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Retirement Plans | 12 Months Ended
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Dec. 31, 2023
Retirement Benefits [Abstract] |
Retirement Plans | Retirement Plans First Commonwealth has a savings plan pursuant to the provisions of section 401(k) of the Internal Revenue code. Effective January 1, 2020, a participating employee can receive a maximum matching contribution of 4% of their eligible compensation. In addition, each participating employee may contribute up to 80% of their eligible compensation to the plan. The 401(k) plan expense was $3.1 million in 2023, $2.9 million in 2022, and $3.0 million in 2021. First Commonwealth maintains a Non-Qualified Deferred Compensation Plan (“NQDC Plan”) to provide deferred compensation for those employees who are in the top 10% of full-time employees, as determined on the basis of eligible compensation. The NQDC Plan provides participants whose maximum retirement contribution is limited by IRS rules to defer additional compensation. Participants in the NQDC Plan are eligible to defer (on a pre-tax basis) from 1% to 25% of their eligible Plan compensation. Participants are also eligible to defer all or a portion of the Annual Incentive Plan (on a pre-tax basis) from 10% to 100% of their annual cash incentive earned. Effective January 1, 2020, an employer elective contribution is available to participants who reach the IRS Compensation limits in the 401(k) Plan. The ‘makeup match’ contribution is made to eligible participants on an annual basis. Effective January 1, 2021, an employer non-elective contribution is available to certain participants determined by the Company. The ‘discretionary’ contribution may be approved from year-to-year and allocated on an annual basis. There was $0.3 million and $0.2 million in NQDC Plan expense recognized in 2023 and 2022, respectively, and no NQDC Plan expense recognized in 2021. Select employees from former acquisitions were covered by postretirement benefit plans which provide medical and life insurance coverage. The measurement date for these plans was December 31. Postretirement Benefits Other than Pensions from Prior Acquisitions Net periodic benefit cost of these plans for the years ended December 31, was as follows:
| 2023 |  | 2022 |  | 2021
| (dollars in thousands)
Service cost | $ | — |  |  | $ | — |  |  | $ | — |
Interest cost on projected benefit obligation | 25 |  |  | 35 |  |  | 23 |
Amortization of transition obligation | — |  |  | — |  |  | — |
Amortization of prior service cost | 76 |  |  | 75 |  |  | 76 |
Gain amortization | (108) |  |  | (96) |  |  | (27) |
Net periodic benefit cost | $ | (7) |  |  | $ | 14 |  |  | $ | 72 |
The following table sets forth the change in the benefit obligation and plan assets as of December 31:
| 2023 |  | 2022
| (dollars in thousands)
Change in Benefit Obligation |  |  |
Benefit obligation at beginning of year | $ | 708 |  |  | $ | 986 |
Service cost | — |  |  | — |
Interest cost | 35 |  |  | 22 |
Amendments | — |  |  | — |
Actuarial gain | (119) |  |  | (212) |
Net benefits paid | (63) |  |  | (88) |
Benefit obligation at end of year | 561 |  |  | 708 |
Change in Plan Assets |  |  |
Fair value of plan assets at beginning of year | — |  |  | — |
Actual return on plan assets | — |  |  | — |
Employer contributions | 63 |  |  | 88 |
Net benefits paid | (63) |  |  | (88) |
Fair value of plan assets at end of year | — |  |  | — |
Funded Status at End of Year | 561 |  |  | 708 |
Unrecognized prior service cost | (310) |  |  | (386) |
Unrecognized net gain | 750 |  |  | 728 |
Amounts recognized in retained earnings | $ | 1,001 |  |  | $ | 1,050 |
As of December 31, the funded status of the plan is:
| 2023 |  | 2022
| (dollars in thousands)
Amounts Recognized in the Statement of Financial Condition as Other liabilities | $ | 561 |  |  | $ | 708 |
The following table sets forth the amounts recognized in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit costs as of December 31:
| 2023 |  | 2022 |  | 2021
| (dollars in thousands)
Amounts recognized in accumulated other comprehensive income, net of tax: |  |  |  |  |
Net (gain) loss | $ | (590) |  |  | $ | (575) |  |  | $ | (461) |
Prior service cost | 244 |  |  | 305 |  |  | 364 |
Total | $ | (346) |  |  | $ | (270) |  |  | $ | (97) |
Weighted-average assumptions used to determine the benefit obligation as of December 31 are as follows:
| 2023 |  | 2022 |  | 2021
Weighted-Average Assumptions |  |  |  |  |
Discount rate | 4.90 | % |  | 5.31 | % |  | 2.38 | %
Health care cost trend: Initial | 6.95 | % |  | 6.50 | % |  | 5.90 | %
Health care cost trend: Ultimate | 4.75 | % |  | 4.75 | % |  | 4.75 | %
Year ultimate reached | 2029 |  | 2028 |  | 2027
Weighted-average assumptions used to determine the net benefit costs as of December 31 are as follows:
| 2023 |  | 2022 |  | 2021
Weighted-Average Assumptions for Net Periodic Cost |  |  |  |  |
Discount rate | 5.31 | % |  | 2.38 | % |  | 1.83 | %
Health care cost trend: Initial | 6.50 | % |  | 5.90 | % |  | 5.95 | %
Health care cost trend: Ultimate | 4.75 | % |  | 4.75 | % |  | 4.75 | %
Year ultimate reached | 2028 |  | 2027 |  | 2026
Corridor | 10.00 | % |  | 10.00 | % |  | 10.00 | %
Recognition period for gains and losses | 9.3 |  | 9.9 |  | 10.4
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 introduced a prescription drug benefit under Medicare Part D and a federal subsidy to sponsors of retiree health care benefit plans that provide a prescription drug benefit that is at least actuarially equivalent to Medicare Part D. The postretirement plans of First Commonwealth are provided through insurance coverage; therefore, First Commonwealth will not receive a direct federal subsidy. The preceding measures of the accumulated postretirement benefit cost assume that First Commonwealth will not receive the subsidy due to the relatively small number of retirees. As of December 31, 2023, the projected benefit payments for the next ten years are as follows:
| Projected Benefit Payments
| (dollars in thousands)
2024 | $ | 83,837 |
2025 | 78,462 |
2026 | 73,542 |
2027 | 67,517 |
2028 | 61,396 |
2029 - 2033 | 219,643 |
The projected payments were calculated using the same assumptions as those used to calculate the benefit obligations included in this note. The estimated costs that will be amortized from accumulated other comprehensive income into net periodic cost for 2024 are as follows:
| Postretirement Benefits
| (dollars in thousands)
Net gain | $ | (108) |
Prior service cost | 76 |
Total | $ | (32) |

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