XML 40 R22.htm IDEA: XBRL DOCUMENT v3.24.0.1
RETIREMENT PLANS
 12 Months Ended
Dec. 31, 2023
Postemployment Benefits [Abstract]  
RETIREMENT PLANS RETIREMENT PLANS
Defined-Contribution 401(k) Retirement Plans
The Bank maintains a 401(k) retirement plan for the benefit of eligible employees. The plan allows employees to contribute up to 100% of their compensation subject to certain limits based on federal tax laws. The plan also provides for the Bank to match 100% of the employee’s contribution to the plan up to 3% of the employee’s compensation, plus 50% the employee’s contribution to the plan on the next 2% of the employee’s compensation. Matching contributions vest immediately to the employee. Bank contributions to the plan were $999 thousand and $901 thousand for 2023 and 2022, respectively, and were included as a component of salaries and employee benefits expense.
ACNB Insurance Services, Inc. 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. ACNB Insurance Services, Inc.’s contributions to the plan were $183 thousand and $157 thousand for 2023 and 2022, respectively, and were included as a component of salaries and employee benefits expense.
Nonqualified Compensation Plans
The Bank 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, 2023 and 2022, totaled $4.5 million and $4.1 million, respectively. The annual expense included in salaries and employee benefits expense totaled $953 thousand and $628 thousand during the years ended December 31, 2023 and 2022, 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.
Defined Benefit Pension Plan
The Bank has a non-contributory, defined benefit pension plan. No employee hired after March 31, 2012 is eligible to participate in the plan. Retirement benefits are a function of both years of service and compensation. As of the last annual census, the Bank had a combined 336 active, vested terminated, and retired persons in the plan. The funding policy is to contribute annually the amount that is sufficient to meet the minimum funding requirements set forth by ERISA. The Bank uses a measurement date of December 31 for this plan.
The following table summarized the changes in the projected benefit obligation and fair value of plan assets for the plan years ended December 31:
(In thousands)20232022
Change in benefit obligation:  
Projected Benefit obligation at beginning of year$30,226 $39,123 
Service cost495 777 
Interest cost1,493 1,052 
Actuarial gain (loss)983 (9,141)
Benefits paid(1,703)(1,585)
Projected benefit obligation at end of year31,494 30,226 
Change in plan assets, at fair value:  
Fair value of plan assets at beginning of year43,119 50,218 
Actual return on plan assets5,011 (5,514)
Benefits paid(1,703)(1,585)
Fair value of plan assets at end of year46,427 43,119 
Funded Status, included in other assets$14,933 $12,893 
The amounts recognized in accumulated other comprehensive income (loss) are as follows:
(In thousands)20232022
Total net actuarial loss (pre-tax)$5,120 $6,887 
For the years ended December 31, 2023 and 2022, the assumptions used to determine the benefit obligation are as follows:
20232022
Discount rate4.90 %5.10 %
Rate of compensation increase3.50 %3.50 %
The discount rate assumption used to determine the benefit obligation decreased since last year. This change results in an increase in the benefit obligation.
The components of net periodic benefit cost (income) related to the non-contributory, defined benefit pension plan are as follows for the years ended December 31 :
(In thousands)20232022
Components of net periodic benefit cost (income):  
Service cost$495 $777 
Interest cost1,493 1,052 
Expected return on plan assets(2,653)(3,136)
Recognized net actuarial loss392 407 
Net Periodic Benefit Income(273)(900)
Net gain(1,375)(491)
Amortization of net loss(392)(407)
Total recognized in other comprehensive income (loss)(1,767)(898)
Total recognized in net periodic benefit cost (income) and other comprehensive income$(2,040)$(1,798)
The assumptions used to determine the net periodic benefit cost (income) are as follows for the years ended December 31:
20232022
Discount rate5.10 %2.75 %
Expected long-term rate of return on plan assets6.75 %6.75 %
Rate of compensation increase3.50 %3.50 %
The Corporation’s comparison of obligations to plan assets at December 31, 2023 and 2022 are as follows:
(In thousands)20232022
Projected benefit obligation$31,494 $30,226 
Accumulated benefit obligation30,411 29,150 
Fair value of plan assets at measurement date46,427 43,119 
For the year ended December 31, 2023 the mortality assumption was updated to reflect the most recently published mortality information through October 2023. Estimated future benefit payments are as follows:
Year(in thousands)
2024$2,010 
20252,060 
20262,070 
20272,060 
20282,060 
2029-203310,750 
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 following 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.
The Corporation’s pension plan weighted-average assets’ allocations at December 31, 2023 and 2022, are as follows:
20232022
Equity securities43 %46 %
Debt securities54 49 
Real property3 5 
100 %100 %
Equity securities included $3.9 million of the Corporation’s common stock, or 8%, of total plan assets, and $3.3 million, or 8%, of total plan assets, at December 31, 2023 and 2022, respectively.
Fair value measurements were as follows:
(In thousands)TotalLevel 1Level 2Level 3
December 31, 2023
Equity securities$20,123 $3,876 $16,247 $— 
Debt securities24,891 — 24,891 — 
Real estate1,413 — 1,413 — 
Total$46,427 $3,876 $42,551 $— 
December 31, 2022
Equity securities$19,749 $3,339 $16,410 $— 
Debt securities21,228 — 21,228 — 
Real estate2,142 — 2,142 — 
Total$43,119 $3,339 $39,780 $—