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RETIREMENT PLANS
12 Months Ended
Dec. 31, 2015
Compensation and Retirement Disclosure [Abstract]  
RETIREMENT PLANS
RETIREMENT PLANS
The Company maintains a 401(k) profit-sharing plan for those employees who meet the eligibility requirements set forth in the plan. Employer contributions to the plan are based on performance of the Company and are at the discretion of the Bank’s Board of Directors. The plan contains limited match or safe harbor provisions. Substantially all of the Company’s employees are covered by the plan and the contributions charged to operations were $361,000, $357,000 and $311,000 for the years ended December 31, 2015, 2014, and 2013.
The Company has a deferred compensation arrangement with certain present and former directors, whereby a director or his beneficiaries will receive a monthly retirement benefit at age 65. The arrangement is funded by an amount of life insurance on the participating director calculated to meet the Company’s obligations under the compensation agreement. The cash value of the life insurance policies is an unrestricted asset of the Company. The estimated present value of future benefits to be paid, which is included in other liabilities, amounted to $115,000 and $125,000 at December 31, 2015 and 2014. Total annual expense for this deferred compensation plan was $12,000, $13,000 and $1,000 for the years ended December 31, 2015, 2014 and 2013.
The Company also has supplemental discretionary deferred compensation plans for directors and executive officers. The plans are funded annually with director fees and salary reductions which are either placed in a trust account invested by the Company’s Orrstown Financial Advisors division or recognized as a liability. The trust account balance was $1,449,000 and $1,385,000 at December 31, 2015 and 2014, respectively, and is included in other assets on the balance sheets, offset by other liabilities in the same amount. Total amounts contributed to these plans were $30,000, $25,000 and $10,000, for the years ended December 31, 2015, 2014, and 2013.
In addition, the Company has two supplemental retirement and salary continuation plans for directors and executive officers. These plans are funded with single premium life insurance on the plan participants. The cash value of the life insurance policies is an unrestricted asset of the Company. The estimated present value of future benefits to be paid totaled $5,211,000 and $4,844,000 at December 31, 2015 and 2014, which is included in other liabilities. Total annual expense for these plans amounted to $626,000, $575,000 and $549,000, for the years ended December 31, 2015, 2014, and 2013.
The Company has promised a continuation of life insurance coverage to certain persons post-retirement. GAAP requires the recording of post-retirement costs and a liability equal to the present value of the cost of post retirement insurance during the insured employee’s term of service. The estimated present value of future benefits to be paid totaled $799,000 and $670,000 at December 31, 2015 and 2014 which is included in other liabilities. Total annual expense for this plan amounted to $129,000, $104,000 and $42,000 for the years ended December 31, 2015, 2014 and 2013.