Note 5 - Pension Plans and Other Postretirement Benefits

The Company has the following retirement plans: a defined contribution plan; a 401(k) plan; a defined benefit plan for employees hired on or before December 31, 1998; and certain employees participate in a supplemental defined contribution plan or a supplemental defined benefit plan or both.

Defined Benefit Plan and Supplemental Defined Benefit Plans

The following tables summarize the components of net periodic pension cost recognized for the defined benefit plan and the supplemental defined benefit plans for the three and six months ended June 30, 2013 and 2012.

	Defined Benefit Plan
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Components of net periodic pension (income) expense:
Service cost:
Benefit accrual	$	-	$	-	$	-	$	-
Other expenses		90		90		180		180
Interest cost		343		357		685		714
Expected return on plan assets		(559)		(606)		(1,119)		(1,212)
Settlement loss		229		459		487		918
Amortization of:
Prior service cost		-		-		-		-
Actuarial loss		400		513		801		1,026
Net periodic pension expense	$	503	$	813	$	1,034	$	1,626

	Supplemental Defined Benefit Plans
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012

Components of net periodic pension (income) expense:
Service cost:
Benefit accrual	$	-	$	-	$	-	$	-
Other expenses		-		-		-		-
Interest cost		153		167		307		335
Expected return on plan assets		-		-		-		-
Settlement loss		-		-		-		-
Amortization of:
Prior service cost		32		31		63		62
Actuarial loss		51		245		102		490
Net periodic pension expense	$	236	$	443	$	472	$	887

Postretirement Benefits Other Than Pensions

In addition to providing pension benefits, the Company also provides certain health care and life insurance benefits to a closed group of eligible employees. Effective January 1, 2007, the Company eliminated the previous group health insurance benefits for retirees 65 years of age and over, including elimination of pharmacy benefits for Medicare eligible retirees, and established a Health Reimbursement Account (“HRA”) for each eligible participant in that closed group. Funding of HRA accounts was $90 and $88 for the six months ended June 30, 2013 and 2012, respectively.

The following table summarizes the components of the net periodic benefit for postretirement benefits other than pensions for the three and six months ended June 30, 2013 and 2012.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Components of net periodic benefit:
Service cost	$	-	$	-	$	-	$	-
Interest cost		23		23		46		46
Amortization of prior service cost		-		-		-		-
Amortization of prior gain		(59)		(130)		(118)		(261)
Net periodic income	$	(36)	$	(107)	$	(72)	$	(215)

2013 Contributions

In 2013, there is no minimum funding requirement for the Company’s defined benefit plan. The following table discloses the minimum funding requirements, contributions made and expected full year contributions for the Company’s plans.

	Defined Benefit Pension Plans
	Defined		Supplemental		Other
	Benefit		Defined Benefit		Postretirement
	Plan		Plans		Benefits

Minimum funding requirement for 2013	$	-		N/A		N/A
Contributions made in the six months ended June 30, 2013		-	$	656	$	215
Expected contributions (approximations) for the year ended December 31, 2013 as of the time of :
This Form 10-Q (1)		3,000		1,320		480
2012 Form 10-K (2)		2,500		1,320		480

N/A - Not applicable.

(1)

HMEC’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.

(2)

HMEC’s Annual Report on Form 10-K for the year ended December 31, 2012, specifically “Notes to Consolidated Financial Statements — Note 9 — Pension Plans and Other Postretirement Benefits”.