XML 154 R27.htm IDEA: XBRL DOCUMENT v2.4.1.9
Employee Benefits
 12 Months Ended
Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]  
Employee Benefits
EMPLOYEE BENEFITS 
We maintain a defined benefit pension plan, or Plan, covering substantially all employees hired prior to January 1, 2008. The benefits are based on years of service and the employee’s compensation for the highest five consecutive years in the last 10 years. Contributions are intended to provide for benefits attributed to employee service to date and for those benefits expected to be earned in the future.
The following table summarizes the activity in the benefit obligation and Plan assets deriving the funded status, which is recorded in other liabilities in the Consolidated Balance Sheets:
(dollars in thousands)
2014

2013

Change in Projected Benefit Obligation
 
 
Projected benefit obligation at beginning of year
$
95,969

$
102,454

Service cost
2,369

2,767

Interest cost
4,470

3,985

Actuarial loss (gain)
16,020

(7,167
)
Benefits paid
(5,704
)
(6,070
)
Projected Benefit Obligation at End of Year
$
113,124

$
95,969

Change in Plan Assets
 
 
Fair value of plan assets at beginning of year
$
89,556

$
81,088

Actual return on plan assets
9,634

14,538

Benefits paid
(5,704
)
(6,070
)
Fair Value of Plan Assets at End of Year
$
93,486

$
89,556

Funded Status
$
(19,638
)
$
(6,413
)

The following table sets forth the amounts recognized in accumulated other comprehensive income (loss) at December 31:
(dollars in thousands)
2014

2013

Prior service credit
$
(1,167
)
$
(1,304
)
Net actuarial loss
30,726

18,373

Total (Before Tax Effects)
$
29,559

$
17,069


Below are the actuarial weighted average assumptions used in determining the benefit obligation:
 
2014

2013

Discount rate
4.00
%
4.75
%
Rate of compensation increase
3.00
%
3.00
%

The following table summarizes the components of net periodic pension cost and other changes in Plan assets and benefit obligation recognized in other comprehensive income (loss) for the years ended December 31:
(dollars in thousands)
2014

2013

2012

Components of Net Periodic Pension Cost
 
 
 
Service cost—benefits earned during the period
$
2,369

$
2,767

$
2,788

Interest cost on projected benefit obligation
4,470

3,985

4,358

Expected return on plan assets
(6,907
)
(6,207
)
(5,564
)
Amortization of prior service cost (credit)
(137
)
(138
)
(137
)
Recognized net actuarial loss
941

2,425

2,474

Net Periodic Pension Expense
$
736

$
2,832

$
3,919

Other Changes in Plan Assets and Benefit Obligation Recognized in Other Comprehensive Income (Loss)
 
 
 
Net actuarial loss (gain)
$
13,294

$
(15,499
)
$
2,477

Recognized net actuarial loss
(941
)
(2,425
)
(2,474
)
Recognized prior service credit
137

138

137

Total (Before Tax Effects)
$
12,490

$
(17,786
)
$
140

Total Recognized in Net Benefit Cost and Other Comprehensive Income (Loss) (Before Tax Effects)
$
13,226

$
(14,954
)
$
4,059


The following table summarizes the actuarial weighted average assumptions used in determining net periodic pension cost:
 
2014

2013

2012

Discount rate
4.75
%
4.00
%
4.75
%
Rate of compensation increase
3.00
%
3.00
%
4.00
%
Expected return on assets
8.00
%
8.00
%
8.00
%

The net actuarial loss included in accumulated other comprehensive income (loss) expected to be recognized in net periodic pension cost during the year ended December 31, 2015 is $1.9 million. The prior service credit expected to be recognized during the same period is $0.1 million.
The accumulated benefit obligation for the Plan was $104.3 million at December 31, 2014 and $88.3 million at December 31, 2013.
We consider many factors when setting the assumed rate of return on Plan assets. As a general guideline the assumed rate of return is equal to the weighted average of the expected returns for each asset category and is estimated based on historical returns as well as expected future returns. The weighted average discount rate is derived from corporate yield curves.
S&T Bank’s Retirement Plan Committee determines the investment policy for the Plan. In general, the targeted asset allocation is 50 percent to 70 percent equities and 30 percent to 50 percent fixed income. A strategic allocation within each asset class is employed based on the Plan’s time horizon, risk tolerances, performance expectations and asset class preferences. Investment managers have discretion to invest in any equity or fixed-income asset class, subject to the securities guidelines of the Plan’s Investment Policy Statement.
At this time, S&T Bank is not required to make a cash contribution to the Plan in 2015. No contributions were made during 2014.
The following table provides information regarding estimated future benefit payments to be paid in each of the next five years and in the aggregate for the five years thereafter:
(dollars in thousands)
Amount

 
 
2015
$
6,440

2016
6,437

2017
6,268

2018
6,719

2019
6,637

2020 - 2024
38,984


We also have supplemental executive retirement plans, or SERPs, for certain key employees. The SERPs are unfunded. The projected benefit obligations related to the SERPs were $3.5 million and $2.8 million at December 31, 2014 and 2013. These amounts also represent the net amount recognized in the statement of financial position for the SERPs. Net periodic benefit costs for the SERPs were $0.4 million, $0.4 million and $0.5 million for each of the years ended December 31, 2014, 2013 and 2012. Additionally, $2.1 million and $1.5 million before tax were reflected in accumulated other comprehensive income (loss) at December 31, 2014 and 2013, in relation to the SERPs. The actuarial assumptions used for the SERPs are the same as those used for the Plan.
We maintain a Thrift Plan, a qualified defined contribution plan, in which substantially all employees are eligible to participate. We make matching contributions to the Thrift Plan up to 3.5 percent of participants’ eligible compensation and may make additional profit-sharing contributions as provided by the Thrift Plan. Expense related to these contributions amounted to $1.3 million in 2014, $1.4 million in 2013 and $1.3 million in 2012.
Fair Value Measurements
The following tables present our Plan assets measured at fair value on a recurring basis by fair value hierarchy level at December 31, 2014 and 2013. There were no transfers between Level 1 and Level 2 for items of a recurring basis during the periods presented. There were no purchases or transfers of Level 3 plan assets in 2014.
 
December 31, 2014
 
Fair Value Asset Classes(1)
(dollars in thousands)
Level 1

Level 2

Level 3

Total

Cash and cash equivalents(2)
$
—

$
5,073

$
—

$
5,073

Fixed Income(3)
26,726

—

—

26,726

Equities:
 
 
 
 
Equity index mutual funds—international(4)
3,728

—

—

3,728

Domestic Individual Equities(5)
57,085

—

—

57,085

International Individual Equities(6)
874

—

—

874

Total Assets at Fair Value
$
88,413

$
5,073

$
—

$
93,486

(1)
Refer to Note 1 Summary of Significant Accounting Policies, Fair Value Measurements for a description of levels within the fair value hierarchy.
(2)
This asset class includes FDIC insured money market instruments.
(3)
This asset class includes a variety of fixed income mutual funds which primarily invests in investment grade rated securities. Investment managers have discretion to invest in fixed income related securities including futures, options and other derivatives. Investments may be made in currencies other than the U.S. dollar.
(4)
The sole investment within this asset class is the Harbor International Institutional fund.
(5)
This asset class includes individual domestic equities invested in an active all-cap strategy. It may also include convertible bonds.
(6)
This asset class includes American Depository Receipts, or ADR.
 
December 31, 2013
 
Fair Value Asset Classes(1)
(dollars in thousands)
Level 1

Level 2

Level 3

Total

Cash and cash equivalents(2)
$
—

$
2,946

$
—

$
2,946

Fixed Income(3)
26,448

—

—

26,448

Equities:
 
 
 
 
Equity index mutual funds—domestic(4)
1,558

—

—

1,558

Equity index mutual funds—international(5)
2,497

—

—

2,497

Domestic Individual Equities(6)
55,206

—

—

55,206

International Individual Equities(7)
901

—

—

901

Total Assets at Fair Value
$
86,610

$
2,946

$
—

$
89,556

(1)
Refer to Note 1 Summary of Significant Accounting Policies, Fair Value Measurements for a description of levels within the fair value hierarchy.
(2)
This asset class includes FDIC insured money market instruments.
(3)
This asset class includes a variety of fixed income mutual funds which primarily invests in investment grade rated securities. Investment managers have discretion to invest in fixed income related securities including futures, options and other derivatives. Investments may be made in currencies other than the U.S. dollar.
(4)
The sole investment within this asset class is S&P 600 index iShares.
(5)
The sole investment within this asset class is MSCI EAFE Index iShares.
(6)
This asset class includes individual domestic equities invested in an active all-cap strategy. It may also include convertible bonds.
(7)
This asset class includes American Depository Receipts, or ADR.