EMPLOYEE BENEFIT PLANS

First Financial sponsors a non-contributory defined benefit pension plan covering substantially all employees and uses a December 31 measurement date for the plan.

First Financial made no cash contributions to fund the pension plan during the three months ended March 31, 2014 and does not expect to make cash contributions to the plan through the remainder of the year. First Financial made no cash contributions to fund the pension plan in 2013. As a result of the plan’s actuarial projections for 2014, First Financial recorded income related to its pension plan of $0.3 million for the three months ended March 31, 2014, compared to an immaterial expense for the same period in 2013.

The following table sets forth information concerning amounts recognized in First Financial’s Consolidated Statements of Income:



	Three months ended
	March 31,
(Dollars in thousands)	2014			2013
Service cost	$	1,041		$	975
Interest cost	620			619
Expected return on assets	(2,292		)	(2,294		)
Amortization of prior service cost	(103		)	(105		)
Net actuarial loss	481			820
Net periodic benefit (income) cost	$	(253	)	$	15

As a result of lump sum distributions from the pension plan during the year, First Financial was required to re-measure the plan's assets and liabilities and recognize pension settlement charges through noninterest expense during 2013. Consistent with FASB ASC Topic 715, Compensation - Retirement Benefits, pension settlement charges are an acceleration of previously deferred costs that would have been recognized in future periods and are triggered when lump sum distributions exceed an annual accounting threshold for the plan. Associates are eligible to request a lump sum distribution from the Company's pension plan at retirement or upon leaving the Company. The accounting threshold for lump sum distributions from the plan reset on January 1, 2014, however, the Company could incur pension settlement charges again if lump sum distributions exceed the annual accounting threshold in future periods.