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Defined Pension Plans

9 Months Ended

Sep. 30, 2017

Note 9 – Defined Pension Plans

The Company has a noncontributory defined-benefit pension plan, which covers most of its employees. Effective December 31, 2016, the Plan was closed to all new participants. The Company accrues and makes contributions designed to fund normal service costs on a current basis using the projected unit credit with service proration method to amortize prior service costs arising from improvements in pension benefits and qualifying service prior to the establishment of the plan over a period of approximately 30 years. Disclosure information is based on a measurement date of December 31 of the corresponding year. The following table represents the components of the net periodic pension costs:

	Estimated			Actual
*(In thousands)*	2017			2016
Service cost – benefits earned during the year	$	3,733		$	3,559
Interest cost on projected benefit obligations		3,621			3,505
Expected return on plan assets		(4,681	)		(4,734	)
Net amortization and deferral		1,382			1,259
Net periodic pension cost	$	4,055		$	3,589

Pension costs recorded to expense were $1,033,000 and $965,000 for the three-month periods ended September 30, 2017 and 2016, respectively, and totaled $3,070,000 and $2,724,000 for the nine-month periods ended September 30, 2017 and 2016, respectively. Pension costs increased in 2017 due to a decrease in the discount rate and expected return on plan assets assumptions and the use of the updated mortality tables. The Company made no contribution to the plan during the nine-month period ended September 30, 2017 and is evaluating the amount of additional contributions, if any, in the remainder of 2017.

In addition to the above funded benefit plan, the Company has an unfunded supplemental executive retirement plan which covers key executives of the Company. This is a noncontributory plan in which the Company and its subsidiaries make accruals designed to fund normal service costs on a current basis using the same method and criteria as its defined benefit plan. The following table represents the components of the net periodic pension costs for 2016 and an estimate for 2017:

	Estimated		Actual
*(In thousands)*	2017		2016
Service cost – benefits earned during the year	$	143	$	133
Interest cost on projected benefit obligation		361		367
Net amortization		323		295
Net periodic pension cost	$	827	$	795

Pension costs recorded to expense were $210,000 and $201,000 for the three-month periods ended September 30, 2017 and 2016, respectively, and were $628,000 and $604,000 for the nine-month periods ended September 30, 2017 and 2016, respectively.