Note 17—Benefit Plans

Defined Contribution Plan

We maintain a defined contribution plan for our employees. All eligible employees may participate in this plan after thirty days of service. We match employee contributions up to a maximum of 6% of the employee’s eligible compensation, with the employer contributions vesting at 100% immediately. For the years ended December 31, 2018, 2017, and 2016, we made contributions to the plans totaling approximately $4.0 million, $3.6 million, and $3.2 million, respectively.

Defined Benefit Plan

We maintain a defined benefit pension plan (the “Benefit Plan”) covering substantially all our Wyoming Refining employees. Benefits are based on years of service and the employee’s highest average compensation received during five consecutive years of the last ten years of employment. Our funding policy is to contribute annually an amount equal to the pension expense, subject to the minimum funding requirements of the Employee Retirement Income Security Act of 1974 and the tax deductibility of such contributions.

In December 2016, the Benefit Plan was amended (the “Plan Amendment”) to freeze all future benefit accruals for salaried plan participants. The Plan Amendment reduced the projected benefit obligation by $3.1 million as of December 31, 2016. The curtailment gain of $3.1 million was recognized in Gain on curtailment of pension obligation in our consolidated statement of operations for the year ended December 31, 2016.

The changes in the projected benefit obligation and the fair value of plan assets of our Benefit Plan for the years ended December 31, 2018 and 2017 were as follows (in thousands):



	2018			2017
Changes in projected benefit obligation:
Projected benefit obligation as of the beginning of the period	$	30,877		$	28,914
Service cost	548			614
Interest cost	1,107			1,192
Actuarial (gain) loss	(2,917		)	1,091
Benefits paid	(2,076		)	(934		)
Projected benefit obligation as of December 31	$	27,539		$	30,877

Changes in fair value of plan assets:
Fair value of plan assets as of the beginning of the period	$	23,461		$	21,345
Actual return on plan assets	(1,131		)	3,050
Benefits paid	(2,076		)	(934		)
Fair value of plan assets as of December 31	$	20,254		$	23,461

The underfunded status of our Benefit Plans is recorded within Other liabilities in our consolidated balance sheets. The reconciliation of the underfunded status of our Benefit Plans of December 31, 2018 and 2017 was as follows:



	2018		2017
Projected benefit obligation	$	27,539	$	30,877
Fair value of plan assets	20,254		23,461
Underfunded status	$	7,285	$	7,416

Gross amounts recognized in accumulated other comprehensive income: (1)
Net actuarial gain	$	3,494	$	2,965

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(1)	As of December 31, 2018, we had $0.1 million in accumulated other comprehensive income that is expected to be amortized into net periodic benefit cost in 2019.

Weighted-average assumptions used to measure our projected benefit obligation as of December 31, 2018 and 2017 and net periodic benefit costs for the years ended December 31, 2018 and 2017 and the period from July 14, 2016, the date of acquisition, to December 31, 2016 are as follows:



	2018		2017		2016
Projected benefit obligation:
Discount rate (1)	4.20	%	3.65	%	4.20	%
Rate of compensation increase	3.00	%	3.00	%	4.30	%

Net periodic benefit costs:
Discount rate (1)	3.65	%	4.20	%	3.80	%
Expected long-term rate of return (2)	6.50	%	6.25	%	7.00	%
Rate of compensation increase	3.00	%	4.30	%	4.03	%

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(1)	In determining the discount rate, we use yields on high-quality fixed income investments with payments matched to the estimated distributions of benefits from our plans.


(2)	The expected long-term rate of return is based on a blend of historic returns of equity and debt securities.

The net periodic benefit cost (credit) for the years ended December 31, 2018 and 2017 and the period from July 14, 2016 to December 31, 2016 includes the following components:



	2018			2017			2016
Components of net periodic benefit cost (credit):
Service cost	$	548		$	614		$	668
Interest cost	1,107			1,192			598
Expected return on plan assets	(1,258		)	(1,189		)	(686		)
Plan amendment effect	—			—			(3,067		)
Net periodic benefit cost (credit)	$	397		$	617		$	(2,487	)

The Interest cost and Expected return on plan assets components of net periodic benefit cost are included in Other income (expense), net in our consolidated statement of operations for the years ended December 31, 2018, 2017, and 2016. The Service cost component of net periodic benefit cost is included in Operating expense (excluding depreciation) in our consolidated statement of operations for the years ended December 31, 2018, 2017, and 2016.

The weighted-average asset allocation at December 31, 2018 is as follows:



	Target		Actual
Asset category:
Equity securities	54	%	54	%
Debt securities	35	%	33	%
Real estate	11	%	13	%
Total	100	%	100	%

We have a long-term, risk-controlled investment approach using diversified investment options with minimal exposure to volatile investment options like derivatives. Our Benefit Plan assets are invested in pooled separate accounts administered by the Benefit Plan custodian. The underlying assets in the pooled separate accounts are invested in equity securities, debt securities, and real estate. The pooled separate accounts are valued based upon the fair market value of the underlying investments and are deemed to be Level 2.

We do not intend to make any contributions to the pension plan during 2019. Based on current data and assumptions, the following benefit payments, which reflect expected future service, as appropriate, are expected to be paid over the next 10 years:



Year Ended
2019	$	1,140
2020	1,260
2021	1,130
2022	1,200
2023	1,270
Thereafter	7,460
	$	13,460