12. EMPLOYEE RETIREMENT PLANS

Defined Benefit Plans

The Company sponsors and/or contributes to pension plans ("Pension Plans") and OPEB 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.

The Pension Plans provide benefits to certain employees and retirees and are closed to new hires. Effective January 31, 2014, amendments to the Pension Plans for United States non-bargained employees froze all future benefit accruals for non-bargained employees who were not already frozen. The financial impact of these amendments to the Pension Plans was recognized in the fourth quarter of 2013.

During 2014, the U.S. Pension Plans were amended to provide a one-time voluntary lump-sum distribution offer to terminated vested participants. Payments were made during December 2014 and a settlement charge of $5.8 million was recognized at December 31, 2014.

The OPEB plans are unfunded and provide medical and life insurance benefits for certain employees and their dependents. The OPEB plans require retiree contributions based on retiree-selected coverage levels for certain retirees and their dependents and provide for the sharing of future benefit cost increases between the Company and participants.

Modifications to the OPEB 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 January 1, 2015 for non-Medicare eligible retirees. In addition, life insurance benefits for non-bargained future retirees were eliminated effective January 1, 2014. These benefit changes were approved and communicated to participants in October 2013 and the quantitative financial impact to the OPEB plans for the United States was reflected beginning in the fourth quarter of 2013.

Benefit Obligations. The reconciliation of the beginning and ending balances of the projected benefit obligation for defined benefit plans is as follows:

	Pension Benefits						OPEB
	As of December 31,
(In millions)	2014			2013			2014			2013
Change in Benefit Obligation
Benefit obligation, beginning of year	$	673.4		$	168.5		$	97.9		$	-
Acquisitions		-			576.1			-			182.9
Service costs		3.6			6.6			0.8			2.0
Interest cost		31.7			28.0			4.4			6.4
Actuarial loss (gain)		141.3			(57.0	)		16.7			(4.2	)
Foreign currency translation adjustment		(1.5	)		(0.8	)		(0.3	)		(0.1	)
Plan participants' contributions		-			-			1.4			3.4
Gross benefits paid		(38.2	)		(32.5	)		(9.2	)		(9.8	)
Plan amendments		-			-			-			(82.7	)
Curtailments		-			(15.5	)		-			-
Settlements		(24.0	)		-			-			-
Other		0.5			-			-			-

Benefit obligation, end of year	$	786.8		$	673.4		$	111.7		$	97.9


Accumulated benefit obligation, end of year	$	784.0		$	670.7			NA			NA

The accumulated benefit obligation is defined as the actuarial present value of pension benefits (whether vested or unvested) attributed to employee services rendered before December 31, 2014 and 2013, respectively, and based on employee service and compensation prior to the applicable date.

Plan Assets. The summary and reconciliation of the beginning and ending balances of the fair value of the plans' assets were as follows:

	Pension Benefits						OPEB
	As of December 31,
(In millions)	2014			2013			2014			2013
Change in Plan Assets
Fair value of plan assets, beginning of year	$	659.4		$	115.8		$	-		$	-
Acquisitions		-			506.7			-			-
Actual return on plan assets		40.1			68.2			-			-
Foreign currency translation adjustment		(1.1	)		(0.7	)		-			-
Employer contribution		2.0			1.9			7.8			6.4
Plan participants' contributions		-			-			1.4			3.4
Gross benefits paid		(38.2	)		(32.5	)		(9.2	)		(9.8	)
Settlements		(24.0	)		-			-			-

Fair value of plan assets, end of year	$	638.2		$	659.4		$	-		$	-

Investments are classified based on the lowest level of input that is significant to the fair value measurement. The following table sets forth, by level within the fair value hierarchy, a summary of the investments measured at fair value and the target and current asset allocations.

Asset Category	Target Allocation 2015			Percentage of Plan Assets, December 31, 2014			Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
(In millions, except percentages)
Short-term investment fund		-	%		2	%	$	10.2	$	-	$	10.2	$	-
U.S. equity securities:
Consumer discretionary sector								4.3		4.3		-		-
Consumer staples sector								6.1		6.1		-		-
Energy sector								1.3		1.3		-		-
Finance sector								2.3		2.3		-		-
Health care sector								9.9		9.9		-		-
Index funds								141.3		-		141.3		-
Industrials sector								3.5		3.5		-		-
Information technology sector								3.7		3.7		-		-
Capital appreciation mutual fund								39.4		39.4		-		-
Small cap growth mutual fund								7.2		7.2		-		-
Pooled equity fund								55.5		-		55.5		-
Other								1.3		1.3		-		-

Total U.S. equity securities		41	%		43	%		275.8		79.0		196.8		-
U.S. fixed income securities:
Western assets total return funds								85.5		-		85.5		-
Blackrock investments, institutional								70.8		-		70.8		-
Other fixed income securities								71.4		-		71.4		-

Total fixed income securities		38	%		36	%		227.7		-		227.7		-
International securities:
Equity securities					13	%		81.5		8.0		68.5		5.0
Euro pacific growth fund					6	%		35.4		35.4		-		-
Fixed income securities								6.2		2.0		-		4.2

Total international securities		18	%		19	%		123.1		45.4		68.5		9.2
Long-biased hedge fund		3	%		-	%		0.2		-		-		0.2
Real estate partnership		-	%		-	%		1.2		-		-		1.2

Total							$	638.2	$	124.4	$	503.2	$	10.6

Asset Category	Target Allocation 2014			Percentage of Plan Assets, December 31, 2013			Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
(In millions, except percentages)
Short-term investment fund		-	%		1	%	$	5.7	$	-	$	5.7	$	-
Receivables		-	%		13	%		86.7		-		-		86.7
U.S. equity securities:
Consumer discretionary sector								6.6		6.6		-		-
Consumer staples sector								9.2		9.2		-		-
Energy sector								1.3		1.3		-		-
Finance sector								3.8		3.8		-		-
Health care sector								8.4		8.4		-		-
Index funds								93.6		-		93.6		-
Industrials sector								2.8		2.8		-		-
Information technology sector								7.3		7.3		-		-
Capital appreciation mutual fund								13.1		13.1		-		-
Small cap growth mutual fund								7.4		7.4		-		-
Pooled equity fund								47.8		-		47.8		-
Other								1.4		1.4		-		-

Total U.S. equity securities		43	%		31	%		202.7		61.3		141.4		-
U.S. fixed income securities:
Pimco total return, institutional								199.4		199.4		-		-
Other fixed income securities								65.2		2.8		62.4		-

Total U.S. fixed income securities		20	%		40	%		264.6		202.2		62.4		-
International equity securities:
Euro pacific growth fund								29.1		29.1		-		-
Emerging market index funds		5	%		10	%		62.8		5.1		57.7		-

Total international equity securities		20	%		14	%		91.9		34.2		57.7		-
Long-biased hedge fund		10	%		1	%		6.7		-		-		6.7
Real estate partnership		2	%		-	%		1.1		-		-		1.1

Total							$	659.4	$	297.7	$	267.2	$	94.5

Roll-forward of Level 3 Investments. During the year ended December 31, 2013, the fair value of Level 3 investments consisted of $86.7 million relating to receivables of pension plan assets acquired in the Merger. The pension plans received a cash settlement of the receivables during 2014 and reinvested the proceeds in other plan assets. The following is a roll-forward of the Level 3 investments of our pension plan assets during the year ended December 31, 2014:

(In millions)	Receivables			Long-Biased Hedge Fund			Real Estate Partnership		Equity Securities		Fixed Income Securities
Beginning balance at December 31, 2013	$	86.7		$	6.7		$	1.1	$	-	$	-
Collection of receivables		(86.2	)		-			-		-		-
Purchases or transfers to Level 3		-			0.4			-		5.0		4.2
Foreign currency translation		-			-			-		-		-
Unrealized gain on plan assets		-			-			0.1		-		-
Realized loss on plan assets		(0.5	)		-			-		-		-
Sale of assets or transfers from Level 3		-			(6.9	)		-		-		-

Ending balance at December 31, 2014	$	-		$	0.2		$	1.2	$	5.0	$	4.2

Funded Status. The following table shows the funded status of the pension and other OPEB benefits, reconciled to the amounts reported on the consolidated balance sheets:

	Pension Benefits						OPEB
	As of December 31,
(In millions)	2014			2013			2014			2013
Funded status, end of year:
Fair value of plan assets	$	638.2		$	659.4		$	-		$	-
Benefit obligations		786.8			673.4			111.7			97.9

Unfunded status	$	(148.6	)	$	(14.0	)	$	(111.7	)	$	(97.9	)


Amounts recognized in the balance sheets consist of:
Noncurrent asset	$	-		$	26.9		$	-		$	-
Current liability		(1.5	)		(1.3	)		(8.7	)		(7.7	)
Noncurrent liability		(147.1	)		(39.6	)		(103.0	)		(90.2	)

Amount recognized, end of year	$	(148.6	)	$	(14.0	)	$	(111.7	)	$	(97.9	)


Gross amounts recognized in accumulated other comprehensive income (loss) consist of:
Net actuarial gain (loss)	$	(131.5	)	$	11.4		$	(12.3	)	$	4.2
Prior service credit (cost)		(0.1	)		(0.1	)		71.2			80.4

Amount recognized, end of year	$	(131.6	)	$	11.3		$	58.9		$	84.6

Certain of our pension plans have projected benefit obligations in excess of the fair value of plan assets. For these plans, the projected benefit obligations and the fair value of plan assets were as follows:

	Pensions As of December 31,
(In millions)	2014		2013
Projected benefit obligation, end of year	$	786.8	$	430.5
Fair value of plan assets, end of year		638.2		389.6

Certain of our pension plans have accumulated benefit obligations in excess of the fair value of plan assets. For these plans, the accumulated benefit obligations and the fair value of plan assets were as follows:

	Pensions As of December 31,
(In millions)	2014		2013
Accumulated benefit obligaiton , end of year	$	784.0	$	417.6
Fair value of plan assets, end of year		638.2		378.9

Changes in Other Comprehensive Income (Loss). The following table summarizes the changes in plan assets and benefit obligations which were recognized in other comprehensive income (loss):

	Pensions									OPEB (1)
	As of December 31,
End of year:	2014			2013			2012			2014			2013
Current year actuarial gain (loss)	$	(142.5	)	$	102.2		$	(15.0	)	$	(16.6	)	$	4.2
Amortization of actuarial loss (gain)		(0.4	)		(13.3	)		1.6			0.1			-
Current year prior service credit		-			-			-			-			82.6
Amortization of prior service credit		-			-			-			(9.2	)		(2.3	)

Total recognized in other comprehensive income (loss)	$	(142.9	)	$	88.9		$	(13.4	)	$	(25.7	)	$	84.5


Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	(137.1	)	$	106.2		$	(13.6	)	$	(21.8	)	$	78.5

(1)	OPEB plans were assumed in the Merger which closed on January 28, 2013.

The following table summarizes the estimated amount that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in 2015:

(In millions)	Pensions			OPEB
Prior service credit	$	-		$	9.2
Actuarial loss		(2.6	)		(0.1	)

Total	$	(2.6	)	$	9.1

Net Periodic Benefit Income (Expense). Net periodic benefit income (expense) for the years ended December 31, 2014, 2013 and 2012 includes the following:

	Pensions Year Ended December 31,									OPEB Benefits Year Ended December 31,
(In millions)	2014			2013			2012			2014			2013
Components of net periodic benefit income (expense):
Interest cost	$	(31.7	)	$	(28.0	)	$	(7.2	)	$	(4.4	)	$	(6.4	)
Service cost		(3.6	)		(6.6	)		-			(0.8	)		(2.0	)
Expected return on assets		47.0			38.5			8.7			-			-
Amortization of:
Prior service credit		-			-			-			9.2			2.3
Actuarial gain (loss)		0.4			(2.1	)		(1.7	)		(0.1	)		-

Total amotization		0.4			(2.1	)		(1.7	)		9.1			2.3
Settlement loss		(5.8	)		-			-			-			-
Curtailment gain		-			15.5			-			-			-
Other components of net periodic pension cost		(0.5	)		-			-			-			-

Total net periodic benefit income (expense)	$	5.8		$	17.3		$	(0.2	)	$	3.9		$	(6.1	)

Assumptions for Defined Benefit Obligations. Mortality is a key assumption used to determine the benefit obligation for the defined benefit pension and OPEB plans. The Company has historically utilized the Society of Actuaries' (SOA) published mortality data in developing a best estimate of mortality. On October 27, 2014, the SOA published updated mortality tables for U.S. plans ("RP-2014") and an updated generational improvement scale ("MP-2014"), which both reflect improved longevity. The Company adopted the SOA's new RP-2014 and MP-2014 as published by the SOA for purposes of measuring pension and OPEB benefit obligations at year-end. The change to the mortality assumption increased the year-end pension and OPEB obligations by $74 million and $2 million, respectively, as of December 31, 2014.

The discount rate reflects the rate at which pension benefit obligations could be effectively settled. We determined our discount rate by matching the expected cash flows of our pension and OPEB obligations to a yield curve generated from a broad portfolio of high-quality fixed rate debt instruments. The rate of compensation is based on projected salary increases for our plan participants. The healthcare cost trend assumption is based on a number of factors including our actual healthcare 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. The weighted average assumptions used for determining our benefit obligations as of December 31, are as follows:

	Pension Benefits		OPEB
	2014	2013	2014	2013
Discount rate	3.98%	4.81%	3.90%	4.65%
Rate of compensation increase	3.01%	3.00%	NA	3.00%
Health care cost trend rate
—Initial rate	NA	NA	7.00%	7.49%
—Ultimate rate	NA	NA	4.50%	4.50%
—Years to ultimate	NA	NA	9	10

Assumptions for Net Periodic Costs. The rate of compensation increase for our pension plans was not applicable in 2012 as all future benefits with respect to compensation increases were frozen for the plans that existed at that time. The rate of compensation increase for our OPEB plans was not applicable in 2014 due to benefit changes made to the U.S. OPEB plans, eliminating the salary-based life insurance benefit for future non-bargained retirees. The following weighted average assumptions were used to determine the net periodic costs for the defined benefit pension and OPEB plans for the years presented:

	Pensions			OPEB
	2014	2013	2012	2014	2013
Discount rate	4.81%	4.16%	5.00%	4.65%	4.39%
Expected return on assets	7.42%	6.91%	8.25%	NA	NA
Rate of compensation increase	3.00%	3.14%	NA	NA	3.11%
Health care cost trend rate:
Initial rate	NA	NA	NA	7.49%	6.63%
Ultimate rate	NA	NA	NA	4.50%	4.50%
Years to ultimate rate	NA	NA	NA	10	11

In selecting the rates for our current and long-term healthcare cost assumptions, we take into consideration a number of factors including our actual healthcare 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. If the assumed healthcare cost trend rates were 1 percent lower or 1 percent higher, the estimated OPEB cost for 2014 would decrease by $0.1 million or increase by $0.1 million, respectively.

The expected long-term rate of return on plan assets assumption is based on historical and projected rates of return for current and planned asset classes in the plan's investment portfolio. Projected rates of return for each of the plans' projected asset classes were selected after analyzing historical experience and future expectations of the returns and volatility of the various asset classes. Based on the target asset allocation for each asset class, the overall expected rate of return for the portfolio was developed and adjusted for historical and expected experience of active portfolio management results compared to the benchmark returns and for the effect of expenses paid from plan assets.

Our investment committee establishes investment policies and strategies and regularly monitors the performance of the plans' funds. Our investment strategy with respect to U.S. pension plan assets is to invest the assets in accordance with the "prudent investor" guidelines contained in the Employee Retirement Income Security Act of 1974 and fiduciary standards. Our policy on funding is to contribute an amount within the range of the minimum required and the maximum tax-deductible contribution.

Expected Cash Flows. During 2015, we expect to make contributions of $1.9 million to our pension plans and $8.9 million to our unfunded OPEB plans for benefit payments. We do not expect any federal subsidy with regards to our OPEB plans. Expected benefit payments for all pension and OPEB plans are as follows:

(In millions)	Pension Benefits		OPEB (Gross)
Expected benefit payments:
2015	$	38.1	$	8.9
2016		39.3		8.3
2017		40.2		7.9
2018		41.5		7.7
2019		42.7		7.4
2020-2024		232.6		33.8

Defined Contribution Plans

Most 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 $21.1 million, $15.7 million and $7.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. In October 2012, we implemented an additional, discretionary company retirement contribution to our U.S. retirement savings plans.