POSTRETIREMENT MEDICAL BENEFITS AND PENSION

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

POSTRETIREMENT MEDICAL BENEFITS AND PENSION

7. POSTRETIREMENT MEDICAL BENEFITS AND PENSION

Postretirement Medical Benefits

The Company provides postretirement medical benefits to retired employees and their dependents as mandated by the Coal Industry Retiree Health Benefit Act of 1992 and pursuant to collective bargaining agreements. The Company also provides these benefits to qualified full-time employees pursuant to collective bargaining agreements.

The components of net periodic postretirement medical benefit cost are as follows:

	Three Months Ended March 31,
	2016		2015
	(In thousands)
Components of net periodic benefit cost:
Service cost	$	935	$	1,054
Interest cost	3,111		2,907
Amortization of deferred items	200		327
Total net periodic benefit cost	$	4,246	$	4,288

The following table shows the net periodic postretirement medical benefit costs that relate to current and former mining operations:

	Three Months Ended March 31,
	2016		2015
	(In thousands)
Former mining operations	$	2,135	$	2,034
Current operations	2,111		2,254
Total net periodic benefit cost	$	4,246	$	4,288

The costs for the former mining operations are included in Heritage health benefit expenses and costs for current operations are included in Cost of sales and Selling and administrative expenses.

Pension

The Company provides pension benefits to qualified full-time employees pursuant to collective bargaining agreements.

The Company incurred net periodic benefit costs of providing these pension benefits as follows:

	Three Months Ended March 31,
	2016			2015
	(In thousands)
Components of net periodic benefit cost:
Service cost	$	608		$	506
Interest cost	2,287			1,985
Expected return on plan assets	(3,231		)	(2,639		)
Amortization of deferred items	1,039			1,110
Total net periodic pension cost	$	703		$	962

These costs are included in Cost of sales and Selling and administrative expenses. The Company made $0.2 million of contributions to its pension plans in the three months ended March 31, 2016. The Company expects to make $0.2 million of contributions to its pension plans during the remainder of 2016.