Note 10 – Defined Benefit and Other Postretirement Benefits

Qualified Pension Plans

Trustmark maintains a noncontributory defined benefit pension plan (Trustmark Capital Accumulation Plan), which covers substantially all associates employed prior to 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. Associates 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. As a result of the BancTrust acquisition on February 15, 2013, Trustmark acquired a qualified pension plan, which was frozen prior to the acquisition date. The following table presents information regarding Trustmark’s net periodic benefit cost for the periods presented and includes amounts related to the acquisition of BancTrust ($ in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net periodic benefit cost:
Service cost	$	148		$	139		$	298		$	279
Interest cost		1,264			945			2,254			1,890
Expected return on plan assets		(2,059	)		(1,400	)		(3,600	)		(2,800	)
Recognized net loss due to settlement		525			-			525			-
Recognized net actuarial loss		1,374			1,309			2,768			2,619
Net periodic benefit cost	$	1,252		$	993		$	2,245		$	1,988

During the three months ended June 30, 2013, Trustmark recognized a $525,000 charge related to the lump sum settlement of certain benefits in the Trustmark Capital Accumulation Plan in accordance with FASB ASC Topic 715-30, “Defined Benefit Plans - Pension.” It is expected that additional settlement charges will be recognized during the remainder of the year.

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. In July 2012, the Moving Ahead for Progress in the 21st Century Act (“MAP-21”) became effective. Through MAP-21, Congress provides pension sponsors with funding relief by stabilizing interest rates used to determine required funding contributions to defined benefit plans. Under MAP-21, instead of using a two-year average of these rates, plan sponsors determine required pension funding contributions based on a 25-year average of these rates with a cap and a floor. For 2013, the cap is set at 115% and the floor is set at 85% of the 25-year average of these rates as of September 30, 2012. Trustmark expects its minimum required contribution for 2013 to be $1.5 million. During 2012, Trustmark made a contribution of $1.5 million for the 2012 plan year.

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 table presents information regarding the plan's net periodic benefit cost for the periods presented ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Net periodic benefit cost:
Service cost	$	149	$	170	$	298	$	340
Interest cost		484		516		968		1,033
Amortization of prior service cost		63		63		126		125
Recognized net actuarial loss		259		215		518		430
Net periodic benefit cost	$	955	$	964	$	1,910	$	1,928