PENSIONS AND OTHER BENEFITS

12 Months Ended

Dec. 31, 2015

Compensation and Retirement Disclosure [Abstract]

PENSIONS AND OTHER BENEFITS

NOTE 14 – PENSION AND OTHER BENEFITS

Salisbury had an insured noncontributory defined benefit retirement plan which was available to employees prior to December 31, 2012 based upon age and length of service. Effective December 31, 2012, the pension plan was frozen, by amending the plan to freeze retirement benefits at current levels and discontinue future benefit accruals. The plan was terminated effective October 15, 2014.  During 2012, Salisbury decided to complete its transition from providing retirement benefits under a defined benefit pension plan to a defined contribution 401(k) plan which is discussed below. 

Years ended December 31, (in thousands)		2014			2013
Change in projected benefit obligation
Benefit obligation at beginning of year	$	5,250		$	6,039
Actuarial gain		(977	)		(860	)
Service cost		—			—
Interest cost		277			255
Curtailments and settlements		—			—
Benefits paid		(4,550	)		(184	)
Benefit obligation at end of year		—			5,250
Change in plan assets
Plan assets at estimated fair value at beginning of year		6,868			6,019
Actual return on plan assets		(2,318	)		1,033
Contributions by employer		—			—
Curtailments and settlements		—			—
Benefits paid		(4,550	)		(184	)
Fair value of plan assets at end of year		—			6,868
Funded status and recognized asset
included in other assets on the balance sheet	$	—		$	1,618

The components of amounts recognized in accumulated other comprehensive income, before tax effect, are as follows:

Years ended December 31, (in thousands)		2014		2013
Unrecognized gain (loss)	$	—	$	924
Total	$	—	$	924

The accumulated benefit obligation for the plan was $5,250,000 at December 31, 2013. The discount rate used in determining the actuarial present value of the projected benefit obligation was 5.10% for 2013.

The components of net periodic cost are as follows:

Years ended December 31, (in thousands)		2014			2013
Service cost	$	—		$	—
Interest cost on benefit obligation		277			255
Expected return on plan assets		(297	)		(258	)
Amortization of net gain (loss)		(1	)		—
Net periodic benefit cost		(21	)		(3	)
Additional amount recognized due to settlement or curtailment		—			—
		(21	)		(3	)
Other changes in plan assets and benefit obligations recognized
in other comprehensive loss (income):
Net actuarial loss (gain)		923			(1,635	)
Amortization of net gain (loss)		1			—
Total recognized in other comprehensive loss (income)		924			(1,635	)
Total recognized in net periodic cost and other comprehensive loss (income)	$	903		$	(1,638	)

The discount rate used to determine the net periodic benefit cost was 5.10% for 2014 and 4.35% for 2013; and the expected return on plan assets was 4.35% for 2014 and 2013.

In 2014, Salisbury terminated the Defined Benefit Pension Plan.  Excess assets in the amount of $1,018,000 were distributed to the Bank’s Defined Contribution Plan (401k) and the Employee Stock Ownership Plan (ESOP) for future allocations to employees.  The division of the excess pension assets was 66.67% to the 401k account (or $679,000) and 33.33% to the ESOP account (or $339,000).

401(k) Plan

Salisbury offers a 401(k) Plan to eligible employees. Under the Plan, eligible participants may contribute a percentage of their pay subject to IRS limitations. Salisbury may make discretionary contributions to the Plan.Effective December 31, 2012, and simultaneously with the freezing of the pension plan, the 401(k) Plan was amended to include a safe harbor contribution of 4% for all qualifying employees. The Bank’s safe harbor contribution percentage is reviewed annually and, under provisions of the plan, is subject to change in the future. An additional discretionary match may also be made for all employees that meet the plan’s qualifying requirements for such a match. This discretionary matching percentage, if any, is also subject to review under the provisions of the plan.

Both the safe harbor and additional discretionary match, if any, vest immediately.

Salisbury’s 401(k) Plan contribution expense for 2015, 2014 and 2013 was $679,000, $331,000 and $657,000, respectively.

Employee Stock Ownership Plan (ESOP)

Salisbury offers an Employee Stock Ownership Plan (ESOP) to eligible employees.  Under the Plan, Salisbury may make discretionary contributions to the Plan. Discretionary contributions vest in full upon six years and reflect the following schedule of qualified service:

20% after the second year, 20% per year thereafter, vesting at 100% after six full years of service. Benefit expenses totaled $323,000, $15,000, and $160,000 in 2015, 2014, and 2013, respectively.

Other Retirement Plans

Salisbury adopted ASC 715-60, “Compensation - Retirement Benefits - Defined Benefit Plans - Other Postretirement" and recognized a liability for Salisbury’s future postretirement benefit obligations under endorsement split-dollar life insurance arrangements. The total liability for the arrangements included in other liabilities was $672,000 and $581,000 at December 31, 2015, and 2014, respectively. Expense under this arrangement was $91,000 for 2015, $53,000 for 2014, and $49,000 for 2013.

The Bank entered into a Supplemental Retirement Plan Agreement with its former Chief Executive Officer that provides for supplemental post retirement payments for a ten year period as described in the agreement. The related liability was $88,000 and $105,000 at December 31, 2015, and 2014, respectively. The related expense amounted to $7,000, $8,000 and $9,000 for 2015, 2014 and 2013, respectively.

The Bank assumed a Supplemental Retirement Plan Agreement with a former Chief Executive Officer of Riverside Bank that provides for supplemental post retirement payments for a fifteen year period as described in the agreement. The related liability was $629,000 and $668,000 at December 31, 2015 and December 31, 2014, respectively. The related expense amounted to $21,000 and $2,000 for 2015 and 2014, respectively.

A Non-Qualified Deferred Compensation Plan (the "Plan") was adopted effective January 1, 2013. This Plan was adopted by the Bank for the benefit of certain key employees ("Executive" or "Executives") who have been selected and approved by the Bank to participate in this Plan and who have evidenced their participation by execution of a Non-Qualified Deferred Compensation Plan Participation Agreement ("Participation Agreement") in a form provided by the Bank. This Plan is intended to comply with Internal Revenue Code ("Code") Section 409A and any regulatory or other guidance issued under such Section.

In 2015, 2014, and 2013, the Bank awarded six (6), seven (7) and six (6) Executives, respectively, with discretionary contributions to the plan. Expenses related to this plan amounted to $39,000 in 2015, $0 in 2014, and $60,000 for 2013. In 2014, there was also a recovery of $8,000 of prior expenses from contributions in 2013. Based on the Executive’s date of retirement, the vesting schedule ranges from 7.7% per year to 50% per year.