status are recognized through other comprehensive income. We currently measure the funded status of our defined benefit plans as of December 31, the date of our year-end consolidated balance sheets.

The status of the defined benefit pension plans at year-end was as follows:



	Year Ended December 31,
In thousands	2017			2016
Change in benefit obligation
Benefit obligation at beginning of year	$	179,247		$	178,715
Interest cost	7,347			7,802
Actuarial (gain) loss	10,121			2,127
Benefits paid	(9,679		)	(9,397		)
Benefit obligation at end of year	$	187,036		$	179,247

Change in plan assets
Fair value of plan assets at beginning of year	116,725			121,682
Actual return on plan assets	17,292			2,883
Contributions	1,675			1,557
Benefits paid	(9,679		)	(9,397		)
Fair value of plan assets at end of year	$	126,013		$	116,725

Funded status at end of year	$	(61,023	)	$	(62,522	)

The following amounts have been recognized in the Consolidated Balance Sheets at December 31:



In thousands	2017		2016
Other current liabilities	$	1,685	$	1,686
Pensions	59,338		60,836
Total	$	61,023	$	62,522

The following amounts have been recognized in accumulated other comprehensive loss, net of tax, at December 31:



In thousands	2017		2016
Net loss	$	45,418	$	46,977

We are not required to make and do not intend to make any contributions to our Qualified Pension Plan in 2018. Based on current estimates we will not be required to make any contributions to our Qualified Pension Plan until 2019.

We are not required to make and do not intend to make any contributions to our Restoration Pension Plan in 2018 other than to the extent needed to cover benefit payments. We expect benefit payments under this supplemental pension plan to total approximately $1.7 million in 2018.

The following information is presented for pension plans with an accumulated benefit obligation in excess of plan assets:



In thousands	2017		2016
Projected benefit obligation	$	187,036	$	179,247
Accumulated benefit obligation	$	187,036	$	179,247
Fair value of plan assets	$	126,013	$	116,725

The Restoration Pension Plan had an accumulated benefit obligation of $27.6 million and $26.6 million at December 31, 2017 and 2016, respectively.

The following table presents the components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) for both plans:



	Year Ended December 31,
In thousands	2017			2016			2015
Net Periodic Benefit Cost (Pre-Tax)
Interest cost	7,347			7,802			7,724
Expected return on plan assets	(7,328		)	(8,245		)	(8,637		)
Recognized actuarial loss	2,754			2,386			6,228
Net periodic benefit cost	$	2,773		$	1,943		$	5,315

Amounts Recognized in Other Comprehensive Income (Loss) (Pre-Tax)
Net (gain) loss	$	(2,597	)	$	5,103		$	(9,408	)

Net (benefit) cost recognized in net periodic benefit cost and other comprehensive (income) loss	$	176		$	7,046		$	(4,093	)

The estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2018 is $2.7 million. The period over which the net loss from the Qualified Pension Plan is amortized into net periodic benefit cost was changed in 2016 from the average future service of active participants (approximately 9 years) to the average future lifetime of all participants (approximately 23 years). This change reflects that the Qualified Pension Plan is frozen and that almost all of the plan's participants are not active employees.

The weighted-average assumptions used for measurement of the defined pension plans were as follows:



	Year Ended December 31,
	2017		2016		2015
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate	4.21	%	4.49	%	4.13	%
Expected return on plan assets	6.50	%	7.00	%	7.00	%

The discount rate assumptions are based on current yields of investment-grade corporate long-term bonds. The expected long-term return on plan assets is based on the expected future average annual return for each major asset class within the plan’s portfolio (which is principally comprised of equity investments) over a long-term horizon. In determining the expected long-term rate of return on plan assets, we evaluated input from our investment consultants, actuaries, and investment management firms, including their review of asset class return expectations, as well as long-term historical asset class returns. Projected returns by such consultants and economists are based on broad equity and bond indices. Additionally, we considered our historical 15-year compounded returns, which have been in excess of the forward-looking return expectations.

The funded pension plan assets as of December 31, 2017 and 2016, by asset category, are as follows:



In thousands	2017		%		2016		%
Equity securities	$	80,191	64	%	$	61,254	52	%
Debt securities	20,481		16	%	21,940		19	%
Other	25,341		20	%	33,531		29	%
Total plan assets	$	126,013	100	%	$	116,725	100	%

The fair values presented have been prepared using values and information available as of December 31, 2017 and 2016.

The following tables present the fair value measurements of the assets in our funded pension plan:



In thousands	December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities	$	80,191	$	80,191	$	—	$	—
Debt securities	20,481		20,481		—		—
Total investments, excluding investments valued at NAV	100,672		100,672		—		—
Investments valued at NAV ⁽¹⁾	25,341		—				—
Total plan assets	$	126,013	$	100,672	$	—	$	—



In thousands	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities	$	61,254	$	61,254	$	—	$	—
Debt securities	21,940		21,940		—		—
Total investments, excluding investments valued at NAV	83,194		83,194		—		—
Investments valued at NAV ⁽¹⁾	33,531		—		—		—
Total plan assets	$	116,725	$	83,194	$	—	$	—

(1) Investment valued at NAV are comprised of cash, cash equivalents, and short-term investments used to provide liquidity for the payment of benefits and other purposes. The commingled funds are valued at NAV based on the market value of the underlying investments, which are primarily government issued securities.

The investment policy for the Qualified Pension Plan focuses on the preservation and enhancement of the corpus of the plan’s assets through prudent asset allocation, quarterly monitoring and evaluation of investment results, and periodic meetings with investment managers.

The investment policy’s goals and objectives are to meet or exceed the representative indices over a full market cycle (3-5 years). The policy establishes the following investment mix, which is intended to subject the principal to an acceptable level of volatility while still meeting the desired return objectives:



	Target		Acceptable Range				Benchmark Index
Domestic Equities	50.0	%	35	%	-	75%	S&P 500
Large Cap Growth	22.5	%	15	%	-	30%	Russell 1000 Growth
Large Cap Value	22.5	%	15	%	-	30%	Russell 1000 Value
Mid Cap Value	5.0	%	5	%	-	15%	Russell Mid Cap Value
Mid Cap Growth	0.0	%	0	%	-	10%	Russell Mid Cap Growth

Domestic Fixed Income	35.0	%	15	%	-	50%	LB Aggregate
International Equities	15.0	%	10	%	-	25%	MSC1 EAFE

The funded pension plan provides for investment in various investment types. Investments, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risk. Due to the level of risk associated with investments, it is reasonably possible that changes in the value of investments will occur in the near term and may impact the funded status of the plan. To address the issue of risk, the investment policy places high priority on the preservation of the value of capital (in real terms) over a market cycle. Investments are made in companies with a minimum five-year operating history and sufficient trading volume to facilitate, under most market conditions, prompt sale without severe market effect. Investments are diversified across numerous market sectors and individual companies. Reasonable concentration in any one issue, issuer, industry, or geographic area is allowed if the potential reward is worth the risk.

Investment managers are evaluated by the performance of the representative indices over a full market cycle for each class of assets. The Pension Plan Committee reviews, on a quarterly basis, the investment portfolio of each manager, which includes rates of return, performance comparisons with the most appropriate indices, and comparisons of each manager’s performance with a universe of other portfolio managers that employ the same investment style.

The expected future benefit payments for both pension plans over the next ten years as of December 31, 2017 are as follows:



In thousands
2018	$	9,922
2019	9,977
2020	10,221
2021	10,476
2022	10,855
2023-2027	57,001
Total	$	108,452

We also sponsor a 401(k)-retirement plan in which we matched a portion of employees’ voluntary before-tax contributions. Under this plan, both employee and matching contributions vest immediately. Total 401(k) expense for these matching payments recognized was $3.0 million for each of the years ending December 31, 2017, 2016, and 2015

December 31,

Weighted-average assumptions used to determine benefit obligations

Discount rate