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Postretirement Benefits Other Than Pensions | 12 Months Ended
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Dec. 31, 2016
Other Postretirement Benefit Plan, Defined Benefit [Member] |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] |
Postemployment Benefits Other Than Pensions | NOTE 17. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS The Company sponsors an other than pension postretirement employee benefit plan (“OPEB”) that provides medical, dental and/or life insurance benefits to approximately 500 retired and 225 active employees (the “OPEB Plan”). The Company has historically self-insured the benefits under the OPEB Plan. The medical plan generally provides for a limited number of years of medical insurance benefits at retirement based on the participant’s attained age at retirement and number of years of service until specified dates and generally has required participant contributions, with most contributions adjusted annually. On December 30, 2016, the Company amended the OPEB Plan and, effective December 31, 2016, will no longer offer coverage to post-65 Medicare-eligible retirees and Medicare-eligible spouses under the self-insured portion of its coverage. Rather, beginning on January 1, 2017, the OPEB Plan will offer access to a private, third-party Medicare exchange and will provide varying levels of a Company-determined subsidy via health reimbursement accounts to certain Medicare-eligible retirees and spouses in order to help fund a portion of the participants’ cost. Further, the amendment eliminates the requirement for such participants to contribute to the OPEB Plan. In conjunction with the amendment, the Company recorded a pre-tax reduction to its Accumulated Postretirement Benefit Obligation of $11.0 million through Other Comprehensive Income. This prior service credit will be amortized into income over the remaining average life of the OPEB Plan’s participants. Changes in Fair Value of Plan Assets and Changes in Accumulated Postretirement Benefit Obligation for the years ended December 31, 2016 and 2015 were:
DOLLARS IN MILLIONS |  |
2016 |  | 2015
Fair Value of Plan Assets at Beginning of Year |  | $ | — |  |  | $ | — |
Employer Contributions |  | 3.4 |  |  | 3.4 |
Plan Participants’ Contributions |  | 1.0 |  |  | 1.2 |
Benefits Paid |  | (4.4 | ) |  | (4.6 | )
Fair Value of Plan Assets at End of Year |  | — |  |  | — |
Accumulated Postretirement Benefit Obligation at Beginning of Year |  | 29.6 |  |  | 31.1 |
Service Cost |  | 0.1 |  |  | 0.2 |
Interest Cost |  | 0.8 |  |  | 1.0 |
Plan Participants’ Contributions |  | 1.0 |  |  | 1.2 |
Benefits Paid |  | (4.4 | ) |  | (4.6 | )
Medicare Part D Subsidy Received |  | 0.3 |  |  | 0.3 |
Plan Amendments |  | (11.0 | ) |  | — |
Actuarial Loss (Gain) |  | (1.3 | ) |  | 0.4 |
Accumulated Postretirement Benefit Obligation at End of Year |  | 15.1 |  |  | 29.6 |
Funded Status—Accumulated Postretirement Benefit Obligation in Excess of Plan Assets |  | $ | (15.1 | ) |  | $ | (29.6 | )
Unamortized Actuarial Gain Reported in AOCI at End of Year |  | $ | 27.6 |  |  | $ | 16.8 |
The measurement dates of the assets and liabilities at end of year in the preceding table under the headings “2016” and “2015” were December 31, 2016 and December 31, 2015, respectively. The weighted-average discount rate and rate of increase in future compensation levels used to develop the components of the Accumulated Postretirement Benefit Obligation at December 31, 2016 and 2015 were:
|  | 2016 |  | 2015
Discount Rate |  | 3.60 | % |  | 3.70 | %
Rate of Increase in Future Compensation Levels |  | 2.60 |  |  | 2.64 |
The assumed health care cost trend rate used in measuring the Accumulated Postretirement Benefit Obligation at December 31, 2016 was 6.75% for 2017, gradually declining to 5.0% in the year 2024 and remaining at that level thereafter for medical benefits and 10.25% for 2017, gradually declining to 5.0% in the year 2024 and remaining at that level thereafter for prescription drug benefits. The assumed health care cost trend rate used in measuring the Accumulated Postretirement Benefit Obligation at December 31, 2015 was 7.0% for 2016, gradually declining to 5.0% in the year 2024 and remaining at that level thereafter for medical benefits and 11.0% for 2016, gradually declining to 5.0% in the year 2024 and remaining at that level thereafter for prescription drug benefits. NOTE 17. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS (Continued) A one-percentage point increase in the assumed health care cost trend rate for each year would have increased the Accumulated Postretirement Benefit Obligation at December 31, 2016 by $0.6 million and 2016 OPEB expense by an insignificant amount. A one-percentage point increase in the assumed health care cost trend rate for each year would have increased the Accumulated Postretirement Benefit Obligation at December 31, 2015 by $1.5 million and 2015 OPEB expense by $0.1 million. The components of Comprehensive OPEB Expense (Income) for the years ended December 31, 2016, 2015 and 2014 were:
DOLLARS IN MILLIONS |  | 2016 |  | 2015 |  | 2014
Service Cost Earned During the Year |  | $ | 0.1 |  |  | $ | 0.2 |  |  | $ | 0.2 |
Interest Cost on Accumulated Postretirement Benefit Obligation |  | 0.8 |  |  | 1.0 |  |  | 1.1 |
Amortization of Actuarial Gain |  | (1.4 | ) |  | (1.4 | ) |  | (1.8 | )
OPEB Income Recognized in Consolidated Statements of Income |  | (0.5 | ) |  | (0.2 | ) |  | (0.5 | )
Unrecognized OPEB Loss (Gain) Arising During the Year |  | (1.3 | ) |  | 0.4 |  |  | (2.0 | )
Prior Service Credit Arising During the Year |  | (11.0 | ) |  | — |  |  | — |
Amortization of Accumulated Unrecognized OPEB Gain |  | 1.4 |  |  | 1.4 |  |  | 1.8 |
Comprehensive OPEB Expense (Income) |  | $ | (11.4 | ) |  | $ | 1.6 |  |  | $ | (0.7 | )
The Company estimates that OPEB Expense for the year ended December 31, 2017 will include income of $3.1 million resulting from the amortization of the related accumulated actuarial gain and prior service credit included in AOCI at December 31, 2016. Effective January 1, 2016, the Company changed its method for estimating the interest and service cost components of expense recognized for its pension and other postretirement employee benefit plans. As a result, the Company elected to use a full yield curve approach to estimate these components of benefit cost by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. See Note 2, “Summary of Accounting Policies and Accounting Changes,” to the Consolidated Financial Statements for further discussion of the change. The weighted-average discount rate and rate of increase in future compensation levels used to develop OPEB Expense for the years ended December 31, 2016, 2015 and 2014 were:
|  | 2016 |  | 2015 |  | 2014
Weighted-average Discount Rate |  | 3.70 | % |  | 3.40 | % |  | 4.00 | %
Service Cost Discount Rate |  | 4.21 |  |  | — |  |  | — |
Interest Cost Discount Rate |  | 2.90 |  |  | — |  |  | — |
Rate of Increase in Future Compensation Levels |  | 2.64 |  |  | 2.68 |  |  | 2.10 |
The Company expects to contribute $1.8 million, net of the expected Medicare Part D subsidy, to its OPEB Plan to fund benefit payments in 2017. The following benefit payments (net of participant contributions), which consider expected future service, as appropriate, are expected to be paid:
DOLLARS IN MILLIONS |  | Years Ending December 31,
2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022-2026
Estimated Benefit Payments: |  |  |  |  |  |  |  |  |  |  |  |
Excluding Medicare Part D Subsidy |  | $ | 1.8 |  |  | $ | 1.8 |  |  | $ | 1.7 |  |  | $ | 1.6 |  |  | $ | 1.5 |  |  | $ | 5.9 |
Expected Medicare Part D Subsidy |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Net Estimated Benefit Payments |  | $ | 1.8 |  |  | $ | 1.8 |  |  | $ | 1.7 |  |  | $ | 1.6 |  |  | $ | 1.5 |  |  | $ | 5.9 |

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