Retirement Plans (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Changes in the Projected Benefit Obligation and Plan Assets of the Corporation’s Pension and Postretirement Plans

The following schedule sets forth the changes in the projected benefit obligation and plan assets of the Corporation's Plans:



	Pension Plan						Postretirement Plan						SERP
(Dollars in thousands)	2017			2016			2017			2016			2017			2016
Projected benefit obligation:
Benefit obligation at beginning of year	$	123,968		$	119,873		$	2,601		$	3,247		$	2,567		$	2,160
Service cost	639			1,041			5			9			61			77
Interest cost	4,966			5,335			94			132			69			92
Settlement and other charges⁽¹⁾	—			—			—			—			—			(264		)
Net actuarial loss (gain)	10,131			2,684			10			(478		)	(274		)	536
Benefits paid	(6,432		)	(4,965		)	(198		)	(309		)	—			(34		)
Curtailment	(11,911		)	—			—			—			—			—
Benefit obligation at end of year	121,361			123,968			2,512			2,601			2,423			2,567
Fair value of plan assets:
Fair value of plan assets at beginning of year	132,751			126,930			—			—			—			—
Actual return on plan assets	19,582			10,786			—			—			—			—
Employer contributions	—			—			198			309			—			—
Benefits paid	(6,432		)	(4,965		)	(198		)	(309		)	—			—
Fair value of plan assets at end of year	145,901			132,751			—			—			—			—
Funded (unfunded) status at December 31	$	24,540		$	8,783		$	(2,512	)	$	(2,601	)	$	(2,423	)	$	(2,567	)
Accumulated benefit obligation	$	121,361		$	115,418		$	2,512		$	2,601		$	2,423		$	2,567


⁽¹⁾	The settlement and other charges relate to the change in control as a result of the merger with Talmer as of August 31, 2016.

Schedule of Weighted-average rate assumptions of the Pension and Postretirement Plans

Weighted-average rate assumptions of the Corporation's Plans follow:



	Pension Plan						Postretirement Plan						SERP
	2017		2016		2015		2017		2016		2015		2017		2016		2015
Discount rate used in determining benefit obligation — December 31	3.68	%	4.22	%	4.55	%	3.41	%	3.79	%	4.23	%	3.38	%	3.63	%	4.51	%
Discount rate used in determining expense	4.22		4.55		4.15		3.79		4.23		3.75		—		4.51		4.07
Discount rate used in determining expense — prior to remeasurement	3.81		—		—		—		—		—		3.63		2.87		—
Expected long-term return on Pension Plan assets	6.75		6.75		6.75		—		—		—		—		—		—
Rate of compensation increase used in determining benefit obligation — December 31	—		3.50		3.50		—		—		—		—		3.50		3.50
Rate of compensation increase used in determining pension expense	3.50		3.50		3.50		—		—		—		3.50		3.50		3.50
Year 1 increase in cost of postretirement benefits	—		—		—		6.5		7.0		7.5		—		—		—

Schedule of Net periodic Pension Cost (Income) of the Pension and Postretirement Plans

Net periodic pension cost (income) of the Corporation's Plans was as follows for the years ended December 31:



	Pension Plan									Postretirement Plan									SERP
(Dollars in thousands)	2017			2016			2015			2017			2016			2015			2017		2016		2015
Service cost	$	639		$	1,041		$	1,021		$	5		$	9		$	16		$	61	$	77	$	70
Interest cost	4,966			5,335			5,242			94			132			133			69		92		85
Expected return on plan assets	(8,938		)	(8,562		)	(8,645		)	—			—			—			—		—		—
Amortization of prior service credit	—			—			(5		)	—			117			130			—		—		—
Amortization of net actuarial loss (gain)	1,837			2,259			3,962			(162		)	(100		)	(1		)	77		78		262
Curtailment	1			—			—			—			—			—			—		—		—
Settlement ⁽¹⁾	—			—			—			—			—			—			322		120		—
Net cost (income)	$	(1,495	)	$	73		$	1,575		$	(63	)	$	158		$	278		$	529	$	367	$	417


⁽¹⁾	The settlement charge relates to the settlement of liabilities under the SERP for the retirement of the plan participant during the third quarter of 2017 and the change in control as a result of the merger with Talmer as of August 31, 2016.

Schedule of Estimated Future Benefit Payments Under the Pension and Postretirement Plans

The following schedule presents estimated future benefit payments for the next 10 years under the Corporation's Plans for retirees already receiving benefits and future retirees, assuming they retire and begin receiving unreduced benefits as soon as they are eligible:



(Dollars in thousands)	Pension Plan		Postretirement Plan		SERP
2018	$	6,001	$	230	$	2,063
2019	6,297		230		22
2020	6,392		231		22
2021	6,657		230		22
2022	6,787		227		22
2023 - 2027	35,689		973		107
Total	$	67,823	$	2,121	$	2,258

Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates

A one percentage-point change in these rates would have the following effects:



	One Percentage-Point
(Dollars in thousands)	Increase		Decrease
Effect on total of service and interest cost components in 2016	$	8	$	(8	)
Effect on postretirement benefit obligation as of December 31, 2016	196		(177		)

Schedule of Allocation of Plan Assets

The Pension Plan's asset allocation by asset category was as follows:



	December 31,
Asset Category	2017		2016
Equity securities	68	%	69	%
Debt securities	28		29
Other	4		2
Total	100	%	100	%

The following schedule sets forth the fair value of the Pension Plan's assets and the level of the valuation inputs used to value those assets at December 31, 2017 and 2016:



(Dollars in thousands)	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2017
Cash	$	5,238	$	—	$	—	$	5,238
Equity securities:
U.S. large- and mid-cap stocks⁽¹⁾	68,909		—		—		68,909
U.S. small-cap mutual funds	5,377		—		—		5,377
International large-cap mutual funds	18,341		—		—		18,341
Emerging markets mutual funds	7,363		—		—		7,363
Debt securities:
U.S. Treasury and government sponsored agency bonds and notes	—		548		—		548
Mutual funds⁽³⁾	40,046		—		—		40,046
Other	79		—		—		79
Total	$	145,353	$	548	$	—	$	145,901
December 31, 2016
Cash	$	2,825	$	—	$	—	$	2,825
Equity securities:
U.S. large- and mid-cap stocks⁽¹⁾	55,389		—		—		55,389
U.S. small-cap mutual funds	5,687		—		—		5,687
International large-cap mutual funds	13,701		—		—		13,701
Emerging markets mutual funds	5,147		—		—		5,147
Chemical Financial Corporation common stock	11,412		—		—		11,412
Debt securities:
U.S. Treasury and government sponsored agency bonds and notes	—		806		—		806
Corporate bonds⁽²⁾	—		1,503		—		1,503
Mutual funds⁽³⁾	36,220		—		—		36,220
Other	61		—		—		61
Total	$	130,442	$	2,309	$	—	$	132,751


⁽¹⁾	Comprised of common stocks and mutual funds traded on U.S. Exchanges whose issuers had market capitalizations exceeding $3 billion.


⁽²⁾	Comprised of investment grade bonds of U.S. issuers from diverse industries.


⁽³⁾	Comprised primarily of fixed-income bonds issued by the U.S. Treasury and government sponsored agencies and bonds of U.S. and foreign issuers from diverse industries.

Schedule of Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax, Related to the Corporation’s Pension, Postretirement and Supplemental Plans

The following sets forth the changes in accumulated other comprehensive income (loss), net of tax, related to the Corporation's Pension Plan, Postretirement Plan and SERP during 2017:



(Dollars in thousands)	Pension Plan			Postretirement Plan			SERP			Total
Accumulated other comprehensive income (loss) at beginning of year	$	(26,123	)	$	724		$	(495	)	$	(25,894	)
Comprehensive income (loss) adjustment:
Prior service costs (credits)	—			—			—			—
Net actuarial (income) loss	1,528			(112		)	229			1,645
Curtailment	7,742			—			—			7,742
Settlement ⁽¹⁾	—			—			209			209
Comprehensive income (loss) adjustment	9,270			(112		)	438			9,596
Reclassification of certain income tax effects⁽²⁾	(3,630		)	132			(12		)	(3,510		)
Accumulated other comprehensive income (loss) at end of year	$	(20,483	)	$	744		$	(69	)	$	(19,808	)


⁽¹⁾	The settlement charge relates to the settlement of liabilities under the SERP for the retirement of the plan participant during the third quarter of 2017.


⁽²⁾	The reclassification from accumulated other comprehensive income (loss) to retained earnings was due to the early adoption of ASU 2018-02, see Note 1 for further information.

Schedule of Estimated Income (Loss) That Will Be Amortized From Accumulated Other Comprehensive Income (Loss) Into Net Periodic Cost

The estimated income (loss) that will be amortized from accumulated other comprehensive income (loss) into net periodic cost, net of tax, in 2018 is as follows:



(Dollars in thousands)	Pension Plan			Postretirement Plan		SERP		Total
Prior service (costs) credits	$	—		$	—	$	—	$	—
Net gain (loss)	(561		)	113		—		(448		)
Total	$	(561	)	$	113	$	—	$	(448	)