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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS
 
Defined Benefit Pension Plan
 
The Corporation has a noncontributory defined benefit pension plan (the “Plan”) for all employees meeting certain age and length of service requirements that were hired prior to January 1, 2004, at which time entrance into the Plan was frozen.  The benefit accrual for the Plan was subsequently frozen at December 31, 2014. Benefits are based primarily on years of service and the average annual compensation during the highest five consecutive years within the final ten years of employment, until December 31, 2014 when the benefit accrual was frozen.

The following table sets forth the obligation and funded status as of December 31, 2023 and 2022:
(In Thousands)20232022
Change in benefit obligation:  
Benefit obligation at beginning of year$16,544 $21,923 
Interest cost792 553 
Actuarial loss (gain)113 (209)
Benefits paid(916)(904)
Change in actuarial assumptions325 (4,819)
Benefit obligation at end of year$16,858 $16,544 
Change in plan assets:  
Fair value of plan assets at beginning of year$20,894 $26,073 
Actual return on plan assets3,351 (4,272)
Benefits paid(916)(904)
Adjustment to fair value of plan assets— (3)
Fair value of plan assets at end of year23,329 20,894 
Funded status$6,471 $4,350 
Accounts recognized on balance sheet as:  
Total assets$6,471 $4,350 
Amounts not yet recognized as a component of net periodic pension cost: 
Amounts recognized in accumulated other comprehensive income (loss) consist of:  
Net loss$3,486 $5,240 

The accumulated benefit obligation for the Plan was $16,858,000 and $16,544,000 at December 31, 2023 and 2022, respectively.

Components of Net Periodic Cost and Other Amounts Recognized in Other Comprehensive Income (Loss) as of December 31, 2023, 2022, and 2021 are as follows:
(In Thousands)202320222021
Net periodic pension cost:   
Interest cost$792 $553 $509 
Expected return on plan assets(1,306)(1,652)(1,542)
Amortization of unrecognized net loss148 69 186 
Net periodic (benefit) cost$(366)$(1,030)$(847)


Assumptions

Weighted-average assumptions used to determine benefit obligations at December 31, 2023, 2022, and 2021: 
 202320222021
Discount rate4.73 %4.93 %2.61 %
Rate of compensation increaseN/AN/AN/A

Weighted-average assumptions used to determine net periodic cost for years ended December 31, 2023, 2022, and 2021:
 202320222021
Discount rate4.93 %2.61 %2.24 %
Expected long-term return on plan assets7.00 %7.00 %7.00 %

The expected long-term rate of return was estimated using market benchmarks by which the plan assets would outperform the market value in the future, based on historical experience adjusted for changes in asset allocation and expectations for overall lower future returns on similar investments compared to past periods.

Plan Assets

The Plan’s weighted-average asset allocations at December 31, 2023 and 2022 by asset category are as follows:
Asset Category20232022
Cash3.91 %4.84 %
Fixed income securities14.34 %15.05 %
Equity70.96 %66.36 %
Inflation Hedges/Real Assets5.38 %3.92 %
Hedged Strategies5.41 %9.83 %
Total100.00 %100.00 %

The investment objective for the Plan is to maximize total return with tolerance for slightly above average risk, meaning the fund is able to tolerate short-term volatility to achieve above-average returns over the long term.

Asset allocation favors equities, with target allocation of approximately 62% equity securities, 15.0% fixed income securities, 10% inflation hedges/real assets, 10% hedged strategies, and 3% cash.  Due to volatility in the market, the target allocation is not always desirable and asset allocations will fluctuate between the acceptable ranges.  The equity portfolio’s exposure is primarily in mid and large capitalization domestic equities with limited exposure to small capitalization and international stocks.

It is management’s intent to give the investment managers flexibility, within the overall guidelines, with respect to investment decisions and their timing. However, certain investments require specific review and approval by management.  Management is also informed of anticipated, significant modifications of any previously approved investment, or anticipated use of derivatives to execute investment strategies.

The following table sets forth by level, within the fair value hierarchy detailed in Note 20 - Fair Value Measurements, the Plan’s assets at fair value as of December 31, 2023 and 2022:
 2023
(In Thousands)Level ILevel IILevel IIITotal
Assets:    
Cash and cash equivalents$913 $— $— $913 
Mutual funds - taxable fixed income3,346 — — 3,346 
Mutual funds - domestic equity11,606 — — 11,606 
Mutual funds - international equity4,947 — — 4,947 
Inflation Hedges/Real Assets1,255 — — 1,255 
Hedged Strategies1,262 — — 1,262 
Total assets at fair value$23,329 $— $— $23,329 
 2022
(In Thousands)Level ILevel IILevel IIITotal
Assets:    
Cash and cash equivalents$1,012 $— $— $1,012 
Mutual funds - taxable fixed income3,144 — — 3,144 
Mutual funds - domestic equity8,393 — — 8,393 
Mutual funds - international equity5,472 — — 5,472 
Inflation Hedges/Real Assets819 — — 819 
Hedged Strategies2,054 — — 2,054 
Total assets at fair value$20,894 $— $— $20,894 
 
The following future benefit payments are expected to be paid:
(In Thousands) 
2024$1,105 
20251,145 
20261,196 
20271,210 
20281,223 
2029-20326,024 
 $11,903 

The Corporation does not expect to contribute to its Pension Plan in 2024.

401(k) Savings Plan

The Corporation also offers a 401(k) savings plan in which eligible participating employees may elect to contribute up to a maximum percentage allowable not to exceed the limits of Code Sections 401(k), 404, and 415.  The Corporation may make matching contributions equal to a discretionary percentage that is determined by the Board of Directors.  Participants are at all times fully vested in their contributions and vest over a period of five years regarding the employer contribution.  Contribution expense was approximately $540,000, $548,000, and $500,000 for the years ended December 31, 2023, 2022, and 2021, respectively.

Deferred Compensation Plan

The Corporation has a deferred compensation plan whereby participating directors elect to forego directors’ fees paid in cash.  Under this plan, the Corporation will make payments for a ten-year period beginning at the later of age 65 or ceasing to be a director in most cases or at death, if earlier, at which time payments would be made to their designated beneficiaries.

To fund benefits under the deferred compensation plan, the Corporation has acquired bank-owned life insurance policies on the lives of the participating directors for which insurance benefits are payable to the Corporation. The Corporation incurred expenses related to the plan of $656,000, $588,000, and $463,000 for the years ended December 31, 2023, 2022, and 2021, respectively.  Benefits paid under the plan were approximately $545,000, $267,000, and $57,000 in 2023, 2022, and 2021, respectively.