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Employee Benefit Plans
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefit Plans
Employee benefits charged to operating expenses are summarized in the table below. Substantially all of the Company’s employees are covered by a defined contribution (401(k)) plan, under which the Company makes matching contributions.
(In thousands)202020192018
Payroll taxes$27,664 $26,959 $25,712 
Medical plans30,002 29,635 27,030 
401(k) plan16,834 15,810 14,986 
Pension plans410 605 651 
Other1,990 3,049 2,918 
Total employee benefits
$76,900 $76,058 $71,297 

A portion of the Company’s employees are covered by a noncontributory defined benefit pension plan, however, participation in the pension plan is not available to employees hired after June 30, 2003. All participants are fully vested in their benefit payable upon normal retirement date, which is based on years of participation and compensation. Since January 2011, all benefits accrued under the pension plan have been frozen. However, the accounts continue to accrue interest at a stated annual rate. Certain key executives also participate in a supplemental executive retirement plan (the CERP) that the Company funds only as retirement benefits are disbursed. The CERP carries no segregated assets. The CERP continues to provide credits based on hypothetical contributions in excess of those permitted under the 401(k) plan. In the tables presented below, the pension plan and the CERP are presented on a combined basis.

Under the Company’s funding policy for the defined benefit pension plan, contributions are made to a trust as necessary to satisfy the statutory minimum required contribution as defined by the Pension Protection Act, which is intended to provide for current service accruals and for any unfunded accrued actuarial liabilities over a reasonable period. To the extent that these requirements are fully covered by assets in the trust, a contribution might not be made in a particular year. No contributions to the defined benefit plan were made in 2020, 2019 or 2018. The minimum required contribution for 2021 is expected to be zero. The Company does not expect to make any further contributions in 2021 other than the necessary funding contributions to the CERP. Contributions to the CERP were $80 thousand, $25 thousand and $24 thousand during 2020, 2019 and 2018, respectively.
The following items are components of the net pension cost for the years ended December 31, 2020, 2019 and 2018.
(In thousands)202020192018
Service cost-benefits earned during the year$410 $607 $651 
Interest cost on projected benefit obligation3,282 4,198 3,756 
Expected return on plan assets(5,214)(4,842)(5,255)
Amortization of prior service cost(271)(271)(271)
Amortization of unrecognized net loss2,138 2,288 2,267 
Net periodic pension cost$345 $1,980 $1,148 
The following table sets forth the pension plans’ funded status, using valuation dates of December 31, 2020 and 2019.
(In thousands)
20202019
Change in projected benefit obligation
Projected benefit obligation at prior valuation date
$120,602 $112,063 
Service cost
410607
Interest cost
3,282 4,198 
Benefits paid
(6,765)(7,016)
Actuarial (gain) loss
9,634 10,750 
Projected benefit obligation at valuation date
127,163 120,602 
Change in plan assets
Fair value of plan assets at prior valuation date
107,556 99,418 
Actual return on plan assets
8,744 15,129 
Employer contributions
80 25 
Benefits paid
(6,765)(7,016)
Fair value of plan assets at valuation date
109,615 107,556 
Funded status and net amount recognized at valuation date
$(17,548)$(13,046)
The accumulated benefit obligation, which represents the liability of a plan using only benefits as of the measurement date, was $127.2 million and $120.6 million for the combined plans on December 31, 2020 and 2019, respectively.

Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss) at December 31, 2020 and 2019 are shown below, including amounts recognized in other comprehensive income during the periods. All amounts are shown on a pre-tax basis.
(In thousands)20202019
Prior service cost$994 $1,265 
Accumulated loss(34,482)(30,516)
Accumulated other comprehensive loss
(33,488)(29,251)
Cumulative employer contributions in excess of net periodic benefit cost15,940 16,205 
Net amount recognized as an accrued benefit liability on the December 31 balance sheet
$(17,548)$(13,046)
Net loss arising during period
(6,104)(461)
Amortization of net loss
2,138 2,288 
Amortization of prior service cost
(271)(271)
Total recognized in other comprehensive income
$(4,237)$1,556 
Total expense recognized in net periodic pension cost and other comprehensive income
$(4,582)$(424)

The following assumptions, on a weighted average basis, were used in accounting for the plans.
202020192018
Determination of benefit obligation at year end:
Effective discount rate for benefit obligations2.25 %3.07 %4.14 %
Assumed credit on cash balance accounts5.00 %5.00 %5.00 %
Determination of net periodic benefit cost for year ended:
Effective discount rate for benefit obligations3.08 %4.13 %3.57 %
Effective rate for interest on benefit obligations2.69 %3.81 %3.28 %
Long-term rate of return on assets5.00 %5.00 %5.00 %
Assumed credit on cash balance accounts5.00 %5.00 %5.00 %
The following table shows the fair values of the Company’s pension plan assets by asset category at December 31, 2020 and 2019. Information about the valuation techniques and inputs used to measure fair value are provided in Note 17 on Fair Value Measurements.
Fair Value Measurements
(In thousands)
Total Fair Value
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
December 31, 2020
Assets:
U.S. government obligations$5,306 $5,306 $— $— 
Government-sponsored enterprise obligations (a)
2,142 — 2,142 — 
State and municipal obligations9,471 — 9,471 — 
Agency mortgage-backed securities (b)
6,984 — 6,984 — 
Non-agency mortgage-backed securities2,225 — 2,225 — 
Asset-backed securities6,090 — 6,090 — 
Corporate bonds (c)
41,278 — 41,278 — 
Equity securities and mutual funds: (d)
Mutual funds5,584 5,584 — — 
Common stocks24,991 24,991 — — 
International developed markets funds1,976 1,976 — — 
Emerging markets funds3,568 3,568 — — 
Total
$109,615 $41,425 $68,190 $— 
December 31, 2019
Assets:
U.S. government obligations
$4,746 $4,746 $— $— 
Government-sponsored enterprise obligations (a)
1,302 — 1,302 — 
State and municipal obligations
8,612 — 8,612 — 
Agency mortgage-backed securities (b)
8,892 — 8,892 — 
Non-agency mortgage-backed securities
3,919 — 3,919 — 
Asset-backed securities
5,093 — 5,093 — 
Corporate bonds (c)
39,663 — 39,663 — 
Equity securities and mutual funds: (d)
Mutual funds6,315 6,315 — — 
Common stocks22,552 22,552 — — 
International developed markets funds4,674 4,674 — — 
Emerging markets funds1,788 1,788 — — 
Total
$107,556 $40,075 $67,481 $— 
(a)    This category represents bonds (excluding mortgage-backed securities) issued by agencies such as the Government National Mortgage Association, the Federal Home Loan Mortgage Corp and the Federal National Mortgage Association.
(b)    This category represents mortgage-backed securities issued by the agencies mentioned in (a).
(c)    This category represents investment grade bonds issued in the U.S., primarily by domestic issuers, representing diverse industries.
(d)    This category represents investments in individual common stocks and equity funds. These holdings are diversified, largely across the technology services, electronic technology, financial services, healthcare, and consumer non-durables industries.

The investment policy of the pension plan is designed for growth in principal, within limits designed to safeguard against significant losses within the portfolio. The policy sets guidelines, which may change from time to time, regarding the types and percentages of investments held. Currently, the policy includes guidelines such as holding bonds rated investment grade or better and prohibiting investment in Company stock. The plan does not utilize derivatives. Management believes there are no significant concentrations of risk within the plan asset portfolio at December 31, 2020. Under the current policy, the long-term investment target mix for the plan is 35% equity securities and 65% fixed income securities. The Company regularly reviews its policies on investment mix and may make changes depending on economic conditions and perceived investment risk.
The assumed overall expected long-term rate of return on pension plan assets used in calculating 2020 pension plan expense was 5.0%. Determination of the plan’s expected rate of return is based upon historical and anticipated returns of the asset classes invested in by the pension plan and the allocation strategy currently in place among those classes. The rate used in plan calculations may be adjusted by management for current trends in the economic environment. The 10-year annualized return for the Company’s pension plan was 7.1%. During 2020, the plan’s assets gained 8.9% of their value, compared to a gain of 14.8% in 2019. Returns for any plan year may be affected by changes in the stock market and interest rates. The Company expects to incur pension expense of $439 thousand in 2021, compared to $345 thousand in 2020.

The pension benefit obligation increased from the prior year primarily due to a decrease in the discount rate from 3.07% to 2.25%, which increased the pension benefit liability by approximately $10.4 million. Additionally, the Company utilizes mortality tables published by the Society of Actuaries to incorporate mortality assumptions into the measurement of the pension benefit obligation. At December 31, 2020, the Company utilized an updated mortality projection scale, which decreased the pension benefit obligation on that date by approximately $900 thousand.

The following future benefit payments are expected to be paid:
(In thousands)
2021$7,467 
20227,466 
20237,569 
20247,464 
20257,429 
2026 - 203035,314