Post-Retirement Health Care

The Corporation offers a fixed subsidy to certain retirees who choose to participate in a third party insurance plan selected by the Corporation. 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):



	2018			2017
Change in benefit obligation
Benefit obligation at beginning of year	$	22,933		$	21,153
Service cost	853			741
Interest cost	789			825
Benefits paid	(1,570		)	(1,003		)
Actuarial (gain) loss	(3,453		)	1,217
Benefit obligation at end of year	$	19,552		$	22,933
Change in plan assets
Fair value at beginning of year	$	—		$	—
Actual return on assets	—			—
Employer contribution	1,570			1,003
Transferred out	—			—
Benefits paid	(1,570		)	(1,003		)
Fair value at end of year	$	—		$	—
Funded Status of Plan	$	(19,552	)	$	(22,933	)

Amounts recognized in the Statement of Financial Position consist of:
Current liabilities	$	1,057		$	1,050
Non-current liabilities	$	18,495		$	21,883

Amounts recognized in Accumulated Other Comprehensive Income (before tax) consist of:
Actuarial (gain) loss	$	(14	)	$	3,565

Change in Accumulated Other Comprehensive Income (before tax):
Amount disclosed at beginning of year	$	3,565		$	2,373
Actuarial (gain) loss	(3,453		)	1,217
Amortization of transition amount	(126		)	(25		)
Amount disclosed at end of year	$	(14	)	$	3,565

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



Fiscal 2019	$	1,056
Fiscal 2020	$	1,053
Fiscal 2021	$	1,051
Fiscal 2022	$	1,065
Fiscal 2023	$	1,085
Fiscal 2024 – 2028	$	5,885

Expected contributions are as follows (in thousands):



Fiscal 2019	$	1,056

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:



	2018		2017		2016
Discount rate	4.2	%	3.5	%	4.0	%

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 4.2 percent was used to determine net periodic benefit costs for 2019. The following table sets forth the components of net periodic benefit costs (in thousands):



	2019
Service cost	$	680
Interest cost	795
Amortization of net (gain) loss	—
Net periodic post-retirement benefit cost	$	1,475