Defined Benefit and Other Postretirement Benefits

12 Months Ended

Dec. 31, 2011

Defined Benefit and Other Postretirement Benefits [Abstract]

Defined Benefit and Other Postretirement Benefits

Note 14 – Defined Benefit and Other Postretirement Benefits

Capital Accumulation Plan

Trustmark maintains a noncontributory defined benefit pension plan (Trustmark Capital Accumulation Plan), which covers substantially all associates employed prior to January 1, 2007. The plan provides retirement benefits that are based on the length of credited service and final average compensation, as defined in the plan and vest upon three years of service.  In an effort to control expenses, the Board voted to freeze plan benefits effective during 2009, with the exception of certain associates covered through plans obtained by acquisitions.  Individuals will not earn additional benefits, except for interest as required by the IRS regulations, after the effective date.  Associates will retain their previously earned pension benefits.  During 2009, Trustmark recorded a one-time curtailment gain of $1.9 million as a result of the freeze in plan benefits due to recognition of the prior service credits previously included in accumulated other comprehensive income (loss).

The following tables present information regarding the plan's benefit obligation, plan assets, funded status of the plan, amounts recognized in accumulated other comprehensive income (loss), net periodic benefit cost and other statistical disclosures ($ in thousands):

	December 31,
	2011			2010
Change in benefit obligation
Benefit obligation, beginning of year	$	94,136		$	91,709
Service cost		522			550
Interest cost		4,460			4,777
Actuarial loss		7,620			3,766
Benefits paid		(6,182	)		(6,666	)
Benefit obligation, end of year	$	100,556		$	94,136
Change in plan assets
Fair value of plan assets, beginning of year	$	77,764		$	72,175
Actual return on plan assets		(331	)		10,330
Employer contributions		1,053			1,925
Benefit payments		(6,182	)		(6,666	)
Fair value of plan assets, end of year	$	72,304		$	77,764
Funded status at end of year - net liability	$	(28,252	)	$	(16,372	)
Amounts recognized in accumulated other comprehensive income (loss)
Net loss - amount recognized	$	49,040		$	39,333

	Years Ended December 31,
	2011			2010			2009
Net periodic benefit cost
Service cost	$	522		$	550		$	392
Interest cost		4,460			4,777			4,837
Expected return on plan assets		(5,882	)		(5,926	)		(6,036	)
Amortization of prior service credits		-			-			(127	)
Curtailment gain		-			-			(1,887	)
Recognized net actuarial loss		4,127			3,397			2,872
Net periodic benefit cost	$	3,227		$	2,798		$	51
Other changes in plan assets and benefit obligation recognized in other comprehensive income (loss), before taxes
Net loss (gain)	$	9,707		$	(4,035	)	$	(3,032	)
Amortization of prior service credits		-			-			2,015
Total recognized in other comprehensive income (loss)	$	9,707		$	(4,035	)	$	(1,017	)
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	12,934		$	(1,237	)	$	(966	)
Weighted-average assumptions as of end of year
Discount rate for benefit obligation		4.00	%		5.05	%		5.50	%
Discount rate for net periodic benefit cost		5.05	%		5.50	%		6.00	%
Expected long-term return on plan assets		8.00	%		8.00	%		8.00	%
Rate of compensation increase		3.00	%		4.00	%		4.00	%

Plan Assets

Trustmark's capital accumulation plan weighted-average asset allocations at December 31, 2011 and 2010, by asset category are as follows:

	2011			2010
Money market fund		3.0	%		1.7	%
Fixed income mutual funds		19.9	%		18.4	%
Equity mutual funds		70.4	%		73.7	%
Equity securities		6.3	%		5.4	%
Fixed income hedge fund		0.4	%		0.8	%
Total		100.0	%		100.0	%

The strategic objective of the plan focuses on capital growth with moderate income.  The plan is managed on a total return basis with the return objective set as a reasonable actuarial rate of return on plan assets net of investment management fees.  Moderate risk is assumed given the average age of plan participants and the need to meet the required rate of return.  Equity and fixed income securities are utilized to allow for capital appreciation while fully diversifying the portfolio with more conservative fixed income investments.  The target asset allocation range for the portfolio is 0-10% Cash and Cash Equivalents, 10-30% Fixed Income, 30-55% Domestic Equity, 10-30% International Equity and 0-20% Other Investments.  Changes in allocations are a result of tactical asset allocation decisions and fall within the aforementioned percentage range for each major asset class.

Trustmark selects the expected long-term rate-of-return-on-assets assumption in consultation with its investment advisors and actuary.  This rate is intended to reflect the average rate of earnings expected to be earned on the funds invested or to be invested to provide plan benefits.  Historical performance is reviewed, especially with respect to real rates of return (net of inflation), for the major asset classes held or anticipated to be held by the trust and for the trust itself.  Undue weight is not given to recent experience that may not continue over the measurement period, with higher significance placed on current forecasts of future long-term economic conditions.

Because assets are held in a qualified trust, anticipated returns are not reduced for taxes.  Further, solely for this purpose, the plan is assumed to continue in force and not terminate during the period in which assets are invested.  However, consideration is given to the potential impact of current and future investment policy, cash flow into and out of the trust and expenses (both investment and non-investment) typically paid from plan assets (to the extent such expenses are not explicitly estimated within periodic cost).

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 table sets forth by level, within the fair value hierarchy, the plan's assets measured at fair value at December 31, 2011 and 2010 ($ in thousands):

	December 31, 2011
	Total		Level 1		Level 2		Level 3
Money market fund	$	2,189	$	-	$	2,189	$	-
Fixed income mutual funds		14,422		14,422		-		-
Equity mutual funds		50,886		50,886		-		-
Equity securities		4,506		4,506		-		-
Fixed income hedge fund		301		-		-		301
Total assets at fair value	$	72,304	$	69,814	$	2,189	$	301
	December 31, 2010
	Total		Level 1		Level 2		Level 3
Money market fund	$	1,297	$	-	$	1,297	$	-
Fixed income mutual funds		14,341		14,341		-		-
Equity mutual funds		57,334		57,334		-		-
Equity securities		4,195		4,195		-		-
Fixed income hedge fund		597		-		-		597
Total assets at fair value	$	77,764	$	75,870	$	1,297	$	597

The following table sets forth a summary of changes in fair value of the plan's Level 3 assets for the years ended December 31, 2011 and 2010 ($ in thousands):

	Fixed Income Hedge Fund
Balance, January 1, 2010	$	4,930
Sales, net		(5,016	)
Net gains included in plan		678
Change in fair value		5
Balance, December 31, 2010		597
Sales, net		(373	)
Net losses included in plan		(8	)
Change in fair value		85
Balance, December 31, 2011	$	301

There have been no changes in methodologies used at December 31, 2011.  The methodology and significant assumptions used in estimating the fair values presented above are as follows:

· Money market fund approximates fair value due to its immediate maturity.

· Fixed income hedge fund is valued in accordance with the valuation provided by the general partner of the underlying partnership.

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 the plan believes its 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 acceptable range of contributions to the plan is determined each year by the plan's actuary.  Trustmark's policy is to fund amounts allowable for federal income tax purposes.  The actual amount of the contribution is determined based on the plan's funded status and return on plan assets as of the measurement date, which is December 31.  For the plan year ended December 31, 2011 and 2010, Trustmark's minimum required contribution was $896 thousand and zero, respectively.  During 2011 and 2010, Trustmark made a contribution of $1.0 million for the plan year ended December 31, 2011 and $1.9 million for the plan year ended December 31, 2009, respectively.  For the plan year ended December 31, 2012, Trustmark's minimum required contribution is expected to be $3.4 million; however, Management and the Board of Directors will monitor the plan throughout 2012 to determine any additional funding requirements by the plan's measurement date.

Estimated Future Benefit Payments and Other Disclosures

The following plan benefit payments, which reflect expected future service, are expected to be paid ($ in thousands):

Year	Amount
2012	$	12,209
2013		7,593
2014		7,700
2015		6,706
2016		6,554
2017-2021		30,205

Amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost during 2012 include a net loss of $4.0 million.

Supplemental Retirement Plan

Trustmark maintains a nonqualified supplemental retirement plan covering directors who elected to defer fees, key executive officers and senior officers.  The plan provides for defined death benefits and/or retirement benefits based on a participant's covered salary.  Trustmark has acquired life insurance contracts on the participants covered under the plan, which may be used to fund future payments under the plan.  The measurement date for the plan is December 31. The following tables present information regarding the plan's benefit obligation, plan assets, funded status of the plan, amounts recognized in accumulated other comprehensive income (loss), net periodic benefit cost and other statistical disclosures ($ in thousands):

	December 31,
	2011			2010
Change in benefit obligation
Benefit obligation, beginning of year	$	45,433		$	41,598
Service cost		589			756
Interest cost		2,276			2,242
Actuarial loss		5,831			2,627
Benefits paid		(2,676	)		(1,818	)
Prior service cost due to amendment		1,193			28
Benefit obligation, end of year	$	52,646		$	45,433
Change in plan assets
Fair value of plan assets, beginning of year	$	-		$	-
Employer contributions		2,676			1,818
Benefit payments		(2,676	)		(1,818	)
Fair value of plan assets, end of year	$	-		$	-
Funded status at end of year - net liability	$	(52,646	)	$	(45,433	)
Amounts recognized in accumulated other comprehensive income (loss)
Net loss	$	17,226		$	11,890
Prior service cost		2,412			1,455
Amounts recognized	$	19,638		$	13,345

	Years Ended December 31,
	2011			2010			2009
Net periodic benefit cost
Service cost	$	589		$	756		$	913
Interest cost		2,276			2,242			2,209
Amortization of prior service cost		236			152			150
Recognized net actuarial loss		495			355			237
Net periodic benefit cost	$	3,596		$	3,505		$	3,509
Other changes in plan assets and benefit obligation recognized in other comprehensive income (loss), before taxes
Net loss	$	5,336		$	2,272		$	2,115
Prior service cost		1,192			28			20
Amortization of prior service cost		(236	)		(152	)		(150	)
Total recognized in other comprehensive income (loss)	$	6,292		$	2,148		$	1,985
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	9,888		$	5,653		$	5,494
Weighted-average assumptions as of end of year
Discount rate for benefit obligation		4.00	%		5.05	%		5.50	%
Discount rate for net periodic benefit cost		5.05	%		5.50	%		6.00	%

Estimated Supplemental Retirement Plan Payments and Other Disclosures

The following supplemental retirement plan benefit payments are expected to be paid in the following years ($ in thousands):

Year	Amount
2012	$	2,357
2013		2,613
2014		2,771
2015		2,951
2016		3,122
2017 - 2021		17,665

Amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost during 2012 include a loss of $862 thousand and prior service cost of $243 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's contributions to this plan were $5.4 million in 2011, $5.3 million in 2010 and $5.2 million in 2009.