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Postretirement Benefit Plans | 12 Months Ended
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Dec. 31, 2021
Defined Benefit Plans And Other Postretirement Benefit Plans Disclosures [Abstract] |
Postretirement Benefit Plans |
(1 5) | Postretirement Benefit Plans
Mid Penn has an unfunded noncontributory defined benefit plan for directors, which provides defined benefits based on the respective director’s years of service, as well as a postretirement healthcare and life insurance benefit plan, which is noncontributory, covering certain full-time employees. Mid Penn also assumed noncontributory defined benefit pension plans as a result of the acquisitions of Scottdale on January 8, 2018 and Riverview on November 30, 2021. None of Mid Penn’s plans contained a promised interest crediting rate. Service costs related to plans benefiting Mid Penn employees are reported as a component of salaries and employee benefits on the Consolidated Statements of Income, while interest costs, expected return on plan assets, amortization (accretion) of prior service cost, and settlement gain are reported as a component of other income. Service costs, interest costs, and amortization of prior service costs related to plans benefiting Mid Penn’s nonemployee directors are reported as a component of director fees and benefits expense within the other expense line item on the Consolidated Statement of Income. The accrued benefit liability, related income statement impacts, and other significant aspects of the plans are detailed below.
| (a) | Life Insurance
Full-time employees who had at least ten years of service as of January 1, 2008 and retire with the Bank after age 55 and at least 20 years of service are eligible for term life insurance coverage. The insurance amount will be $50,000 until age 65. After age 65, the insurance amount will decrease by $5,000 per year until age 74. Thereafter, the insurance amount will be $5,000.
| (b) | Health and Life Benefit Plan
Full-time employees who had at least 10 years of service as of January 1, 2008 and who retire at age 55 or later, after completion of at least 20 years of service, are eligible for medical benefits. Medical benefits are provided for up to five years after retirement. Employees who retired prior to December 31, 2015 may elect the least expensive single coverage in the employer’s group medical plan. If the retiree becomes eligible for Medicare during the five year duration of coverage, the Bank will pay, at its discretion, premiums for single 65-special coverage or similar supplemental coverage. For those employees who retired between September 18, 2015 and December 31, 2015, the Bank will only pay up to $5,000 towards such medical coverage. Employees who retired after December 31, 2015 may not participate in the employer’s group medical plan. Instead, the Bank will reimburse the retiree for up to $5,000 (grossed up by 36.79 percent as of December 31, 2021) in medical costs. The following tables provide a reconciliation of the changes in the plan’s health and life insurance benefit obligations and fair value of plan assets for the years ended December 31, 2021 and 2020, and a statement of the funded status at December 31, 2021 and 2020.
(Dollars in thousands) |  |  |  |  |  |  |  |
|  | December 31, |
Change in benefit obligations: |  | 2021 |  |  | 2020 |
Benefit obligations, January 1 |  | $ | 342 |  |  | $ | 404 |
Service cost |  |  | 2 |  |  |  | 3 |
Interest cost |  |  | 9 |  |  |  | 13 |
Change in experience |  |  | 73 |  |  |  | 45 |
Change in assumptions |  |  | (5 | ) |  |  | 27 |
Benefit payments |  |  | (22 | ) |  |  | (150 | )
Benefit obligations, December 31 |  | $ | 399 |  |  | $ | 342 |
Change in fair value of plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets, January 1 |  | $ | — |  |  | $ | — |
Employer contributions |  |  | 22 |  |  |  | 150 |
Benefit payments |  |  | (22 | ) |  |  | (150 | )
Fair value of plan assets, December 31 |  | $ | — |  |  | $ | — |
Funded status at year end |  | $ | (399 | ) |  | $ | (342 | )
Mid Penn has capped the benefit to future retirees under its post-retirement health benefit plan. Employees who had achieved ten years of service as of January 1, 2008 and subsequently retire after at least 20 years of service are eligible for reimbursement of major medical insurance premiums up to $5,000, if the employee has not yet reached age 65. Upon becoming eligible for Medicare, Mid Penn will reimburse up to $5,000 in premiums for Medicare Advantage or a similar supplemental coverage. The maximum reimbursement period will not exceed five years regardless of retirement age and will end upon the participant obtaining other employment where major medical coverage is available or the participant’s death. The amount recognized in other liabilities on the consolidated balance sheets at December 31, 2021 and 2020, is as follows:
(Dollars in thousands) |  |  |  |  |  |  |  |
|  | 2021 |  |  | 2020 |
Accrued benefit liability |  | $ | 399 |  |  | $ | 342 |
The amounts recognized in accumulated other comprehensive loss consist of:
(Dollars in thousands) |  | December 31, |
|  | 2021 |  |  | 2020 |
Net loss, pretax |  | $ | 82 |  |  | $ | 22 |
Net prior service cost, pretax |  |  | (15 | ) |  |  | (40 | )
The accumulated benefit obligation for health and life insurance plans was $399,000 and $342,000 at December 31, 2021 and 2020, respectively. The components of net periodic postretirement benefit (income) cost for 2021, 2020 and 2019 are as follows:
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Service cost |  | $ | 2 |  |  | $ | 3 |  |  | $ | 3 |
Interest cost |  |  | 9 |  |  |  | 13 |  |  |  | 17 |
Amortization of prior service cost |  |  | (25 | ) |  |  | (25 | ) |  |  | (25 | )
Amortization of net (gain) or loss |  |  | 9 |  |  |  | — |  |  |  | (5 | )
Net periodic postretirement benefit (income) cost |  | $ | (5 | ) |  | $ | (9 | ) |  | $ | (10 | )
Assumptions used in the measurement of Mid Penn’s benefit obligations at December 31, 2021 and 2020 are as follows:
Weighted-average assumptions: |  | 2021 |  |  | 2020 |
Discount rate |  |  | 2.40 | % |  |  | 2.25 | %
Rate of compensation increase |  |  | 2.00 | % |  |  | 2.00 | %
Assumptions used in the measurement of Mid Penn’s net periodic benefit cost for the years ended December 31, 2021, 2020 and 2019 are as follows:
Weighted-average assumptions: |  | 2021 |  |  | 2020 |  |  | 2019 |
Discount rate |  |  | 2.25 | % |  |  | 3.00 | % |  |  | 4.00 | %
Rate of compensation increase |  |  | 2.00 | % |  |  | 2.00 | % |  |  | 3.00 | %
Assumed health care cost trend rates at December 31, 2021, 2020 and 2019 are as follows:
|  | 2021 |  |  | 2020 |  |  | 2019 |
Health care cost trend rate assumed for next year |  |  | 5.50 | % |  |  | 5.50 | % |  |  | 5.50 | %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) |  |  | 5.40 | % |  |  | 5.40 | % |  |  | 5.40 | %
Year that the rate reaches the ultimate trend rate |  | 2024 |  |  | 2024 |  |  | 2024 |
Mid Penn expects to contribute $38,000 to its life and health benefit plans in 2022. The following table shows the estimated benefit payments for future periods.
(Dollars in thousands) |  |  |  |
1/1/2022 to 12/31/2022 |  | $ | 38 |
1/1/2023 to 12/31/2023 |  |  | 34 |
1/1/2024 to 12/31/2024 |  |  | 31 |
1/1/2025 to 12/31/2025 |  |  | 35 |
1/1/2026 to 12/31/2026 |  |  | 26 |
1/1/2027 to 12/31/2031 |  |  | 164 |
| (c) | Directors’ Retirement Plan
Mid Penn has an unfunded defined benefit retirement plan for directors with benefits based on years of service. The adoption of this plan generated unrecognized prior service cost of $274,000, which had been amortized over the expected future years of service of active directors and was fully amortized as of December 31, 2021. The following tables provide a reconciliation of the changes in the directors’ defined benefit plan’s benefit obligations and fair value of plan assets for the years ended December 31, 2021 and 2020, and a statement of the status at December 31, 2021 and 2020. This Plan is unfunded.
(Dollars in thousands) |  |  |  |  |  |  |  |
|  | December 31, |
Change in benefit obligations: |  | 2021 |  |  | 2020 |
Benefit obligations, January 1 |  | $ | 1,142 |  |  | $ | 1,077 |
Service cost |  |  | 47 |  |  |  | 49 |
Interest cost |  |  | 26 |  |  |  | 31 |
Actuarial loss (gain) |  |  | 61 |  |  |  | 7 |
Change in assumptions |  |  | 25 |  |  |  | 65 |
Benefit payments |  |  | (106 | ) |  |  | (87 | )
Benefit obligations, December 31 |  | $ | 1,195 |  |  | $ | 1,142 |
Change in fair value of plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets, January 1 |  | $ | — |  |  | $ | — |
Employer contributions |  |  | 106 |  |  |  | 87 |
Benefit payments |  |  | (106 | ) |  |  | (87 | )
Fair value of plan assets, December 31 |  | $ | — |  |  | $ | — |
Funded status at year end |  | $ | (1,195 | ) |  | $ | (1,142 | )
Amounts recognized in other liabilities on the consolidated balance sheet at December 31, 2021 and 2020 are as follows:
(Dollars in thousands) |  |  |  |  |  |  |  |
|  | 2021 |  |  | 2020 |
Accrued benefit liability |  | $ | 1,195 |  |  | $ | 1,142 |
Amounts recognized in accumulated other comprehensive loss consist of:
(Dollars in thousands) |  | December 31, |
|  | 2021 |  |  | 2020 |
Net prior service cost, pretax |  | $ | — |  |  | $ | — |
Net loss, pretax |  |  | 189 |  |  |  | 110 |
The accumulated benefit obligation for the retirement plan was $1,195,000 at December 31, 2021 and $1,142,000 at December 31, 2020. The components of net periodic retirement cost for 2021, 2020 and 2019 are as follows:
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Service cost |  | $ | 47 |  |  | $ | 49 |  |  | $ | 51 |
Interest cost |  |  | 26 |  |  |  | 31 |  |  |  | 42 |
Amortization of prior-service cost |  |  | 7 |  |  |  | — |  |  |  | — |
Net periodic retirement cost |  | $ | 80 |  |  | $ | 80 |  |  | $ | 93 |
Assumptions used in the measurement of Mid Penn’s benefit obligations at December 31, 2021 and 2020 are as follows:
Weighted-average assumptions: |  | 2021 |  |  | 2020 |
Discount rate |  |  | 2.40 | % |  |  | 2.25 | %
Change in consumer price index |  |  | 1.40 | % |  |  | 1.00 | %
Assumptions used in the measurement of Mid Penn’s net periodic benefit cost for the years ended December 31, 2021, 2020 and 2019 are as follows:
Weighted-average assumptions: |  | 2021 |  |  | 2020 |  |  | 2019 |
Discount rate |  |  | 2.40 | % |  |  | 2.25 | % |  |  | 3.00 | %
Change in consumer price index |  |  | 1.40 | % |  |  | 1.00 | % |  |  | 1.00 | %
Mid Penn expects to contribute $108,000 to its retirement plan in 2022. The following table shows the estimated benefit payments for future periods.
(Dollars in thousands) |  |  |  |
1/1/2022 to 12/31/2022 |  | $ | 108 |
1/1/2023 to 12/31/2023 |  |  | 101 |
1/1/2024 to 12/31/2024 |  |  | 89 |
1/1/2025 to 12/31/2025 |  |  | 91 |
1/1/2026 to 12/31/2026 |  |  | 88 |
1/1/2027 to 12/31/2031 |  |  | 350 |
The Bank is the owner and beneficiary of insurance policies on the lives of certain officers and directors, which informally fund the retirement plan obligation. The aggregate cash surrender value of these policies was $4,055,000 and $3,987,000 at December 31, 2021 and 2020, respectively.
| (c) | Scottdale Defined Benefit Pension Plan
As a result of the acquisition of Scottdale on January 8, 2018, Mid Penn has assumed a noncontributory defined benefit pension plan covering certain former employees of Scottdale. After the acquisition, Mid Penn does not allow for any further participants to join the Plan. Mid Penn’s policy is to fund pension benefits as accrued. The Plan’s assets are managed by the Trust Department of the Bank and were primarily invested in corporate equity securities at the time of acquisition but have since been diversified into a more conservative investment profile, including fixed income debt securities. The investment objective of the plan is “Balanced” to provide relatively stable growth from assets offset by a moderate level of income with target portfolio allocations of up to 20% cash, 30-50% fixed income securities, and 40-60% equity securities. The valuation of the plan’s assets is subject to market fluctuations. For the years ended December 31, 2021 and 2020, Mid Penn recognized $47,000 and $3,000 of settlement gains, respectively, as a result of certain lump sum payouts to participants of the defined benefit pension plan. The settlement gains were recorded in noninterest income as a component of other income in the Consolidated Statements of Income for the years ended December 31, 2021 and 2020. The following tables provide a reconciliation of the changes in the defined benefit pension plan’s benefit obligations and fair value of plan assets for the year ended December 31, 2021 and 2020, and a statement of the status at December 31, 2021 and 2020.
(Dollars in thousands) |  |  |  |  |  |  |  |
|  | December 31, |
Change in benefit obligations: |  | 2021 |  |  | 2020 |
Benefit obligations, January 1 |  | $ | 5,401 |  |  | $ | 5,587 |
Service cost |  |  | 83 |  |  |  | 79 |
Interest cost |  |  | 134 |  |  |  | 180 |
Settlement (gain) loss |  |  | — |  |  |  | (85 | )
Actuarial loss (gain) |  |  | (309 | ) |  |  | 495 |
Settlement payments |  |  | (378 | ) |  |  | (769 | )
Benefit payments |  |  | (87 | ) |  |  | (86 | )
Benefit obligations, December 31 |  | $ | 4,844 |  |  | $ | 5,401 |
Change in fair value of plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets, January 1 |  | $ | 4,939 |  |  | $ | 5,404 |
Return on plan assets |  |  | 582 |  |  |  | 229 |
Employer contributions |  |  | 285 |  |  |  | 200 |
Benefit payments |  |  | (87 | ) |  |  | (86 | )
Administrative expenses |  |  | (39 | ) |  |  | (39 | )
Settlement payments |  |  | (378 | ) |  |  | (769 | )
Fair value of plan assets, December 31 |  | $ | 5,302 |  |  | $ | 4,939 |
Funded status at year end |  | $ | 458 |  |  | $ | (462 | )
Amounts recognized on the consolidated balance sheet at December 31, 2021 and 2020 are as follows:
(Dollars in thousands) |  |  |  |  |  |  |  |
|  | 2021 |  |  | 2020 |
Accrued pension benefit (asset) liability |  | $ | (458 | ) |  | $ | 462 |
Amounts recognized in accumulated other comprehensive loss consist of the following as of December 31 2021 and 2020:
(Dollars in thousands) |  | December 31, |
|  | 2021 |  |  | 2020 |
Unrecognized actuarial gain |  | $ | 602 |  |  | $ | 24 |
The accumulated benefit obligation for the retirement plan was $4,844,000 at December 31, 2021 and $5,401,000 at December 31, 2020. The components of net periodic retirement cost for December 31, 2021 and 2020 are as follows:
(Dollars in thousands) |  |  |  |  |  |  |  |
|  | 2021 |  |  | 2020 |
Service cost |  | $ | 83 |  |  | $ | 79 |
Interest cost |  |  | 134 |  |  |  | 180 |
Expected return on plan assets |  |  | (227 | ) |  |  | (273 | )
Recognized net actuarial gain |  |  | — |  |  |  | — |
Net periodic retirement cost |  | $ | (10 | ) |  | $ | (14 | )
Assumptions used in the measurement of Mid Penn’s benefit obligations and net periodic pension costs at December 31, 2021 and 2020 are as follows:
Weighted-average assumptions: |  | 2021 |  |  | 2020 |
Discount rate |  |  | 3.00 | % |  |  | 2.50 | %
Expected long-term return on plan assets |  |  | 4.50 | % |  |  | 4.50 | %
Rate of compensation increases |  |  | 2.50 | % |  |  | 2.50 | %
The plan’s weighted-average asset allocations by investment category as of December 31, 2021 and 2020 are as follows:
Weighted-average asset allocations: |  | 2021 |  |  | 2020 |
Cash and cash equivalents |  |  | 12.64 | % |  |  | 10.57 | %
Common stock |  |  | 60.75 | % |  |  | 58.45 | %
Corporate bonds |  |  | 26.61 | % |  |  | 30.98 | %
|  |  | 100.00 | % |  |  | 100.00 | %
The following tables set forth by level, within the fair value hierarchy, the plan’s assets at fair value as of December 31, 2021 and 2020.
|  | Fair Value Measurements |
(Dollars in thousands) |  | Quoted prices in active markets |  |  | Significant other observable inputs |  |  | Significant unobservable inputs |
December 31, 2021 |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Cash and cash equivalents |  | $ | 670 |  |  | $ | — |  |  | $ | — |
Common stock: |  |  |  |  |  |  |  |  |  |  |  |
Mining |  |  | 43 |  |  |  | — |  |  |  | — |
Manufacturing |  |  | 870 |  |  |  | — |  |  |  | — |
Transportation, Communications, Electric, Gas, and Sanitary Services |  |  | 500 |  |  |  | — |  |  |  | — |
Wholesale Trade |  |  | 23 |  |  |  | — |  |  |  | — |
Finance, Insurance, and Real Estate |  |  | 1,633 |  |  |  | — |  |  |  | — |
Services |  |  | 145 |  |  |  | — |  |  |  | — |
Corporate bonds |  |  | 7 |  |  |  | 1,411 |  |  |  | — |
|  | $ | 3,891 |  |  | $ | 1,411 |  |  | $ | — |
|  | Fair Value Measurements |
(Dollars in thousands) |  | Quoted prices in active markets |  |  | Significant other observable inputs |  |  | Significant unobservable inputs |
December 31, 2020 |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Cash and cash equivalents |  | $ | 522 |  |  | $ | — |  |  | $ | — |
Common stock: |  |  |  |  |  |  |  |  |  |  |  |
Mining |  |  | 23 |  |  |  | — |  |  |  | — |
Manufacturing |  |  | 807 |  |  |  | — |  |  |  | — |
Transportation, Communications, Electric, Gas, and Sanitary Services |  |  | 555 |  |  |  | — |  |  |  | — |
Finance, Insurance, and Real Estate |  |  | 17 |  |  |  | — |  |  |  | — |
Services |  |  | 1,348 |  |  |  | — |  |  |  | — |
Other |  |  | 137 |  |  |  | — |  |  |  | — |
Corporate bonds |  |  | — |  |  |  | 1,530 |  |  |  | — |
|  | $ | 3,409 |  |  | $ | 1,530 |  |  | $ | — |
A description of the valuation methodologies used for assets measured at fair value is disclosed below. Common Stocks Valued at the closing price reported on the active market on which the individual securities are traded. Corporate Bonds Valued using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather relying on the securities’ relationship to other benchmark quoted prices. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its 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. Mid Penn does not expect to make contributions to the defined benefit pension plan in 2022. The following table shows the estimated benefit payments for future periods.
(Dollars in thousands) |  |  |  |
1/1/2022 to 12/31/2022 |  | $ | 93 |
1/1/2023 to 12/31/2023 |  |  | 95 |
1/1/2024 to 12/31/2024 |  |  | 207 |
1/1/2025 to 12/31/2025 |  |  | 257 |
1/1/2026 to 12/31/2026 |  |  | 253 |
1/1/2027 to 12/31/2031 |  |  | 1,547 |
| (d) | Riverview Defined Benefit Plan
As a result of the acquisition of Riverview on November 30, 2021, Mid Penn has assumed noncontributory defined benefit pension plans covering certain former employees of Riverview (or its predecessor-in-interest) as follows:
| • | Pursuant to the consolidation with Union Bancorp, Inc. (“Union”) effective November 1, 2013, Riverview assumed Union’s noncontributory defined benefit pension plan, which substantially covered all Union employees. The plan benefits were based on average salary and years of service. Union elected to freeze all benefits earned under the plan effective January 1, 2007.
| • | Riverview also assumed responsibility of Citizens National Bank of Meyersdale’s (“Citizens”) noncontributory defined benefit pension plan effective as of the December 31, 2015 merger date. The plan substantially covered all Citizens employees, and the plan benefits were based on average salary and years of service. Citizens elected to freeze all benefits earned under the plan effective January 1, 2013.
| • | As a result of a merger effective October 1, 2017, Riverview assumed responsibility of CBT Financial Corp’s (“CBT”) postretirement benefits plan, which is an unfunded postretirement benefit plan covering health insurance costs and post-retirement life insurance benefits for certain retirees.
Subsequent to the merger, Mid Penn disallowed any further participants to join the plans. Mid Penn’s policy is to fund pension and post-retirement benefits as accrued. The plans’ assets are managed by a third party and were primarily invested in a combination of cash and cash equivalents, equity securities and fixed income securities at the time of acquisition. The valuation of the plans’ assets is subject to market fluctuations. The following tables provide a reconciliation of the changes in the defined benefit pension plan’s benefit obligations and fair value of plan assets for the one-month period beginning with the November 30, 2021 acquisition date and ended December 31, 2021, and a statement of the status at December 31, 2021.
(Dollars in thousands) |  |  |  |
|  | December 31, |
Change in benefit obligations: |  | 2021 |
Benefit obligations, November 30, 2021 |  | $ | 8,278 |
Interest cost |  |  | 19 |
Actuarial loss (gain) |  |  | (86 | )
Benefit payments |  |  | (46 | )
Benefit obligations, December 31 |  | $ | 8,165 |
Change in fair value of plan assets: |  |  |  |
Fair value of plan assets, November 30, 2021 |  | $ | 8,894 |
Return on plan assets |  |  | 136 |
Benefit payments |  |  | (46 | )
Fair value of plan assets, December 31 |  | $ | 8,984 |
Funded status at year end |  | $ | 819 |
Amounts recognized in other liabilities on the consolidated balance sheet as of December 31, 2021 is as follows:
(Dollars in thousands) |  |  |  |
|  | 2021 |
Accrued pension benefit (asset) liability |  | $ | (819 | )
As of December 31, 2021 amounts related to the plan that have been recognized in accumulated other comprehensive loss but not yet recognized as a component of net periodic pension cost are as follows:
(Dollars in thousands) |  | December 31, |
|  | 2021 |
Unrecognized actuarial gain |  | $ | 176 |
Net periodic pension expense and postretirement benefit cost include the following components from November 30, 2021 to December 31, 2021:
(Dollars in thousands) |  |  |  |
|  | 2021 |
Interest cost |  | $ | 19 |
Expected return on plan assets |  |  | (46 | )
Net periodic pension (benefit) expense |  | $ | (27 | )
(Dollars in thousands) |  |  |  |
|  | 2021 |
Service credit |  | $ | — |
Interest cost |  |  | — |
Net periodic postretirement benefit credit |  | $ | — |
The accumulated benefit obligation was $8,165,000 at December 31, 2021 for the pension benefit and postretirement benefit plans. Assumptions used in the measurement of Mid Penn’s benefit obligations and net periodic pension costs at December 31, 2021 are as follows:
|  |  |  |  |  |  |  |  |  | Postretirement |
|  |  |  |  |  |  |  |  |  | Life Insurance |
|  | Pension Benefits |  |  | Benefits |
|  | Union |  |  | Citizens |  |  | Citizens |
Weighted-average assumptions: |  | 2021 |  |  | 2021 |  |  | 2021 |
Discount rate |  |  | 2.75 | % |  |  | 2.75 | % |  |  | 2.75 | %
Expected long-term return on plan assets |  |  | 6.25 | % |  |  | 6.25 | % |  | n/a |
The following summarizes the actuarial assumptions used for the pension plan and postretirement benefits plan:
| • | For the pension plan, the selected long-term rate of return on plan assets was primarily based on the asset allocation of the plan’s assets. Analysis of the historic returns on these asset classes and projections of expected future returns were considered in setting the long-term rate of return.
| • | The benefit offered under the postretirement benefits plan is fixed; therefore, the accumulated postretirement benefit obligation is not impacted by health care cost trends or the rate of compensation increase.
The plan’s weighted-average asset allocations by investment category as of December 31, 2021 are as follows:
|  | Pension Benefits |
Weighted-average asset allocations: |  | 2021 |
Cash and cash equivalents |  |  | 1.48 | %
Equity |  |  | 41.14 | %
Fixed income |  |  | 57.38 | %
|  |  | 100.00 | %
The following table sets forth by level, within the fair value hierarchy, the plan’s assets at fair value as of December 31, 2021.
|  | Fair Value Measurements |
(Dollars in thousands) |  | Quoted prices in active markets |  |  | Significant other observable inputs |  |  | Significant unobservable inputs |
December 31, 2021 |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Cash and cash equivalents |  | $ | 133 |  |  | $ | — |  |  | $ | — |
Mutual fund - equity: |  |  |  |  |  |  |  |  |  |  |  |
Large-cap value |  |  | 376 |  |  |  | — |  |  |  | — |
Large-cap core |  |  | 382 |  |  |  | — |  |  |  | — |
Mid-cap core |  |  | 465 |  |  |  | — |  |  |  | — |
Small-cap core |  |  | 306 |  |  |  | — |  |  |  | — |
International growth |  |  | 592 |  |  |  | — |  |  |  | — |
International value |  |  | 305 |  |  |  | — |  |  |  | — |
Large cap growth |  |  | 727 |  |  |  | — |  |  |  | — |
Small / midcap growth |  |  | 157 |  |  |  | — |  |  |  | — |
Mutual funds / ETFs - fixed income: |  |  |  |  |  |  |  |  |  |  |  |
Fixed income - core plus |  |  | 2,020 |  |  |  | — |  |  |  | — |
Intermediate duration - Government credit |  |  | 671 |  |  |  | — |  |  |  | — |
Long duration - Government credit |  |  | 1,697 |  |  |  | — |  |  |  | — |
Long U.S. Treasury - ETF |  |  | 767 |  |  |  | — |  |  |  | — |
Common / collective trusts equity: |  |  |  |  |  |  |  |  |  |  |  |
Large cap value |  |  | — |  |  |  | 386 |  |  |  | — |
|  | $ | 8,598 |  |  | $ | 386 |  |  | $ | — |
The valuation used is based on quoted market prices provided by an independent third party. The following table shows the estimated benefit payments for future periods.
|  |  |  |  |  | Postretirement |
(Dollars in thousands) |  |  |  |  |  | Life Insurance |
|  | Pension Benefits |  |  | Benefits |
1/1/2022 to 12/31/2022 |  | $ | 540 |  |  | $ | 4 |
1/1/2023 to 12/31/2023 |  |  | 526 |  |  |  | 4 |
1/1/2024 to 12/31/2024 |  |  | 522 |  |  |  | 4 |
1/1/2025 to 12/31/2025 |  |  | 503 |  |  |  | 3 |
1/1/2026 to 12/31/2026 |  |  | 492 |  |  |  | 3 |
1/1/2027 to 12/31/2031 |  |  | 2,303 |  |  |  | 11 |

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