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## Note 8. Pension Plans and Other Postretirement Benefits — 

The Company has defined benefit pension plans and defined contribution plans covering substantially all employees. Benefits under the defined benefit pension plans are generally based on years of service and/or final average pay. The Company funds the U.S. pension plans in accordance with the requirements of the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code. 

The Company also sponsors several postretirement plans covering certain salaried and hourly employees. The plans provide health care and life insurance benefits for eligible retirees. In certain plans, Company contributions towards premiums are capped based on the cost as of a certain date, thereby creating a defined contribution. For the non-collectively bargained plans, the Company maintains the right to amend or terminate the plans at its discretion. 

Components of pension expense (income) for the Company’s defined benefit plans and components of postretirement benefit expense included the following: 

<img src='content_image/10450.jpg'>

In 2003, the Company recorded termination benefits expense of $7.4 million related to workforce reductions which is included in restructuring costs in the statement of operations. 

In 2002, the Company recorded $1.7 million of non-cash income on the curtailment of postretirement benefits for terminated employees related to work force reductions in the Flat-Rolled Products segment. This amount is included in restructuring costs in the statement of operations. 

In 2001, the Company recorded curtailment and termination benefits expense of $9.8 million related to employees of the Company’s Houston, PA stainless steel melt shop that was permanently idled during the fourth quarter. Of this amount, $8.2 million related to curtailment charges and $1.6 million related to termination benefits recorded in accordance with generally accepted accounting principles. This amount is included in restructuring costs in the statement of operations. 

Actuarial assumptions used to develop the components of pension expense (income) and postretirement benefit expense were as follows: 

<img src='content_image/10451.jpg'>

