OTHER POSTRETIREMENT BENEFITS

The Company has an unfunded postretirement healthcare plan which provides health insurance to certain employees and their spouses upon retirement. This plan has been frozen and no additional participants will be added to the plan in the future.

The following table presents the changes in the accumulated postretirement benefit obligation related to the Company’s unfunded postretirement healthcare benefits at December 31 (in thousands):



	2017			2016
Projected benefit obligation at January 1	$	7,202		$	8,149
Service cost	17			22
Interest cost	269			272
Actuarial gain	(150		)	(923		)
Benefits paid, net of contributions	(318		)	(318		)
Projected benefit obligation at December 31	7,020			7,202
Fair value of plan assets	—			—
Under funded status	(7,020		)	(7,202		)
Unamortized prior service cost	427			471
Unrecognized actuarial loss	2,382			2,679
Net amount recognized	$	(4,211	)	$	(4,052	)

Amounts recognized in the consolidated financial statements consisted of (in thousands):



	2017			2016
Accrued postretirement benefit liability
Current portion	$	314		$	294
Long term portion	6,706			6,908
Pre-tax accumulated other comprehensive loss – unamortized post-retirement healthcare costs	(2,809		)	(3,150		)
Net amount recognized	$	4,211		$	4,052

The measurement date used to determine postretirement benefit obligation measures was December 31.

Components of net periodic postretirement benefit cost charged to expense for the years ended December 31 were as follows (in thousands):



	2017			2016			2015
Service cost	$	17		$	22		$	26
Interest cost	269			272			300
Amortization of unrecognized prior service cost	44			44			44
Loss amortization (2)	146			134			197
Net periodic benefit cost	$	476		$	472		$	567
Assumptions used to calculate the benefit obligation:
Discount rate	3.4		%	3.8		%	3.9		%
Annual rate of increase in the per capita cost of:
Medical costs before age 65 (1)	7.3		%	7.5		%	7.8		%
Medical costs after age 65 (1)	6.3		%	6.5		%	6.8		%
Prescription drug costs (1)	10.5		%	10.5		%	11.0		%

(1) It was assumed that these rates would gradually decline to 4% by 2075.

(2) Actuarial (gains)/losses are amortized utilizing the corridor approach. Differences between actual experience and the actuarial assumptions are reflected in (gain)/loss. If the total net (gain) or loss exceeds 10 percent of the greater of the accumulated postretirement benefit obligation or plan asset, this excess must be amortized over the average remaining service period of the active plan participants. If most of the plan participants are inactive, the amortization period is the expected future lifetime of inactive plan participants.

A 1% change in the annual medical inflation rate issued would have the following impact on the amounts reported at December 31 as follows (in thousands):



	2017			2016
Effect on accumulated postretirement benefit obligation
1% increase	$	950		$	975
1% decrease	$	(803	)	$	(824	)
Effect on annual service and interest costs
1% increase	$	41		$	42
1% decrease	$	(34	)	$	(35	)

Expected benefit payments from the plan for the years ended December 31 are as follows (in thousands):



	2018		2019		2020		2021		2022		2023 - 2027
Expected benefit payments	$	314	$	333	$	353	$	371	$	389	$	2,159