Employee Benefits

9 Months Ended

Sep. 30, 2020

Retirement Benefits [Abstract]

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS

Our qualified and nonqualified defined benefit plans were amended to freeze benefit accruals for all persons entitled to benefits under the plans in 2016. We will continue recording pension expense related to these plans, primarily representing interest costs on the accumulated benefit obligation and amortization of actuarial losses accumulated in the plans, as well as income from expected investment returns on pension assets. Since the plans have been frozen, no service costs are included in net periodic pension expense.

The defined benefit plan of DNB was merged into S&T's defined benefit plan at November 30, 2019 and the components of net periodic pension cost at September 30, 2020 include the impact of the addition of the DNB defined benefit plan.

The investment policy for S&T's defined benefit plan is 90 percent fixed income and 10 percent equity and cash. The expected long-term rate of return on plan assets is 3.45 percent compared to 4.80 percent in prior periods.

We contributed $0.1 million to our pension plan during the three and nine months ended September 30, 2020.

We remeasured our pension obligation and recognized a pension settlement charge of $0.7 million for the three and nine months ended September 30, 2020. A settlement charge is incurred when the aggregate amount of lump-sum distributions during the year is greater than the sum of the interest cost component of the annual net periodic pension cost.

The following table summarizes the components of net periodic pension cost for the periods presented:

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	2020			2019			2020			2019
Components of Net Periodic Pension Cost
Interest cost on projected benefit obligation		$	905		$	989		$	2,686		$	2,967
Expected return on plan assets		(970)			(1,181)			(2,913)			(3,541)
Net amortization		411			395			1,180			1,184
Settlement Charge		671			—			671			—
Net Periodic Pension Expense		$	1,017		$	203		$	1,624		$	610

The components of net periodic pension expense are included in salaries and employee benefits on the Consolidated Statements of Comprehensive Income.