The Company maintains the First Seacoast Bank Employee Stock Ownership Plan (“ESOP”) to provide eligible employees of the Company the opportunity to own Company stock. The ESOP is a tax-qualified retirement plan for the benefit of Company employees. Contributions are allocated to eligible participants on the basis of compensation, subject to federal limits. The Company uses the principal and interest method to determine the release of shares amount. The number of shares committed to be released per year through 2038 is 11,924.

The ESOP funded its purchase of 238,473 shares through a loan from the Company equal to 100% of the aggregate purchase price of the common stock. The ESOP trustee is repaying the loan principally through the Bank’s contributions to the ESOP over the remaining loan term of 17.5 years. At December 31, 2021 and 2020, the remaining principal balance on the ESOP debt was $2.1 million and $2.2 million, respectively.

Under applicable accounting requirements, the Company records compensation expense for the ESOP equal to fair market value of shares when they are committed to be released from the suspense account to participants’ accounts under the plan. Total compensation expense recognized in connection with the ESOP for the years ended December 31, 2021 and 2020, was $115,000 and $89,000, respectively. At December 31, 2021 and 2020, total unearned compensation for the ESOP was $2.0 million and $2.1 million, respectively.

	December 31,
	2021		2020
Shares held by the ESOP include the following:
Allocated		23,848		11,924
Committed to be allocated		11,924		11,924
Unallocated		202,701		214,625
Total		238,473		238,473

The fair value of unallocated shares was approximately $2.2 million and $1.9 million at December 31, 2021 and 2020, respectively.

During the years ended December 31, 2021 and 2020, the Company sponsored a 401(k) defined contribution plan for substantially all employees pursuant to which employees of the Company could elect to make contributions to the plan subject to Internal Revenue Service limits. The Company also makes matching and profit-sharing contributions to eligible participants in accordance with plan provisions. The Company’s contributions for the years ended December 31, 2021 and 2020 was $189,000 and $198,000, respectively.

The Company participates in the Pentegra Defined Benefit Plan for Financial Institutions (The Pentegra DB Plan), a tax-qualified defined benefit pension plan. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code. There are no collective bargaining agreements in place that require contributions to the Pentegra DB Plan. The Pentegra DB 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, under the Pentegra DB Plan, contributions made by a participating employer may be used to provide benefits to participants of other participating employers.

The funded status (fair value of plan assets divided by funding target) as of July 1, 2021 is as follows:

2021 Valuation Report			104.99	%	⁽¹⁾

Based upon the funded status of the Pentegra DB Plan as of July 1, 2021, no funding improvement plan or rehabilitation plan has been implemented or is pending as of December 31, 2021. The Bank’s contributions to the Pentegra DB Plan during the year ended December 31, 2021 totaled $200,000 and were not more than 5% of the total contributions to the Pentegra DB Plan for the plan year ending June 30, 2020.

Total pension plan expense for the years ended December 31, 2021 and 2020 was $200,000 and $300,000, respectively, and is included in salaries and employee benefits in the accompanying consolidated statements of income. The Company did not pay a surcharge to the Pentegra DB Plan during the years ended December 31, 2021 or 2020.

The Company enacted a “hard freeze” for the Pentegra DB Plan as of December 31, 2018, eliminating all future service-related accruals for participants. Prior to this enactment the Company maintained a “soft freeze” status that continued service-related accruals for its active participants with no new participants permitted into the Pentegra DB Plan. The Company estimates a contribution amount of $200,000 for the fiscal year ended December 31, 2022.

The Company maintains a nonqualified supplemental retirement plan for its current President and former President. The plan provides supplemental retirement benefits payable in installments over a period of years upon retirement or death. The recorded liability at December 31, 2021 and 2020 relating to this supplemental retirement plan was $634,000 and $607,000, respectively. The discount rate used to determine the Company’s obligation was 5.00% during the years ended December 31, 2021 and 2020. The projected rate of salary increase for its current President was and 3% for the years ended December 31, 2021 and 2020. For the years ended December 31, 2021 and 2020, the expense of this salary retirement plan was $82,000 and $73,000, respectively.

The recorded liability at December 31, 2021 and 2020 relating to the supplemental retirement plan for the Company’s former President was $90,000 and $132,000, respectively. The discount rate used to determine the Company’s obligation was 6.25% during the years ended December 31, 2021 and 2020. For the years ended December 31, 2021 and 2020, the expense of this supplemental plan was $6,000 and $8,000, respectively.

The Company has an endorsement method split dollar plan for a former President. The recorded liability at December 31, 2021 and 2020 relating to this supplemental executive benefit agreement was $35,000 and $34,000, respectively. For the years ended December 31, 2021 and 2020, the expense of this supplemental plan was $1,000.

The Company has a supplemental retirement plan for eligible directors that provides for monthly benefits based upon years of service to the Company, subject to certain limitations as set forth in the agreements. The present value of these future payments is being accrued over the estimated period of service. The estimated liability at December 31, 2021 and 2020 relating to this plan was $550,000 and $573,000, respectively. The discount rate used to determine the Company’s obligation was 6.25% during the years ended December 31, 2021 and 2020. Total supplemental retirement plan expense amounted to $63,000 for the years ended December 31, 2021 and 2020. The Company enacted a “hard freeze” for this supplemental retirement plan as of January 1, 2022 (See Note 21 Subsequent Events, for more information).

Additionally, the Company has a deferred directors’ fee plan which allows members of the board of directors to defer the receipt of fees that otherwise would be paid to them in cash. At December 31, 2021 and 2020, the total deferred directors’ fees amounted to $420,000 and $321,000, respectively.