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. 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
Year ended December 31, (dollars in thousands)	2015		2014		2013		2015			2014		2013		2015		2014		2013
Service cost (benefits earned during the period)	$	855	$	1,007	$	1,190	$	1		$	1	$	2	$	856	$	1,008	$	1,192
Interest cost on projected benefit obligation	2,537		2,840		2,622		52			108		110		2,589		2,948		2,732
Amortization of unrecognized:
Prior service cost	140		140		140		—			—		—		140		140		140
Loss (gain)	592		267		857		(56		)	—		—		536		267		857
Nonpension postretirement benefit expense	$	4,124	$	4,254	$	4,809	$	(3	)	$	109	$	112	$	4,121	$	4,363	$	4,921

Actuarial Assumptions

The discount rate used to determine the accumulated postretirement benefit obligation was:



	U.S. Plans				Non-U.S. Plans
	2015		2014		2015		2014
Discount rate	4.56	%	4.10	%	3.69	%	3.61	%

The discount rate used to determine net postretirement benefit cost was:



	U.S. Plans						Non-U.S. Plans
	2015		2014		2013		2015		2014		2013
Discount rate	4.10	%	4.74	%	3.85	%	3.61	%	4.36	%	3.71	%

The weighted average assumed health care cost trend rates at December 31 were as follows:



	U.S. Plans				Non-U.S. Plans
	2015		2014		2015		2014
Initial health care trend	7.00	%	7.25	%	7.00	%	7.25	%
Ultimate health care trend	5.00	%	5.00	%	5.00	%	5.00	%
Years to reach ultimate trend rate	8		9		8		9

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

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
Year ended December 31, (dollars in thousands)	2015			2014			2015			2014			2015			2014
Change in accumulated nonpension postretirement benefit obligation:
Benefit obligation, beginning of year	$	65,565		$	61,117		$	2,536		$	2,706		$	68,101		$	63,823
Service Cost	855			1,007			1			1			856			1,008
Interest cost	2,537			2,840			52			108			2,589			2,948
Plan participants' contributions	610			699			—			—			610			699
Actuarial (gain) loss	(7,287		)	5,466			(740		)	29			(8,027		)	5,495
Exchange rate fluctuations	—			—			(346		)	(219		)	(346		)	(219		)
Benefits paid	(3,485		)	(5,564		)	(113		)	(89		)	(3,598		)	(5,653		)
Benefit obligation, end of year	$	58,795		$	65,565		$	1,390		$	2,536		$	60,185		$	68,101

Funded status and accrued benefit cost	$	(58,795	)	$	(65,565	)	$	(1,390	)	$	(2,536	)	$	(60,185	)	$	(68,101	)

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)	2015		2014
Current liability	$	4,903	$	4,800
Long-term liability	55,282		63,301
Total accrued postretirement benefit liability	$	60,185	$	68,101

The pre-tax amounts recognized in accumulated other comprehensive loss as of December 31, 2015 and 2014, are as follows:



Year ended December 31, (dollars in thousands)	U.S. Plans						Non-U.S. Plans						Total
Year ended December 31, (dollars in thousands)	2015			2014			2015			2014			2015			2014
Net actuarial loss (gain)	$	5,080		$	12,959		$	(654	)	$	(30	)	$	4,426		$	12,929
Prior service cost	(1,323		)	(1,183		)	—			—			(1,323		)	(1,183		)
Total cost (credit)	$	3,757		$	11,776		$	(654	)	$	(30	)	$	3,103		$	11,746

The pre-tax amounts in accumulated other comprehensive loss at December 31, 2015, that are expected to be recognized as components of net periodic benefit cost during 2016 are as follows:



Year ended December 31, (dollars in thousands)	U.S. Plans		Non-U.S. Plans			Total
Net actuarial loss (gain)	$	81	$	(45	)	$	36
Prior service cost	140		—			140
Total cost (credit)	$	221	$	(45	)	$	176

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
2016	$	4,861	$	152	$	5,013
2017	$	5,041	$	149	$	5,190
2018	$	5,166	$	148	$	5,314
2019	$	5,065	$	142	$	5,207
2020	$	4,926	$	137	$	5,063
2021-2025	$	21,031	$	500	$	21,531