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Non-pension Post-retirement Benefits
 12 Months Ended
Dec. 31, 2018
Retirement Benefits [Abstract]  
Non-pension Post-retirement Benefits
Non-pension Post-retirement Benefits

We provide certain retiree healthcare 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 December 15, 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, post-retirement plans cover the hourly and salaried U.S.-based employees of Libbey (excluding those mentioned above). The non-U.S., non-pension, post-retirement plans cover the retirees and active employees of Libbey who are located in Canada. The post-retirement benefit plans are unfunded.

Effect on Operations

The provision for our non-pension, post-retirement, benefit expense consists of the following:
Year ended December 31,
(dollars in thousands)
 
U.S. Plans
 
Non-U.S. Plans
 
Total
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Service cost
 
$
604

 
$
631

 
$
1

 
$
1

 
$
605

 
$
632

Interest cost on projected benefit obligation
 
1,822

 
2,104

 
38

 
44

 
1,860

 
2,148

Amortization of unrecognized:
 
 
 
 
 
 
 
 
 
 
 
 
Prior service credit
 
(282
)
 
(201
)
 
—

 
—

 
(282
)
 
(201
)
Actuarial gain
 
(209
)
 
(257
)
 
(64
)
 
(59
)
 
(273
)
 
(316
)
Non-pension post-retirement benefit expense (income)
 
$
1,935

 
$
2,277

 
$
(25
)
 
$
(14
)
 
$
1,910

 
$
2,263



The non-service cost components of benefit expense above are included in other income (expense) on the Consolidated Statements of Operations. See note 16 for additional information.

Actuarial Assumptions

The significant assumptions used for each year and at December 31st were as follows:
 
U.S. Plans
 
Non-U.S. Plans
 
2018
 
2017
 
2018
 
2017
Net periodic benefit expense
 
 
 
 
 
 
 
Discount rate
3.60
%
 
4.05
%
 
3.26
%
 
3.48
%
Non-pension post-retirement benefit obligation
 
 
 
 
 
 
 
Discount rate
4.27
%
 
3.60
%
 
3.52
%
 
3.26
%
Weighted average assumed healthcare cost trend rates
 
 
 
 
 
 
 
Healthcare cost trend rate assumed for next year
6.25
%
 
6.50
%
 
6.25
%
 
6.50
%
Ultimate healthcare trend rate
5.00
%
 
5.00
%
 
5.00
%
 
5.00
%
Year the ultimate healthcare trend rate is reached
2024

 
2024

 
2024

 
2024



We use various actuarial assumptions, including the discount rate and the expected trend in healthcare 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 healthcare cost trend rate represents our expected annual rates of change in the cost of healthcare benefits. The trend rate noted above represents a forward projection of healthcare costs as of the measurement date.

Accumulated Post-retirement Benefit Obligation
The components of our non-pension, post-retirement, benefit obligation are as follows:
Year ended December 31,
(dollars in thousands)
 
U.S. Plans
 
Non-U.S. Plans
 
Total
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Change in accumulated non-pension post-retirement benefit obligation:
 
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation, beginning of year
 
$
52,648

 
$
58,921

 
$
1,295

 
$
1,344

 
$
53,943

 
$
60,265

Service cost
 
604

 
631

 
1

 
1

 
605

 
632

Interest cost
 
1,822

 
2,104

 
38

 
44

 
1,860

 
2,148

Plan participants' contributions
 
512

 
525

 
—

 
—

 
512

 
525

Actuarial gain
 
(5,305
)
 
(5,483
)
 
(106
)
 
(108
)
 
(5,411
)
 
(5,591
)
Exchange rate fluctuations
 
—

 
—

 
(96
)
 
90

 
(96
)
 
90

Benefits paid
 
(4,382
)
 
(4,050
)
 
(65
)
 
(76
)
 
(4,447
)
 
(4,126
)
Benefit obligation, end of year
 
$
45,899

 
$
52,648

 
$
1,067

 
$
1,295

 
$
46,966

 
$
53,943

 
 
 
 
 
 
 
 
 
 
 
 
 
Funded status and accrued benefit cost
 
$
(45,899
)
 
$
(52,648
)
 
$
(1,067
)
 
$
(1,295
)
 
$
(46,966
)
 
$
(53,943
)


The U.S. non-pension, post-retirement, benefit plans experienced actuarial gains of $5.3 million in 2018 primarily due to lower than expected healthcare costs and the updated discount rate. Actuarial gains in the U.S. of $5.5 million in 2017 were primarily driven by assumption changes related to lower than expected healthcare costs and demographic gains, partially offset by losses from the updated discount rate.

The total accrued non-pension, post-retirement, benefits liability at December 31st represents unfunded post-retirement benefits and is included in the Consolidated Balance Sheets as follows:
December 31,
(dollars in thousands)
 
2018
 
2017
Non-pension post-retirement benefits (current portion)
 
$
3,951

 
$
4,185

Non-pension post-retirement benefits
 
43,015

 
49,758

Total non-pension post-retirement benefits liability
 
$
46,966

 
$
53,943



The cumulative pretax amounts recognized in AOCI as of December 31 are as follows:
December 31,
(dollars in thousands)
 
U.S. Plans
 
Non-U.S. Plans
 
Total
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Net actuarial gain
 
$
(5,176
)
 
$
(80
)
 
$
(806
)
 
$
(832
)
 
$
(5,982
)
 
$
(912
)
Prior service credit
 
(980
)
 
(1,262
)
 
—

 
—

 
(980
)
 
(1,262
)
Total credit in AOCI
 
$
(6,156
)
 
$
(1,342
)
 
$
(806
)
 
$
(832
)
 
$
(6,962
)
 
$
(2,174
)


Non-pension, post-retirement, 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
2019
 
$
3,888

 
$
146

 
$
4,034

2020
 
$
3,879

 
$
141

 
$
4,020

2021
 
$
3,761

 
$
130

 
$
3,891

2022
 
$
3,746

 
$
120

 
$
3,866

2023
 
$
3,593

 
$
108

 
$
3,701

2024-2028
 
$
15,739

 
$
254

 
$
15,993