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EMPLOYEE RETIREMENT PLANS | 6 Months Ended
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Jun. 30, 2014
EMPLOYEE RETIREMENT PLANS |
EMPLOYEE RETIREMENT PLANS | 11. EMPLOYEE RETIREMENT PLANS Defined Benefit Pension and OPEB Welfare Plans The Company sponsors and/or contributes to other postretirement medical and insurance plans ("OPEB") and pension and other benefit plans covering many of our United States employees, in whole or in part, based on meeting certain eligibility criteria. In addition, the Company and its subsidiaries have various pension plans and other forms of postretirement arrangements outside the United States, namely in Canada and Taiwan. As part of the Merger, we assumed certain liabilities related to pensions ("Assumed Pension Plans") and other postretirement benefit plans ("Assumed Postretirement Plans"). Refer to Note 2 to the unaudited condensed consolidated financial statements for additional information related to the Merger. We had no other OPEB obligations prior to the Merger. Certain employees in the United States who were hired before January 1, 2009 are covered by a defined benefit pension plan. That plan was frozen to future benefit accruals in 2009. The Assumed Pension Plans provide benefits to certain employees and retirees of the Merged Business and are closed to new hires. Recently approved amendments to the Assumed Pension Plans for United States salaried employees froze all future benefit accruals for non-union employees effective January 31, 2014. The impact of these amendments to the Assumed Pension Plans was recognized in the fourth quarter of 2013. The Assumed Postretirement Plans are unfunded and provide medical and life insurance benefits for certain employees of the Merged Business and their dependents. In connection with the Merger, we also acquired an Employee Group Waiver Plan ("EGWP") for certain Medicare-eligible retirees of the Merged Business and their dependents. The EGWP includes a fully-insured Medicare Part D prescription drug plan, however the EGWP was eliminated effective January 1, 2014, as part of the changes described below. The Assumed Postretirement Plans require retiree contributions based on retiree-selected coverage levels for certain retirees and their dependents and provide for sharing of future benefit cost increases between the Company and participants. Recently approved modifications to the Assumed Postretirement Plans were made with respect to certain participants, to deliver retiree medical benefits through health reimbursement account contributions. For the impacted participants, these retiree medical changes became effective on January 1, 2014 for Medicare eligible retirees and will become effective January 1, 2015 for non-Medicare eligible future retirees. In addition, life insurance benefits for our assumed United States non-bargained future retirees were eliminated effective January 1, 2014. These OPEB benefit changes were approved and communicated to participants in October 2013 and the quantitative financial impact to the Assumed Postretirement Plans for the United States has been reflected beginning in the fourth quarter of 2013. Components of net periodic benefit income (expense) for the three months ended June 30, 2014 and 2013 includes the following:
|  | Pensions Three Months Ended June 30, |  | OPEB Benefits Three Months Ended June 30, |
--- | --- | --- | --- | --- | ---
(In millions) |  | 2014 |  | 2013 |  | 2014 |  | 2013 |
Components of net periodic benefit income (expense): |  |  |  |  |  |  |  |  |  |  |  |  |
Interest cost |  | $ | (7.9 | ) | $ | (7.5 | ) | $ | (1.1 | ) | $ | (2.0 | )
Service cost |  |  | (0.9 | ) |  | (1.7 | ) |  | (0.2 | ) |  | (0.6 | )
Expected return on assets |  | ​ | 11.8 |  | ​ | 9.8 |  | ​ | - |  | ​ | - |
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service credit |  | ​ | - |  | ​ | - |  | ​ | 2.2 |  | ​ | - |
Actuarial gain (loss) |  |  | 0.1 |  |  | (0.5 | ) |  | - |  |  | - |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total net periodic benefit income (expense) |  | $ | 3.1 |  | $ | 0.1 |  | $ | 0.9 |  | $ | (2.6 | )
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Components of net periodic benefit income (expense) for the six months ended June 30, 2014 and 2013 includes the following:
|  | Pensions Six Months Ended June 30, |  | OPEB Benefits Six Months Ended June 30, |
--- | --- | --- | --- | --- | ---
(In millions) |  | 2014 |  | 2013 |  | 2014 |  | 2013 |
Components of net periodic benefit income (expense): |  |  |  |  |  |  |  |  |  |  |  |  |
Interest cost |  | $ | (15.8 | ) | $ | (13.0 | ) | $ | (2.2 | ) | $ | (3.3 | )
Service cost |  |  | (1.8 | ) |  | (2.8 | ) |  | (0.4 | ) |  | (1.1 | )
Expected return on assets |  | ​ | 23.6 |  | ​ | 17.2 |  | ​ | - |  | ​ | - |
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service credit |  | ​ | - |  | ​ | - |  | ​ | 4.6 |  | ​ | - |
Actuarial gain (loss) |  |  | 0.2 |  |  | (1.1 | ) |  | - |  |  | - |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total net periodic benefit income (expense) |  | $ | 6.2 |  | $ | 0.3 |  | $ | 2.0 |  | $ | (4.4 | )
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Assumptions The following weighted average assumptions were used to determine the net periodic benefit income (expense) for the defined benefit pension and other postretirement welfare plans.
|  | Pensions |  | OPEB
--- | --- | --- | --- | ---
|  | 2014 |  | 2013 |  | 2014 |  | 2013
Discount rate |  | 4.83% |  | 4.09% |  | ​ | 4.65% |  | 4.35%
Expected return on assets |  | 7.42% |  | 6.81% |  |  | Not Applicable |  | Not Applicable
Rate of compensation increase |  | 3.00% |  | 3.15% |  | ​ | 3.00% |  | 3.11%
The weighted-average healthcare cost trend rate (inflation) used for 2014 is 7.49 percent declining to 4.50 percent in the year 2024. In selecting the rates for our current and long-term health care cost assumptions, we take into consideration a number of factors including our actual health care cost increases, the design of our benefit programs, the demographics of our active and retiree populations and external expectations of future medical cost inflation rates. Contributions There were no significant contributions to the pension plan trusts during the three and six months ended June 30, 2014 and 2013. We estimate that we will make payments of approximately $1.9 million for benefit payments related to our pension plans and $7.8 million for benefit payments related to OPEB plans for the year ending December 31, 2014. Defined Contribution Plans Most of our employees are covered by defined contribution plans under which we make contributions to individual employee accounts. Our expense related to our defined contribution plans was approximately $3.2 million and $3.6 million for the three months ended June 30, 2014 and 2013, respectively and $7.5 million and $7.3 million for the six months ended June 30, 2014 and 2013, respectively.

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- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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