6 .	ACCRUED RETIREMENT BENEFITS

Accrued Retirement Benefits

December 31, 2017

and

2016

consisted of the following:

	2017			2016
	(in thousands)

Defined benefit pension plans	$	5,812		$	7,560
Non-qualified retirement plans		2,219			1,674
Total		8,031			9,234
Less current portion		(164	)		(175	)
Non-current portion of accrued retirement benefits	$	7,867		$	9,059

The Company

has

two

defined benefit pension plans which cover substantially all of its former bargaining and non-bargaining full-time, part-time and intermittent employees. In

2011,

pension benefits under both plans were frozen. The Company also has unfunded non-qualified retirement plans covering

twelve

of its former executives. The non-qualified retirement plans were frozen in

2009

and future vesting of additional benefits was discontinued.

During the

fourth

quarter of

2016,

participants who had terminated employment and had

not

started to collect their pension benefits were offered a limited-time opportunity to take their benefits as a

one

-time lump sum payment. The offer was extended to approximately

500

participants of which

325

participants elected to take the

one

-time lump sum payment. In total, approximately

$9.3

million

of lump sum settlement payments were paid out of the trusts for the defined benefit pension plans.. In addition, approximately

$0.8

million of

one

-time lump sum payments were made to settle obligations under the Company’s non-qualified retirement plans.

The measurement date for the Company

’s benefit plan disclosures is

December

of each year. The changes in benefit obligations and plan assets for

2017

and

2016,

and the funded status of the plans and assumptions used to determine benefit information at

December

31,

2017

and

2016

were as follows:

	2017					2016
	(in thousands)

Change in benefit obligations:
Benefit obligations at beginning of year	$	56,378				$	66,852
Interest cost		2,216					2,804
Actuarial loss (gain)		2,074					1,042
Benefits paid		(4,216			)		(4,217			)
Lump sum payments		-					(10,103			)
Benefit obligations at end of year		56,452					56,378

Change in plan assets:
Fair value of plan assets at beginning of year		47,176					56,434
Actual return on plan assets		5,531					5,188
Employer reimbursement for retirement benefits		(230			)		(1,054			)
Employer contributions		181					928
Benefits paid		(4,216			)		(4,217			)
Lump sum payments		-					(10,103			)
Fair value of plan assets at end of year		48,442					47,176

Funded status	$	(8,010			)	$	(9,202			)
Accumulated benefit obligations	$	56,452				$	56,378

Weighted average assumptions used to determine benefit obligations at December 31:
Discount rate	3.59%		-	3.64%		4.07%		-	4.14%
Expected long-term return on plan assets	5.00%					5.00%
Rate of compensation increase	n/a					n/a

ccumulated other comprehensive loss of

$20.2

million and

$22.3

million at

December 31, 2017

and

2016,

respectively, represent the net actuarial loss which has

not

yet been recognized as a component of pension expense. In

2018,

$0.7

million of net actuarial loss is expected to be recognized as a component of net pension expense.

Components of net periodic benefit cost and other amounts recognized in comprehensive income were as follows:

	2017			2016
	(in thousands)

Pension and other benefits:
Interest cost	$	2,216		$	2,804
Expected return on plan assets		(2,255	)		(2,713	)
Recognized net actuarial loss		840			1,030
Settlement/Curtailment Expense		-			3,958
Pension expense	$	801		$	5,079

Other changes in plan assets and benefit obligations recognized in comprehensive income:
Net gain	$	(1,201	)	$	(1,384	)
Recognized gain		(840	)		(4,988	)
Total recognized gain in comprehensive income	$	(2,041	)	$	(6,372	)

Weighted average assumptions used to determine net periodic benefit cost:	2017			2016
Pension benefits:
Discount rate	4.07%	-	4.14%	4.30%	-	4.44%
Expected long-term return on plan assets	5.00%			5.00%
Rate of compensation increase	n/a			n/a

The expected long-term rate of return on plan assets was based on a building-block approach. Historical markets are studied and long-term historical relationships between equities and fixed income are

presumed consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors, such as inflation and interest rates, are evaluated before long-term capital markets are determined. Diversification and rebalancing of plan assets are properly considered as part of establishing long-term portfolio returns.

The fair values of the Company

’s pension plan assets at

December

31,

2017

and

2016,

by asset category, were as follows:

	2017 Fair Value Measurements (in thousands)
		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)	Total
AHGT pooled equity funds	$	-	$	14,772	$	14,772
AHGT pooled fixed income funds		-		32,581		32,581
Cash management funds		-		1,089		1,089
	$	-	$	48,442	$	48,442

	2016 Fair Value Measurements (in thousands)
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
AHGT pooled equity funds	$	-	$	7,177	$	7,177
AHGT pooled fixed income funds		-		39,025		39,025
Cash management funds		-		974		974
	$	-	$	47,176	$	47,176

Aon Hewitt Group Trust (AHGT)

ooled equity and fixed income funds:

Pooled equity and fixed income funds consist of various AHGT Funds offered through private placements. The units are valued daily using net asset values (NAV). NAV are based on the fair value of each fund’s underlying investments. Level

assets are priced using quotes for trades occurring in active markets for the identical asset. Level

assets are priced using observable inputs for the asset (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs).

An administrative committee consisting of certain senior management employees administers the Company

’s defined benefit pension plans. The pension plan assets are allocated among approved asset types based on the plans current funded status and other characteristics set by the administrative committee, and subject to liquidity requirements of the plans.

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

2018	$	4,225
2019		4,154
2020		4,077
2021		3,981
2022		3,865
2023 - 2027		17,680

he Company does

not

expect to be required to make minimum contributions to its pension plans in

2018.

required minimum contributions were made in

2017

2016.