Note 12 - Postretirement Medical Benefits

12 Months Ended

Dec. 31, 2011

Pension and Other Postretirement Benefits Disclosure [Text Block]

12.  Postretirement Medical Benefits

Prior to 2003, the Company provided lifetime medical and dental benefits upon retirement for certain employees meeting the eligibility requirements as of December 31, 1989 (Plan 1). During 2003, the Company implemented an additional postretirement health insurance program (Plan 2). Under Plan 2, any employee meeting the service requirement of 20 years of full time service to the Company and is at least age 55 years of age upon retirement is eligible to continue their health insurance coverage. Under both plans, retirees not yet eligible for Medicare have coverage identical to the coverage offered to active employees. Under both plans, Medicare-eligible retirees are provided with a Medicare Advantage plan. The Company pays 100% of the cost of Plan 1. The Company and the retirees each pay 50% of the cost under Plan 2. Both plans are unfunded.

The following schedules set forth a reconciliation of the changes in the plans benefit obligation and funded status for the years ended December 31, 2011 and 2010.

(In thousands)	2011			2010
Change in Benefit Obligation
Obligation at beginning of year	$	11,760		$	12,524
Service cost		432			396
Interest cost		605			607
Actuarial loss (gain)		1,750			(1,523	)
Participant contributions		86			76
Benefit payments		(339	)		(320	)
Obligation at end of year	$	14,294		$	11,760

The following table provides disclosure of the net periodic benefit cost as of December 31 for the years indicated.

(In thousands)	2011			2010
Service cost	$	432		$	397
Interest cost		605			607
Amortization of transition obligation		102			101
Recognized prior service cost		257			257
Net periodic benefit cost	$	1,396		$	1,362
Major assumptions:
Discount rate used to determine net periodic benefit cost		5.55	%		6.00	%
Discount rate used to determine benefit obligation as of year end		4.39			5.55
Retiree participation rate (Plan 1)		100.00			100.00
Retiree participation rate (Plan 2)		72.00			72.00

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. For measurement purposes, the rate of increase in pre-Medicare medical care claims costs was 9%, 8%, and 7% in 2012, 2013, and 2014, respectively, then grading down by .5% annually to 5% for 2015 and thereafter. For dental claims cost, it was 5% for 2011 and thereafter. A 1% change in the assumed health care cost trend rates would have the following incremental effects:

(In thousands)	1% Increase		1% Decrease
Effect on total of service and interest cost components of net periodic postretirement health care benefit cost	$	290	$	(220	)
Effect on accumulated postretirement benefit obligation		2,922		(2,289	)

The following table presents estimated future benefit payments in the period indicated.

(In thousands)	Postretirement Medical Benefits
2012	$	367
2013		383
2014		413
2015		432
2016		457
2017-2021		2,934
Total	$	4,986

Amounts recognized in accumulated other comprehensive income as of December 31, 2011 and 2010 are as follows:

(In thousands)	2011		2010
Unrecognized net actuarial loss	$	2,469	$	719
Unrecognized transition obligation		101		203
Unrecognized prior service cost		896		1,153
Total	$	3,466	$	2,075

The estimated costs that will be amortized from accumulated other comprehensive income into net periodic cost over the next fiscal year are as follows.

(In thousands)	Postretirement Medical Benefits
Transition obligation	$	101
Unrecognized prior service cost		257
Unrecognized net actuarial loss		57
Total	$	415