Components of Net Periodic Benefit Cost

6 Months Ended

Jun. 30, 2020

Retirement Benefits [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 (decrease) increase in benefit cost for pension benefits and other post-retirement benefits for the three and six months ended June 30, 2020 and 2019 includes the following components (in thousands):

	Three months ended June 30,					Six months ended June 30,
	Pension benefits			Other post-retirement benefits		Pension benefits			Other post-retirement benefits
	2020		2019	2020	2019	2020		2019	2020	2019
Service cost	$	—	—	20	20	$	—	—	40	40
Interest cost	250		300	178	209	500		600	356	419
Expected return on plan assets	(737)		(641)	—	—	(1,474)		(1,282)	—	—
Amortization of prior service cost	—		—	—	—	—		—	—	—
Amortization of the net loss (gain)	174		254	(62)	(207)	348		508	(124)	(414)
Net periodic (decrease) increase in benefit cost	$	(313)	(87)	136	22	$	(626)	(174)	272	45

In its consolidated financial statements for the year ended December 31, 2019, the Company previously disclosed that it does not expect to contribute to the pension plan in 2020. As of June 30, 2020, no contributions have been made to the pension plan.

The net periodic benefit (decrease) increase in benefit cost for pension benefits and other post-retirement benefits for the three and six months ended June 30, 2020 were calculated using the January 1, 2020 pension and other post-retirement benefits actuarial valuations.