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2313301 - Disclosure - Employee Benefit Plans (Tables)
(http://www.avoninvestor.com/role/EmployeeBenefitPlansTables)
TableStatement [Table]
Slicers (applies to each fact value in each table cell)
Reporting Entity [Axis]0000008868 (http://www.sec.gov/CIK)
Defined Benefit Plans and Other Postretirement Benefit Plans [Axis]Defined Benefit Plan and Other Postretirement Benefit Plan [Domain]
Statement [Line Items]Period [Axis]
2016-01-01 - 2016-12-31
Net Periodic Benefit Cost
Reconciliation of Benefit Obligations, Plan Assets and Funded Status
The following table summarizes changes in the benefit obligation, plan assets and the funded status of our significant defined benefit pension and postretirement plans. We use a December 31 measurement date for all of our employee benefit plans.
 
 
Pension Plans
 
 
 
 
U.S. Plans
 
Non-U.S. Plans
 
Postretirement Benefits
 
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
Change in Benefit Obligation:
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
(606.8
)
 
$
(705.2
)
 
$
(667.7
)
 
$
(777.6
)
 
$
(76.6
)
 
$
(93.4
)
Service cost
 
(6.4
)
 
(13.0
)
 
(5.0
)
 
(5.3
)
 
(.1
)
 
(.7
)
Interest cost
 
(6.5
)
 
(25.1
)
 
(21.8
)
 
(23.6
)
 
(1.7
)
 
(3.7
)
Actuarial (loss) gain
 
(7.5
)
 
44.4

 
(95.9
)
 
54.3

 
2.6

 
5.7

Plan participant contributions
 
—

 
—

 
—

 
—

 
—

 
(2.5
)
Benefits paid
 
26.0

 
92.1

 
37.3

 
35.6

 
1.4

 
7.9

Plan amendments
 
—

 
—

 
—

 
—

 
(1.0
)
 
9.0

Curtailments
 
.2

 
—

 
1.0

 
.2

 
—

 
—

Settlements
 
—

 
—

 
—

 
—

 
—

 
—

Special termination benefits
 
—

 
—

 
—

 
—

 
(.1
)
 
—

Divestitures
 
509.9

 
—

 
—

 
—

 
50.1

 
—

Venezuela deconsolidation
 
—

 
—

 
1.5

 
—

 
—

 
—

Foreign currency changes and other
 
3.5

 
—

 
97.7

 
48.7

 
(.6
)
 
1.1

Ending balance
 
$
(87.6
)
 
$
(606.8
)
 
$
(652.9
)
 
$
(667.7
)
 
$
(26.0
)
 
$
(76.6
)
Change in Plan Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
408.3

 
$
506.5

 
$
576.3

 
$
607.9

 
$
—

 
$
—

Actual return on plan assets
 
.7

 
(13.7
)
 
153.6

 
16.3

 
—

 
—

Company contributions
 
26.6

 
7.6

 
20.0

 
21.6

 
1.4

 
5.4

Plan participant contributions
 
—

 
—

 
—

 
—

 
—

 
2.5

Benefits paid
 
(26.0
)
 
(92.1
)
 
(37.3
)
 
(35.6
)
 
(1.4
)
 
(7.9
)
Divestitures
 
(355.9
)
 
—

 
—

 
—

 
—

 
—

Foreign currency changes and other
 
(2.3
)
 
—

 
(98.9
)
 
(33.9
)
 
—

 
—

Ending balance
 
$
51.4

 
$
408.3

 
$
613.7

 
$
576.3

 
$
—

 
$
—

Funded Status:
 
 
 
 
 
 
 
 
 
 
 
 
Funded status at end of year(1)
 
$
(36.2
)
 
$
(198.5
)
 
$
(39.2
)
 
$
(91.4
)
 
$
(26.0
)
 
$
(76.6
)
Amount Recognized in Balance Sheet:
 
 
 
 
 
 
 
 
 
 
 
 
Other assets
 
$
—

 
$
—

 
$
54.8

 
$
8.1

 
$
—

 
$
—

Accrued compensation
 
(1.7
)
 
(6.6
)
 
(1.4
)
 
(1.6
)
 
(2.4
)
 
(6.9
)
Employee benefit plans liability
 
(34.5
)
 
(191.9
)
 
(92.6
)
 
(97.9
)
 
(23.6
)
 
(69.7
)
Net amount recognized(1)
 
$
(36.2
)
 
$
(198.5
)
 
$
(39.2
)
 
$
(91.4
)
 
$
(26.0
)
 
$
(76.6
)
Pretax Amounts Recognized in Accumulated Other Comprehensive Loss:
 
 
 
 
 
 
 
 
 
 
 
 
Net actuarial loss
 
$
49.5

 
$
310.2

 
$
176.5

 
$
239.6

 
$
1.7

 
$
15.5

Prior service credit
 
(.2
)
 
(1.4
)
 
(1.0
)
 
(1.2
)
 
(1.6
)
 
(29.1
)
Total pretax amount recognized
 
$
49.3

 
$
308.8

 
$
175.5

 
$
238.4

 
$
.1

 
$
(13.6
)
Supplemental Information:
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated benefit obligation
 
$
85.2

 
$
601.7

 
$
182.3

 
$
185.0

 
N/A

 
N/A

Plans with Projected Benefit Obligation in Excess of Plan Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Projected benefit obligation
 
$
87.6

 
$
606.8

 
$
200.8

 
$
207.3

 
N/A

 
N/A

Fair value plan assets
 
51.4

 
408.3

 
106.8

 
107.8

 
N/A

 
N/A

Plans with Accumulated Benefit Obligation in Excess of Plan Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Projected benefit obligation
 
$
87.6

 
$
606.8

 
$
182.8

 
$
186.3

 
N/A

 
N/A

Accumulated benefit obligation
 
85.2

 
601.7

 
172.8

 
173.7

 
N/A

 
N/A

Fair value plan assets
 
51.4

 
408.3

 
92.9

 
93.7

 
N/A

 
N/A


(1) Includes $145.7 of the U.S. pension plans net liability and $53.6 of the postretirement benefit plans net liability (related to the U.S.) at December 31, 2015, which are included in discontinued operations. Amounts associated with the pension and postretirement benefit plans in Canada and the postretirement benefit plan in Puerto Rico, which are included in discontinued operations, have been excluded from all amounts in the table above.
  
Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income
Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Loss
 
 
Pension Benefits
 
 
 
 
 
 
 
 
U.S. Plans
 
Non-U.S. Plans
 
Postretirement Benefits
 
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
Net Periodic Benefit Cost:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 
$
6.4

 
$
13.0

 
$
14.1

 
$
5.0

 
$
5.3

 
$
6.0

 
$
.1

 
$
.7

 
$
.7

Interest cost
 
6.5

 
25.1

 
27.8

 
21.8

 
23.6

 
31.0

 
1.7

 
3.7

 
4.1

Expected return on plan assets
 
(8.2
)
 
(32.6
)
 
(35.8
)
 
(33.0
)
 
(36.4
)
 
(36.4
)
 
—

 
—

 
—

Amortization of prior service credit
 
(.2
)
 
(.7
)
 
(.3
)
 
(.1
)
 
(.1
)
 
(.1
)
 
(1.2
)
 
(4.0
)
 
(4.4
)
Amortization of net actuarial losses
 
10.8

 
43.7

 
45.1

 
6.5

 
8.4

 
6.5

 
.3

 
1.8

 
1.3

Amortization of transition obligation
 
—

 
—

 
—

 
—

 
.1

 
—

 
—

 
—

 
—

Settlements/curtailments
 
.1

 
27.9

 
38.0

 
.3

 
.5

 
2.7

 
(.1
)
 
—

 
(2.7
)
Net periodic benefit cost(2)
 
$
15.4

 
$
76.4

 
$
88.9

 
$
.5

 
$
1.4

 
$
9.7

 
$
.8

 
$
2.2

 
$
(1.0
)
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actuarial losses (gains)
 
$
13.6

 
$
1.8

 
$
105.9

 
$
(24.6
)
 
$
(34.2
)
 
$
97.0

 
$
(2.6
)
 
$
(5.6
)
 
$
2.0

Prior service (credit) cost
 
—

 
—

 
(2.0
)
 
—

 
—

 
—

 
1.0

 
(9.0
)
 
—

Amortization of prior service credit
 
1.3

 
.7

 
.3

 
.1

 
.1

 
.1

 
26.7

 
4.0

 
7.2

Amortization of net actuarial losses
 
(274.4
)
 
(71.6
)
 
(81.5
)
 
(7.8
)
 
(9.1
)
 
(9.9
)
 
(11.3
)
 
(1.8
)
 
(1.6
)
Amortization of transition obligation
 
—

 
—

 
—

 
—

 
(.1
)
 
—

 
—

 
—

 
—

Foreign currency changes
 
—

 
—

 
—

 
(29.6
)
 
(19.4
)
 
(28.0
)
 
(.1
)
 
.2

 
.1

Total recognized in other comprehensive (loss) income*
 
$
(259.5
)
 
$
(69.1
)
 
$
22.7

 
$
(61.9
)
 
$
(62.7
)
 
$
59.2

 
$
13.7

 
$
(12.2
)
 
$
7.7

Total recognized in net periodic benefit cost and other comprehensive (loss) income
 
$
(244.1
)
 
$
7.3

 
$
111.6

 
$
(61.4
)
 
$
(61.3
)
 
$
68.9

 
$
14.5

 
$
(10.0
)
 
$
6.7


(2) Includes $4.4, $53.7 and $62.6 of the U.S. pension plans in 2016, 2015 and 2014, respectively, and immaterial amounts of the postretirement benefit plans (related to the U.S.) in 2016, 2015 and 2014, which are included in discontinued operations. Amounts associated with the pension and postretirement benefit plans in Canada and the postretirement benefit plan in Puerto Rico, which are included in discontinued operations, have been excluded from all amounts in the table above.
* Amounts represent the pre-tax effect classified within other comprehensive (loss) income. The net of tax amounts are classified within the Consolidated Statements of Comprehensive Income (Loss).
  
Accumulated Other Comprehensive Loss Expected to be Recognized as Components of Net Periodic Benefit Cost During Next Fiscal Year
The amounts in AOCI that are expected to be recognized as components of net periodic benefit cost during 2017 are as follows:
 
 
Pension Benefits
 
 
 
 
U.S. Plans
 
Non-U.S. Plans
 
Postretirement
Benefits
Net actuarial loss
 
$
5.0

 
$
7.3

 
$
.1

Prior service credit
 
(.1
)
 
(.1
)
 
(.3
)
  
Weighted-Average Assumptions Used to Determine Benefit Obligations
Assumptions
Weighted-average assumptions used to determine benefit obligations recorded in the Consolidated Balance Sheets as of December 31 were as follows:
 
 
Pension Benefits
 
Postretirement
 
 
U.S. Plans
 
Non-U.S. Plans
 
Benefits
 
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
Discount rate
 
3.67
%
 
4.19
%
 
2.69
%
 
3.69
%
 
5.33
%
 
4.50
%
Rate of compensation increase
 
4.00
%
 
4.00
%
 
2.79
%
 
3.26
%
 
N/A

 
N/A

  
Weighted-Average Assumptions Used to Determine Net Benefit Cost
Weighted-average assumptions used to determine net benefit cost recorded in the Consolidated Statements of Operations for the years ended December 31 were as follows:
 
 
Pension Benefits
 
 
 
 
 
 
 
 
U.S. Plans
 
Non-U.S. Plans
 
Postretirement Benefits
 
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
Discount rate
 
4.19
%
 
3.83
%
 
4.54
%
 
3.58
%
 
3.27
%
 
4.59
%
 
4.50
%
 
4.20
%
 
4.97
%
Rate of compensation increase
 
4.00
%
 
4.00
%
 
4.00
%
 
2.94
%
 
3.20
%
 
3.70
%
 
N/A

 
N/A

 
N/A

Rate of return on assets
 
7.00
%
 
7.25
%
 
7.50
%
 
6.40
%
 
6.55
%
 
6.33
%
 
N/A

 
N/A

 
N/A

  
Pension and Postretirement Plans Target and Weighted-Average Asset Allocations
Plan Assets
Our U.S. and non-U.S. funded defined benefit pension plans target and weighted-average asset allocations at December 31, 2016 and 2015, by asset category were as follows:
 
 
U.S. Pension Plan
 
Non-U.S. Pension Plans
 
 
% of Plan Assets
 
% of Plan Assets
 
 
Target
 
at Year-End
 
Target
 
at Year-End
Asset Category
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Equity securities
 
30
%
 
28
%
 
27
%
 
20
%
 
22
%
 
23
%
Debt securities
 
70

 
69

 
69

 
70

 
68

 
72

Other
 
—

 
3

 
4

 
10

 
10

 
5

Total
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
  
Schedule Of Fair Value Hierarchy For Pension And Postretirement Assets
The following tables present the fair value hierarchy for pension assets measured at fair value on a recurring basis as of December 31, 2016:
 
 
U.S. Pension Plan
Asset Category
 
Level 1
 
Level 2
 
Total
Equity Securities:
 
 
 
 
 
 
Domestic equity
 
$
—

 
$
15.7

 
$
15.7

 
 
—

 
15.7

 
15.7

Fixed Income Securities:
 
 
 
 
 
 
Corporate bonds
 
—

 
25.7

 
25.7

Government securities
 
—

 
9.9

 
9.9

 
 
—

 
35.6

 
35.6

Cash
 
.1

 
—

 
.1

Total
 
$
.1

 
$
51.3

 
$
51.4

 
 
Non-U.S. Pension Plans
Asset Category
 
Level 1
 
Level 2
 
Level 3
 
Total
Equity Securities:
 
 
 
 
 
 
 
 
Domestic equity
 
$
—

 
$
27.7

 
$
—

 
$
27.7

International equity
 
—

 
107.6

 
—

 
107.6

 
 
—

 
135.3

 
—

 
135.3

Fixed Income Securities:
 
 
 
 
 
 
 
 
Corporate bonds
 
—

 
194.8

 
—

 
194.8

Government securities
 
—

 
192.8

 
—

 
192.8

Other
 
—

 
32.0

 
—

 
32.0

 
 
—

 
419.6

 
—

 
419.6

Other
 
 
 
 
 
 
 
 
Cash
 
23.2

 
—

 
—

 
23.2

Derivatives
 
—

 
34.1

 
—

 
34.1

Real estate
 
—

 
—

 
.9

 
.9

Other
 
—

 


 
.6

 
.6

 
 
23.2

 
34.1

 
1.5

 
58.8

Total
 
$
23.2

 
$
589.0

 
$
1.5

 
$
613.7

The following tables present the fair value hierarchy for pension assets measured at fair value on a recurring basis as of December 31, 2015:
 
 
U.S. Pension Plan
Asset Category
 
Level 1
 
Level 2
 
Total
Equity Securities:
 
 
 
 
 
 
Domestic equity
 
$
—

 
$
13.3

 
$
13.3

International equity
 
—

 
79.5

 
79.5

Emerging markets
 
—

 
16.5

 
16.5

 
 
—

 
109.3

 
109.3

Fixed Income Securities:
 
 
 
 
 
 
Corporate bonds
 
—

 
156.8

 
156.8

Government securities
 
—

 
126.8

 
126.8

 
 
—

 
283.6

 
283.6

Cash
 
12.2

 
—

 
12.2

Derivatives
 
—

 
3.2

 
3.2

Total(3)
 
$
12.2

 
$
396.1

 
$
408.3

(3) Includes $374.8 which is included in discontinued operations at December 31, 2015.
 
 
Non-U.S. Pension Plans
Asset Category
 
Level 1
 
Level 2
 
Level 3
 
Total
Equity Securities:
 
 
 
 
 
 
 
 
Domestic equity
 
$
—

 
$
24.1

 
$
—

 
$
24.1

International equity
 
—

 
109.7

 
—

 
109.7

 
 
—

 
133.8

 
—

 
133.8

Fixed Income Securities:
 
 
 
 
 
 
 
 
Corporate bonds
 
—

 
206.5

 
—

 
206.5

Government securities
 
—

 
197.7

 
—

 
197.7

Other
 
—

 
11.1

 
—

 
11.1

 
 
—

 
415.3

 
—

 
415.3

Other:
 
 
 
 
 
 
 
 
Cash
 
11.5

 
—

 
—

 
11.5

Derivatives
 
—

 
13.9

 
—

 
13.9

Real estate
 
—

 
—

 
1.0

 
1.0

Other
 
—

 
—

 
.8

 
.8

 
 
11.5

 
13.9

 
1.8

 
27.2

Total
 
$
11.5

 
$
563.0

 
$
1.8

 
$
576.3

  
Reconciliation of Beginning and Ending Balance For Our Level 3 Investments
A reconciliation of the beginning and ending balances for our Level 3 investments is provided in the table below: 
 
Amount

Balance at January 1, 2015
$
1.9

Actual return on plan assets held
.1

Foreign currency changes
(.2
)
 
 
Balance at December 31, 2015
1.8

Actual return on plan assets held
(.2
)
Foreign currency changes
(.1
)
 
 
Balance at December 31, 2016
$
1.5

  
Expected Benefit Payments
Total benefit payments expected to be paid from the plans are as follows:
 
 
Pension Benefits
 
 
 
 
U.S. Plans
 
Non-U.S. Plans
 
Total
 
Postretirement
Benefits
2017
 
$
13.2

 
$
26.2

 
$
39.4

 
$
2.4

2018
 
10.2

 
27.5

 
37.7

 
2.3

2019
 
9.3

 
28.0

 
37.3

 
2.3

2020
 
8.8

 
28.7

 
37.5

 
2.2

2021
 
8.4

 
29.8

 
38.2

 
2.1

2022-2026
 
35.6

 
212.4

 
248.0

 
9.4

  
Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates
 
Assets Held in Trust
We established a grantor trust to provide assets that may be used for the benefits payable under the SERP and SLIP. The trust is irrevocable and, although subject to creditors’ claims, assets contributed to the trust can only be used to pay such benefits with certain exceptions. The assets held in the trust are included in other assets and at December 31 consisted of the following:
 
 
2016
 
2015
Corporate-owned life insurance policies
 
$
34.9

 
$
32.7

Cash and cash equivalents
 
.3

 
.7

Total
 
$
35.2

 
$
33.4