I. Postretirement Benefits Other Than Pensions

The company and its subsidiaries provide health care and life insurance benefits to certain retired employees. These employees become eligible for benefits after meeting minimum age and service requirements.

The following table sets forth the amounts included in "Other liabilities" in the Consolidated Balance Sheets at December 28, 1997, and December 29, 1996 (in thousands):


 19971996
Accumulated postretirement benefit obligation:
Retirees$ 50,213$ 49,806
Fully eligible active plan
    participants
16,937
7,828
Other active plan participants34,105
36,125
101,25593,759
Unrecognized prior service costs arising
    from plan amendments
3,744
4,123
Unrecognized net gain from past
    experience different from that
    assumed

12,968


15,911
Accrued postretirement benefit cost$117,967
$113,793
 

Net periodic postretirement benefit cost for 1997, 1996, and 1995 includes the following components (in thousands):


 199719961995
Service cost for benefits
    earned during the
    period

$ 3,511

$ 2,939

$ 2,719
Interest cost on accumulated
    post-retirement benefit
    obligation

6,973

6,546

6,515
Amortization of prior
    service costs
(378)
(290)
(290)
Amortization of gains(1,576)
(909)
(1,296)
Net periodic postretirement
    benefit cost
$ 8,530

$ 8,286

$ 7,648
 

The assumed health care cost trend rate used in measuring the benefit obligation at December 28, 1997 was 10.8 percent for pre-age 65 benefits (10.3% for post-age 65 benefits) decreasing to 5.5 percent in the year 2015 and thereafter. The discount rate used in determining the benefit obligation at December 28, 1997 and December 29, 1996 was 7.5 percent.

The effect on the accumulated postretirement benefit obligation of a 1 percent increase each year in the health care cost trend rate used would result in increases of approximately $11,800,000 in the obligation at December 28, 1997 and $1,500,000 in the aggregate service and interest components of the 1997 expense.

The company's policy is to fund the above-mentioned benefits as claims and premiums are paid. The cash expenditures for postretirement benefits were approximately $3,700,000 in 1997, $3,850,000 in 1996, and $2,980,000 in 1995.