Western Union 2015 Annual Report Download - page 228

THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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11. Employee Benefit Plans
Defined Contribution Plans
The Company administers several defined contribution plans in various countries globally, including The Western Union
Company Incentive Savings Plan (the "401(k)"), which covers eligible employees on the United States payroll. Such plans have
vesting and employer contribution provisions that vary by country. In addition, the Company sponsors a non-qualified deferred
compensation plan for a select group of highly compensated United States employees. The plan provides tax-deferred contributions
and the restoration of Company matching contributions otherwise limited under the 401(k). The aggregate amount charged to
expense in connection with all of the above plans was $18.0 million, $17.4 million and $16.9 million during the years ended
December 31, 2015, 2014 and 2013, respectively.
Defined Benefit Plan
The Company has a frozen defined benefit pension plan (the "Plan") and recognizes its funded status, measured as the difference
between the fair value of the plan assets and the projected benefit obligation, in "Other liabilities" in the Consolidated Balance
Sheets. Plan assets, which are managed in a third-party trust, primarily consist of a diversified blend of approximately 60% debt
securities, 20% equity investments, and 20% alternative investments (e.g., hedge funds, royalty rights and private equity funds)
and had a total fair value of $276.7 million and $302.9 million as of December 31, 2015 and 2014, respectively. The significant
majority of plan assets fall within either Level 1 or Level 2 of the fair value hierarchy. The benefit obligation associated with the
Plan will vary over time only as a result of changes in market interest rates, the life expectancy of the plan participants, and benefit
payments, since the accrual of benefits was suspended when the Plan was frozen in 1988. The benefit obligation was $346.0 million
and $377.8 million and the discount rate assumption used in the measurement of this obligation was 3.52% and 3.27% as of
December 31, 2015 and 2014, respectively. The Company’s unfunded pension obligation was $69.3 million and $74.9 million as
of December 31, 2015 and 2014, respectively.
The net periodic benefit cost associated with the Plan was $2.8 million for the year ended December 31, 2015 and $3.8 million
for both of the years ended December 31, 2014 and 2013. The expected long-term return on plan assets assumption is 7.00% for
2016. The Company made contributions of $6.7 million and $13.2 million to the Plan in the years ended December 31, 2015 and
2014, respectively. No funding to the Plan will be required for 2016. The estimated undiscounted future benefit payments are
expected to be $35.0 million in 2016, $33.4 million in 2017, $31.9 million in 2018, $30.4 million in 2019, $28.8 million in 2020
and $120.4 million in 2021 through 2025.
201 FORM 10-K
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