People’s United maintains a qualified noncontributory defined benefit pension plan (the “People’s Qualified Plan”) that covers substantially all full-time and part-time employees who (i) meet certain age and length of service requirements and (ii) were employed by the Bank prior to August 14, 2006. Benefits are based upon the employee’s years of credited service and either the average compensation for the last five years or the average compensation for the five consecutive years of the last  ten years that produce the highest average.

New employees of the Bank starting on or after August 14, 2006 are not eligible to participate in the People’s Qualified Plan. Instead, the Bank makes contributions on behalf of these employees to a qualified defined contribution plan in an annual amount equal to 3% of the employee’s eligible compensation. Employee participation in this plan is restricted to employees who (i) are at least 18 years of age and (ii) worked at least 1000 hours in a year. Both full-time and part-time employees are eligible to participate as long as they meet these requirements.

In July 2011, the Bank amended the People’s Qualified Plan to “freeze”, effective December 31, 2011, the accrual of pension benefits for People’s Qualified Plan participants. As such, participants will not earn any additional benefits after that date. Instead, effective January 1, 2012, the Bank began making contributions on behalf of these participants to a qualified defined contribution plan in an annual amount equal to 3% of the employee’s eligible compensation.

In addition to the People’s Qualified Plan, People’s United continues to maintain qualified defined benefit pension plans that cover (i) former First Connecticut employees who meet certain eligibility requirements (the “First Connecticut Qualified Plan”) and (ii) former United Financial employees who meet certain eligibility requirements (the “United Financial Qualified Plan”). All benefits under these plans were frozen effective February 28, 2013 and December 31, 2012, respectively. Effective October 1, 2018, both the Chittenden Qualified Plan and the Suffolk Qualified Plan were merged into the People’s Qualified Plan.

People’s United also maintains (i) unfunded, nonqualified supplemental plans to provide retirement benefits to certain senior officers (the “People’s Supplemental Plans”) and (ii) an unfunded plan that provides retirees with optional medical, dental and life insurance benefits (the “People’s Postretirement Plan”). People’s United accrues the cost of these postretirement benefits over the employees’ years of service to the date of their eligibility for such benefit. People’s United also continues to maintain: (1) for certain eligible former First Connecticut employees (i) an unfunded, nonqualified supplemental retirement plan (the “First Connecticut Supplemental Plan”) and (ii) unfunded plans that provide medical, dental and life insurance benefits (the “First Connecticut Postretirement Plans”); (2) for certain eligible former BSB Bancorp employees (i) an unfunded, nonqualified supplemental retirement plan (the “BSB Bancorp Supplemental Plan”) and (ii) unfunded plans that provide life insurance benefits (the “BSB Bancorp Post Retirement Welfare (Life Insurance) Plan”); and (3) for certain former United Financial employees (i) an unfunded, nonqualified supplemental retirement plan (the “United Financial Supplemental Plan”) and (ii) unfunded plans that provide medical, dental and life insurance benefits (the “United Financial Postretirement Benefit Plan”).

An employer is required to recognize an asset or a liability for the funded status of pension and other postretirement plans. The funded status is measured as the difference between the fair value of plan assets and the applicable benefit obligation, which is the projected benefit obligation for a pension plan and the accumulated postretirement benefit obligation for another postretirement plan. Plan assets and benefit obligations are required to be measured as of the date of the employer’s fiscal year-end.

The following table summarizes changes in the benefit obligations and plan assets of (i) the People’s Qualified Plan (including the Chittenden Qualified Plan and the Suffolk Qualified Plan), the First Connecticut Qualified Plan, the People's Supplemental Plans, the First Connecticut Supplemental Plan, the BSB Bancorp Supplemental Plan and the United Financial Supplemental Plan (together the “Pension Plans”) and (ii) the People’s Postretirement Plan, the First Connecticut Postretirement Plans, the BSB Bancorp Post Retirement Welfare (Life Insurance) Plan and the United Financial Postretirement Plan (together the “Other Postretirement Plans”). The table also shows the funded status (or the difference between benefit obligations and plan assets) recognized in the Consolidated Statements of Condition. All plans have a December 31 measurement date.


	Pension Plans						Other Postretirement Plans
(in millions)	2019		2018		2019		2018
Benefit obligations: (1)
Beginning of year	$	562.7	$	584.8	$	15.3	$	14.6
Service cost	—		—		0.3		0.3
Interest cost	22.9		20.2		0.6		0.5
Actuarial loss (gain)	80.2		(51.0)		1.2		(1.7)
Benefits paid	(28.2)		(21.4)		(0.7)		(0.8)
Settlements	(13.1)		(2.7)		—		—
Acquisitions (2)	41.0		35.2		2.0		2.4
Plan revaluations (3)	—		(2.4)		—		—
End of year	665.5		562.7		18.7		15.3
Fair value of plan assets:
Beginning of year	596.4		584.9		—		—
Actual return on assets	138.6		(40.9)		—		—
Employer contributions	18.7		52.7		0.7		0.8
Benefits paid	(28.2)		(21.4)		(0.7)		(0.8)
Settlements	(13.1)		(2.7)		—		—
Acquisitions (2)	34.3		23.8		—		—
End of year	746.7		596.4		—		—
Funded status at end of year	$	81.2	$	33.7	$	(18.7)	$	(15.3)
Amounts recognized in the Consolidated Statements of Condition:
Other assets	$	121.4	$	78.0	$	—	$	—
Other liabilities	(40.2)		(44.3)		(18.7)		(15.3)
Funded status at end of year	$	81.2	$	33.7	$	(18.7)	$	(15.3)

(2)Represents the benefit obligations and plan assets of the United Financial Qualified Plan and the United Financial Supplemental Plan as of November 1, 2019, the BSB Bancorp Supplemental Plan as of April 1, 2019, the First Connecticut Qualified Plan as of October 1, 2018, and the benefit obligations of the United Financial Postretirement Plan as of November 1, 2019, the BSB Bancorp Post Retirement Welfare (Life Insurance) Plan as of April 1, 2019 and the First Connecticut Postretirement Plans as of October 1, 2018

Plan assets for the People’s Qualified Plan, the United Financial Qualified Plan and the First Connecticut Qualified Plan (together the “Qualified Plans”) were $687.8 million, $34.0 million and $24.9 million, respectively, as of December 31, 2019. The related projected benefit obligation of each plan was $569.1 million, $31.9 million and $24.3 million, respectively, at the same date.

Although the People’s Supplemental Plans and the First Connecticut Supplemental Plan (together the “Supplemental Plans”) hold no assets, People’s United has funded trusts to provide benefit payments to the extent such benefits are not paid directly by People’s United. Trust assets of $33.1 million as of December 31, 2019 (which are included in other assets in the Consolidated Statements of Condition) were exceeded by the related projected benefit obligation of $40.2 million at that date.


	Pension Plans										Other Postretirement Plans
Years ended December 31 (in millions)	2019		2018		2017		2019		2018		2017
Net periodic benefit (income) expense:
Interest cost	$	22.9	$	20.2	$	19.1	$	0.9	$	0.8	$	0.8
Expected return on plan assets	(46.1)		(44.3)		(37.9)		—		—		—
Recognized net actuarial loss	5.3		7.3		6.5		0.1		0.3		0.2
Recognized prior service credit	—		(0.3)		(0.8)		—		—		—
Settlements (1)	2.9		1.0		2.6		—		—		—
Net periodic benefit (income) expense	(15.0)		(16.1)		(10.5)		1.0		1.1		1.0
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss):
Net actuarial (gain) loss	(20.5)		26.0		(4.8)		1.1		(2.0)		1.0
Prior service credit	—		0.3		0.8		—		—		—
Total pre-tax changes recognized in other comprehensive income (loss)	(20.5)		26.3		(4.0)		1.1		(2.0)		1.0
Total recognized in net periodic benefit (income) expense and other comprehensive income (loss)	$	(35.5)	$	10.2	$	(14.5)	$	2.1	$	(0.9)	$	2.0

(1)Settlement charges are a result of lump-sum benefit payments in excess of the sum of a plan’s annual interest and service costs. When an employer settles the full amount of its obligation for vested benefits with respect to some of a plan’s participants, the employer is required to recognize in income a pro-rata portion of the aggregate gain or loss recorded in AOCL.

The Company uses a corridor approach in the valuation of its Qualified Plans, which results in the deferral of actuarial gains and losses resulting from differences between actual results and actuarial assumptions. Amortization of actuarial gains and losses occurs when the accumulated unrecognized gain or loss balance, as of the beginning of the year, exceeds 10% of the greater of the projected benefit obligation or the market-related value of plan assets. The excess unrecognized gain or loss balance is amortized over the average remaining life expectancy of plan participants for the People’s Qualified Plan (approximately 26 years) and over the average working lifetime of active participants for both the First Connecticut Qualified Plan (approximately 28 years) and the United Financial Qualified Plan (approximately 30 years) as of December 31, 2019.

Qualified Plans

Other Postretirement Plans

2019

2018

2017

2019

2018

2017

Weighted-average assumptions used to determine
benefit obligations at December 31:

Discount rate:

People’s Qualified Plan

3.38

4.41

3.74

3.40

4.40

3.70

First Connecticut Qualified Plan

3.39

4.41

n/a

United Financial Qualified Plan

3.42

n/a

Chittenden Qualified Plan (1)

n/a

3.62

n/a

Suffolk Qualified Plan (1)

n/a

3.72

n/a

Rate of compensation increase

n/a

Weighted-average assumptions used to determine net
periodic benefit (income) expense for the years
ended December 31:

Discount rate:

People’s Qualified Plan (2)

4.41

3.74%/4.34%

4.41

4.40

3.70

4.40

First Connecticut Qualified Plan

4.41

4.35

n/a

United Financial Qualified Plan

3.33

n/a

Chittenden Qualified Plan (1)

n/a

4.16

n/a

Suffolk Qualified Plan (1)

n/a

4.24

n/a

Expected return on plan assets

People’s Qualified Plan

7.25

n/a

First Connecticut Qualified Plan

6.00

n/a

United Financial Qualified Plan

5.25

n/a

Rate of compensation increase

n/a

Assumed health care cost trend rates at December 31:

Health care cost trend rate assumed for next year

n/a

5.70

6.00

6.20

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)

n/a

4.50

Year that the rate reaches the ultimate trend rate

n/a

2037

The discount rates used to determine the benefit obligation of the Supplemental Plans at December 31, 2019 ranged from 2.76% to 3.40%, while the discount rate used to determine net periodic benefit (income) expense for 2019 ranged from 3.33% to 4.40%. The discount rates used to determine the benefit obligation of the People’s Supplemental Plans at December 31, 2018 ranged from 4.00% to 4.40%, while the discount rate used to determine net periodic benefit (income) expense for 2018 ranged from 3.32% to 4.30%.

The discount rates reflect the then current rates available on long-term high-quality fixed-income debt instruments, and are reset annually on the measurement date. To determine the discount rates, People’s United reviews, along with its independent actuary, spot interest rate yield curves based upon yields from a broad population of high-quality bonds adjusted to match the timing and amounts of expected benefit payments. People’s United uses a full yield curve approach to estimate the interest cost component of net periodic benefit income by applying the specific spot rates along the yield curve, used in the determination of the benefit obligations, to the relevant projected cash flows.

In developing an expected long-term rate of return on asset assumption for the Qualified Plans for purposes of determining 2019 net periodic benefit income, People’s United considered the historical returns and the future expectations for returns within each asset class, as well as the target asset allocation of the pension portfolio. This resulted in an expected  long-term rate of return assumption of 7.25% for the People’s Qualified Plan, 6.00% for the First Connecticut Qualified Plan and 5.25% for the United Financial Qualified Plan. This was intended to reflect expected asset returns over the life of the related pension benefits expected to be paid.

In 2020, $22.3 million in net periodic benefit income is expected to be recognized related to the Qualified Plans. This amount was determined using the following assumptions: (i) expected long-term rates of return of 7.25% for both the People’s Qualified Plan and the First Connecticut Qualified Plan, and 5.25% for the United Financial Qualified Plan; (ii) discount rates of 3.38%, 3.39% and 3.42% for the People's Qualified Plan, the First Connecticut Qualified Plan and the United Financial Qualified Plan, respectively; and (iii) updated mortality tables issued by the Society of Actuaries in the fourth quarter of 2019. The mortality rate is a key assumption used in valuing retirement benefit obligations as it reflects the probability of future benefit payments that are contingent upon the longevity of plan participants and their beneficiaries.

People’s United’s funding policy is to contribute the amounts required by applicable regulations, although additional amounts may be contributed from time to time. In February 2018, People’s United made voluntary employer contributions of $40 million to the People’s Qualified Plan and $10 million to the Chittenden Qualified Plan (none to the Suffolk Qualified Plan) in response to tax reform (see Note 13). Employer contributions for the Supplemental Plans and the Other Postretirement Plans in 2020 are expected to total $4.9 million, representing net benefit payments expected to be paid under these plans.

Expected future net benefit payments for the Pension Plans as of December 31, 2019 are: $28.5 million in 2020; $30.0 million in 2021; $30.6 million in 2022; $31.2 million in 2023; $33.0 million in 2024; and an aggregate of $181.2 million in 2025 through 2029. As of December 31, 2019, expected future net benefit payments for the Other Postretirement Plans are  (i) $1.1 million in each of the years 2020 through 2023, $1.0 million for 2024 and (ii) an aggregate of $4.7 million in 2025 through 2029.

The investment strategy of the Qualified Plans is to develop a diversified portfolio, representing a variety of asset classes of varying duration, in order to effectively fund expected near-term and long-term benefit payments. All investment decisions are governed by an established policy that contains the following asset allocation guidelines:

Equity investments are required to be diversified among industries and economic sectors and may be invested directly in individual securities or indirectly through the use of mutual funds, trust company common funds, REIT's, investment partnerships, LLCs or exchange traded funds. Limitations have been established on the overall allocation to any individual security representing more than 3% of the market value of plan assets. A limit of 50% of equity holdings may be invested in international equities. Short sales, margin purchases, physical commodities and future contracts, and exchange traded or  over-the-counter options are prohibited.

Fixed income securities are oriented toward risk-averse, investment-grade securities rated “A” or higher. A limit of up to 30% of the fixed income holdings may be purchased and held indirectly in issues rated below “Baa3” by Moody’s or “BBB-” by Standard & Poor’s, if the higher investment risk is compensated for by the prospect of a positive incremental investment return. With the exception of U.S. government securities, in which the Qualified Plans may invest the entire fixed income allocation, fixed income securities require diversification among individual securities and sectors. Limitations have been established on the overall investment in securities of a single issuer to no more than 2.5% of the market value of total plan assets. There is no limit on the maximum maturity of securities held.


	Plan Assets
	2019										2018
As of December 31	People’s Qualified Plan		First Connecticut Qualified Plan		United Financial Qualified Plan (1)		People’s Qualified Plan		First Connecticut Qualified Plan
Equity securities	66	%	66	%	9	%	70	%	73	%
Cash and fixed income securities	34		34		91		30		27
Total	100	%	100	%	100	%	100	%	100	%


	Fair Value Measurements Using
As of December 31, 2019 (in millions)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	18.9	$	—	$	—	$	18.9
Equity securities:
Common stocks	261.2		—		—		261.2
Mutual funds	—		215.2		—		215.2
Fixed income securities:
U.S. Treasury	—		104.8		—		104.8
Corporate	—		73.0		—		73.0
Mutual funds	—		72.5		—		72.5
Other	—		1.1		—		1.1
Total	$	280.1	$	466.6	$	—	$	746.7


	Fair Value Measurements Using
As of December 31, 2018 (in millions)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	15.2	$	—	$	—	$	15.2
Equity securities:
Common stocks	216.6		—		—		216.6
Mutual funds	—		201.1		—		201.1
Fixed income securities:
Corporate	—		68.5		—		68.5
U.S. Treasury	—		58.6		—		58.6
Mutual funds	—		32.9		—		32.9
Other	—		3.5		—		3.5
Total	$	231.8	$	364.6	$	—	$	596.4

In April 2007, People’s United established an ESOP. At that time, People’s United loaned the ESOP $216.8 million to purchase 10,453,575 shares of People’s United common stock in the open market. In order for the ESOP to repay the loan, People’s United expects to make annual cash contributions of approximately $18.8 million until 2036. Such cash contributions may be reduced by the cash dividends paid on unallocated ESOP shares, which totaled $4.4 million in 2019, $4.6 million in 2018 and $4.8 million in 2017. At December 31, 2019, the loan balance totaled $171.8 million.

Employee participation in this plan is restricted to those employees who (i) are at least 18 years of age and (ii) worked at least 1000 hours within 12 months of their hire date or any plan year (January 1 to December 31) after their date of hire. Employees meeting the aforementioned eligibility criteria during the plan year must continue to be employed as of the last day of the plan year in order to receive an allocation of shares for that plan year.

Shares of People’s United common stock are held by the ESOP and allocated to eligible participants annually based upon a percentage of each participant’s eligible compensation. Since the ESOP was established, a total of 4,529,883 shares of People’s United common stock have been allocated or committed to be released to participants’ accounts. At  December 31, 2019, 5,923,692 shares of People’s United common stock, with a fair value of $100.1 million at that date, have not been allocated or committed to be released.

Compensation expense related to the ESOP is recognized at an amount equal to the number of common shares committed to be released by the ESOP for allocation to participants’ accounts multiplied by the average fair value of People’s United’s common stock during the reporting period. The difference between the fair value of the shares of People’s United’s common stock committed to be released and the cost of those common shares is recorded as a credit to additional paid-in capital (if fair value exceeds cost) or, to the extent that no such credits remain in additional paid-in capital, as a charge to retained earnings (if fair value is less than cost). Expense recognized for the ESOP totaled $5.7 million, $6.2 million and $6.4 million for the years ended December 31, 2019, 2018 and 2017, respectively.

People’s United sponsors an employee savings plan that qualifies as a 401(k) plan under the Internal Revenue Code. Employees may contribute up to 50% of their pre-tax compensation up to certain limits, and People’s United makes a matching contribution equal to 100% of a participant’s contributions up to 4% of pre-tax compensation. Participants vest immediately in their own contributions and after one year in People’s United’s contributions. A supplemental savings plan has also been established for certain senior officers and the Company has funded a trust to provide benefit payments to the extent such benefits are not paid directly by People’s United. People’s United also continues to maintain, for former First Connecticut participants who met certain eligibility requirements, a funded plan that provides supplemental retirement benefits. Combined trust assets of $17.9 million as of December 31, 2019 (which are included in other assets in the Consolidated Statements of Condition) were exceeded by the related combined benefit obligations of $44.2 million at that date. Expense recognized for these employee savings plans totaled $32.3 million, $29.1 million and $25.4 million for the years ended December 31, 2019, 2018 and 2017, respectively.