Defined Benefit Pension Plan

12 Months Ended

Jun. 30, 2021

Defined Benefit Pension Plan

Defined Benefit Pension Plan

NOTE 15 – Defined Benefit Pension Plan

The following table sets forth the Plan’s funded status and amounts recognized in the Company’s consolidated balance sheets:

	June 30, 2021		June 30, 2020
Change in projected benefit obligation
Projected benefit obligation at beginning of year	$	12,363,236	$	10,601,032
Interest cost		335,720		371,932
Benefits paid		(418,160)		(297,103)
Actuarial (gain) loss		(269,252)		1,687,375
Settlement		—		—
Projected benefit obligation at end of year		12,011,544		12,363,236
Change in plan assets
Fair value of plan assets at beginning of year		9,268,753		9,770,170
Actual return on assets		3,257,972		(204,314)
Employer contributions		—		—
Expenses paid from trust		—		—
Benefits paid		(418,160)		(297,103)
Fair value of plan assets at end of year		12,108,565		9,268,753
Funded status at end of year	$	97,021	$	(3,094,483)

Amounts recognized in the consolidated balance sheets in accrued interest payable and other liabilities consist of:

	June 30, 2021		June 30, 2020
Pension asset (liability)	$	97,021	$	(3,094,483)

Amounts recognized in accumulated other comprehensive loss consist of:

	June 30, 2021		June 30, 2020
Accumulated pension actuarial loss, net of income tax benefit of $1,522,485 and $1,522,485, respectively	$	1,552,435	$	4,853,355

The accumulated benefit obligation for the Plan was $12,011,544 and $12,363,236 at June 30, 2021 and 2020, respectively.

The components of net periodic pension cost (income) included in compensation and benefits on the statements of operations are as follows:

	June 30, 2021		June 30, 2020
Interest cost	$	335,720	$	371,932
Expected return on plan assets		(634,851)		(671,118)
Amortization of net actuarial loss		408,547		215,747
Net periodic pension (income) loss	$	109,416	$	(83,439)

For the years ended June 30, 2021 and 2020, actuarial assumptions include an assumed discount rate on benefit obligations of 2.82% and 2.76% respectively, and an expected long‑term rate of return of 7.0% for June 30, 2021 and 2020. The expected long-term rate of return for the Plan’s total assets is based on the expected returns of each of the below asset categories, weighted based on the current target allocation for each class. The trustees evaluate whether adjustments are needed based on historical returns to more accurately reflect expectations of future returns. An annual salary increase of 0% was utilized for the year ended June 30, 2021 and 2020.

There were no  contributions paid to the Plan during the years ended June 30, 2021 and 2020.

At June 30, 2021, the projected benefit payments for future fiscal years were estimated as follows:

2022	$	1,180,800
2023		703,700
2024		696,200
2025		1,582,100
2026		969,000
2025-2029		4,089,600
	$	9,221,400

At June 30, 2021 and 2020, all Plan assets supporting the Bank’s defined benefit plan are held at fair value and represent Level 1 classified investments.

The percentage of the fair value of total Plan assets for each major category is as follows:

	June 30, 2021		June 30, 2020
Cash Equivalents	15.5	%	0.9	%
Equities
Large Cap	29.2	%	48.6	%
Mid Cap	8.4	%	4.3	%
Small Cap	4.5	%	25.3	%
International	6.3	%	4.0	%
Other	16.0	%	8.3	%
Alternatives/Multi-Asset	0.9	%	8.6	%
Fixed Income
Government Securities	4.0	%	—	%
Corporate Bonds	2.4	%
Mutual Funds	12.8	%	—	%
Total	100.0	%	100.0	%

The Bank’s investment policies and strategies for the Plan use target allocations for the individual asset categories. Current allocations are all within policy guidelines. The Bank’s investment goals are to maximize returns subject to specific risk management policies.

The Bank anticipates making at least the minimum required contribution in fiscal year 2022.