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Retirement Benefit Plans | 9 Months Ended
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Sep. 30, 2019
Defined Benefit Plan [Abstract] |
Retirement Benefit Plans | RETIREMENT BENEFIT PLANS (Dollars in Thousands) Arrow sponsors qualified and non-qualified defined benefit pension plans and other postretirement benefit plans for its employees. Arrow maintains a non-contributory pension plan, which covers substantially all employees. Effective December 1, 2002, all active participants in the qualified defined benefit pension plan were given a one-time irrevocable election to continue participating in the traditional plan design, for which benefits were based on years of service and the participant’s final compensation (as defined), or to begin participating in the new cash balance plan design. All employees who participate in the plan after December 1, 2002 automatically participate in the cash balance plan design. The interest credits under the cash balance plan are based on the 30-year U.S. Treasury rate in effect for November of the prior year. The service credits under the cash balance plan are equal to 6.0% of eligible salaries for employees who become participants on or after January 1, 2003. For employees in the plan prior to January 1, 2003, the service credits are scaled based on the age of the participant, and range from 6.0% to 12.0%. The funding policy is to contribute up to the maximum amount that can be deducted for federal income tax purposes and to make all payments required under ERISA. Arrow also maintains a supplemental non-qualified unfunded retirement plan to provide eligible employees of Arrow and its subsidiaries with benefits in excess of qualified plan limits imposed by federal tax law. Arrow has multiple non-pension postretirement benefit plans. The health care, dental and life insurance plans are contributory, with participants’ contributions adjusted annually. Arrow’s policy is to fund the cost of postretirement benefits based on the current cost of the underlying policies. However, the health care plan provision for automatic increases of Company contributions each year is based on the increase in inflation and is limited to a maximum of 5%. As of December 31, 2018, Arrow updated its mortality assumption to the RP-2014 Mortality Table for annuitants and non-annuitants with projected generational mortality improvements using Scale MP-2018 for the pension plans and the RPH-2014 Mortality Table for annuitants and non-annuitants with projected generational mortality improvements using Scale MP-2018 for the retiree health plan. The revised assumptions resulted in a decrease in postretirement liabilities. As of December 31, 2018, Arrow also updated its mortality assumption for annuity/lump sum conversions for the pension plans to the 2019 IRC Section 417(e)(3)B) applicable mortality table. The revised assumption results in an increase in postretirement liabilities for the pension plans. The interest rates used in determining the present value of a lump sum payment/annuitizing cash balance accounts were changed to the segment rates in effect for the January 1, 2019 plan year (3.43%, 4.46%, 4.88%) as of December 31, 2018. This change was made to more accurately reflect current expected long-term interest rates and resulted in an increase in liability for the Arrow Financial Corporation Employees' Pension Plan and Trust and the Arrow Financial Corporation Select Executive Retirement Plan. The following tables provide the components of net periodic benefit costs for the three- and nine-month periods ended September 30, 2019 and 2018.
|  |  |  | Select |  |
|  | Employees' |  | Executive |  | Postretirement
|  | Pension |  | Retirement |  | Benefit
|  | Plan |  | Plan |  | Plans
Net Periodic Benefit Cost |  |  |  |  |  |
For the Three Months Ended September 30, 2019: |  |  |  |  |  |
Service Cost 1 |  | $ | 382 |  |  | $ | 81 |  |  | $ | 30 |
Interest Cost 2 |  | 513 |  |  | 54 |  |  | 91 |
Expected Return on Plan Assets 2 |  | (765 | ) |  | — |  |  | — |
Amortization of Prior Service Cost 2 |  | 17 |  |  | 14 |  |  | 25 |
Amortization of Net Loss 2 |  | 153 |  |  | 29 |  |  | (10 | )
Net Periodic Cost |  | $ | 300 |  |  | $ | 178 |  |  | $ | 136 |
Plan Contributions During the Period |  | $ | — |  |  | $ | 117 |  |  | $ | 51 |
For the Three Months Ended September 30, 2018: |  |  |  |  |  |
Service Cost 1 |  | $ | 389 |  |  | $ | 104 |  |  | $ | 34 |
Interest Cost 2 |  | 400 |  |  | 48 |  |  | 81 |
Expected Return on Plan Assets 2 |  | (841 | ) |  | — |  |  | — |
Amortization of Prior Service (Credit) Cost 2 |  | (12 | ) |  | 14 |  |  | 25 |
Amortization of Net Loss 2 |  | 48 |  |  | 33 |  |  | — |
Net Periodic (Benefit) Cost |  | $ | (16 | ) |  | $ | 199 |  |  | $ | 140 |
Plan Contributions During the Period |  | $ | — |  |  | $ | 116 |  |  | $ | 56 |
Net Periodic Benefit Cost |  |  |  |  |  |
For the Nine Months Ended September 30, 2019: |  |  |  |  |  |
Service Cost 1 |  | $ | 1,146 |  |  | $ | 243 |  |  | $ | 91 |
Interest Cost 2 |  | 1,253 |  |  | 162 |  |  | 273 |
Expected Return on Plan Assets 2 |  | (2,296 | ) |  | — |  |  | — |
Amortization of Prior Service (Credit) Cost 2 |  | 52 |  |  | 41 |  |  | 76 |
Amortization of Net Loss 2 |  | 460 |  |  | 86 |  |  | (32 | )
Net Periodic (Benefit) Cost |  | $ | 615 |  |  | $ | 532 |  |  | $ | 408 |
Plan Contributions During the Period |  | $ | — |  |  | $ | 350 |  |  | $ | 142 |
Estimated Future Contributions in the Current Fiscal Year |  | $ | — |  |  | $ | — |  |  | $ | — |
For the Nine Months Ended September 30, 2018: |  |  |  |  |  |
Service Cost 1 |  | $ | 1,168 |  |  | $ | 311 |  |  | $ | 102 |
Interest Cost 2 |  | 1,199 |  |  | 152 |  |  | 248 |
Expected Return on Plan Assets 2 |  | (2,522 | ) |  | — |  |  | — |
Amortization of Prior Service (Credit) Cost 2 |  | (37 | ) |  | 43 |  |  | 75 |
Amortization of Net Loss 2 |  | 145 |  |  | 99 |  |  | — |
Net Periodic (Benefit) Cost |  | $ | (47 | ) |  | $ | 605 |  |  | $ | 425 |
Plan Contributions During the Period |  | $ | — |  |  | $ | 349 |  |  | $ | 175 |
Footnotes: 1. Included in Salaries and Employee Benefits on the Consolidated Statements of Income 2. Included in Other Operating Expense on the Consolidated Statements of Income A contribution to the qualified pension plan in 2019 was not required, and currently, additional contributions in 2019 are not expected. Arrow makes contributions to its other post-retirement benefit plans in an amount equal to benefit payments for the year.

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- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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