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Benefit Plan
 12 Months Ended
Dec. 31, 2024
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Benefit Plans Benefit Plans
The Corporation has a noncontributory Defined Benefit Pension Plan (the “Pension Plan”) covering substantially all of the employees of Park National Corporation and its subsidiaries. The Pension Plan provides benefits based on an employee’s years of service and compensation.

There was no pension contribution in 2024 or 2023 and no contribution is expected to be made in 2025.
 
Using accrual measurement dates of December 31, 2024 and 2023, plan assets and benefit obligation activity for the Pension Plan are listed below:

(In thousands)20242023
Change in fair value of plan assets
Fair value at beginning of measurement period$232,894 $209,138 
Actual return on plan assets31,116 34,764 
Benefits paid(38,239)(11,008)
Fair value at end of measurement period$225,771 $232,894 
Change in benefit obligation
Projected benefit obligation at beginning of measurement period$139,217 $127,394 
Service cost6,916 6,236 
Interest cost6,443 6,523 
Actuarial (gain) loss(9,804)10,072 
Benefits paid(38,239)(11,008)
Projected benefit obligation at the end of measurement period$104,533 $139,217 
Funded status at end of year (fair value of plan assets less benefit obligation)$121,238 $93,677 
 
The decrease in the projected benefit obligation ("PBO") from $139.2 million as of December 31, 2023 to $104.5 million as of December 31, 2024, was the result of an increase in benefits paid, an increase in the discount rate from 5.14% to 5.89% and assumption updates for a change in the mortality table for lump sum distributions, reflecting updates for the 2024 assumption study, partially offset by demographic losses and an increase in the interest credit rate.
The asset allocation for the Pension Plan as of each measurement date, by asset category, was as follows:
 
Percentage of Plan Assets
Asset categoryTarget Allocation20242023
Equity securities50% - 100%61 %85 %
Fixed income and cash equivalentsremaining balance39 %15 %
Total100 %100 %
 
The investment policy, as established by the Retirement Plan Committee, is to invest assets according to the target allocation stated above. Assets will be reallocated periodically based on the investment strategy of the Retirement Plan Committee. The investment policy is reviewed periodically.

The expected long-term rate of return on plan assets used to measure the benefit obligation was 6.92% at both December 31, 2024 and December 31, 2023. This return was estimated based on historical returns, current trends in the plan assets as well as projected future rates of returns on those assets.

The accumulated benefit obligation for the Pension Plan was $82.1 million and $113.4 million at December 31, 2024 and 2023, respectively.
 
On November 17, 2009, the Park Pension Plan completed the purchase of 115,800 common shares of Park for $7.0 million or $60.45 per share. At December 31, 2024 and 2023, the fair value of the 115,800 common shares held by the Pension Plan was $19.9 million, or $171.43 per share and $15.4 million, or $132.86 per share, respectively.
 
The weighted average assumptions used to determine benefit obligations at December 31, 2024, 2023 and 2022 were as follows:

202420232022
Discount rate5.89 %5.14 %5.32 %
Rate of compensation increase
Under age 25 (under age 30 for 2022)7.50 %7.50 %8.25 %
Ages 25-29 (ages 30-39 for 2022)7.00 %7.00 %6.00 %
Ages 30-34 (ages 40-49 for 2022)6.75 %6.75 %5.00 %
Ages 35-39 (ages 50-54 for 2022)6.00 %6.00 %4.25 %
Ages 40-44 (ages 55-59 for 2022)5.25 %5.25 %3.75 %
Ages 45-54 (ages 60-64 for 2022)4.75 %4.75 %3.50 %
Ages 55-69 (ages 65 and over for 2022)3.75 %3.75 %3.25 %
Ages 70 and over (for 2023 and 2024)3.00 %3.00 %N/A
Interest crediting rate4.64 %3.89 %4.07 %

The estimated future pension benefit payments reflecting expected future service for the next ten years are shown below (in thousands):

2025$8,469 
20268,450 
20278,283 
20288,239 
20298,816 
2030-203443,780 
Total$86,037 
 
The following table shows ending balances of accumulated other comprehensive income at December 31, 2024 and 2023.
 
(In thousands)20242023
Prior service cost$(340)$(388)
Net actuarial gain 21,547 2,529 
Total21,207 2,141 
Deferred tax liability(4,453)(449)
Accumulated other comprehensive income $16,754 $1,692 

Using actuarial measurement dates of December 31 for 2024, 2023 and 2022, components of net periodic benefit income and other amounts recognized in other comprehensive income (loss) were as follows:

(In thousands)202420232022Affected Line Item in the Consolidated Statements of Income
Components of net periodic benefit income and other amounts recognized in other comprehensive income (loss)
Service cost$(6,916)$(6,236)$(9,749)Employee benefits
Interest cost(6,443)(6,523)(5,705)Other components of net periodic benefit income
Expected return on plan assets15,754 14,143 17,798 Other components of net periodic benefit income
Recognized prior service cost(48)(48)15 Other components of net periodic benefit income
Settlement income6,148 — — Pension settlement gain
Net periodic benefit income $8,495 $1,336 $2,359 
Net actuarial gain (loss)$25,166 $10,549 $(1,109)
Amortization of actuarial gain(6,148)— — 
Amortization of prior service cost (credit)48 48 (15)
Total recognized in other comprehensive income (loss) 19,066 10,597 (1,124)
Total recognized in net benefit income and other comprehensive income (loss)$27,561 $11,933 $1,235 
 
During the year ended December 31, 2024, Park recognized a $6.1 million pension settlement gain due to a combination of lump sum payouts as well as the purchase of a nonparticipating annuity contract which will provide ongoing benefits to vested participants. To calculate the gain, the PBO was remeasured as of September 30, 2024 as well as December 31, 2024. In calculating the September 30, 2024 PBO, a discount rate of 5.17% was used which was a 3 basis point increase from the discount rate utilized to calculate the December 31, 2023 PBO. There were no changes from December 31, 2023 to the assumptions utilized for the long-term rate of return on plan assets, salaries increases, turnover rates or mortality. There was no pension settlement gain recognized during the year ended December 31, 2023.
The weighted average assumptions used to determine net periodic benefit income for the years ended December 31, 2024, 2023 and 2022 are listed below:

202420232022
Discount rate5.14 %5.32 %3.23 %
Rate of compensation increase
Under age 25 (under age 30 for 2023 and 2022)7.50 %8.25 %8.25 %
Ages 25-29 (ages 30-39 for 2023 and 2022)7.00 %6.00 %6.00 %
Ages 30-34 (ages 40-49 for 2023 and 2022)6.75 %5.00 %5.00 %
Ages 35-39 (ages 50-54 for 2023 and 2022)6.00 %4.25 %4.25 %
Ages 40-44 (ages 55-59 for 2023 and 2022)5.25 %3.75 %3.75 %
Ages 45-54 (ages 60-64 for 2023 and 2022)4.75 %3.50 %3.50 %
Ages 55-69 (ages 65 and over for 2023 and 2022)3.75 %3.25 %3.25 %
Ages 70 and over (for 2024)3.00 %N/AN/A
Interest crediting rate3.89 %4.07 %N/A
Expected long-term return on plan assets6.92 %6.92 %6.92 %
 
U.S. GAAP defines fair value as the price that would be received by Park for an asset or paid by Park to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date, using the most advantageous market for the asset or liability. The fair values of equity securities, consisting of mutual fund investments and common stock held by the Pension Plan, are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs). Additionally, due to their short-term nature, the fair value of interest bearing demand deposits is determined by reference to their face value (Level 1 inputs). Interest bearing time deposits, United States treasury notes, United States Government agency obligations and corporate bonds are valued by the trustee based on yields available on comparable securities of issuers with similar credit ratings as of the end of the year (Level 2 inputs). No investments were categorized as Level 3 inputs.

The fair value of the plan assets at December 31, 2024 and December 31, 2023, by asset class, is as follows.
Fair Value MeasurementsFair Value Measurements
at December 31, 2024, Usingat December 31, 2023, Using
(In thousands)(Level 1)(Level 2)(Level 1)(Level 2)
Interest-bearing account$3,529 $3,671 $1,395 $4,758 
Mutual funds34,973 — 49,740 — 
U.S. Treasury Notes— 55,062 — — 
U.S. Government agency obligations— 11,237 — 12,466 
Corporate bonds— 14,003 — 15,572 
Common stocks103,296 — 148,963 — 
Total$141,798 $83,973 $200,098 $32,796 

Salary Deferral Plan

The Corporation has a voluntary salary deferral plan (the Corporation's Employees Stock Ownership Plan) covering substantially all of the employees of the Corporation and its subsidiaries. Eligible employees may contribute a portion of their compensation subject to a maximum statutory limitation. The Corporation provides a matching contribution established annually by the Corporation. Contribution expense for the Corporation was $5.3 million, $5.0 million, and $4.6 million for 2024, 2023 and 2022, respectively.

Supplemental Executive Retirement Plan

The Corporation has entered into Supplemental Executive Retirement Plan Agreements (the "SERP Agreements") with certain key officers of Park National Corporation and its subsidiaries which provide defined pension benefits in excess of limits imposed by federal income tax law. The accrued benefit cost for the SERP Agreements totaled $15.5 million and $15.2 million
for 2024 and 2023, respectively, and is recorded within "Other liabilities" on the Consolidated Balance Sheet. The expense for the Corporation was as follows:

(In thousands)202420232022Affected Line Item in the Consolidated
Statements of Income
Service cost$1,297 $1,224 $1,091 Employee benefits
Interest cost658 567 564 Miscellaneous expense
Total SERP expense$1,955 $1,791 $1,655