Postretirement Medical Benefits

The Company provides lifetime medical and dental benefits upon retirement for certain employees meeting the eligibility requirements as of

December

31,

1989

(“Plan

1”).

Additional participants are not eligible to be included in Plan

unless they met the requirements on this date. During

2003,

the Company implemented an additional postretirement health insurance program (“Plan

2”).

Under Plan

any employee meeting the service requirement of

years of full time service to the Company and is at least 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

The Company and the retirees each pay

50%

of the cost under Plan

Both plans are unfunded

Employees hired on or after

January

2016

are not eligible for benefits under Plan

The following disclosures of the net periodic benefit cost components of Plan

and Plan

were measured at

January

2017

and

2016

Three months ended March 31, (In thousands)	2017			2016
Service cost	$	147		$	159
Interest cost		167			171
Curtailment gain recognized		(351	)		-
Recognized prior service cost		8			13
Net periodic benefit cost	$	(29	)	$	343

In connection with the merger of certain of its subsidiaries in

February

2017,

the Company recognized a curtailment gain of

$351

thousand during the

first

quarter of

2017

as a result of revaluing its postretirement medical benefits plan liability due to a reduction in workforce. The gain is net of

$67

thousand of prior service costs recognized due to the curtailment.

The Company expects benefit payments of

$468

thousand for

2017,

of which

$82

thousand have been made during the

first

three

months of

2017.