EMPLOYEE BENEFITS - POSTRETIREMENT

The Company has a postretirement healthcare benefits plan that provides coverage for a majority of its United States employees and their dependents should they elect to maintain such coverage upon retirement. Covered employees become eligible for participation when they qualify for retirement while working for the Company. Participation in the plan is voluntary and requires participants to make contributions toward the cost of the plan, as determined by the Company.

The net periodic benefit costs charged to operating expenses, which are valued at the measurement date of January 1 and recognized evenly throughout the year, consisted of the following components (in thousands of dollars):



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Service cost	$	2,567		$	5,015		$	5,294		$	10,029
Interest cost	2,119			3,203			4,469			6,405
Expected return on assets	(1,769		)	(1,553		)	(3,538		)	(3,106		)
Amortization of transition asset	(36		)	(36		)	(71		)	(71		)
Amortization of unrecognized losses	746			1,207			1,862			2,414
Amortization of prior service credits	(1,852		)	(124		)	(3,705		)	(248		)
Net periodic benefit costs	$	1,775		$	7,712		$	4,311		$	15,423

For the six months of 2013, the net periodic benefit costs decreased $11 million driven primarily by plan design changes that went into effect on January 1, 2013. Covered employees as of December 31, 2012, will remain eligible for retiree health benefits with the employee contribution structure modified for certain employees based on minimum age and service requirements. Employees hired after January 1, 2013, will not be eligible for retiree health benefits.

The Company has established a Group Benefit Trust to fund the plan and process benefit payments. The funding of the trust is an estimated amount which is intended to allow the maximum deductible contribution under the Internal Revenue Code of 1986 (IRC), as amended. There are no minimum funding requirements and the Company intends to follow its practice of funding the maximum deductible contribution under the IRC. During the three and six months ended June 30, 2013, the Company contributed $1.3 million and $2.2 million, respectively, to the trust.