Note 18—Post‑Retirement Benefits

At December 31, 2016, 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, 2016, 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)	2016		2015		2014
Change in benefit obligation:
Benefit obligation at beginning of year	$	422	$	436	$	444
Interest cost		13		12		15
Actuarial loss		1		19		24
Benefits paid		(43)		(45)		(47)
Benefit obligation at end of year		393		422		436
Change in plan assets:
Fair value of plan assets at beginning of year		—		—		—
Employer contribution		43		45		47
Benefits paid		(43)		(45)		(47)
Fair value of plan assets at end of year		—		—		—
Funded status	$	(393)	$	(422)	$	(436)

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


	Year Ended December 31,
	2016		2015		2014
Weighted-average assumptions used to determine benefit obligation at December 31:
Discount rate	3.50	%	3.30	%	3.00	%
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate	3.30	%	3.00	%	3.60	%
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)	2016		2015		2014
Interest cost	$	13	$	12	$	15
Recognized net actuarial loss		10		9		6
Net periodic benefit cost		23		21		21
Net loss		1		19		24
Amortization of loss		(10)		(9)		(6)
Total amount recognized in other comprehensive income		(9)		10		18
Total recognized in net periodic benefit cost and other comprehensive income	$	14	$	31	$	39

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 2016:


	One-Percentage Point
(Dollars in thousands)	Increase		Decrease
Effect on total of interest cost	$	1	$	(1)
Effect on postretirement benefit obligation		23		(21)

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


(Dollars in thousands)
2017	$	42
2018		42
2019		41
2020		39
2021		38
2022-2026		157
	$	359

The Company expects to contribute approximately $42,000 to the retiree medical plan in 2017.

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, 2016, and the liability for future benefits has been recorded in the consolidated financial statements.

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)	2016		2015		2014
Change in benefit obligation:
Benefit obligation at beginning of year	$	2,092	$	2,331	$	2,197
Interest cost		74		77		85
Participants’ contributions		—		—		72
Actuarial (gain) loss		546		(105)		299
Benefits paid		(280)		(233)		(322)
Less: Federal subsidy on benefits paid		15		22		—
Benefit obligation at end of year		2,447		2,092		2,331
Change in plan assets:
Fair value of plan assets at beginning of year		—		—		—
Employer contribution		280		233		250
Participants’ contributions		—		—		72
Benefits paid		(280)		(233)		(322)
Fair value of plan assets at end of year		—		—		—
Funded status	$	(2,447)	$	(2,092)	$	(2,331)

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


	Year Ended December 31,
	2016		2015		2014
Weighted-average assumptions used to determine benefit obligation at December 31:
Discount rate	3.50	%	3.70	%	3.45	%
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate	3.70	%	3.45	%	4.05	%
Assumed health care cost trend rates at December 31:
Health care cost trend rate assumed for next year	5.00	%	6.25	%	6.50	%

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


	Year Ended December 31,
(Dollars in thousands)	2016		2015		2014
Interest cost	$	74	$	77	$	84
Recognized net actuarial loss		95		115		96
Net periodic benefit cost		169		192		180
Net (gain) loss		546		(106)		299
Amortization of loss		(95)		(115)		(96)
Total amount recognized in other comprehensive income		451		(221)		203
Total recognized in net periodic benefit cost and other comprehensive income	$	620	$	(29)	$	383

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 $134,000.

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 2016:


	One-Percentage Point
(Dollars in thousands)	Increase		Decrease
Effect on aggregate service and interest cost	$	6	$	(6)
Effect on postretirement benefit obligation		176		(159)

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


(Dollars in thousands)
2017	$	236
2018		233
2019		229
2020		223
2021		216
2022-2026		932
	$	2,069

The Company expects to contribute approximately $236,000 to the retiree welfare plan in 2017.