Pension and Non-pension Postretirement Benefits

3 Months Ended

Mar. 31, 2015

Compensation and Retirement Disclosure [Abstract]

Pension and Non-pension Postretirement Benefits

Pension and Non-pension Postretirement Benefits

We have pension plans covering the majority of our employees. Benefits generally are based on compensation and service for salaried employees and job grade and length of service for hourly employees. Our policy is to fund pension plans such that sufficient assets will be available to meet future benefit requirements. In addition, we have an unfunded supplemental employee retirement plan (SERP) that covers certain salaried U.S.-based employees of Libbey hired before January 1, 2006. The U.S. pension plans cover the salaried U.S.-based employees of Libbey hired before January 1, 2006 and most hourly U.S.-based employees (excluding employees hired at Shreveport after 2008 and at Toledo after September 30, 2010). Effective January 1, 2013, we ceased annual company contribution credits to the cash balance accounts in our Libbey U.S. Salaried Pension Plan and SERP. The non-U.S. pension plans cover the employees of our wholly owned subsidiaries in the Netherlands and Mexico. The plan in Mexico is primarily unfunded.

The components of our net pension expense, including the SERP, are as follows:

Three months ended March 31,	U.S. Plans						Non-U.S. Plans						Total
(dollars in thousands)	2015			2014			2015			2014			2015			2014
Service cost	$	1,161		$	1,025		$	748		$	578		$	1,909		$	1,603
Interest cost	3,709			3,870			1,103			1,424			4,812			5,294
Expected return on plan assets	(5,662		)	(5,608		)	(598		)	(632		)	(6,260		)	(6,240		)
Amortization of unrecognized:
Prior service cost	104			265			(64		)	57			40			322
Loss	1,886			1,242			406			258			2,292			1,500
Pension expense	$	1,198		$	794		$	1,595		$	1,685		$	2,793		$	2,479

We have contributed $1.4 million of cash into our pension plans for the three months ended March 31, 2015. Pension contributions for the remainder of 2015 are estimated to be $3.3 million.

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. Benefits for most hourly retirees are determined by collective bargaining. The U.S. non-pension postretirement plans cover the hourly and salaried U.S.-based employees of Libbey (excluding those mentioned above). The non-U.S. non-pension postretirement plans cover the retirees and active employees of Libbey who are located in Canada. The postretirement benefit plans are unfunded.

The provision for our non-pension postretirement benefit expense consists of the following:

Three months ended March 31,	U.S. Plans				Non-U.S. Plans				Total
(dollars in thousands)	2015		2014		2015		2014		2015		2014
Service cost	$	282	$	252	$	—	$	—	$	282	$	252
Interest cost	660		710		19		27		679		737
Amortization of unrecognized:
Prior service cost	35		35		—		—		35		35
Loss / (gain)	196		67		—		—		196		67
Non-pension postretirement benefit expense	$	1,173	$	1,064	$	19	$	27	$	1,192	$	1,091

Our 2015 estimate of non-pension cash payments is $4.9 million, and we have paid $0.9 million for the three months ended March 31, 2015.