Note 10 – Defined Benefit and Other Postretirement Benefits

Qualified Pension Plans

Trustmark maintains a noncontributory defined benefit pension plan (Trustmark Capital Accumulation Plan), in which substantially all associates employed prior to 2007 participate. 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. Plan benefits were frozen during 2009, with the exception of certain associates covered through plans obtained by acquisitions that were subsequently merged into the Trustmark plan. Associates have not earned additional benefits, except for interest as required by Internal Revenue Service (IRS) regulations, since the plan was frozen. 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 (BancTrust Pension Plan), which was frozen prior to the acquisition date. On January 28, 2014, Trustmark's Board of Directors authorized the termination of the BancTrust Pension Plan effective as of April 15, 2014. The IRS has been asked to review the BancTrust Pension Plan’s tax qualification at its termination, and it is anticipated that the IRS will issue a determination letter once its review is complete. A termination notice has been filed with the Pension Benefit Guaranty Corporation (PBGC) and it is not anticipated that the PBGC will raise any issues with respect to the plan’s termination. Plan assets of the BancTrust Pension Plan will continue to be held in trust until the termination distributions are made. The termination of the BancTrust Pension Plan is not expected to have a material impact on net periodic pension cost between the plan termination date and the date final termination distributions are made.

The following table presents information regarding net periodic benefit cost for Trustmark’s qualified pension plans for the periods presented ($ in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net periodic benefit cost:
Service cost	$	123		$	148		$	372		$	446
Interest cost		1,328			1,252			3,971			3,506
Expected return on plan assets		(1,563	)		(2,060	)		(4,681	)		(5,660	)
Recognized net loss due to settlement		1,709			838			2,459			1,363
Recognized net actuarial (gain) loss		(1,701	)		1,374			(229	)		4,142
Net periodic benefit cost	$	(104	)	$	1,552		$	1,892		$	3,797

The range of potential contributions to Trustmark’s qualified pension plans is determined annually by the plans’ 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 are deductible for federal income tax purposes. The actual amount of the contribution is determined annually based on the plans’ funded status and return on plan assets as of the measurement date, which is December 31. For the plan year ending December 31, 2014, the minimum required contribution for Trustmark’s qualified pension plan was expected to be $1.8 million prior to the passage of the Highway and Transportation Funding Act (HATFA). As of September 30, 2014, approximately $1.0 million had been contributed. HATFA extends the pension funding relief for several more years and is mandatory for 2014. As a result of HATFA, there is no minimum required contribution for the plan year ending December 31, 2014. Therefore, it is not anticipated that any additional contributions will be made during 2014.

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. As a result of the BancTrust acquisition on February 15, 2013, Trustmark acquired a nonqualified supplemental retirement plan, which plan benefits were frozen prior to the acquisition date. The following table presents information regarding net periodic benefit cost for Trustmark’s nonqualified supplemental retirement plans for the periods presented ($ in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Net periodic benefit cost:
Service cost	$	74	$	150	$	222	$	448
Interest cost		548		484		1,650		1,452
Amortization of prior service cost		63		62		188		188
Recognized net actuarial loss		164		260		497		778
Net periodic benefit cost	$	849	$	956	$	2,557	$	2,866