POSTRETIREMENT MEDICAL BENEFITS AND PENSION

3 Months Ended

Mar. 31, 2017

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,
	2017		2016
	(In thousands)
Components of net periodic benefit cost:
Service cost	$	793	$	935
Interest cost	3,197		3,111
Amortization of deferred items	964		200
Total net periodic benefit cost	$	4,954	$	4,246

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

	Three Months Ended March 31,
	2017		2016
	(In thousands)
Former mining operations	$	2,305	$	2,135
Current operations	2,649		2,111
Total net periodic benefit cost	$	4,954	$	4,246

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,
	2017			2016
	(In thousands)
Components of net periodic benefit cost:
Service cost	$	407		$	608
Interest cost	2,630			2,287
Expected return on plan assets	(3,627		)	(3,231		)
Amortization of deferred items	594			573
Total net periodic pension cost	$	4		$	237

These costs are included in Cost of sales and Selling and administrative expenses. The Company made $0.1 million and $0.2 million of contributions to its pension plans in the three months ended March 31, 2017 and 2016, respectively. The Company expects to make $1.1 million of contributions to its pension plans during the remainder of 2017.