Pension Plans and Other Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2017

Summary of contributions to qualified defined contribution plan, 401(k), non-qualified defined contribution plan and total assets of the plans

Contributions to employees' accounts under the qualified defined contribution plan, the 401(k) plan and the non-qualified defined contribution plan, as well as total assets of the plans, were as follows:



($ in thousands)	Year Ended December 31,
	2017		2016		2015
401(k) plan
Contributions to employees' accounts	$	7,637	$	6,918	$	6,466
Total assets at the end of the year	180,514		177,352		161,956

Qualified defined contribution plan
Contributions to employees' accounts	—		—		—
Total assets at the end of the year	—		—		9,118

Non-qualified defined contribution plan
Contributions to employees' accounts	84		72		122
Total assets at the end of the year	—		—		—

Funded status of the defined benefit, supplemental retirement pension plans and postretirement benefits other than pensions

The following tables summarize the funded status of the defined benefit and supplemental retirement pension plans as of December 31, 2017, 2016 and 2015 (the measurement dates) and identify (1) the assumptions used to determine the projected benefit obligation and (2) the components of net pension cost for the defined benefit plan and supplemental retirement plans for the following periods:



($ in thousands)	Defined Benefit Plan									Supplemental Defined Benefit Plans
	December 31,									December 31,
	2017			2016			2015			2017			2016			2015
Change in benefit obligation:
Projected benefit obligation at beginning of year	$	29,407		$	31,233		$	34,279		$	16,847		$	17,004		$	18,524
Service cost	650			650			450			—			—			—
Interest cost	1,091			1,244			1,189			631			687			654
Plan amendments	—			—			—			—			—			—
Actuarial loss (gain)	(721		)	(220		)	(1,371		)	805			488			(845		)
Benefits paid	(1,995		)	(3,500		)	(3,314		)	(1,451		)	(1,332		)	(1,329		)
Settlements	—			—			—			—			—			—
Projected benefit obligation at end of year	$	28,432		$	29,407		$	31,233		$	16,832		$	16,847		$	17,004
Change in plan assets:
Fair value of plan assets at beginning of year	$	25,446		$	27,667		$	31,408		$	—		$	—		$	—
Actual return on plan assets	2,909			1,766			200			—			—			—
Employer contributions	—			—			—			1,451			1,332			1,329
Benefits paid	(1,995		)	(3,500		)	(3,314		)	(1,451		)	(1,332		)	(1,329		)
Expenses paid	(517		)	(487		)	(627		)	—			—			—
Settlements	—			—			—			—			—			—
Fair value of plan assets at end of year	$	25,843		$	25,446		$	27,667		$	—		$	—		$	—
Funded status	$	(2,589	)	$	(3,961	)	$	(3,566	)	$	(16,832	)	$	(16,847	)	$	(17,004	)

Prepaid (accrued) benefit expense	$	8,016		$	8,653		$	9,265		$	(10,648	)	$	(11,210	)	$	(11,622	)

Total amount recognized in Consolidated Balance Sheets, all in Other liabilities	$	(2,589	)	$	(3,961	)	$	(3,566	)	$	(16,832	)	$	(16,847	)	$	(17,004	)

Amounts recognized in accumulated other comprehensive income (loss) (AOCI):
Prior service cost	$	—		$	—		$	—		$	—		$	—		$	—
Net actuarial loss	10,605			12,613			12,831			6,184			5,637			5,382
Total amount recognized in AOCI	$	10,605		$	12,613		$	12,831		$	6,184		$	5,637		$	5,382

Information for pension plans with an accumulated benefit obligation greater than plan assets:
Projected benefit obligation	$	28,432		$	29,407		$	31,233		$	16,832		$	16,847		$	17,004
Accumulated benefit obligation	28,432			29,407			31,233			16,832			16,847			17,004
Fair value of plan assets	25,843			25,446			27,667			—			—			—

Defined benefit plan and the supplemental defined benefit plans

The change in the Company's AOCI for the defined benefit plans for the year ended December 31, 2015 was primarily attributable to an increase in the discount rate, partially offset by the performance of plan assets.



($ in thousands)	Defined Benefit Plan									Supplemental Defined Benefit Plans
	Year Ended December 31,									Year Ended December 31,
	2017			2016			2015			2017			2016			2015
Components of net periodic pension (income) expense:
Service cost:
Benefit accrual	$	—		$	—		$	—		$	—		$	—		$	—
Other expenses	650			650			450			—			—			—
Interest cost	1,091			1,244			1,189			631			687			654
Expected return on plan assets	(1,493		)	(1,675		)	(1,875		)	—			—			—
Settlement loss	—			—			—			—			—			—
Amortization of:
Prior service cost	—			—			—			—			—			—
Actuarial loss	389			393			1,626			258			233			273
Net periodic pension expense	$	637		$	612		$	1,390		$	889		$	920		$	927

Changes in plan assets and benefit obligations included in other comprehensive income (loss):
Prior service cost	$	—		$	—		$	—		$	—		$	—		$	—
Net actuarial loss (gain)	(1,619		)	175			930			805			488			(845		)
Amortization of:
Prior service cost	—			—			—			—			—			—
Actuarial loss	(389		)	(393		)	(1,626		)	(258		)	(233		)	(273		)
Total recognized in other comprehensive income (loss)	$	(2,008	)	$	(218	)	$	(696	)	$	547		$	255		$	(1,118	)

Weighted average assumptions used to determine expense:
Discount rate	3.90		%	4.20		%	3.66		%	3.90		%	4.20		%	3.66		%
Expected return on plan assets	6.25		%	6.50		%	6.75		%	*			*			*
Annual rate of salary increase	*			*			*			*			*			*

Weighted average assumptions used to determine benefit obligations as of December 31:
Discount rate	3.50		%	3.90		%	4.20		%	3.50		%	3.90		%	4.20		%
Expected return on plan assets	6.25		%	6.50		%	6.75		%	*			*			*
Annual rate of salary increase	*			*			*			*			*			*

____________________

* Not applicable.

Fair value hierarchy for the Company's defined benefit pension plan assets

Fair values of the equity security funds and fixed income funds have been determined from public quotations. The following table presents the fair value hierarchy for the Company's defined benefit pension plan assets, excluding cash held.



($ in thousands)			Fair Value Measurements at Reporting Date Using
	Total		Level 1		Level 2		Level 3
December 31, 2017
Asset category
Equity security funds (1)
United States	$	10,517	$	—	$	10,517	$	—
International	2,573		—		2,573		—
Fixed income funds	12,165		—		12,165		—
Short-term investment funds	588		588		—		—
Total	$	25,843	$	588	$	25,255	$	—

December 31, 2016
Asset category
Equity security funds (1)
United States	$	9,836	$	—	$	9,836	$	—
International	2,492		—		2,492		—
Fixed income funds	12,402		—		12,402		—
Short-term investments funds	716		716		—		—
Total	$	25,446	$	716	$	24,730	$	—

____________________

(1)

None of the trust fund assets for the defined benefit pension plan have been invested in shares of HMEC's common stock.

Summary of minimum funding requirement and the expected full year contributions for the Company's plans

The following table discloses that minimum funding requirement and the expected full year contributions for the Company's plans.



($ in thousands)	Defined Benefit Pension Plans
	Defined Benefit Plan		Supplemental Defined Benefit Plans

Minimum funding requirement for 2018	$	—	N/A
Expected contributions (approximations) for the year ended December 31, 2018 as of the time of this Form 10-K (1)	—		$	1,317

____________________

N/A - Not applicable.

(1) HMEC's Annual Report on Form 10-K for the year ended December 31, 2017.

Estimated future benefit payments

Estimated future benefit payments as of December 31, 2017 were as follows:



($ in thousands)	2018		2019		2020		2021		2022		2023-2027
Pension plans
Defined benefit plan	$	2,726	$	2,576	$	2,443	$	2,207	$	2,216	$	9,140
Supplemental retirement plans	1,317		1,303		1,287		1,269		1,248		5,820