Other Postretirement Benefits

12 Months Ended

Dec. 31, 2013

Other Postretirement Benefits [Abstract]

Other Postretirement Benefits

9. 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):

		2013			2012			2011
Projected benefit obligation at January 1	$	5,954		$	5,120		$	5,201
Service cost		16			15			13
Interest cost		203			224			278
Plan amendments and curtailments		603			–			–
Actuarial (gain) loss		(553	)		899			(80	)
Benefits paid		(323	)		(304	)		(292	)
Projected benefit obligation at December 31		5,900			5,954			5,120
Fair value of plan assets		–			–			–
Under funded status		(5,900	)		(5,954	)		(5,120	)
Unamortized prior service cost		603			–			(1	)
Unrecognized actuarial loss		1,653			2,329			1,541
Net amount recognized	$	(3,644	)	$	(3,625	)	$	(3,580	)

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

		2013			2012			2011
Accrued postretirement benefit liability
Current portion	$	(356	)	$	(322	)	$	(303	)
Long term portion		(5,544	)		(5,632	)		(4,817	)
Pre-tax accumulated other comprehensive loss –
unamortized post-retirement healthcare costs		2,256			2,329			1,540
Net amount recognized	$	(3,644	)	$	(3,625	)	$	(3,580	)

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

		2013			2012			2011
Service cost	$	16		$	15		$	13
Interest cost		203			224			278
Amortization of unrecognized prior service cost		–			(1	)		(1	)
Loss amortization		123			111			125
Net periodic benefit cost	$	342		$	349		$	415
Assumptions used to calculate the benefit obligation:
Discount rate		4.5	%		3.5	%		4.5	%
Annual rate of increase in the per capita cost of:
Medical costs before age 65 1		8.5	%		9.0	%		10.0	%
Medical costs after age 65 1		7.3	%		7.5	%		8.0	%
Prescription drug costs 1		7.8	%		8.0	%		9.0	%

¹ It was assumed that these rates would gradually decline to 5% by 2021.

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

		2013			2012
Effect on accumulated
postretirement benefit obligation
1% increase	$	697		$	706
1% decrease	$	(597	)	$	(643	)
Effect on annual service and interest
costs
1% increase	$	27		$	30
1% decrease	$	(23	)	$	(27	)

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

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

2014	$	356
2015	$	362
2016	$	359
2017	$	372
2018	$	377
Years 2019 - 2023	$	1,986