Pension and Other Post-Retirement Benefits

12 Months Ended

Dec. 31, 2011

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

9. Pension and Other Post-Retirement Benefits

Pension Plan

Prior to September 1, 2005, the Bank participated in a multi-employer defined benefit pension plan covering all of its full time (as defined) employees who had been employed by the Bank for more than six months and were at least twenty-one years of age. Benefits under this plan became fully vested after five years of service. The plan is a single plan under Internal Revenue Code Section 413(c) and, as a result, all of the assets stand behind all of the liabilities. Accordingly, contributions made by a participating employer may be used to provide benefits to participants of other participating employers. The Bank’s net pension cost for the period is the amount of contributions due. Total pension expense was $284,000 for the year ended December 31, 2011 compared with $156,000 and $88,000 for 2010 and 2009, respectively. Contributions paid by Naugatuck Valley Savings and Loan were $370,000, $157,000 and $134,000, for the years ended December 31, 2011, 2010 and 2009, respectively. These contributions were not more than 5% of the total contributions to the Plan. The funded status of Naugatuck Valley Savings and Loan’s portion of the Plan at July 1, 2011 and 2010 (most recent data available) was 81.56% and 85.25%, respectively. Current valuations of the Bank’s allocation of the Plan’s pooled assets are not available. After September 2005, the Plan was amended and as a result, is considered frozen, with no new participants being accepted. No future compensation will be considered for benefit accruals, and there will be no future credited service, service accruals, or additional accrued benefits.

Defined Contribution Plan

The Bank has a defined contribution 401(k) plan for eligible employees. The Bank provides 75% matching of employee contributions, with a maximum contribution on up to 6% of the employee’s salary. The Bank’s contribution vests over a 6 year graded vesting schedule. The Bank’s contribution to the plan was $224,000, $204,000, and $194,000 for the years ended December 31, 2011, 2010 and 2009, respectively. Additionally, during the year ended December 31, 2011, the Bank accrued $161,000 of additional contributions in connection with the findings resulting from a review of its 401(k) plan. The review revealed inconsistencies in the compensation items that were considered eligible for determining deferral and matching contributions. The Bank is applying under the Internal Revenue Service Voluntary Correction Program to correct these inconsistencies.

Directors Retirement Plan

The Bank sponsors a deferred compensation plan under which non-employee directors may elect to defer up to 100% of their compensation in the form of either cash or stock-appreciation rights (“SARs”). If a deferral is made in SARs, then at the time of distribution an individual will receive in cash the value of an equivalent number of shares of the Company’s stock that could have been purchased at the time of the deferral. The individual will also receive in cash an amount equal to any dividends which would be paid on the equivalent shares during the deferral period. Under terms of the plan, an election to defer compensation, including which form (cash or SARs), must be made prior to December 31^st of the preceding year. Each year the form of previous deferrals may be converted to the other form at the option of the individual participant.

Healthcare Benefits

In addition to providing pension benefits, the Bank provides certain health care benefits to retired employees (the “Healthcare Benefits Plan”). Substantially all of the Bank’s employees hired prior to February 2007 may become eligible for those benefits. The Bank’s policy is to accrue the expected cost of providing those benefits during the years that the employee renders the necessary service.

The following table summarizes the obligation and funded status for the Healthcare Benefits Plan as of December 31, 2011 and 2010:

	Healthcare Benefit Plan
(In thousands)	2011			2010
Measurement date		12/31/2011			12/31/2010
Change in benefit obligation
Projected benefit obligation at beginning of year	$	376		$	361
Interest cost		28			15
Projected benefit obligation at end of year		404			376
Change in plan assets:
Fair value of plan assets at beginning of year		-			-
Employer contributions		24			19
Plan participant contributions		-			-
Benefits paid		(24	)		(19	)
Fair value of plan assets at end of year		-			-
Funded status at end of year recognized in the the Company's consolidated balance sheets	$	(404	)	$	(376	)

Net Periodic Benefit Cost and Contributions

The benefit costs related to the Healthcare Benefits Plan for the years ended December 31, 2011 and 2010 were as follows:

	Healthcare Benefit Plan
(In thousands)	2011		2010		2009
Components of net periodic benefit cost
Interest cost	$	28	$	15	$	27
Expected return on plan assets		-		-		-
Net periodic benefit cost		28		15		27

Assumptions and Effects

The actuarial assumptions used to determine the projected benefit obligations and net periodic benefit cost of the Healthcare Benefits Plan for the years ended December 31, 2011 and 2010 were as follows:

	Healthcare Benefit Plan
Weighted-average assumptions:	2011			2010			2009
Discount rate		5.000	%		5.750	%		6.250	%
Rate of compensation increase		-			-			-
Medical trend rate next year		5.00	%		5.00	%		7.00	%
Ultimate medical trend rate		5.00	%		5.00	%		5.00	%
Year ultimate trend rate is achieved		2011			2011			2011

Assumed health care cost trend rates have a significant effect on the amounts reported for the Healthcare Benefits Plan. At December 31, 2011, a one percentage-point increase in the assumed health care trend rates would increase the projected benefit obligation by $32,000 compared with a decrease of $13,000 if the assumed health care trend rate were to decrease by one percentage-point.

Due to the unfunded status of the Healthcare Benefits Plan, the Bank expects to contribute the amount of the estimated benefit payments for the next fiscal year, which is expected to be $30,000 for the year ending December 31, 2012.