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Employee Benefit Plans
 12 Months Ended
Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]  
Employee Benefits Plan

Note 13 – Employee Benefit Plans

 

401(k) Plan: 

The 401(k) plan allows employees to contribute to their individual accounts under the plan amounts up to the IRS maximum. Matching company contributions to the plan are discretionary. Expense for matching company contributions under the plan was $140,000, $91,000, and $178,000 in 2014, 2013, and 2012, respectively.

 

Employee Stock Ownership Plan: 

Employees participate in an ESOP. ChoiceOne may make discretionary contributions to the ESOP. Shares of ChoiceOne common stock are allocated to participants based on relative compensation earned and compensation expense is recorded when allocated. Dividends on allocated shares increase the participant accounts. Participants become fully vested upon completing six years of qualifying service. Participants receive the shares at the end of employment. A participant may require stock received to be repurchased by ChoiceOne at any time. ChoiceOne did not contribute to the ESOP nor was any expense recorded in 2014, 2013, or 2012.

 

Shares held by the ESOP as of December 31 were as follows:

 

          
(Dollars in thousands)  2014    2013    2012  
          
Shares allocated to participants   5,355    5,355    5,355 
Shares unallocated   —    —    — 
Total shares of ChoiceOne stock held by ESOP   5,355    5,355    5,355 
                
Fair value of allocated shares, subject to repurchase obligation, recorded in other liabilities  $123   $91   $77 

   

Post-retirement Benefits Plan: 

ChoiceOne maintains an unfunded post-retirement health care plan, which permits employees (and their dependents) the ability to participate upon retirement from ChoiceOne. ChoiceOne does not pay any portion of the health care premiums charged to its retired participants. A liability has been accrued for the obligation under this plan. ChoiceOne incurred negative post-retirement benefit expense of $20,000 in 2014, $11,000 in 2013, and $10,000 in 2012. The post-retirement obligation liability was $149,000 as of December 31, 2014 and $125,000 as of December 31, 2013.

 

Deferred Compensation Plans: 

A deferred director compensation plan covers former directors of VRB, which was acquired by ChoiceOne in 2006. Under the plan, ChoiceOne pays each former director the amount of director fees deferred plus interest at rates ranging from 5.50% to 5.84% over various periods as elected by each director. The payout periods range from one month to ten years beginning with the individual’s termination of service. A liability has been accrued for the obligation under this plan. ChoiceOne incurred deferred compensation plan expense of $12,000, $14,000, and $15,000 in 2014, 2013, and 2012, respectively. The deferred compensation liability was $203,000 as of December 31, 2014 and $233,000 as of December 31, 2013.

 

A supplemental executive retirement plan covers four former executive officers of VRB. Under the plan, ChoiceOne pays these individuals a specific amount of compensation plus interest at 7.50% over a 15-year period commencing upon early retirement age (as defined in the plan) or normal retirement age (as defined in the plan). A liability has been accrued for the obligation under this plan. The effective interest rate used for the accrual for the retirement liability is based on long-term interest rates. As a result a decrease in long-term interest rates during 2014 caused an increase in plan expense in 2014, while an increase in long-term interest rates during 2013 caused a decrease in plan expense in 2013. ChoiceOne incurred deferred compensation plan expense of $42,000 in 2014, negative expense of $1,000 in 2013 and expense of $120,000 in 2012. Deferred compensation liabilities of $664,000 and $696,000 were outstanding as of December 31, 2014 and December 31, 2013, respectively.