Employee Benefit Plans

401(k) Plan

The Bank has a defined contribution plan available to substantially all employees who have completed 3 months of service. Employees may contribute up to Internal Revenue Service ("IRS") determined limits and the Bank may match employee contributions not to exceed 3.0% of compensation depending on contribution level. Subject to a vote of the Board of Directors, the Bank may also make a profit-sharing contribution to the Plan. Such contribution equaled 2.0% of each eligible employee's compensation in 2015. The amount for 2016 has not been established. The expense related to the 401(k) plan was $120,000 and $121,000 for the three months ended March 31, 2016 and 2015, respectively.

Deferred Compensation and Supplemental Retirement Benefits

The Bank also provides unfunded, non-qualified deferred compensation payable over two years, as well as unfunded supplemental retirement benefits for certain officers, payable in installments over 20 years upon retirement or death. The agreements consist of individual contracts with differing characteristics that, when taken together, do not constitute a postretirement plan. The costs for these benefits are recognized over the service periods of the participating officers in accordance with FASB ASC Topic 712 "Compensation – Nonretirement Postemployment Benefits". The expense of these supplemental retirement benefits was $54,000 for the three months ended March 31, 2016 and $78,000 for the same period in 2015. As of March 31, 2016, the associated accrued liability included in other liabilities in the balance sheet was $3,082,000 compared to $3,088,000 and $3,031,000 at December 31, 2015 and March 31, 2015, respectively.

Post-Retirement Benefit Plans

The Bank sponsors two post-retirement benefit plans. One plan currently provides a subsidy for health insurance premiums to certain retired employees and a future subsidy for seven active employees who were age 50 and over in 1996. These subsidies are based on years of service and range between $40 and $1,200 per month per person. The other plan provides life insurance coverage to certain retired employees and health insurance for retired directors. None of these plans are pre-funded. The Company utilizes FASB ASC Topic 712 "Compensation – Nonretirement Postemployment Benefits" to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its balance sheet and to recognize changes in the funded status in the year in which the changes occur through comprehensive income. The following table sets forth the accumulated postretirement benefit obligation and funded status:



	At or for the three months ended March 31,
	2016			2015
Change in benefit obligation
Benefit obligation at beginning of year	$	1,967,000		$	1,928,000
Service cost	—			—
Interest cost	21,000			18,000
Benefits paid	(30,000		)	(26,000		)
Benefit obligation at end of period	$	1,958,000		$	1,920,000
Funded status
Benefit obligation at end of period	$	(1,958,000	)	$	(1,920,000	)
Unamortized loss	240,000			192,000
Accrued benefit cost at end of period	$	(1,718,000	)	$	(1,728,000	)

The following table sets forth the net periodic pension cost:



	For the three months ended March 31,
	2016		2015
Components of net periodic benefit cost
Service cost	$	—	$	—
Interest cost	21,000		18,000
Net periodic benefit cost	$	21,000	$	18,000

Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss) are as follows:



	March 31, 2016			December 31, 2015			March 31, 2015
Unamortized net actuarial loss	$	(240,000	)	$	(240,000	)	$	(192,000	)
Deferred tax benefit at 35%	84,000			84,000			67,000
Net unrecognized postretirement benefits included in accumulated other comprehensive income (loss)	$	(156,000	)	$	(156,000	)	$	(125,000	)

A weighted average discount rate of 4.25% was used in determining the accumulated benefit obligation and the net periodic benefit cost. The assumed health care cost trend rate is 7.0%. The measurement date for benefit obligations was as of year-end for prior years presented. The expected benefit payments for all of 2016 are $121,000. Plan expense for 2016 is estimated to be $85,000. A 1% change in trend assumptions would create an approximate change in the same direction of $100,000 in the accumulated benefit obligation, $7,000 in the interest cost and $1,000 in the service cost.