Components of Net Periodic Benefit Cost

9 Months Ended

Sep. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Components of Net Periodic Benefit Cost

Components of Net Periodic Benefit Cost

The Bank has a noncontributory defined benefit pension plan covering its full-time employees who had attained age 21 with at least one year of service as of April 1, 2003. The pension plan was frozen on April 1, 2003. All participants in the Plan are 100% vested. The pension 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 is fully eligible to receive the benefits. Effective January 1, 2003, eligibility for retiree health care benefits was frozen as 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 and nine months ended September 30, 2016 and 2015 includes the following components (in thousands):

	Three months ended September 30,							Nine months ended September 30,
	Pension benefits					Other post- retirement benefits		Pension benefits					Other post- retirement benefits
	2016			2015		2016	2015	2016			2015		2016	2015
Service cost	$	—		—		37	42	$	—		—		112	126
Interest cost	312			284		285	280	936			852		854	842
Expected return on plan assets	(612		)	(632	)	—	—	(1,836		)	(1,898	)	—	—
Amortization of prior service cost	—			—		—	—	—			—		—	—
Amortization of the net loss	236			193		—	—	708			581		—	—
Net periodic benefit (increase) cost	$	(64	)	(155	)	322	322	$	(192	)	(465	)	966	968

In its consolidated financial statements for the year ended December 31, 2015, the Company previously disclosed that it does not expect to contribute to the pension plan in 2016. As of September 30, 2016, no contributions have been made to the pension plan.

The net periodic benefit (increase) cost for pension benefits and other post-retirement benefits for the three and nine months ended September 30, 2016 were calculated using the actual January 1, 2016 pension and other post-retirement benefits valuations.