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 September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Net periodic benefit cost:
Service cost	$	148		$	134		$	446		$	413
Interest cost		1,252			947			3,506			2,837
Expected return on plan assets		(2,060	)		(1,438	)		(5,660	)		(4,238	)
Recognized net loss due to settlement		838			-			1,363			-
Recognized net actuarial loss		1,374			1,303			4,142			3,922
Net periodic benefit cost	$	1,552		$	946		$	3,797		$	2,934

In the table above, recognized net loss due to settlement is 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, whereas for 2012 the cap was 110% and the floor was 90% of the average of these rates as of September 30, 2011. Trustmark expects its minimum required contribution for 2013 to be approximately $2.1 million. During 2012, Trustmark made a minimum required contribution of $1.5 million for the 2012 plan year. The increase of approximately $600 thousand in 2013 as compared to 2012 is primarily due to the change in MAP-21 interest rates, with the effective interest rate dropping from 6.82% in 2012 to 6.13% in 2013.

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 September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Net periodic benefit cost:
Service cost	$	150	$	170	$	448	$	510
Interest cost		484		517		1,452		1,550
Amortization of prior service cost		62		63		188		188
Recognized net actuarial loss		260		215		778		645
Net periodic benefit cost	$	956	$	965	$	2,866	$	2,893