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Employee Benefits
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Employee Benefits Employee Benefits
Defined Benefit Pension Plans
Washington Trust maintains a qualified pension plan for the benefit of certain eligible employees who were hired prior to October 1, 2007. Washington Trust also has non-qualified retirement plans to provide supplemental retirement benefits to certain employees, as defined in the plans. The defined benefit pension plans were previously amended to freeze benefit accruals after a 10-year transition period ending in December 2023.

The qualified pension plan is funded on a current basis, in compliance with the requirements of ERISA.

Pension benefit costs and benefit obligations incorporate various actuarial and other assumptions, including discount rates, mortality, rates of return on plan assets and compensation increases. Washington Trust evaluates these assumptions annually.

The following table presents the plans’ projected benefit obligations, fair value of plan assets and funded (unfunded) status:
(Dollars in thousands)Qualified
Pension Plan		Non-Qualified
Retirement Plans
At December 31, 2022202120222021
Change in Benefit Obligation:
Benefit obligation at beginning of period
$89,408 $94,742 $17,717 $17,973 
Service cost
2,062 2,369 218 208 
Interest cost
2,368 2,004 423 337 
Actuarial (gain) loss(23,658)(4,011)(3,880)102 
Benefits paid
(3,422)(5,556)(916)(903)
Administrative expenses
(102)(140)— — 
Benefit obligation at end of period
66,656 89,408 13,562 17,717 
Change in Plan Assets:
Fair value of plan assets at beginning of period
103,047 101,929 — — 
Actual return on plan assets
(17,970)6,814 — — 
Employer contributions
— — 916 903 
Benefits paid
(3,422)(5,556)(916)(903)
Administrative expenses
(102)(140)— — 
Fair value of plan assets at end of period
81,553 103,047 — — 
Funded (unfunded) status at end of period (1)
$14,897 $13,639 ($13,562)($17,717)
(1)Funded status of the qualified pension plan is included in other assets in the Consolidated Balance Sheets. Unfunded status of the non-qualified retirement plans is included in other liabilities in the Consolidated Balance Sheets.

The non-qualified retirement plans provide for the designation of assets in rabbi trusts.  Securities available for sale and other short-term investments designated for this purpose, with the carrying value of $14.0 million and $16.7 million are included in the Consolidated Balance Sheets at December 31, 2022 and 2021, respectively.

The following table presents the amounts included in AOCI (AOCL) related to the qualified pension plan and non-qualified retirement plans:
(Dollars in thousands)Qualified
Pension Plan		Non-Qualified
Retirement Plans
At December 31, 2022202120222021
Net actuarial loss included in AOCI (AOCL), pre-tax
$1,846 $3,920 $3,455 $8,027 
The accumulated benefit obligation for the qualified pension plan was $64.8 million and $85.2 million, respectively, at December 31, 2022 and 2021.  The accumulated benefit obligation for the non-qualified retirement plans amounted to $13.1 million and $16.4 million, respectively, at December 31, 2022 and 2021.

The following table presents components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss), on a pre-tax basis:
(Dollars in thousands)Qualified
Pension Plan		Non-Qualified
Retirement Plans
Years ended December 31, 202220212020202220212020
Net Periodic Benefit Cost:
Service cost (1)
$2,062 $2,369 $2,164 $218 $208 $170 
Interest cost (2)
2,368 2,004 2,505 423 337 465 
Expected return on plan assets (2)
(4,634)(4,815)(4,538)— — — 
Recognized net actuarial loss (2)
1,020 2,121 1,582 692 723 560 
Net periodic benefit cost
816 1,679 1,713 1,333 1,268 1,195 
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (on a pre-tax basis):
Net (gain) loss(2,074)(8,132)1,708 (4,572)(621)1,244 
Recognized in other comprehensive income (loss)
(2,074)(8,132)1,708 (4,572)(621)1,244 
Total recognized in net periodic benefit cost and other comprehensive income (loss)
($1,258)($6,453)$3,421 ($3,239)$647 $2,439 
(1)Included in salaries and employee benefits expense in the Consolidated Statements of Income.
(2)Included in other expenses in the Consolidated Statements of Income.

Assumptions
The following table presents the measurement date and weighted-average assumptions used to determine benefit obligations at December 31, 2022 and 2021:
Qualified
Pension Plan		Non-Qualified Retirement Plans
2022202120222021
Measurement dateDec 31, 2022Dec 31, 2021Dec 31, 2022Dec 31, 2021
Discount rate5.54 %3.00 %5.50 %2.90 %
Rate of compensation increase5.00 3.75 5.00 3.75 

The following table presents the measurement date and weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2022, 2021 and 2020:
Qualified Pension PlanNon-Qualified Retirement Plans
202220212020202220212020
Measurement dateDec 31, 2021Dec 31, 2020Dec 31, 2019Dec 31, 2021Dec 31, 2020Dec 31, 2019
Equivalent single discount rate for benefit obligations
3.00 %2.71 %3.42 %2.89 %2.51 %3.30 %
Equivalent single discount rate for service cost
3.11 2.86 3.54 3.16 2.94 3.62 
Equivalent single discount rate for interest cost
2.67 2.16 3.07 2.48 1.97 2.93 
Expected long-term return on plan assets
5.25 5.75 5.75 N/AN/AN/A
Rate of compensation increase
3.75 3.75 3.75 3.75 3.75 3.75 

The expected long-term rate of return on plan assets is based on what the Corporation believes is realistically achievable based on the types of assets held by the plan and the plan’s investment practices.  The assumption is updated annually, taking
into account the asset allocation, historical asset return trends on the types of assets held and the current and expected economic conditions. Decreases in the long-term rate of return assumption on plan assets increase pension costs and, in general, may increase the requirement to make funding contributions to the plans. Increases in the long-term rate of return on plan assets have the opposite effect.

The discount rate assumption for defined benefit pension plans is reset on the measurement date.  Discount rates are selected for each plan by matching expected future benefit payments stream to a yield curve based on a selection of high-quality fixed-income debt securities. Decreases in discount rates increase the present value of pension obligations and increase our pension costs, while increases in discount rates have the opposite effect.

The "spot rate approach" was utilized in the calculation of interest and service cost. The spot rate approach applies separate discount rates for each projected benefit payment in the calculation of interest and service cost. This approach provides a more precise measurement of service and interest cost by improving the correlation between projected benefit cash flows and their corresponding spot rates.

Plan Assets
The following tables present the fair values of the qualified pension plan’s assets:
(Dollars in thousands)Fair Value Measurements Using
Fair Value
December 31, 2022Level 1Level 2Level 3
Assets:
Cash and cash equivalents$8,438 $— $— $8,438 
Obligations of U.S. government-sponsored enterprises— 42,601 — 42,601 
Obligations of states and political subdivisions— 1,728 — 1,728 
Corporate bonds— 4,854 — 4,854 
Mutual funds23,932 — — 23,932 
Total plan assets$32,370 $49,183 $— $81,553 

(Dollars in thousands)Fair Value Measurements Using
Fair Value
December 31, 2021Level 1Level 2Level 3
Assets:
Cash and cash equivalents$7,532 $— $— $7,532 
Obligations of U.S. government-sponsored enterprises
— 47,485 — 47,485 
Obligations of states and political subdivisions— 2,233 — 2,233 
Corporate bonds— 6,636 — 6,636 
Common stocks16,565 — — 16,565 
Mutual funds22,596 — — 22,596 
Total plan assets$46,693 $56,354 $— $103,047 

The qualified pension plan uses fair value measurements to record fair value adjustments to the securities held in its investment portfolio.

When available, the qualified pension plan uses quoted market prices to determine the fair value of securities; such items are classified as Level 1. This category includes cash and cash equivalents, as well as common stocks and mutual funds which are exchange-traded.

Level 2 securities in the qualified pension plan include debt securities with quoted prices, which are traded less frequently than exchange-traded instruments, whose values are determined using matrix pricing with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.  This category includes obligations of U.S. government-sponsored enterprises, obligations of states and political subdivisions and corporate bonds.
In certain cases where there is limited activity or less transparency around inputs to the valuation, securities may be classified as Level 3.  As of December 31, 2022 and 2021, the qualified pension plan did not have any securities in the Level 3 category.

The following table presents the asset allocations of the qualified pension plan, by asset category:
December 31,20222021
Asset Category:
Cash and cash equivalents10.3 %7.3 %
Fixed income securities (1)
60.3 54.7 
Equity securities (2)
29.4 38.0 
Total100.0 %100.0 %
(1)Includes obligations of U.S. government agencies and U.S. government-sponsored enterprises, obligations of states and political subdivisions and corporate bonds.
(2)Includes mutual funds at December 31, 2022 and common stocks and mutual funds at December 31, 2021.

The assets of the qualified defined benefit pension plan trust are managed to ensure that all present and future benefit obligations are met as they come due.  It seeks to achieve this goal while trying to mitigate volatility in plan funded status, contributions and expense by aligning the characteristics of the plan assets to that of the plan liabilities. The qualified pension plan is well-funded and will become frozen at December 31, 2023, at which point all future benefit accruals will cease. Our investment approach takes these factors into consideration, and as such we have been increasing our allocation to lower-risk fixed income securities and reducing our allocation to higher-risk equity securities.

Cash inflow is typically composed of investment income from portfolio holdings and employer contributions, while cash outflow is for the purpose of paying plan benefits and certain plan expenses.  As early as possible each year, the trustee is advised of the projected schedule of employer contributions and estimations of benefit payments.

Cash Flows
Contributions
The Code permits flexibility in plan contributions so that normally a range of contributions is possible.  The Corporation does not expect to make a contribution to the qualified pension plan in 2023.  In addition, the Corporation expects to contribute $904 thousand in benefit payments to the non-qualified retirement plans in 2023.

Estimated Future Benefit Payments
The following table presents the benefit payments, which reflect expected future service, as appropriate, expected to be paid:
(Dollars in thousands)Qualified
Pension Plan		Non-Qualified
Retirement Plans
Years ending December 31,2023$2,870 $904 
20243,243 892 
20253,553 899 
20263,888 935 
20274,169 951 
2028 and thereafter23,832 4,870 

401(k) Plan
The Corporation’s 401(k) Plan provides a match up to a maximum of 3% of employee contributions for substantially all employees.  In addition, substantially all employees hired after September 30, 2007, who are ineligible for participation in the qualified defined benefit pension plan, receive a non-elective employer contribution of 4% of compensation.  Total employer matching contributions under this plan amounted to $3.2 million, $3.0 million and $2.8 million in 2022, 2021 and 2020, respectively.
Deferred Compensation Plan
The Amended and Restated Nonqualified Deferred Compensation Plan provides supplemental retirement and tax benefits to directors and certain officers.  The plan is funded primarily through pre-tax contributions made by the participants.  The assets and liabilities of the Deferred Compensation Plan are recorded at fair value in the Consolidated Balance Sheets.  The participants in the plan bear the risk of market fluctuations of the underlying assets.  The accrued liability related to this plan amounted to $18.7 million and $21.2 million, respectively, at December 31, 2022 and 2021, and is included in other liabilities on the accompanying Consolidated Balance Sheets.  The corresponding invested assets are reported in other assets in the Consolidated Balance Sheets.