Pension Plans and Other Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2018

Summary of contributions to qualified defined contribution plan, 401(k), non-qualified defined contribution plan and total assets of the plans

Contributions to employees' accounts under the 401(k) plan and the non-qualified defined contribution plan, as well as total assets of the plans, were as follows:



($ in thousands)	Year Ended December 31,
	2018		2017		2016
401(k) plan
Contributions to employees' accounts	$	7,655	$	7,637	$	6,918
Total assets at the end of the year	167,767		180,514		177,352

Non-qualified defined contribution plan
Contributions to employees' accounts	70		84		72
Total assets at the end of the year	—		—		—

Funded status of the defined benefit, supplemental retirement pension plans and postretirement benefits other than pensions

The following tables summarize the funded status of the defined benefit and supplemental retirement pension plans as of December 31, 2018, 2017 and 2016 (the measurement dates) and identify (1) the assumptions used to determine the projected benefit obligation and (2) the components of net pension cost for the defined benefit plan and supplemental retirement plans for the following periods:



($ in thousands)	Defined Benefit Plan									Supplemental Defined Benefit Plans
	December 31,									December 31,
	2018			2017			2016			2018			2017			2016
Change in benefit obligation:
Projected benefit obligation at beginning of year	$	28,432		$	29,407		$	31,233		$	16,832		$	16,847		$	17,004
Service cost	650			650			650			—			—			—
Interest cost	947			1,091			1,244			566			631			687
Plan amendments	—			—			—			—			—			—
Actuarial loss (gain)	(2,208		)	(721		)	(220		)	(789		)	805			488
Benefits paid	(2,746		)	(1,995		)	(3,500		)	(1,205		)	(1,451		)	(1,332		)
Settlements	—			—			—			—			—			—
Projected benefit obligation at end of year	$	25,075		$	28,432		$	29,407		$	15,404		$	16,832		$	16,847
Change in plan assets:
Fair value of plan assets at beginning of year	$	25,843		$	25,446		$	27,667		$	—		$	—		$	—
Actual return on plan assets	(640		)	2,909			1,766			—			—			—
Employer contributions	—			—			—			1,205			1,451			1,332
Benefits paid	(2,746		)	(1,995		)	(3,500		)	(1,205		)	(1,451		)	(1,332		)
Expenses paid	(367		)	(517		)	(487		)	—			—			—
Settlements	—			—			—			—			—			—
Fair value of plan assets at end of year	$	22,090		$	25,843		$	25,446		$	—		$	—		$	—
Funded status	$	(2,985	)	$	(2,589	)	$	(3,961	)	$	(15,404	)	$	(16,832	)	$	(16,847	)

Prepaid (accrued) benefit expense	$	7,425		$	8,016		$	8,653		$	(10,320	)	$	(10,648	)	$	(11,210	)

Total amount recognized in Consolidated Balance Sheets, all in Other liabilities	$	(2,985	)	$	(2,589	)	$	(3,961	)	$	(15,404	)	$	(16,832	)	$	(16,847	)

Amounts recognized in accumulated other comprehensive income (loss) (AOCI):
Prior service cost	$	—		$	—		$	—		$	—		$	—		$	—
Net actuarial loss	10,410			10,605			12,613			5,084			6,184			5,637
Total amount recognized in AOCI	$	10,410		$	10,605		$	12,613		$	5,084		$	6,184		$	5,637

Information for pension plans with an accumulated benefit obligation greater than plan assets:
Projected benefit obligation	$	25,075		$	28,432		$	29,407		$	15,404		$	16,832		$	16,847
Accumulated benefit obligation	25,075			28,432			29,407			15,404			16,832			16,847
Fair value of plan assets	22,090			25,843			25,446			—			—			—

Defined benefit plan and the supplemental defined benefit plans



($ in thousands)	Defined Benefit Plan									Supplemental Defined Benefit Plans
	Year Ended December 31,									Year Ended December 31,
	2018			2017			2016			2018			2017			2016
Components of net periodic pension (income) expense:
Service cost:
Benefit accrual	$	—		$	—		$	—		$	—		$	—		$	—
Other expenses	650			650			650			—			—			—
Interest cost	947			1,091			1,244			566			631			687
Expected return on plan assets	(1,377		)	(1,493		)	(1,675		)	—			—			—
Settlement loss	—			—			—			—			—			—
Amortization of:
Prior service cost	—			—			—			—			—			—
Actuarial loss	371			389			393			310			258			233
Net periodic pension expense	$	591		$	637		$	612		$	876		$	889		$	920

Changes in plan assets and benefit obligations included in other comprehensive income (loss):
Prior service cost	$	—		$	—		$	—		$	—		$	—		$	—
Net actuarial loss (gain)	177			(1,619		)	175			(789		)	805			488
Amortization of:
Prior service cost	—			—			—			—			—			—
Actuarial loss	(371		)	(389		)	(393		)	(310		)	(258		)	(233		)
Total recognized in other comprehensive income (loss)	$	(194	)	$	(2,008	)	$	(218	)	$	(1,099	)	$	547		$	255

Weighted average assumptions used to determine expense:
Discount rate	3.50		%	3.90		%	4.20		%	3.50		%	3.90		%	4.20		%
Expected return on plan assets	5.90		%	6.25		%	6.50		%	*			*			*
Annual rate of salary increase	*			*			*			*			*			*

Weighted average assumptions used to determine benefit obligations as of December 31:
Discount rate	4.20		%	3.50		%	3.90		%	4.20		%	3.50		%	3.90		%
Expected return on plan assets	5.90		%	6.25		%	6.50		%	*			*			*
Annual rate of salary increase	*			*			*			*			*			*

____________________

* Not applicable.

Fair value hierarchy for the Company's defined benefit pension plan assets

Fair values of the equity security funds and fixed income funds have been determined from public quotations. The following table presents the fair value hierarchy for the Company's defined benefit pension plan assets, excluding cash held.



($ in thousands)			Fair Value Measurements at Reporting Date Using
	Total		Level 1		Level 2		Level 3
December 31, 2018
Asset category
Equity security funds⁽¹⁾
United States	$	8,198	$	—	$	8,198	$	—
International	2,089		—		2,089		—
Fixed income funds	11,003		—		11,003		—
Short-term investment funds	800		800		—		—
Total	$	22,090	$	800	$	21,290	$	—

December 31, 2017
Asset category
Equity security funds⁽¹⁾
United States	$	10,517	$	—	$	10,517	$	—
International	2,573		—		2,573		—
Fixed income funds	12,165		—		12,165		—
Short-term investments funds	588		588		—		—
Total	$	25,843	$	588	$	25,255	$	—

____________________

⁽¹⁾

None of the trust fund assets for the defined benefit pension plan have been invested in shares of HMEC's common stock.

Summary of minimum funding requirement and the expected full year contributions for the Company's plans

The following table discloses that minimum funding requirement and the expected full year contributions for the Company's plans.



($ in thousands)	Defined Benefit Pension Plans
	Defined Benefit Plan		Supplemental Defined Benefit Plans

Minimum funding requirement for 2018	$	—	N/A
Expected contributions (approximations) for the year ended December 31, 2019 as of the time of this Form 10-K⁽¹⁾	—		$	1,307

____________________

N/A - Not applicable.

⁽¹⁾ HMEC's Annual Report on Form 10-K for the year ended December 31, 2018.

Estimated future benefit payments

Estimated future benefit payments as of December 31, 2018 were as follows:



($ in thousands)	2019		2020		2021		2022		2023		2024-2028
Pension plans
Defined benefit plan	$	2,668	$	2,482	$	2,225	$	2,346	$	1,971	$	8,700
Supplemental retirement plans	1,307		1,292		1,275		1,255		1,232		5,701