Defined Benefit and Other Postretirement Benefits

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

Defined Benefit and Other Postretirement Benefits

Note 15 – Defined Benefit and Other Postretirement Benefits

Qualified Pension Plan

Trustmark maintains a noncontributory tax-qualified defined benefit pension plan titled the Trustmark Corporation Pension Plan for Certain Employees of Acquired Financial Institutions (the Continuing Plan) to satisfy commitments made by Trustmark to associates covered through plans obtained in acquisitions.

The following tables present information regarding the benefit obligation, plan assets, funded status, amounts recognized in accumulated other comprehensive loss, net periodic benefit cost and other statistical disclosures for the Continuing Plan for the periods presented ($ in thousands):

	December 31,
	2021			2020
Change in benefit obligation:
Benefit obligation, beginning of year	$	9,547		$	9,060
Service cost		252			254
Interest cost		173			241
Actuarial (gain) loss		(198	)		876
Benefits paid		(1,127	)		(884	)
Benefit obligation, end of year	$	8,647		$	9,547
Change in plan assets:
Fair value of plan assets, beginning of year	$	2,873		$	3,443
Actual return on plan assets		291			(87	)
Employer contributions		863			401
Benefit payments		(1,127	)		(884	)
Fair value of plan assets, end of year	$	2,900		$	2,873
Funded status at end of year - net liability	$	(5,747	)	$	(6,674	)
Amounts recognized in accumulated other comprehensive loss:
Net loss - amount recognized	$	1,428		$	2,564
Actuarial (gain) loss included in benefit obligation:
Change in discount rate	$	(491	)	$	1,009
Change in mortality table		15			(47	)
Other		278			(86	)
Actuarial (gain) loss	$	(198	)	$	876

	Years Ended December 31,
	2021			2020			2019
Net periodic benefit cost:
Service cost	$	252		$	254		$	211
Interest cost		173			241			361
Expected return on plan assets		(130	)		(154	)		(202	)
Recognized net loss due to lump sum settlements		183			119			312
Recognized net actuarial loss		594			326			373
Net periodic benefit cost	$	1,072		$	786		$	1,055
Other changes in plan assets and benefit obligation recognized in other    comprehensive income (loss), before taxes:
Net loss - Total recognized in other comprehensive income (loss)	$	(1,136	)	$	671		$	(277	)
Total recognized in net periodic benefit cost and other comprehensive    income (loss)	$	(64	)	$	1,457		$	778
Weighted-average assumptions as of end of year:
Discount rate for benefit obligation		2.41	%		1.95	%		2.84	%
Discount rate for net periodic benefit cost		1.95	%		2.84	%		3.97	%
Expected long-term return on plan assets		5.00	%		5.00	%		5.00	%

Plan Assets

The weighted-average asset allocations by asset category are presented below for the Continuing Plan at December 31, 2021 and 2020.

	December 31,
	2021			2020
Money market fund		4.0	%		5.0	%
Exchange traded funds:
Equity securities		50.0	%		43.0	%
Fixed income		35.0	%		41.0	%
International		11.0	%		11.0	%
Total		100.0	%		100.0	%

The strategic objective of the investments of the assets in the Continuing Plan aims to provide long-term capital growth with moderate income. The allocation is managed on a total return basis with the average participant age in mind. It is constructed with an intermediate investment time frame with a moderate to high risk tolerance or a long-term investment time frame with a low to moderate risk tolerance. The plan allocation is typically balanced between equity and fixed income. The equity exposure has the potential to earn a return greater than inflation while the fixed income exposure may reduce the risk and volatility of the portfolio to which the equity allocation contributes.

Fair Value Measurements

At this time, Trustmark presents no fair values that are derived through internal modeling. Should positions requiring fair valuation arise that are not relevant to existing methodologies, Trustmark will make every reasonable effort to obtain market participant assumptions, or independent evaluation.

The following tables set forth by level, within the fair value hierarchy, the Continuing Plan’s assets measured at fair value at December 31, 2021 and 2020 ($ in thousands):

	December 31, 2021
	Total		Level 1		Level 2		Level 3
Money market fund	$	107	$	107	$	—	$	—
Exchange traded funds:
Equity securities		1,460		1,460		—		—
Fixed income		1,021		1,021		—		—
International		312		312		—		—
Total assets at fair value	$	2,900	$	2,900	$	—	$	—

	December 31, 2020
	Total		Level 1		Level 2		Level 3
Money market fund	$	131	$	131	$	—	$	—
Exchange traded funds:
Equity securities		1,242		1,242		—		—
Fixed income		1,182		1,182		—		—
International		318		318		—		—
Total assets at fair value	$	2,873	$	2,873	$	—	$	—

There have been no changes in the methodologies used in estimating the fair value of plan assets at December 31, 2021. The money market fund approximates fair value due to its immediate maturity.

The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although Trustmark believes their valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Contributions

The range of potential contributions to the Continuing Plan is determined annually by the Continuing Plan’s actuary in accordance with applicable IRS rules and regulations. Trustmark’s policy is to fund amounts that are sufficient to satisfy the annual minimum funding requirements and do not exceed the maximum that is deductible for federal income tax purposes. The actual amount of the contribution

is determined annually based on the Continuing Plan’s funded status and return on plan assets as of the measurement date, which is December 31. For the plan year ending December 31, 2021, Trustmark’s minimum required contribution to the Continuing Plan was $312 thousand and Trustmark contributed $324 thousand. For the plan year ending December 31, 2022, Trustmark’s minimum required contribution to the Continuing Plan is expected to be $164 thousand. Management and the Board of Directors of Trustmark will monitor the Continuing Plan throughout 2022 to determine any additional funding requirements by the plan’s measurement date.

Estimated Future Benefit Payments and Other Disclosures

The following table presents the expected benefit payments, which reflect expected future service, for the Continuing Plan ($ in thousands):

Year	Amount
2022	$	1,275
2023		1,486
2024		1,145
2025		594
2026		641
2027 - 2031		2,138

Amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost during 2022 include a net loss of $241 thousand.

Supplemental Retirement Plans

Trustmark maintains a nonqualified supplemental retirement plan covering key executive officers and senior officers as well as directors who have elected to defer fees. The plan provides for retirement and/or death benefits based on a participant’s covered salary or deferred fees. Although plan benefits may be paid from Trustmark’s general assets, Trustmark has purchased life insurance contracts on the participants covered under the plan, which may be used to fund future benefit payments under the plan. The annual measurement date for the plan is December 31. As a result of mergers prior to 2014, Trustmark became the administrator of nonqualified supplemental retirement plans, for which the plan benefits were frozen prior to the merger date.

The following tables present information regarding the benefit obligation, plan assets, funded status, amounts recognized in accumulated other comprehensive loss, net periodic benefit cost and other statistical disclosures for Trustmark’s nonqualified supplemental retirement plans for the periods presented ($ in thousands):

	December 31,
	2021			2020
Change in benefit obligation:
Benefit obligation, beginning of year	$	59,646		$	57,482
Service cost		75			77
Interest cost		1,125			1,576
Actuarial (gain) loss		(2,357	)		4,168
Benefits paid		(3,454	)		(3,657	)
Benefit obligation, end of year	$	55,035		$	59,646
Change in plan assets:
Fair value of plan assets, beginning of year	$	—		$	—
Employer contributions		3,454			3,657
Benefit payments		(3,454	)		(3,657	)
Fair value of plan assets, end of year	$	—		$	—
Funded status at end of year - net liability	$	(55,035	)	$	(59,646	)
Amounts recognized in accumulated other comprehensive loss:
Net loss	$	17,937		$	21,486
Prior service cost		348			459
Amounts recognized	$	18,285		$	21,945
Actuarial (gain) loss included in benefit obligation:
Change in discount rate	$	(2,431	)	$	4,997
Change in mortality table		134			(380	)
Other		(60	)		(449	)
Actuarial (gain) loss	$	(2,357	)	$	4,168

	Years Ended December 31,
	2021			2020			2019
Net periodic benefit cost:
Service cost	$	75		$	77		$	109
Interest cost		1,125			1,576			2,044
Amortization of prior service cost		111			150			250
Recognized net actuarial loss		1,192			957			627
Net periodic benefit cost	$	2,503		$	2,760		$	3,030
Other changes in plan assets and benefit obligation recognized in other    comprehensive income (loss), before taxes:
Net (gain) loss	$	(3,549	)	$	3,211		$	4,872
Amortization of prior service cost		(111	)		(150	)		(250	)
Total recognized in other comprehensive income (loss)	$	(3,660	)	$	3,061		$	4,622
Total recognized in net periodic benefit cost and other comprehensive    income (loss)	$	(1,157	)	$	5,821		$	7,652
Weighted-average assumptions as of end of year:
Discount rate for benefit obligation		2.41	%		1.95	%		2.84	%
Discount rate for net periodic benefit cost		1.95	%		2.84	%		3.97	%

Estimated Supplemental Retirement Plan Payments and Other Disclosures

The following table presents the expected benefits payments for Trustmark’s supplemental retirement plans ($ in thousands):

Year	Amount
2022	$	4,065
2023		3,978
2024		3,967
2025		3,801
2026		3,742
2027 - 2031		16,941

Amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost during 2022 include a loss of $986 thousand and prior service cost of $111 thousand.

Other Benefit Plans

Defined Contribution Plan

Trustmark provides associates with a self-directed 401(k) retirement plan that allows associates to contribute a percentage of base pay, within limits provided by the Internal Revenue Code and accompanying regulations, into the plan. Trustmark matches 100% of associate contributions to the plan based on the amount of each participant’s contributions up to a maximum of 6% of eligible compensation. Associates may become eligible to make elective deferral contributions the first of the month following 30 days of employment. Eligible associates must complete one year of service in order to vest in Trustmark’s matching contributions. Trustmark’s contributions to this plan were $9.9 million in 2021, $9.2 million in 2020 and $8.2 million in 2019.