Note 5 - Pension Plans and Other Postretirement Benefits

The Company has the following retirement plans: a defined contribution plan; a 401(k) plan; a frozen defined benefit plan for employees hired on or before December 31, 1998; and certain employees participate in a supplemental defined contribution plan or a frozen supplemental defined benefit plan or both.

Defined Benefit Plan and Supplemental Defined Benefit Plans

The following table summarizes the components of net periodic pension cost recognized for the defined benefit plan and the supplemental defined benefit plans for the following periods:

					Supplemental
	Defined Benefit Plan				Defined Benefit Plans
	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2014		2013		2014		2013
Components of net periodic pension (income) expense:
Service cost:
Benefit accrual	$	-	$	-	$	-	$	-
Other expenses		90		90		-		-
Interest cost		420		342		179		154
Expected return on plan assets		(601)		(560)		-		-
Settlement loss		189		258		-		-
Amortization of:
Prior service cost		-		-		-		31
Actuarial loss		343		401		39		51
Net periodic pension expense	$	441	$	531	$	218	$	236

Postretirement Benefits Other Than Pensions

In addition to providing pension benefits, the Company also provides certain health care and life insurance benefits to a closed group of eligible employees. In December 2013, the Company announced the elimination of postretirement medical coverage for all remaining eligible participants effective March 31, 2014. As result of this plan change, prior service cost will be amortized over the average working lifetime of active eligible participants. As a result of the changes in the plan for other postretirement benefits, the Company recorded a reduction in its expenses of $314 and $33 for the three months ended March 31, 2014 and 2013, respectively. Funding of the previously established Health Reimbursement Accounts (“HRAs”) was $63 and $35 for the three months ended March 31, 2014 and 2013, respectively.

The following table summarizes the components of the net periodic benefit for postretirement benefits other than pensions for the following periods:

	Three Months Ended
	March 31,
	2014		2013
Components of net periodic benefit:
Service cost	$	-	$	-
Interest cost		12		23
Amortization of prior service credit		(157)		-
Amortization of prior gain		(62)		(59)
Net periodic income	$	(207)	$	(36)

2014 Contributions

In 2014, there is no minimum funding requirement for the Company’s defined benefit plan. The following table discloses the minimum funding requirements, contributions made and expected full year contributions for the Company’s plans.

	Defined Benefit Pension Plans
	Defined		Supplemental		Other
	Benefit		Defined Benefit		Postretirement
	Plan		Plans		Benefits

Minimum funding requirement for 2014	$	-		N/A		N/A
Contributions made in the three months ended March 31, 2014		-	$	332	$	60
Expected contributions (approximations) for the year ended December 31, 2014 as of the time of :
This Form 10-Q (1)		2,000		1,320		217
2013 Form 10-K (2)		2,000		1,320		217

N/A -

Not applicable.

(1)

HMEC’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.

(2)

HMEC’s Annual Report on Form 10-K for the year ended December 31, 2013, specifically “Notes to Consolidated Financial Statements -- Note 9 -- Pension Plans and Other Postretirement Benefits”.