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Retirement Agreements and Other Postretirement Benefit Plan | 12 Months Ended
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Dec. 31, 2023
Retirement Benefits [Abstract] |
Retirement Agreements and Other Postretirement Benefit Plan | Retirement Agreements and Other Postretirement Benefit Plan The Company has a 401(k) savings plan. In order to participate in the plan, employees must be 21 years old. In order to be eligible for employer contributions, individuals must be employed for a period of one year and work at least 1,000 hours annually. The Company makes a 3% Safe Harbor contribution and also has the option annually to make a discretionary profit share contribution. Individuals may elect to make contributions up to the maximum deductible amount as determined by the Internal Revenue Code of 1986, as amended (the “IRC”). Expenses related to the 401(k) plan were approximately $1.6 million and $1.7 million for 2023 and 2022, respectively. In November 2003, ITIC, a wholly owned subsidiary of the Company, entered into employment agreements with the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of ITIC. These individuals also serve as the Chairman, President and Executive Vice President, respectively, of the Company. The agreements provide compensation and life, health, dental and vision benefits upon the occurrence of specific events, including death, disability, retirement, termination without cause or upon a change in control. The employment agreements also prohibit each of these executives from competing with ITIC and its parent, subsidiaries and affiliates in North Carolina while employed by ITIC and for a period of two years following termination of their employment. In addition, during the second quarter of 2004, ITIC entered into nonqualified deferred compensation plan agreements with these executives. The amounts accrued for all agreements at December 31, 2023 and 2022 were approximately $15.2 million and $15.0 million, respectively, which includes postretirement compensation and health benefits, and was calculated based on the terms of the contract. Both the 2023 and 2022 accruals are included in the accounts payable and accrued liabilities line item of the Consolidated Balance Sheets. These executive contracts are accounted for on an individual contract basis. On December 24, 2008, the executive contracts were amended effective January 1, 2009 to bring them into compliance with Section 409A of the IRC, and were amended and restated to provide for an annual cash payment to the officers equal to the amounts the Company would have contributed to their accounts under its 401(k) plan if such contributions were not limited by the federal tax laws, less the amount of any contributions that the Company actually makes to their accounts under the Company’s 401(k) plan. On November 17, 2003, ITIC entered into employment agreements with key executives that provide for the continuation of certain employee benefits upon retirement, which were most recently amended and restated on May 4, 2022. The executive employee benefits include health insurance, dental insurance, vision insurance and life insurance. The benefits are unfunded. Estimated future benefit payouts expected to be paid for each of the next five years are $24 thousand in 2024, $36 thousand in 2025, $44 thousand in 2026, $58 thousand in 2027, $83 thousand in 2028 and $297 thousand in the next five years thereafter. Cost of the Company’s postretirement benefits included the following components and is presented in the personnel expenses line of its Consolidated Statements of Operations:
(in thousands) | 2023 |  | 2022
Net periodic benefit cost |  |  |
Service cost – benefits earned during the year | $ | — |  |  | $ | — |
Interest cost on the projected benefit obligation | 65 |  |  | 26 |
Amortization of unrecognized prior service cost | — |  |  | — |
Amortization of unrecognized (gain) loss | (37) |  |  | 12 |
Net periodic benefits cost at end of year | $ | 28 |  |  | $ | 38 |
The Company is required to recognize the funded status (i.e., the difference between the fair value of the assets and the accumulated postretirement benefit obligations of its postretirement benefits) in its Consolidated Balance Sheets, with a corresponding adjustment to accumulated other comprehensive income, net of tax. The net amount in accumulated other comprehensive income is $68 thousand, $55 thousand net of tax, for December 31, 2023, and $44 thousand, $36 thousand net of tax, for December 31, 2022, and represents the net unrecognized actuarial gains and unrecognized prior service costs. The effects of the funded status on the Company’s Consolidated Balance Sheets at December 31, 2023 and 2022 are presented in the following table:
(in thousands) | 2023 |  | 2022
Funded status |  |  |
Actuarial present value of future benefits: |  |  |
Fully eligible active employees | $ | (906) |  |  | $ | (928) |
Non-eligible active employees | — |  |  | — |
Plan assets | — |  |  | — |
Funded status of accumulated postretirement benefit obligation, recognized in accounts payable and accrued liabilities | $ | (906) |  |  | $ | (928) |
Development of the accumulated postretirement benefit obligation for the years ended December 31, 2023 and 2022 includes the following:
(in thousands) | 2023 |  | 2022
Accrued postretirement benefit obligation at beginning of year | $ | (928) |  |  | $ | (1,118) |
Service cost – benefits earned during the year | — |  |  | — |
Interest cost on projected benefit obligation | (65) |  |  | (26) |
Actuarial gain | 87 |  |  | 216 |
Accrued postretirement benefit obligation at end of year | $ | (906) |  |  | $ | (928) |
The changes in amounts related to accumulated other comprehensive income, pre-tax, are as follows:
(in thousands) | 2023 |  | 2022
Balance at beginning of year | $ | 44 |  |  | $ | (184) |
Components of accumulated other comprehensive income: |  |  |
Unrecognized prior service cost | — |  |  | — |
Amortization of gain (loss), net | (37) |  |  | 12 |
Actuarial gain | 61 |  |  | 216 |
Balance at end of year | $ | 68 |  |  | $ | 44 |

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