XML 36 R22.htm IDEA: XBRL DOCUMENT
v3.20.4

RETIREMENT PLANS | 12 Months Ended
--- | ---
Dec. 31, 2020
Postemployment Benefits [Abstract] |
RETIREMENT PLANS | RETIREMENT PLANSThe Corporation’s banking subsidiary has a non-contributory, defined benefit pension plan. Retirement benefits are a function of both years of service and compensation. The funding policy is to contribute annually the amount that is sufficient to meet the minimum funding requirements set forth in the Employee Retirement Income Security Act. A measurement date of December 31 has been used for the fiscal years ended December 31, 2020 and 2019.
In thousands | 2020 |  | 2019
Change in benefit obligation: |  |  |
Benefit obligation at beginning of year | $ | 34,534 |  |  | $ | 30,338 |
Service cost | 751 |  |  | 696 |
Interest cost | 1,080 |  |  | 1,213 |
Actuarial loss | 4,405 |  |  | 3,603 |
Benefits paid | (1,358) |  |  | (1,316) |
Projected benefit obligation at end of year | 39,412 |  |  | 34,534 |
Change in plan assets: |  |  |
Fair value of plan assets at beginning of year | 44,292 |  |  | 39,680 |
Actual return on plan assets | 2,403 |  |  | 5,928 |
Employer contribution | — |  |  | — |
Benefits paid | (1,358) |  |  | (1,316) |
Fair value of plan assets at end of year | 45,337 |  |  | 44,292 |
Funded Status, included in other assets | $ | 5,925 |  |  | $ | 9,758 |
Amounts recognized in accumulated other comprehensive loss: |  |  |
Total net actuarial loss | $ | 13,221 |  |  | $ | 9,147 |
Prior service cost | — |  |  | — |
Total included in accumulated other comprehensive loss (pretax) | $ | 13,221 |  |  | $ | 9,147 |
For the years ended December 31, 2020 and 2019, the assumptions used to determine the benefit obligation are as follows:
| 2020 |  | 2019
Discount rate | 2.45 | % |  | 3.20 | %
Rate of compensation increase | 3.50 | % |  | 3.50 | %
The components of net periodic benefit (income) cost related to the non-contributory, defined benefit pension plan for the years ended December 31 are as follows:
In thousands | 2020 |  | 2019
Components of net periodic benefit cost (income): |  |  |
Service cost | $ | 751 |  |  | $ | 696 |
Interest cost | 1,080 |  |  | 1,213 |
Expected return on plan assets | (2,746) |  |  | (2,549) |
Recognized net actuarial loss | 675 |  |  | 850 |
Amortization of prior service cost | — |  |  | — |
Net Periodic Benefit (Income) Cost | (240) |  |  | 210 |
Net loss | 4,749 |  |  | 224 |
Amortization of net loss | (675) |  |  | (850) |
Amortization of prior service cost | — |  |  | — |
Total recognized in other comprehensive loss (income) | $ | 4,074 |  |  | $ | (626) |
Total recognized in net periodic benefit cost (income) and other comprehensive (income) loss | $ | 3,834 |  |  | $ | (416) |
For the years ended December 31, 2020 and 2019, the assumptions used to determine the net periodic benefit cost (income) are as follows:
| 2020 |  | 2019
Discount rate | 3.20 | % |  | 4.10 | %
Expected long-term rate of return on plan assets | 6.75 | % |  | 6.75 | %
Rate of compensation increase | 3.50 | % |  | 3.50 | %
The Corporation’s comparison of obligations to plan assets at December 31, 2020 and 2019 are as follows:
In thousands | 2020 |  | 2019
Projected benefit obligation | $ | 39,412 |  |  | $ | 34,534 |
Accumulated benefit obligation | 37,522 |  |  | 33,080 |
Fair value of plan assets at measurement date | 45,337 |  |  | 44,292 |
It has not yet been determined the amount that the Bank may contribute to the Plan in 2021. ACNB does not anticipate any refunds from the postretirement Plan. The Corporation reduced the future benefit accruals for the defined benefit pension plan effective January 1, 2010, in order to manage total benefit expense. The new formula is the earned benefit as of December 31, 2009, plus 0.75% of a participant’s average monthly pay multiplied by years of benefit service earned on and after January 1, 2010, but not more than 25 years. The benefit formula percentage and maximum years of benefit service were both reduced. Effective April 1, 2012, no inactive or former participant in the Plan is eligible to again participate in the plan, and no employee hired after March 31, 2012, is eligible to participate in the Plan. As of the last annual census, ACNB Bank had a combined 347 active, vested terminated, and retired persons in the Plan. For the year ended December 31, 2019 the mortality assumptions were derived using the mortality rates from RP-2006 (underlying baseline table from SOA RP-2014 study based on experience data for private pension plans of 2006, the central year of experience data 2004-2008). For the year ended December 31, 2020 the mortality assumption has been updated to reflect the historical U.S. mortality date in the MP-2020 report. The assumption changes increased the benefit obligation by $3,699,000. Based on current data and assumptions, the following benefit payments, which reflect expected future service, as appropriate, are:
Years Ending | In thousands
2021 | $ | 1,730 |
2022 | 1,720 |
2023 | 1,840 |
2024 | 1,890 |
2025 | 1,920 |
2026 - 2030 | 9,800 |
The Corporation’s pension plan weighted-average assets’ allocations at December 31, 2020 and 2019, are as follows:
| 2020 |  | 2019
Equity securities | 45 | % |  | 45 | %
Debt securities | 42 | % |  | 42 | %
Real estate | 13 | % |  | 13 | %
| 100 | % |  | 100 | %
The Corporation’s overall investment strategy is to achieve a mix of investments to meet the long-term rate of return assumption and near-term pension obligations with a diversification of assets types, fund strategies and fund managers. The mix of investments is adjusted periodically by retaining an advisory firm to recommend appropriate allocations after reviewing the Corporation’s risk tolerance on contribution levels, funded status and plan expense, and any applicable regulatory requirements. The weighted-average assets’ allocation in the above table represents the Corporation’s conclusion on the appropriate mix of investments. The specific investment vehicles are institutional separate accounts from a variety of fund managers which are regularly reviewed by the Corporation for acceptable performance. Equity securities included Corporation common stock in amounts of $1,963,000, or 4% of total plan assets, and $2,854,000, or 6% of total plan assets, at December 31, 2020 and 2019, respectively. Fair value measurements at December 31, 2020, are as follows:
In thousands | Total |  | Level 1 |  | Level 2 |  | Level 3
Equity securities | $ | 24,542 |  |  | $ | 1,963 |  |  | $ | 22,579 |  |  | $ | — |
Debt securities | 14,568 |  |  | — |  |  | 14,568 |  |  | — |
Real estate | 6,227 |  |  | — |  |  | 6,227 |  |  | — |
Fair value measurements at December 31, 2019, are as follows:
In thousands | Total |  | Level 1 |  | Level 2 |  | Level 3
Equity securities | $ | 20,098 |  |  | $ | 2,854 |  |  | $ | 17,244 |  |  | $ | — |
Debt securities | 18,516 |  |  | — |  |  | 18,516 |  |  | — |
Real estate | 5,678 |  |  | — |  |  | 5,678 |  |  | — |
The Corporation’s banking subsidiary maintains a 401(k) plan for the benefit of eligible employees. Employees may contribute up to 100% of their compensation subject to certain limits based on federal tax laws. The Bank makes matching contributions equal to 100% of an employee’s compensation contributed to the plan up to 3% of an employee’s pay, plus 50% of an employee’s compensation contributed to the plan on the next 2% of their pay for the payroll period. Matching contributions vest immediately to the employee. Bank contributions to and expenses for the plan were $887,000 and $709,000 for 2020 and 2019, respectively. RIG has a similar but separate 401(k) plan with the match of 6% for non-highly compensated employees and 3% match for highly compensated employees. RIG’s contributions to and expenses for the plan were $126,000 and $123,000 for 2020 and 2019, respectively. The Corporation’s banking subsidiary maintains nonqualified compensation plans for selected senior officers. The estimated present value of future benefits is accrued over the period from the effective date of the agreements until the expected retirement dates of the individuals. The balance accrued for these plans included in other liabilities as of December 31, 2020 and 2019, totaled $3,491,000 and $3,196,000, respectively. The annual expense included in salaries and benefits expense totaled $524,000 and $493,000 during the years ended December 31, 2020 and 2019, respectively. To fund the benefits under these plans, the Bank is the owner of single premium life insurance policies on participants in the nonqualified retirement plans.

X
- Definition The entire disclosure for retirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 55 -Paragraph 17 -URI http://asc.fasb.org/extlink&oid=118257860&loc=d3e4179-114921 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section S99 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(i) -URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (o) -URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (p) -URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 70 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 60 -Section 50 -Paragraph 3 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=6414203&loc=d3e39689-114964 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(iv)(03) -URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (q) -URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (r)(1) -URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(iii) -URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (l) -URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (r)(2) -URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_PostemploymentBenefitsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration