Note 13 - Postretirement Medical Benefits

12 Months Ended

Dec. 31, 2017

Postretirement Health Coverage [Member]

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

13

. Postretirement Medical Benefits

T

he 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

1

unless they met the requirements on this date. 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

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

. Employees hired on or after

January 1, 2016

are

not

eligible for benefits under Plan

2.

The following schedules set forth a reconciliation of the changes to the benefit obligation and funded status of the plans for the years ended

December 31, 2017

and

2016

.

In connection with the merger of certain of its subsidiaries in

February 2017,

the Company recognized a curtailment gain of $

417

thousand and prior service costs of

$66

thousand, for a net gain of

$351

thousand at the time of curtailment. This gain is a result of revaluing its postretirement medical benefits plan liability due to a reduction in workforce during the

first

quarter of

2017

.

(In thousands)	201 7			201 6
Change in Benefit Obligation
Obligation at beginning of year	$	16,555		$	16,204
Service cost		557			637
Interest cost		660			683
Curtailment gain recognized		(417	)		-
Actuarial loss (gain)		263			(660	)
Participant contributions		196			153
Benefit payments		(550	)		(462	)
Obligation at end of year	$	17,264		$	16,555

The Company

’s contributions were

$354

thousand and

$309

thousand for

2017

and

2016,

respectively. The Company expects benefit payments of

$459

thousand for

2018

.

The following table provides disclosure of the net periodic benefit cost as of

December 31

for the years indicated

.

(In thousands)	201 7			201 6
Service cost	$	557		$	637
Interest cost		660			683
Curtailment gain recognized		(417	)		-
Recognized prior service cost		75			50
Net periodic benefit cost	$	875		$	1,370
Major assumptions:
Discount rate used to determine net periodic benefit cost		4.12	%		4.34	%
Discount rate used to determine benefit obligation as of year end		3.58			4.12
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

6.5%,

6.0%,

and

5.5%

for

2018,

2019,

and

2020,

respectively, then grading down by

.25%

annually to

4.75%

for

2023

and thereafter. For dental claims cost, it was

5%

for

2018

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	$	295	$	(247	)
Effect on accumulated postretirement benefit obligation		3,530		(2,733	)

The

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

(In thousands)	Postretirement Medical Benefits
201 8	$	459
201 9		477
20 20		508
20 21		551
20 22		592
202 3-2027		3,439
Total	$	6,026

Amounts recognized in accumulated other comprehensive income as of

December 31,

2017

and

2016

are as follows:

(In thousands)	201 7		201 6
Unrecognized net actuarial loss (gain)	$	169	$	(93	)
Unrecognized prior service cost		-		75
Total	$	169	$	(18	)

The

re are

no

estimated costs that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year

.