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PENSION AND POSTRETIREMENT PLANS | 3 Months Ended
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Mar. 31, 2015
PENSION AND POSTRETIREMENT PLANS |
PENSION AND POSTRETIREMENT PLANS | 1 4.PENSION AND POSTRETIREMENT PLANS The expenses we record for our pension and other postretirement benefit pension plans depend on factors such as changes in market interest rates, the value of plan assets, mortality assumptions and health care trend rates. Significant unfavorable changes in these factors would increase our expenses. Our pension plan assets consist primarily of equity and fixed income securities. If the performance of investments in the plan does not meet the Company’s assumptions, the excess obligation may increase and the Company may have to record additional costs and/or contribute additional funds to the pension plan. An increase in pension expenses and contributions could decrease the Company’s cash available to pay its outstanding obligations as well as impact net income. Our postretirement plan is unfunded. We record expense as employees render the services necessary to earn the benefits. The expenses are based on estimates including health care cost increases, retirement and mortality. Actual results may vary materially from estimates which could result in an increase to our expense and decrease in net income. Pension Plan Motor Products - Owosso has a defined benefit pension plan covering substantially all of its hourly union employees hired prior to April 10, 2002. The benefits are based on years of service, the employee’s compensation during the last three years of employment, and accumulated employee contributions. Components of net periodic pension expense included in the condensed consolidated statements of operations and comprehensive income for the quarters ending March 31, 2015 and 2014 are as follows (in thousands):
|  | For the three months ended |
|  | March 31, 2015 |  | March 31, 2014 |
Service cost |  | $ | 27 |  | $ | 21 |
Interest cost |  | 68 |  | 66 |
Expected return on assets |  | 48 |  | 11 |
Amortization of net loss |  | (82 | ) | (85 | )
Net periodic pension expense |  | $ | 61 |  | $ | 13 |
The Company expects to contribute approximately $166 to the Pension Plan during 2015. For the quarter ended March 31, 2015 there were $59 of cash contributions made to the plan. Benefits expected to be paid from the Pension Plan during 2015 are $309. For the quarter ended March 31, 2015 there were $70 of benefit payments paid to participants. Post Retirement Welfare Plan Motor Products-Owosso provides postretirement medical insurance and life insurance benefits to current and former employees hired before January 1, 1994 who retire from Motor Products. Employees who retire after January 1, 2005 must have twenty or more years of continuous service in order to be eligible for retiree medical benefits. Partial contributions from retirees are required for the medical insurance benefits. The Company’s portion of the medical insurance premiums is funded from the general assets of the Company. The Company recognizes the expected cost of providing such post-retirement benefits during employees’ active service periods. Components of net periodic postretirement benefit income included in the condensed consolidated statements of operations and comprehensive income for the quarters ending March 31, 2015 and 2014 are as follows (in thousands):
|  | For the three months ended |
|  | March 31, 2015 |  | March 31, 2014 |
Service cost |  | $ | 2 |  | $ | 2 |
Interest cost |  | 13 |  | 14 |
Amortization of net gain |  | (18 | ) | (19 | )
Amortization of prior service cost |  | (3 | ) | (3 | )
Net postretirement benefit |  | $ | (6 | ) | $ | (6 | )
Benefit payments for the Post Retirement Welfare Plan during 2015 are expected to be $51.

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