Components of Net Periodic Benefit Cost

The Bank has a noncontributory defined benefit pension plan covering its full-time employees who had attained age 21 with at least one year of service as of April 1, 2003. The pension plan was frozen on April 1, 2003. All participants in the Plan are 100% vested. The pension plan’s assets are invested in investment funds and group annuity contracts currently managed by the Principal Financial Group and Allmerica Financial.

In addition to pension benefits, certain health care and life insurance benefits are currently made available to certain of the Bank’s retired employees. The costs of such benefits are accrued based on actuarial assumptions from the date of hire to the date the employee is fully eligible to receive the benefits. Effective January 1, 2003, eligibility for retiree health care benefits was frozen as to new entrants and benefits were eliminated for employees with less than ten years of service as of December 31, 2002. Effective January 1, 2007, eligibility for retiree life insurance benefits was frozen as to new entrants and retiree life insurance benefits were eliminated for employees with less than ten years of service as of December 31, 2006.

Net periodic (increase) benefit cost for pension benefits and other post-retirement benefits for the three and nine months ended September 30, 2017 and 2016 includes the following components (in thousands):



	Three months ended September 30,								Nine months ended September 30,
	Pension benefits					Other post- retirement benefits			Pension benefits					Other post- retirement benefits
	2017			2016		2017		2016	2017			2016		2017		2016
Service cost	$	—		—		26		37	$	—		—		78		112
Interest cost	306			312		218		285	920			936		654		854
Expected return on plan assets	(637		)	(612	)	—		—	(1,913		)	(1,836	)	—		—
Amortization of prior service cost	—			—		—		—	—			—		—		—
Amortization of the net loss	230			236		(169	)	—	690			708		(507	)	—
Net periodic (increase) benefit cost	$	(101	)	(64	)	75		322	$	(303	)	(192	)	225		966

In its consolidated financial statements for the year ended December 31, 2016, the Company previously disclosed that it does not expect to contribute to the pension plan in 2017. As of September 30, 2017, no contributions have been made to the pension plan.

The net periodic (increase) benefit cost for pension benefits and other post-retirement benefits for the three and nine months ended September 30, 2017 were calculated using the actual January 1, 2017 pension and other post-retirement benefits valuations.