Note 5. Components of Net Periodic Benefit Cost

The Bank has a noncontributory defined benefit pension plan (the “Plan”) covering its full-time employees who had attained age 21 with at least one year of service as of April 1, 2003, the date on which the Plan was frozen. All participants in the Plan are 100% vested. The Plan’s assets are invested in investment funds and group annuity contracts currently managed by the Principal Financial Group and Allmerica Financial.

In addition to pension benefits, certain health care and life insurance benefits are currently made available to certain of the Bank’s retired employees. The costs of such benefits are accrued based on actuarial assumptions from the date of hire to the date the employee became fully eligible to receive the benefits. Effective January 1, 2003, eligibility for retiree health care benefits was frozen to new entrants and benefits were eliminated for employees with less than ten years of service as of December 31, 2002. Effective January 1, 2007, eligibility for retiree life insurance benefits was frozen as to new entrants, and retiree life insurance benefits were eliminated for employees with less than ten years of service as of December 31, 2006.

Net periodic benefit (increase) cost for pension benefits and other post-retirement benefits for the three months ended March 31, 2014 and 2013 includes the following components (in thousands):



	Three months ended March 31,
	Pension benefits					Other post- retirement benefits
	2014			2013		2014		2013
Service cost	$	—		—		42		60
Interest cost	352			318		272		245
Expected return on plan assets	(894		)	(792	)	—		—
Amortization of prior service cost	—			—		(1	)	(1	)
Amortization of the net loss (gain)	93			338		(51	)	4
Net periodic benefit (increase) cost	$	(449	)	(136	)	262		308

In its consolidated financial statements for the year ended December 31, 2013, the Company previously disclosed that it does not expect to contribute to the Plan in 2014. As of March 31, 2014, no contributions to the Plan have been made.

The net periodic benefit cost (increase) for pension benefits and other post-retirement benefits for the three months ended March 31, 2014 were calculated using the actual January 1, 2014 pension valuation and the estimated results of the other post-retirement benefits January 1, 2014 valuations.