Employee Benefit Plans

401(k) Plan: Union maintains a tax-qualified defined contribution 401(k) plan under which employees may elect to make tax deferred contributions of up to the IRS maximum from their annual salary. All employees meeting service requirements are eligible to participate in the plan. Union may make employer matching and profit-sharing contributions to the 401(k) plan at the discretion of the Board. Company contributions are fully vested after three years of service. The 401(k) plan includes "Safe Harbor" provisions requiring annual nondiscretionary minimum contributions to the plan for all eligible participants in an amount equal to 3% of eligible earnings of each eligible participant. Additionally, in 2019 and 2018 a discretionary profit-sharing contribution was made to the plan in an amount equal to 3% percent of each employee's eligible earnings, as defined by the plan. The following table summarizes employer contributions for the years ended December 31, 2019 and 2018:



	2019		2018
	(Dollars in thousands)
Employer matching	$	270	$	236
Profit sharing	280		279
Safe harbor	336		304
Total	$	886	$	819

Nonqualified Deferred Compensation Plans: The Company and Union have two nonqualified deferred compensation plans for directors and certain key officers. The Company accrued an expense of $8 thousand and $7 thousand in 2019 and 2018, respectively, under the 2008 Plan. The benefit obligations under the 2008 Plan represent general unsecured obligations of the Company and no assets are segregated for such payments. However, the Company and Union have purchased life insurance contracts on the lives of each participant in order to recoup the funding costs of these benefits. The benefits accrued under the 2008 Plan aggregated $359 thousand and $388 thousand at December 31, 2019 and 2018, respectively, and are included in Accrued interest and other liabilities. The cash surrender value of the life insurance policies purchased to recoup the funding costs under the 2008 Plan aggregated $1.0 million and $974 thousand at December 31, 2019 and 2018, respectively, and are included in Company-owned life insurance in the Company's consolidated balance sheets.

The 2006 Plan was adopted for directors and certain key officers. The 2006 Plan is a non-qualified defined contribution plan that provides a means by which participants may elect to defer receipt of current compensation from the Company or its subsidiary in order to provide retirement or other benefits as selected in the individual adoption agreements. Participants may select among designated reference investments consisting of investment funds, with the performance of the participant's account mirroring the selected reference investment. Distributions are made only upon a qualifying distribution event, which may include a separation from service, death, disability or unforeseeable emergency, or upon a date specified in the participant's deferral election form. The 2006 Plan is intended to comply with the provisions of Section 409A of the Internal Revenue Code. The 2006 Plan is unfunded, representing a general unsecured obligation of the Company of $699 thousand and $558 thousand as of December 31, 2019 and 2018, respectively.

Defined Benefit Pension Plan:

The Company terminated its Defined Benefit Pension Plan during the fourth quarter of 2018. The settlement of all assets and liabilities under the Plan was completed by December 31, 2018. Participants were provided distribution options to either purchase an annuity, take a lump-sum cash payment, or do a direct rollover into a qualifying retirement plan. Net periodic pension expense for 2018 included a settlement loss in the amount of $4.0 million, resulting in total pension expense of $4.6 million. This expense was partially offset by a reduction in the provision for income taxes of $900 thousand as a result of the settlement of the Plan's assets and liabilities. The Company no longer has any remaining defined benefit pension plan obligations and thus no periodic pension expense related to the Plan.

The following table sets forth the Plan's obligations and funded status at December 31, 2018:



	(Dollars in thousands)
Change in projected benefit obligation
Projected benefit obligation at beginning of year	$	20,832
Interest cost	599
Settlement gain	(326		)
Actuarial gain	(2,667		)
Benefits paid	(712		)
Settlement payments	(17,726		)
Projected benefit obligation at end of year	—

Change in fair value of plan assets
Fair value of plan assets at beginning of year	18,499
Actual loss on plan assets	(717		)
Administrative expenses	(194		)
Employer contributions	850
Benefits paid	(712		)
Settlement payments	(17,726		)
Fair value of plan assets at end of year	—
Net liability for pension benefits	$	—

There was no accumulated benefit obligation at December 31, 2018. The impact of the Plan activity for 2018 on OCI is detailed in Note 24.

Net periodic pension cost for 2018 consisted of the following components:



	(Dollars in thousands)
Interest cost on projected benefit obligation	$	599
Expected return on plan assets	(531		)
Amortization of net actuarial loss	502
Net periodic pension cost	$	570
Recognized settlement loss	4,061
Total net periodic pension cost	$	4,631

Weighted average assumptions used to determine net periodic pension cost for the year ended December 31, 2018 were a discount rate and expected long-term rate of return on plan assets of 3.52% and no rate of compensation increase for 2018.