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Note 9 - Non-pension Post-retirement Benefits
 12 Months Ended
Dec. 31, 2019
Notes to Financial Statements  
Postemployment Benefits Disclosure [Text Block]
9.
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 over half of our union hourly employees. Hourly employees hired at Shreveport after
December 15, 2008,
and at Toledo after
September 30, 2010,
are
not
eligible to participate. 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,
  
U.S. Plans
    
Non-U.S. Plans
    
Total
  
(dollars in thousands)
  
2019
    
2018
    
2019
    
2018
    
2019
    
2018
  
Service cost
   $
443
     $
604
     $
1
     $
1
     $
444
     $
605
  
Interest cost on projected benefit obligation
    
1,836
      
1,822
      
36
      
38
      
1,872
      
1,860
  
Amortization of unrecognized:
                                                
Prior service credit
    
(282
 )    
(282
 )    
—
      
—
      
(282
 )    
(282
 )
Actuarial gain
    
(376
 )    
(209
 )    
(76
 )    
(64
 )    
(452
 )    
(273
 )
Non-pension post-retirement benefit expense (income)
   $
1,621
     $
1,935
     $
(39
 )   $
(25
 )   $
1,582
     $
1,910
  
 
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 31
st
were as follows:
 
   
U.S. Plans
    
Non-U.S. Plans
  
   
2019
    
2018
    
2019
    
2018
  
Net periodic benefit expense
    
 
    
 
    
 
    
 
Discount rate
  
4.27
 %  
3.60
 %  
3.52
 %  
3.26
 %
Non-pension post-retirement benefit obligation
    
 
    
 
    
 
    
 
Discount rate
  
3.41
 %  
4.27
 %  
2.92
 %  
3.52
 %
Weighted average assumed healthcare cost trend rates
    
 
    
 
    
 
    
 
Healthcare cost trend rate assumed for next year
  
6.00
 %  
6.25
 %  
6.00
 %  
6.25
 %
Ultimate healthcare trend rate
  
4.50
 %  
5.00
 %  
5.00
 %  
5.00
 %
Year the ultimate healthcare trend rate is reached
  
2026
    
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 changes in the non-pension, post-retirement, benefit obligation are as follows:
 
Year ended December 31,
  
U.S. Plans
    
Non-U.S. Plans
    
Total
  
(dollars in thousands)
  
2019
    
2018
    
2019
    
2018
    
2019
    
2018
  
Change in accumulated non-pension post-retirement benefit obligation:
                                                
Benefit obligation, beginning of year
   $
45,899
     $
52,648
     $
1,067
     $
1,295
     $
46,966
     $
53,943
  
Service cost
    
443
      
604
      
1
      
1
      
444
      
605
  
Interest cost
    
1,836
      
1,822
      
36
      
38
      
1,872
      
1,860
  
Plan participants’ contributions
    
409
      
512
      
—
      
—
      
409
      
512
  
Actuarial (gain) loss
    
4,666
      
(5,305
 )    
(41
 )    
(106
 )    
4,625
      
(5,411
 )
Exchange rate fluctuations
    
—
      
—
      
49
      
(96
 )    
49
      
(96
 )
Benefits paid
    
(4,990
 )    
(4,382
 )    
(51
 )    
(65
 )    
(5,041
 )    
(4,447
 )
Benefit obligation, end of year
   $
48,263
     $
45,899
     $
1,061
     $
1,067
     $
49,324
     $
46,966
  
                                                 
Funded status and accrued benefit cost
   $
48,263
     $
45,899
     $
1,061
     $
1,067
     $
49,324
     $
46,966
  
 
The U.S. non-pension, post-retirement, benefit plans experienced actuarial losses of
$4.7
 million in
2019
 primarily due to the updated discount rate and higher than expected healthcare costs. Actuarial (gains) in the U.S. of $(
5.3
) million in
2018
 were primarily driven by the updated discount rate and lower than expected healthcare costs. 
 
The total accrued non-pension, post-retirement, benefits liability at
December 31
st
represents unfunded post-retirement benefits and is included in the Consolidated Balance Sheets as follows:
 
December 31,
      
 
      
 
(dollars in thousands)
  
2019
    
2018
  
Non-pension post-retirement benefits (current portion)
   $
3,817
     $
3,951
  
Non-pension post-retirement benefits
    
45,507
      
43,015
  
Total non-pension post-retirement benefits liability
   $
49,324
     $
46,966
  
 
The cumulative pretax amounts recognized in AOCI as of
December 
31
are as follows:
 
December 31,
  
U.S. Plans
    
Non-U.S. Plans
    
Total
  
(dollars in thousands)
  
2019
    
2018
    
2019
    
2018
    
2019
    
2018
  
Net actuarial gain
   $
(134
 )   $
(5,176
 )   $
(808
 )   $
(806
 )   $
(942
 )   $
(5,982
 )
Prior service credit
    
(698
 )    
(980
 )    
—
      
—
      
(698
 )    
(980
 )
Total credit in AOCI
   $
(832
 )   $
(6,156
 )   $
(808
 )   $
(806
 )   $
(1,640
 )   $
(6,962
 )
 
Non-pension, post-retirement, benefit payments, net of estimated future retiree contributions, are anticipated to be paid as follows:
 
Fiscal Year
                          
(dollars in thousands)
    
U.S. Plans
    
Non-U.S. Plans
    
Total
  
2020
     $
3,768
     $
114
     $
3,882
  
2021
     $
3,686
     $
109
     $
3,795
  
2022
     $
3,688
     $
103
     $
3,791
  
2023
     $
3,594
     $
93
     $
3,687
  
2024
     $
3,498
     $
84
     $
3,582
  
2025-2029     $
15,370
     $
245
     $
15,615