Postretirement Health Care

Guidance on employers’ accounting for other postretirement plans requires recognition of the overfunded or underfunded status on the balance sheet. Under this guidance, gains and losses, prior services costs and credits and any remaining transition amounts under previous guidance not yet recognized through net periodic benefit cost are recognized in accumulated other comprehensive income (loss), net of tax effects, until they are amortized as a component of net periodic benefit cost. Also, the measurement date – the date at which the benefit obligation and plan assets are measured – is required to be the Corporation’s fiscal year-end.



(In thousands)	2013			2012			2011
Change in benefit obligation
Benefit obligation at beginning of year	$	18,547		$	16,872		$	15,411
Service cost	525			450			364
Interest cost	668			721			804
Benefits paid	(1,263		)	(1,131		)	(909		)
Actuarial (gain)/loss	(2,029		)	1,635			1,202
Benefit obligation at end of year	$	16,448		$	18,547		$	16,872
Change in plan assets
Fair value at beginning of year	$	—		$	—		$	—
Actual return on assets	—			—			—
Employer contribution	1,263			1,131			909
Transferred out	—			—			—
Benefits paid	(1,263		)	(1,131		)	(909		)
Fair value at end of year	$	—		$	—		$	—
Funded Status of Plan	$	(16,448	)	$	(18,547	)	$	(16,872	)
Amounts recognized in the Statement of Financial Position consist of:
Current liabilities	$	924		$	994		$	988
Noncurrent liabilities	$	15,524		$	17,554		$	15,884
Amounts recognized in Accumulated Other Comprehensive Income (before tax) consist of:
Actuarial (gain)/loss	$	(900	)	$	1,129		$	(506	)
Transition (asset)/obligation	—			117			624
Prior service cost	—			—			—
	$	(900	)	$	1,246		$	118
Change in Accumulated Other Comprehensive Income (before tax):
Amount disclosed at beginning of year	$	1,246		$	118		$	(593	)
Actuarial (gain)/loss	(2,029		)	1,635			1,202
Amortization of actuarial gain or loss	—			—			17
Amortization of transition amount	(117		)	(507		)	(508		)
Amortization of prior service cost	—			—			—
Amount disclosed at end of year	$	(900	)	$	1,246		$	118



Estimated Future Benefit Payments (In thousands)
Fiscal 2014	924
Fiscal 2015	928
Fiscal 2016	943
Fiscal 2017	971
Fiscal 2018	995
Fiscal 2019 – 2023	5,773
Expected Contributions During Fiscal 2014
Total	$	924

The discount rates at fiscal year-end 2013, 2012 and 2011, were 4.6%, 3.7% and 4.4%, respectively. The Corporation payment for these benefits has reached the maximum amounts per the plan; therefore, healthcare trend rates have no impact on the Corporation’s cost. There were no funds designated as plan assets.



Components of Net Periodic Postretirement Benefit Cost (in thousands)	2014
Service cost	$	504
Interest cost	735
Amortization of net (gain)/loss	—
Amortization of unrecognized transition (asset)/obligation	—
Net periodic postretirement benefit cost/(income)	$	1,239

A discount rate of 4.6% was used to determine net periodic benefit cost for 2014. The discount rate is set at the measurement date to reflect the yield of a portfolio of high quality, fixed income debt instruments. There are no plan assets invested.