Note 16—Benefit Plans

Defined Contribution Plan

We maintain two defined contribution plans for our employees. All eligible employees may participate in one of these plans, either immediately or after one year of service, depending on the plan. We match employee contributions up to a maximum of 6% of the employee's eligible compensation. Vesting percentages associated with the employer contributions range from 0% to 100%, depending on the plan and the number of years of service. For the years ended December 31, 2017, 2016, and 2015, we made contributions to the plans totaling approximately $3.6 million, $3.2 million, and $1.4 million, respectively.

Defined Benefit Plan

We maintain a defined benefit pension plan (the “Benefit Plan”) covering substantially all our Wyoming Refining employees. Benefits are based on years of service and the employee’s highest average compensation received during five consecutive years of the last ten years of employment. Our funding policy is to contribute annually an amount equal to the pension expense, subject to the minimum funding requirements of the Employee Retirement Income Security Act of 1974 and the tax deductibility of such contributions.

In December 2016, the Benefit Plan was amended (the “Plan Amendment”) to freeze all future benefit accruals for salaried plan participants. The Plan Amendment reduced the projected benefit obligation by $3.1 million as of December 31, 2016. The curtailment gain of $3.1 million was recognized as reduction of Operating expense (excluding depreciation) in our consolidated statement of operations for the year ended December 31, 2016.

The changes in the projected benefit obligation and the fair value of plan assets of our Benefit Plan for the year ended December 31, 2017 and the period from July 14, 2016 to December 31, 2016 were as follows (in thousands):



	2017			2016
Changes in projected benefit obligation:
Projected benefit obligation as of the beginning of the period	$	28,914		$	34,319
Service cost	614			668
Interest cost	1,192			598
Plan amendment	—			(3,067		)
Actuarial (gain) loss	1,091			(2,436		)
Benefits paid	(934		)	(1,168		)
Projected benefit obligation as of December 31	$	30,877		$	28,914

Changes in fair value of plan assets:
Fair value of plan assets as of the beginning of the period	$	21,345		$	22,067
Actual return on plan assets	3,050			446
Employer contributions	—			—
Benefits paid	(934		)	(1,168		)
Fair value of plan assets as of December 31	$	23,461		$	21,345

The underfunded status of our Benefit Plans is recorded within Other liabilities in our consolidated balance sheets. The reconciliation of the underfunded status of our Benefit Plans of December 31, 2017 and 2016 was as follows:



	2017		2016
Projected benefit obligation	$	30,877	$	28,914
Fair value of plan assets	23,461		21,345
Underfunded status	$	7,416	$	7,569

Gross amounts recognized in accumulated other comprehensive income: (1)
Net actuarial gain	$	2,965	$	2,196

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(1)	As of December 31, 2017, we had no amounts recorded in accumulated other comprehensive income that are expected to be amortized into net periodic benefit cost in 2018.

Weighted-average assumptions used to measure our projected benefit obligation as of December 31, 2017 and 2016 and net periodic benefit costs for the year ended December 31, 2017 and the period from July 14, 2016 to December 31, 2016 are as follows:



	2017		2016
Projected benefit obligation:
Discount rate (1)	3.65	%	4.20	%
Rate of compensation increase	3.00	%	4.30	%

Net periodic benefit costs:
Discount rate (1)	4.20	%	3.80	%
Expected long-term rate of return (2)	6.25	%	7.00	%
Rate of compensation increase	4.30	%	4.03	%

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(1)	In determining the discount rate, we use yields on high-quality fixed income investments with payments matched to the estimated distributions of benefits from our plans.


(2)	The expected long-term rate of return is based on a blend of historic returns of equity and debt securities.

The net periodic benefit cost (credit) for the year ended December 31, 2017 and the period from July 14, 2016 to December 31, 2016 includes the following components:



	2017			2016
Components of net periodic benefit cost (credit):
Service cost	$	614		$	668
Interest cost	1,192			598
Expected return on plan assets	(1,189		)	(686		)
Plan amendment effect	—			(3,067		)
Net periodic benefit cost (credit)	$	617		$	(2,487	)

The weighted-average asset allocation at December 31, 2017 is as follows:



	Target		Actual
Asset category:
Equity securities	60	%	59	%
Debt securities	30	%	32	%
Real estate	10	%	9	%
Total	100	%	100	%

We have a long-term, risk-controlled investment approach using diversified investment options with minimal exposure to volatile investment options like derivatives. Our Benefit Plan assets are invested in pooled separate accounts administered by the Benefit Plan custodian. The underlying assets in the pooled separate accounts are invested in equity securities, debt securities, and real estate. The pooled separate accounts are valued based upon the fair market value of the underlying investments and are deemed to be Level 2.

We do not intend to make any contributions to the pension plan during 2018. Based on current data and assumptions, the following benefit payments, which reflect expected future service, as appropriate, are expected to be paid over the next 10 years:



Year Ended
2018	$	1,090
2019	1,140
2020	1,240
2021	1,310
2022	1,270
Thereafter	7,800
	$	13,850

Other Post-Retirement Benefits - Medical

Prior to December 31, 2015, we sponsored a post-retirement medical plan to provide health care coverage continuation from the date of retirement to age 65 for qualifying employees. Employees hired before 2006 were generally eligible to participate in the plan after five years of service and reaching the age of 55 and would have paid 20% of the monthly insurance premium. Employees hired after 2006 were generally eligible to participate in the plan after five years of service and reaching the age of 55 and were required to pay 100% of the monthly insurance premium; however, after 10 years of service, they were only required to pay 50% of the monthly insurance premium.

On December 31, 2015, we terminated our post-retirement medical plan and extinguished the remaining benefit obligation of $6.6 million. The plan termination gain of $5.6 million is included as a reduction of Operating expense (excluding depreciation) on our consolidated statement of operations for the year ended December 31, 2015.

The changes in the benefit obligation of our post-retirement medical plan as of and for the year ended December 31, 2015 were as follows (in thousands):



	Year Ended December 31,
	2015
Benefit obligation at the beginning of year	$	5,414
Service cost	370
Interest cost	212
Plan amendments	—
Plan termination	(6,632		)
Actuarial loss (gain)	636
Projected benefit obligation at end of year	$	—

The post-retirement medical plan was an unfunded plan and therefore had no plan assets as of or during the year ended December 31, 2015.

The weighted-average discount rate used to determine net periodic benefit costs for the year ended December 31, 2015 was 3.5%.