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Defined Benefit and Other Postretirement Benefits | 12 Months Ended
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Dec. 31, 2014
Defined Benefit and Other Postretirement Benefits [Abstract] |
Defined Benefit and Other Postretirement Benefits | Note 15 – Defined Benefit and Other Postretirement Benefits Qualified Pension Plans Trustmark maintains a noncontributory tax-qualified defined benefit pension plan (Trustmark Capital Accumulation Plan), in which substantially all associates employed prior to 2007 participate. The plan provides retirement benefits that are based on the length of credited service and final average compensation, as defined in the plan and vest upon three years of service. Benefit accruals under the plan were frozen during 2009, with the exception of certain associates covered through plans obtained by acquisitions that were subsequently merged into the Trustmark plan. Associates have not earned additional benefits, except for interest as required by Internal Revenue Service (IRS) regulations, since the plan was frozen. Current and former associates who participate in the plan retain their right to receive benefits that accrued before the plan was frozen. As a result of the BancTrust merger on February 15, 2013, Trustmark became the sponsor of the Retirement Plan for Employees of BancTrust Financial Group, Inc. (BancTrust Pension Plan), a tax-qualified defined benefit pension plan, which was frozen prior to the merger date. On January 28, 2014, Trustmark's Board of Directors authorized the termination of the BancTrust Pension Plan effective as of April 15, 2014. The IRS has been asked to review the BancTrust Pension Plan’s tax qualification at its termination, and it is anticipated that the IRS will issue a favorable determination letter with respect to the plan’s termination once its review is complete. In addition, as required by law, a termination notice has been filed with the Pension Benefit Guaranty Corporation (PBGC), and it is not anticipated that the PBGC will raise any issues with respect to the plan’s termination. During 2014, the assets of the BancTrust Pension plan were held in trust and distributed in conjunction with the plan termination. All assets of the BancTrust Pension Plan were distributed as of December 31, 2014. Benefits that were not paid to participants were annuitized under annuity contracts. As a result of the termination of the plan, Trustmark recognized a pre-tax gain of $1.2 million during 2014. The following tables present information regarding the benefit obligation, plan assets, funded status, amounts recognized in accumulated other comprehensive loss, net periodic benefit cost and other statistical disclosures for Trustmark’s qualified defined benefit pension plans (Trustmark Capital Accumulation Plan and BancTrust Pension Plan) ($ in thousands):
|  | December 31, |
|  | 2014 |  |  | 2013 |
Change in benefit obligation: |  |  |  |  |  |
Benefit obligation, beginning of year |  | $ | 128,974 |  |  | $ | 103,235 |
Benefit obligation from business combination |  |  | - |  |  |  | 43,138 |
Service cost |  |  | 495 |  |  |  | 595 |
Interest cost |  |  | 5,299 |  |  |  | 4,758 |
Actuarial loss (gain) |  |  | 11,675 |  |  |  | (8,060 | )
Benefits paid for BancTrust Pension Plan |  |  | (38,853 | ) |  |  | - |
Benefits paid for Trustmark Capital Accumulation Plan |  |  | (7,041 | ) |  |  | (14,692 | )
Settlement loss from BancTrust termination |  |  | 1,355 |  |  |  | - |
Benefit obligation, end of year |  | $ | 101,904 |  |  | $ | 128,974 |
Change in plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets, beginning of year |  | $ | 126,142 |  |  | $ | 76,660 |
Fair value of plan assets from business combination |  |  | - |  |  |  | 40,391 |
Actual return on plan assets |  |  | 4,632 |  |  |  | 21,661 |
Employer contributions |  |  | 1,407 |  |  |  | 2,122 |
Benefit payments for BancTrust Pension Plan |  |  | (38,853 | ) |  |  | - |
Benefit payments for Trustmark Capital Accumulation Plan |  |  | (7,041 | ) |  |  | (14,692 | )
Fair value of plan assets, end of year |  | $ | 86,287 |  |  | $ | 126,142 |
Funded status at end of year - net liability |  | $ | (15,617 | ) |  | $ | (2,832 | )
Amounts recognized in accumulated other comprehensive loss: |  |  |  |  |  |  |  |
Net loss - amount recognized |  | $ | 28,100 |  |  | $ | 15,436 |
|  | Years Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Net periodic benefit cost: |  |  |  |  |  |  |  |  |
Service cost |  | $ | 495 |  |  | $ | 595 |  |  | $ | 547 |
Interest cost |  |  | 5,299 |  |  |  | 4,758 |  |  |  | 3,942 |
Expected return on plan assets |  |  | (6,245 | ) |  |  | (7,720 | ) |  |  | (5,983 | )
Recognized net loss due to BancTrust termination |  |  | 1,355 |  |  |  | - |  |  |  | - |
Recognized net loss due to lump sum settlements |  |  | 905 |  |  |  | 2,225 |  |  |  | - |
Recognized net actuarial (gain) loss |  |  | (283 | ) |  |  | 5,516 |  |  |  | 5,225 |
Net periodic benefit cost |  | $ | 1,526 |  |  | $ | 5,374 |  |  | $ | 3,731 |
Other changes in plan assets and benefit obligation recognized in other comprehensive income (loss), before taxes: |  |  |  |  |  |  |  |  |  |  |  |
Net loss (gain) - Total recognized in other comprehensive income (loss) |  | $ | 12,664 |  |  | $ | (29,742 | ) |  | $ | (3,861 | )
Total recognized in net periodic benefit cost and other comprehensive income (loss) |  | $ | 14,190 |  |  | $ | (24,368 | ) |  | $ | (130 | )
Weighted-average assumptions as of end of year: |  |  |  |  |  |  |  |  |  |  |  |
Discount rate for benefit obligation |  |  | 3.57 | % |  |  | 4.30 | % |  |  | 3.50 | %
Discount rate for net periodic benefit cost |  |  | 4.30 | % |  |  | 3.50 | % |  |  | 4.00 | %
Expected long-term return on plan assets |  |  | 7.50 | % |  |  | 7.50 | % |  |  | 8.00 | %
Plan Assets The weighted-average asset allocations by asset category for Trustmark’s qualified defined benefit pension plans at December 31, 2014 and 2013 are presented below. Due to the termination and full distribution of the BancTrust Pension Plan during 2014, December 31, 2014 includes only amounts related to the Trustmark Capital Accumulation Plan.
|  | 2014 |  |  | 2013 |
Money market fund |  |  | 8.7 | % |  |  | 5.2 | %
Fixed income mutual funds |  |  | 11.9 | % |  |  | 17.6 | %
Equity mutual funds |  |  | 72.2 | % |  |  | 58.4 | %
Equity securities |  |  | 7.0 | % |  |  | 18.7 | %
Fixed income hedge fund |  |  | 0.2 | % |  |  | 0.1 | %
Total |  |  | 100.0 | % |  |  | 100.0 | %
The strategic objective of the investments of the assets in the Trustmark Capital Accumulation Plan is capital growth with moderate income. The qualified defined benefit pension plan is managed on a total return basis with the return objective set as a reasonable actuarial rate of return on plan assets net of investment management fees. Moderate risk is assumed given the average age of plan participants and the need to meet the required rate of return. Equity and fixed income securities are utilized to allow for capital appreciation while fully diversifying the portfolio with more conservative fixed income investments. The target asset allocation range for the portfolio is 0-10% Cash and Cash Equivalents, 10-30% Fixed Income, 30-55% Domestic Equity, 10-30% International Equity and 0-20% Other Investments. Changes in allocations are a result of tactical asset allocation decisions and fall within the aforementioned percentage range for each major asset class. Trustmark selects the expected long-term rate-of-return-on-assets assumption in consultation with its investment advisors and actuary. This rate is intended to reflect the average rate of earnings expected to be earned on the funds invested or to be invested to provide plan benefits. Historical performance is reviewed, especially with respect to real rates of return (net of inflation), for the major asset classes held or anticipated to be held by the trust and for the trust itself. Undue weight is not given to recent experience that may not continue over the measurement period, with higher significance placed on current forecasts of future long-term economic conditions. Because assets are held in a qualified trust, anticipated returns are not reduced for taxes. Further, solely for this purpose, the qualified defined benefit pension plans are assumed to continue in force and not terminate during the period in which assets are invested. However, consideration is given to the potential impact of current and future investment policy, cash flow into and out of the trust and expenses (both investment and non-investment) typically paid from plan assets (to the extent such expenses are not explicitly estimated within periodic cost). Fair Value Measurements At this time, Trustmark presents no fair values that are derived through internal modeling. Should positions requiring fair valuation arise that are not relevant to existing methodologies, Trustmark will make every reasonable effort to obtain market participant assumptions, or independent evaluation. The following table sets forth by level, within the fair value hierarchy, the qualified defined benefit pension plans’ assets measured at fair value at December 31, 2014 and 2013 ($ in thousands):
|  | December 31, 2014 |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Money market fund |  | $ | 7,544 |  |  | $ | 7,544 |  |  | $ | - |  |  | $ | - |
Fixed income mutual funds |  |  | 10,267 |  |  |  | 10,267 |  |  |  | - |  |  |  | - |
Equity mutual funds |  |  | 62,265 |  |  |  | 62,265 |  |  |  | - |  |  |  | - |
Equity securities |  |  | 6,057 |  |  |  | 6,057 |  |  |  | - |  |  |  | - |
Fixed income hedge fund |  |  | 154 |  |  |  | - |  |  |  | - |  |  |  | 154 |
Total assets at fair value |  | $ | 86,287 |  |  | $ | 86,133 |  |  | $ | - |  |  | $ | 154 |
|  | December 31, 2013 |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Money market fund |  | $ | 6,563 |  |  | $ | 6,563 |  |  | $ | - |  |  | $ | - |
Fixed income mutual funds |  |  | 22,225 |  |  |  | 15,245 |  |  |  | 6,980 |  |  |  | - |
Equity mutual funds |  |  | 73,608 |  |  |  | 73,608 |  |  |  | - |  |  |  | - |
Equity securities |  |  | 23,583 |  |  |  | 23,583 |  |  |  | - |  |  |  | - |
Fixed income hedge fund |  |  | 163 |  |  |  | - |  |  |  | - |  |  |  | 163 |
Total assets at fair value |  | $ | 126,142 |  |  | $ | 118,999 |  |  | $ | 6,980 |  |  | $ | 163 |
The following table sets forth a summary of changes in fair value of the Level 3 plan assets for the years ended December 31, 2014 and 2013 ($ in thousands):
|  | Fixed Income Hedge Fund |
Balance, January 1, 2013 |  | $ | 163 |
Change in fair value |  |  | - |
Balance, December 31, 2013 |  |  | 163 |
Change in fair value |  |  | (9 | )
Balance, December 31, 2014 |  | $ | 154 |
There have been no changes in the methodologies used in estimating the fair value of plan assets at December 31, 2014. The methodology and significant assumptions used in estimating the fair values presented above are as follows:
| · | Money market fund approximates fair value due to its immediate maturity.
| · | Fixed income hedge fund is valued in accordance with the valuation provided by the general partner of the underlying partnership.
The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the qualified defined benefit pension plans believe their valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. Contributions The range of potential contributions to Trustmark’s qualified defined benefit pension plans is determined annually by the plans’ actuary in accordance with applicable IRS rules and regulations. Trustmark's policy is to fund amounts that are sufficient to satisfy the annual minimum funding requirements and are deductible for federal income tax purposes. The actual amount of the contribution is determined annually based on the plans’ funded status and return on plan assets as of the measurement date, which is December 31. For the plan year ended December 31, 2013, Trustmark made minimum required contributions to the Trustmark Capital Accumulation Plan of $2.1 million. For the plan year ending December 31, 2014, the minimum required contribution for Trustmark’s Capital Accumulation Plan was expected to be $1.8 million prior to the passage of the Highway and Transportation Funding Act (HATFA). Trustmark contributed approximately $1.0 million to the Trustmark Capital Accumulation Plan prior to the passage of HATFA. HATFA extends the pension funding relief for several more years and was mandatory for 2014. As a result of HATFA, there was no minimum required contribution for the plan year ending December 31, 2014. Therefore, no additional contributions were made during 2014. For the plan year ending December 31, 2015, Trustmark’s minimum required contribution to the Trustmark Capital Accumulation Plan is expected to be zero; however, Management and the Board of Directors will monitor the plan throughout 2015 to determine any additional funding requirements by the plan’s measurement date. A contribution of $334 thousand was required during 2014 for the BancTrust Pension Plan in order to complete the plan termination. Since the plan has terminated, there will be no additional contributions required in the future. Estimated Future Benefit Payments and Other Disclosures The following table presents the expected benefit payments, which reflect expected future service, for Trustmark’s Capital Accumulation Plan ($ in thousands):
Year |  | Amount |
2015 |  | $ | 10,654 |
2016 |  |  | 8,402 |
2017 |  |  | 7,734 |
2018 |  |  | 6,346 |
2019 |  |  | 6,286 |
2020 - 2024 |  |  | 28,762 |
Amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost during 2015 include a net loss of $5.0 million. Supplemental Retirement Plans Trustmark maintains a nonqualified supplemental retirement plan covering directors who elected to defer fees, key executive officers and senior officers. The plan provides for defined death benefits and/or retirement benefits based on a participant's covered salary. Trustmark has acquired life insurance contracts on the participants covered under the plan, which may be used to fund future payments under the plan. The measurement date for the plan is December 31. As a result of the BancTrust merger on February 15, 2013, Trustmark became the administrator of an additional nonqualified supplemental retirement plan, for which the plan benefits were frozen prior to the merger date. The following tables present information regarding the benefit obligation, plan assets, funded status, amounts recognized in accumulated other comprehensive loss, net periodic benefit cost and other statistical disclosures for Trustmark’s nonqualified supplemental retirement plans ($ in thousands):
|  | December 31, |
|  | 2014 |  |  | 2013 |
Change in benefit obligation: |  |  |  |  |  |
Benefit obligation, beginning of year |  | $ | 52,489 |  |  | $ | 56,619 |
Benefit obligation from business combination |  |  | - |  |  |  | 1,658 |
Service cost |  |  | 296 |  |  |  | 597 |
Interest cost |  |  | 2,198 |  |  |  | 1,943 |
Actuarial loss (gain) |  |  | 7,392 |  |  |  | (4,187 | )
Benefits paid |  |  | (2,631 | ) |  |  | (4,141 | )
Benefit obligation, end of year |  | $ | 59,744 |  |  | $ | 52,489 |
Change in plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets, beginning of year |  | $ | - |  |  | $ | - |
Employer contributions |  |  | 2,631 |  |  |  | 4,141 |
Benefit payments |  |  | (2,631 | ) |  |  | (4,141 | )
Fair value of plan assets, end of year |  | $ | - |  |  | $ | - |
Funded status at end of year - net liability |  | $ | (59,744 | ) |  | $ | (52,489 | )
Amounts recognized in accumulated other comprehensive loss: |  |  |  |  |  |  |  |
Net loss |  | $ | 21,242 |  |  | $ | 14,509 |
Prior service cost |  |  | 1,860 |  |  |  | 2,110 |
Amounts recognized |  | $ | 23,102 |  |  | $ | 16,619 |
|  | Years Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Net periodic benefit cost: |  |  |  |  |  |  |  |  |
Service cost |  | $ | 296 |  |  | $ | 597 |  |  | $ | 679 |
Interest cost |  |  | 2,198 |  |  |  | 1,943 |  |  |  | 2,067 |
Amortization of prior service cost |  |  | 250 |  |  |  | 250 |  |  |  | 250 |
Recognized net actuarial loss |  |  | 661 |  |  |  | 1,038 |  |  |  | 861 |
Net periodic benefit cost |  | $ | 3,405 |  |  | $ | 3,828 |  |  | $ | 3,857 |
Other changes in plan assets and benefit obligation recognized in other comprehensive income (loss), before taxes: |  |  |  |  |  |  |  |  |  |  |  |
Net loss (gain) |  | $ | 6,733 |  |  | $ | (5,224 | ) |  | $ | 2,507 |
Prior service cost |  |  | - |  |  |  | - |  |  |  | 198 |
Amortization of prior service cost |  |  | (250 | ) |  |  | (250 | ) |  |  | (250 | )
Total recognized in other comprehensive income (loss) |  | $ | 6,483 |  |  | $ | (5,474 | ) |  | $ | 2,455 |
Total recognized in net periodic benefit cost and other comprehensive income (loss) |  | $ | 9,888 |  |  | $ | (1,646 | ) |  | $ | 6,312 |
Weighted-average assumptions as of end of year: |  |  |  |  |  |  |  |  |  |  |  |
Discount rate for benefit obligation |  |  | 3.57 | % |  |  | 4.30 | % |  |  | 3.50 | %
Discount rate for net periodic benefit cost |  |  | 4.30 | % |  |  | 3.50 | % |  |  | 4.00 | %
Estimated Supplemental Retirement Plan Payments and Other Disclosures The following table presents the expected benefits payments for Trustmark’s supplemental retirement plans ($ in thousands):
Year |  | Amount |
2015 |  | $ | 2,868 |
2016 |  |  | 3,145 |
2017 |  |  | 3,479 |
2018 |  |  | 3,591 |
2019 |  |  | 3,656 |
2020 - 2024 |  |  | 19,504 |
Amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost during 2015 include a loss of $992 thousand and prior service cost of $250 thousand. Other Benefit Plans Defined Contribution Plan Trustmark provides associates with a self-directed 401(k) retirement plan that allows associates to contribute a percentage of base pay, within limits provided by the Internal Revenue Code and accompanying regulations, into the plan. Trustmark matches 100% of associate contributions to the plan based on the amount of each participant’s contributions up to a maximum of 6% of eligible compensation. Associates may become eligible to make elective deferral contributions the first of the month following 30 days of employment. Eligible associates must complete one year of service in order to vest in Trustmark’s matching contributions. Trustmark's contributions to this plan were $6.7 million in 2014, $6.8 million in 2013 and $5.7 million in 2012.

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- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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