Retirement Benefits
 9 Months Ended
Sep. 30, 2012
Compensation and Retirement Disclosure [Abstract]  
Retirement benefits

Note 3 – Retirement benefits

 

Pension plans

We have various defined-benefit pension plans covering eligible current and former employees. Benefits under most plans are based on salary and years of service.

 

The components of net periodic pension cost (credit) for our pension plans were as follows:

   U.S. plans Non-U.S. plans Total 
 (In millions) 2012 2011 2012 2011 2012 2011 
               
 Three months ended September 30,             
               
 Service cost$ -  -  2.8  2.5  2.8  2.5 
 Interest cost on projected benefit obligation  11.0  11.6  5.0  4.3  16.0  15.9 
 Return on assets – expected  (14.9)  (16.2)  (3.0)  (3.0)  (17.9)  (19.2) 
 Amortization of losses  9.7  7.0  0.9  0.5  10.6  7.5 
 Amortization of prior service cost  -  -  0.6  0.4  0.6  0.4 
 Settlement loss   1.0  -  1.5  0.7  2.5  0.7 
 Net periodic pension cost$ 6.8  2.4  7.8  5.4  14.6  7.8 
               
 Nine months ended September 30,             
               
 Service cost$ -  -  8.2  7.8  8.2  7.8 
 Interest cost on projected benefit obligation  33.0  34.7  13.9  12.9  46.9  47.6 
 Return on assets – expected  (44.9)  (48.7)  (9.1)  (9.1)  (54.0)  (57.8) 
 Amortization of losses  29.4  21.0  3.0  2.0  32.4  23.0 
 Amortization of prior service cost  -  -  1.4  1.2  1.4  1.2 
 Settlement loss   5.0  -  2.6  1.7  7.6  1.7 
 Net periodic pension cost$ 22.5  7.0  20.0  16.5  42.5  23.5 

We made a $9 million stock contribution to our primary U.S. pension plan in the first three months of 2012 and cash contributions in an aggregate amount of $13 million to the plan in the first nine months of 2012. New federal legislation titled Moving Ahead for Progress in the 21st Century (“MAP-21”) was passed in July 2012. MAP-21 effectively raises the discount rates used to determine our primary U.S. pension plan's benefit liability for funding purposes and has the effect of spreading the expected funding requirements for the pension plan over a longer period of time. As a result of the implementation of this legislation, we are not required to make additional contributions to the primary U.S. pension plan during the remainder of 2012.

 

We recognized $5.0 million in settlement losses in the first nine months of 2012 related to the payment of U.S. pension benefits.

 

 

Retirement benefits other than pensions

We provide retirement healthcare benefits for eligible current and former U.S. and Canadian employees, including former employees of our former U.S. coal operation. Retirement benefits related to our former coal operation include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for United Mine Workers of America Represented Employees (the “UMWA plans”) as well as costs related to black lung obligations.

 

The components of net periodic postretirement cost related to retirement benefits other than pensions were as follows:

    UMWA plans Black lung and other plans Total 
 (In millions) 2012 2011 2012 2011 2012 2011 
                
 Three months ended September 30,             
                
 Service cost$ -  -  0.2  -  0.2  - 
 Interest cost on accumulated postretirement benefit obligations  5.6  5.9  0.7  0.7  6.3  6.6 
 Return on assets – expected  (5.3)  (6.4)  -  -  (5.3)  (6.4) 
 Amortization of losses   5.1  3.8  0.4  0.1  5.5  3.9 
 Amortization of prior service cost  -  -  0.5  0.5  0.5  0.5 
 Net periodic pension cost$ 5.4  3.3  1.8  1.3  7.2  4.6 
                
 Nine months ended September 30,             
                
 Service cost$ -  -  0.3  -  0.3  - 
 Interest cost on accumulated postretirement benefit obligations  16.8  17.9  2.2  2.1  19.0  20.0 
 Return on assets – expected  (15.9)  (19.2)  -  -  (15.9)  (19.2) 
 Amortization of losses  15.6  11.3  1.0  0.3  16.6  11.6 
 Amortization of prior service cost  -  -  1.5  1.5  1.5  1.5 
 Net periodic pension cost$ 16.5  10.0  5.0  3.9  21.5  13.9