Post-Retirement Health Care

Guidance on employers’ accounting for other post-retirement plans requires recognition of the overfunded or underfunded status on the balance sheet. Under this guidance, gains and losses, prior service costs and credits, and any remaining transition amounts under previous guidance not yet recognized through net periodic benefit cost are recognized in accumulated other comprehensive income (loss), net of tax effects, until they are amortized as a component of net periodic benefit cost. Also, the measurement date – the date at which the benefit obligation and plan assets are measured – is required to be the Corporation’s fiscal year-end. The following table sets forth the activity and reporting location of the benefit obligation and plan assets (in thousands):



	2017			2016
Change in benefit obligation
Benefit obligation at beginning of year	$	21,153		$	20,884
Service cost	741			735
Interest cost	825			846
Benefits paid	(1,003		)	(1,017		)
Actuarial (gain) loss	1,217			(295		)
Benefit obligation at end of year	$	22,933		$	21,153
Change in plan assets
Fair value at beginning of year	$	—		$	—
Actual return on assets	—			—
Employer contribution	1,003			1,017
Transferred out	—			—
Benefits paid	(1,003		)	(1,017		)
Fair value at end of year	$	—		$	—
Funded Status of Plan	$	(22,933	)	$	(21,153	)

Amounts recognized in the Statement of Financial Position consist of:
Current liabilities	$	1,050		$	1,034
Non-current liabilities	$	21,883		$	20,119

Amounts recognized in Accumulated Other Comprehensive Income (before tax) consist of:
Actuarial (gain) loss	$	3,565		$	2,373

Change in Accumulated Other Comprehensive Income (before tax):
Amount disclosed at beginning of year	$	2,373		$	2,730
Actuarial (gain) loss	1,217			(295		)
Amortization of transition amount	(25		)	(62		)
Amount disclosed at end of year	$	3,565		$	2,373

Estimated future benefit payments are as follows (in thousands):



Fiscal 2018	$	1,050
Fiscal 2019	$	1,056
Fiscal 2020	$	1,067
Fiscal 2021	$	1,085
Fiscal 2022	$	1,122
Fiscal 2023 – 2027	$	6,206

Expected contributions are as follows (in thousands):



Fiscal 2018	$	1,050

The discount rate is set at the measurement date to reflect the yield of a portfolio of high quality, fixed income debt instruments. The discount rate used was as follows:



	2017		2016		2015
Discount rate	3.5	%	4.0	%	4.2	%

The Corporation's payment for these benefits is a fixed subsidy per the plan; therefore, healthcare trend rates have no impact on the Corporation’s cost. There were no funds designated as plan assets. A discount rate of 3.5 percent was used to determine net periodic benefit costs for 2018. The following table sets forth the components of net periodic benefit costs (in thousands):



	2018
Service cost	$	853
Interest cost	789
Amortization of net (gain) loss	125
Net periodic post-retirement benefit cost (income)	$	1,767