Employee Benefit Plans

3 Months Ended

Mar. 31, 2017

Employee Benefit Plans

Employee Benefit Plans

7. Employee Benefit Plans

The Company sponsors a defined benefit pension plan, with benefits frozen as of March 1, 2012, and postretirement health and life insurance benefits for union employees.  The Company also sponsors a cash balance pension plan for nonunion employees, with benefits frozen as of April 1, 2007, and certain management employees receive postretirement health and life insurance under grandfathered provisions of a terminated plan.

The following provides the components of benefit costs (income) for the three months ended March, 2017 and 2016 (dollars in thousands):

Pension

	Three Months Ended
	March 31,
	2017		2016
Interest cost	$	1,781	$	1,996
Expected asset return		(2,656)		(2,678)
Amortization of loss		124		129
Net periodic benefit income		(751)		(553)
Settlement loss		1,956		—
Total benefit (income) expense	$	1,205	$	(553)

Other Postretirement Benefits

	Three Months Ended
	March 31,
	2017		2016
Service cost	$	254	$	259
Interest cost		596		655
Amortization of (gain) loss		(38)		119
Total benefit expense	$	812	$	1,033

During the three months ended March 31, 2017, the Company’s pension plans for union employees and management employees paid lump-sum benefits to certain plan participants in full settlement of obligations due amounting to $10.6 million.  This resulted in the recognition of a loss on settlement for both pension plans amounting to $2.0 million for the three months ended March 31, 2017.  Because of the settlements, the Company measured its pension plan obligations and plan assets as of March 31, 2017.  The Company used discount rates ranging from 3.81% to 3.82% as of March 31, 2017 to measure the pension plan obligations.  The new measurements resulted in a retirement plan gain which was recognized in other comprehensive income of $1.6 million for the three months ended March 31, 2017.  For the three months ended March 31, 2016, lump sum benefits paid did not exceed the threshold requiring settlement accounting.

In January 2017, the Company amended the postretirement health benefits plan for management employees by implementing a cap on the amount of the premium subsidy at 2017 levels.  This resulted in recognition of a negative plan amendment as of January 31, 2017.  Because of the plan amendment, the Company measured its management postretirement benefits obligation as of January 31, 2017 using a discount rate of 4.07%.  The new measurement resulted in a retirement plan gain which was recognized in other comprehensive income of $19.7 million for the three months ended March 31, 2017.

The Company previously disclosed in its consolidated financial statements for the year ended December 31, 2016 that it expected to contribute $4.8 million to its pension plan in 2017.  For the three months ended March 31, 2017, the Company has made no contributions to the plan.  The Company presently expects to contribute the full amount during the remainder of 2017.