Note 18—Post‑Retirement Benefits

At December 31, 2015, the Company and its subsidiary have two post-retirement health and life insurance benefit plans, South State Bank Retiree Medical Plan (the “retiree medical plan”) and the First Federal Retiree Welfare Plan (the “retiree welfare plan”).

Retiree Medical Plan

Under the retiree medical plan, post‑retirement health and life insurance benefits are provided to eligible employees, such benefits being limited to those employees of the Company eligible for early retirement under the pension plan on or before December 31, 1993, and former employees who are currently receiving benefits. The plan was unfunded at December 31, 2015, and the liability for future benefits has been recorded in the consolidated financial statements.

The following sets forth the retiree medical plan’s funded status and amounts recognized in the Company’s accompanying consolidated financial statements:


	December 31,
(Dollars in thousands)	2015		2014		2013
Change in benefit obligation:
Benefit obligation at beginning of year	$	436	$	444	$	518
Interest cost		12		15		19
Actuarial (gain) loss		19		24		(41)
Benefits paid		(45)		(47)		(52)
Benefit obligation at end of year		422		436		444
Change in plan assets:
Fair value of plan assets at beginning of year		—		—		—
Employer contribution		45		47		52
Benefits paid		(45)		(47)		(52)
Fair value of plan assets at end of year		—		—		—
Funded status	$	(422)	$	(436)	$	(444)

Weighted‑average assumptions used to determine benefit obligations and net periodic benefit cost are as follows:


	Year Ended December 31,
	2015		2014		2013
Weighted-average assumptions used to determine benefit obligation at December 31:
Discount rate	3.30	%	3.00	%	3.60	%
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate	3.00	%	3.60	%	3.80	%
Assumed health care cost trend rates at December 31:
Health care cost trend rate assumed for next year	5.00	%	5.00	%	5.00	%

Components of net periodic benefit cost and other amounts recognized in other comprehensive income are as follows:


	Year Ended December 31,
(Dollars in thousands)	2015		2014		2013
Interest cost	$	12	$	15	$	19
Recognized net actuarial loss		9		6		10
Net periodic benefit cost		21		21		29
Net (gain) loss		19		24		(41)
Amortization of loss		(9)		(6)		(10)
Total amount recognized in other comprehensive income		10		18		(51)
Total recognized in net periodic benefit cost and other comprehensive income	$	31	$	39	$	(22)

The estimated net loss for the retiree medical plan that will be amortized from other comprehensive income into periodic benefit cost over the next fiscal year is $10,000.

Assumed health care cost trend rates have a significant effect on the amounts reported for the post‑retirement benefit plan. A one‑percentage‑point change in assumed health care cost trend rates would have the following effects at the end of 2015:


	One-Percentage Point
(Dollars in thousands)	Increase		Decrease
Effect on total of interest cost	$	1	$	(1)
Effect on postretirement benefit obligation		27		(24)

Estimated future benefit payments (including expected future service as appropriate):


(Dollars in thousands)
2016	$	42
2017		42
2018		41
2019		40
2020		39
2021-2025		166
	$	370

The Company expects to contribute approximately $42,000 to the retiree medical plan in 2016.

Retiree Welfare Plan

Under the retiree welfare plan, post-retirement health and life insurance benefits are provided to eligible employees, such benefits being limited to retired FFHI employees who are currently receiving benefits. The plan was unfunded at December 31, 2015, and the liability for future benefits has been recorded in the consolidated financial statements. Prior to the July 26, 2013 FFHI merger, the company had no obligations under the retiree welfare plan, therefore information is presented as of December 31, 2015 and 2014 and for the years ended December 31, 2015, and 2014 and for the period from July 26, 2013 to December 31, 2013.

The following sets forth the retiree welfare plan’s funded status and amounts recognized in the Company’s accompanying consolidated financial statements:


	December 31,
(Dollars in thousands)	2015		2014		2013
Change in benefit obligation:
Benefit obligation at beginning of year	$	2,331	$	2,197	$	2,231
Interest cost		77		85		37
Participants’ contributions		—		72		63
Actuarial (gain) loss		(105)		299		(4)
Benefits paid		(233)		(322)		(145)
Less: Federal subsidy on benefits paid		22		—		15
Benefit obligation at end of year		2,092		2,331		2,197
Change in plan assets:
Fair value of plan assets at beginning of year		—		—		—
Employer contribution		233		250		82
Participants’ contributions		—		72		63
Benefits paid		(233)		(322)		(145)
Fair value of plan assets at end of year		—		—		—
Funded status	$	(2,092)	$	(2,331)	$	(2,197)

Weighted‑average assumptions used to determine benefit obligations and net periodic benefit cost are as follows:


	Year Ended December 31,
	2015		2014		2013
Weighted-average assumptions used to determine benefit obligation at December 31:
Discount rate	3.70	%	3.45	%	4.05	%
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate	3.45	%	4.05	%	3.95	%
Assumed health care cost trend rates at December 31:
Health care cost trend rate assumed for next year	6.25	%	6.50	%	6.75	%

Components of net periodic benefit cost and other amounts recognized in other comprehensive income are as follows:


	Year Ended December 31,
(Dollars in thousands)	2015		2014		2013
Interest cost	$	77	$	84	$	36
Recognized net actuarial loss		115		96		39
Net periodic benefit cost		192		180		75
Net (gain) loss		(106)		299		(4)
Amortization of loss		(115)		(96)		(39)
Total amount recognized in other comprehensive income		(221)		203		(43)
Total recognized in net periodic benefit cost and other comprehensive income	$	(29)	$	383	$	32

The estimated net loss for the retiree welfare plan that will be amortized from other comprehensive income into periodic benefit cost over the next fiscal year is $95,000.


	One-Percentage Point
(Dollars in thousands)	Increase		Decrease
Effect on aggregate service and interest cost	$	5	$	(4)

Estimated future benefit payments (including expected future service as appropriate):


(Dollars in thousands)
2016	$	189
2017		190
2018		190
2019		190
2020		186
2021-2025		818
	$	1,763

The Company expects to contribute approximately $189,000 to the retiree welfare plan in 2016.