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Nonpension Postretirement Benefits
 12 Months Ended
Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]  
Nonpension Postretirement Benefits
Nonpension Postretirement Benefits

We provide certain retiree health care and life insurance benefits covering our U.S. and Canadian salaried employees hired before January 1, 2004 and a majority of our union hourly employees (excluding employees hired at Shreveport after 2008 and at Toledo after September 30, 2010). Employees are generally eligible for benefits upon retirement and completion of a specified number of years of creditable service. Effective January 1, 2013, we ended our existing healthcare benefit for salaried retirees age 65 and older and instead provide a Retiree Health Reimbursement Arrangement (RHRA) that supports retirees in purchasing a Medicare plan that meets their needs. Also effective January 1, 2013, we reduced the maximum life insurance benefit for salaried retirees to $10,000. Benefits for most hourly retirees are determined by collective bargaining. The U.S. nonpension postretirement plans cover the hourly and salaried U.S.-based employees of Libbey (excluding those mentioned above). The non-U.S. nonpension postretirement plans cover the retirees and active employees of Libbey who are located in Canada. The postretirement benefit plans are not funded.

Effect on Operations

The provision for our nonpension postretirement benefit expense consists of the following:
Year ended December 31,
(dollars in thousands)
 
U.S. Plans
 
Non-U.S. Plans
 
Total
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Service cost (benefits earned during the period)
 
$
1,007

 
$
1,190

 
$
1,470

 
$
1

 
$
2

 
$
2

 
$
1,008

 
$
1,192

 
$
1,472

Interest cost on projected benefit obligation
 
2,840

 
2,622

 
3,426

 
108

 
110

 
104

 
2,948

 
2,732

 
3,530

Amortization of unrecognized:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior service cost
 
140

 
140

 
422

 
—

 
—

 
—

 
140

 
140

 
422

Loss (gain)
 
267

 
857

 
916

 
—

 
—

 
(1
)
 
267

 
857

 
915

Nonpension postretirement benefit expense
 
$
4,254

 
$
4,809

 
$
6,234

 
$
109

 
$
112

 
$
105

 
$
4,363

 
$
4,921

 
$
6,339



Actuarial Assumptions

The discount rate used to determine the accumulated postretirement benefit obligation was:
 
U.S. Plans
 
Non-U.S. Plans
 
2014
 
2013
 
2014
 
2013
Discount rate
4.10
%
 
4.74
%
 
3.61
%
 
4.36
%

The discount rate used to determine net postretirement benefit cost was:
 
U.S. Plans
 
Non-U.S. Plans
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Discount rate
4.74
%
 
3.85
%
 
4.91
%
 
4.36
%
 
3.71
%
 
3.97
%


The weighted average assumed health care cost trend rates at December 31 were as follows:
 
U.S. Plans
 
Non-U.S. Plans
 
2014
 
2013
 
2014
 
2013
Initial health care trend
7.25
%
 
7.50
%
 
7.25
%
 
7.50
%
Ultimate health care trend
5.00
%
 
5.00
%
 
5.00
%
 
5.00
%
Years to reach ultimate trend rate
9

 
10

 
9

 
10



We use various actuarial assumptions, including the discount rate and the expected trend in health care costs, to estimate the costs and benefit obligations for our retiree health plan. The discount rate is determined based on high-quality fixed income investments that match the duration of expected retiree medical benefits at our December 31 measurement date to establish the discount rate. The discount rate at December 31 is used to measure the year-end benefit obligations and the earnings effects for the subsequent year.

The health care cost trend rate represents our expected annual rates of change in the cost of health care benefits. The trend rate noted above represents a forward projection of health care costs as of the measurement date.

Sensitivity to changes in key assumptions is as follows:

•
A 1.0 percent change in the health care trend rate would not have a material impact upon the nonpension postretirement expense.

•A 1.0 percent change in the discount rate would change the nonpension postretirement expense by $0.4 million.

Accumulated Postretirement Benefit Obligation
The components of our nonpension postretirement benefit obligation are as follows:
Year ended December 31,
(dollars in thousands)
 
U.S. Plans
 
Non-U.S. Plans
 
Total
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Change in accumulated nonpension postretirement benefit obligation:
 
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation, beginning of year
 
$
61,117

 
$
73,523

 
$
2,706

 
$
2,684

 
$
63,823

 
$
76,207

Service Cost
 
1,007

 
1,190

 
1

 
2

 
1,008

 
1,192

Interest cost
 
2,840

 
2,622

 
108

 
110

 
2,948

 
2,732

Plan participants' contributions
 
699

 
810

 
—

 
—

 
699

 
810

Actuarial (gain) loss
 
5,466

 
(11,477
)
 
29

 
238

 
5,495

 
(11,239
)
Exchange rate fluctuations
 
—

 
—

 
(219
)
 
(188
)
 
(219
)
 
(188
)
Benefits paid
 
(5,564
)
 
(5,551
)
 
(89
)
 
(140
)
 
(5,653
)
 
(5,691
)
Benefit obligation, end of year
 
$
65,565

 
$
61,117

 
$
2,536

 
$
2,706

 
$
68,101

 
$
63,823

 
 
 
 
 
 
 
 
 
 
 
 
 
Funded status and accrued benefit cost
 
$
(65,565
)
 
$
(61,117
)
 
$
(2,536
)
 
$
(2,706
)
 
$
(68,101
)
 
$
(63,823
)


The net accrued postretirement benefit liability at December 31 of the respective year-ends were included in the Consolidated Balance Sheets as follows:
December 31,
(dollars in thousands)
 
2014
 
2013
Current liability
 
$
4,800

 
$
4,758

Long-term liability
 
63,301

 
59,065

Total accrued postretirement benefit liability
 
$
68,101

 
$
63,823



The pre-tax amounts recognized in accumulated other comprehensive loss as of December 31, 2014 and 2013, are as follows:
Year ended December 31,
(dollars in thousands)
 
U.S. Plans
 
Non-U.S. Plans
 
Total
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Net actuarial loss (gain)
 
$
12,959

 
$
7,760

 
$
(30
)
 
$
(62
)
 
$
12,929

 
$
7,698

Prior service cost
 
(1,183
)
 
(1,044
)
 
—

 
—

 
(1,183
)
 
(1,044
)
Total cost (credit)
 
$
11,776

 
$
6,716

 
$
(30
)
 
$
(62
)
 
$
11,746

 
$
6,654



The pre-tax amounts in accumulated other comprehensive loss at December 31, 2014, that are expected to be recognized as components of net periodic benefit cost during 2015 are as follows:
Year ended December 31,
(dollars in thousands)
 
U.S. Plans
 
Non-U.S. Plans
 
Total
Net actuarial loss
 
$
786

 
$
—

 
$
786

Prior service cost
 
140

 
—

 
140

Total cost
 
$
926

 
$
—

 
$
926



Nonpension postretirement benefit payments net of estimated future Medicare Part D subsidy payments and future retiree contributions, are anticipated to be paid as follows:
Fiscal Year
(dollars in thousands)
 
U.S. Plans
 
Non-U.S. Plans
 
Total
2015
 
$
4,624

 
$
272

 
$
4,896

2016
 
$
4,820

 
$
274

 
$
5,094

2017
 
$
5,134

 
$
269

 
$
5,403

2018
 
$
5,337

 
$
264

 
$
5,601

2019
 
$
5,186

 
$
254

 
$
5,440

2020-2024
 
$
22,104

 
$
925

 
$
23,029