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Employee Benefits
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Employee Benefits Employee Benefits
Defined Benefit Pension Plans
Washington Trust has 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. These defined benefit pension plans were previously amended to freeze benefit accruals after a 10-year transition period, which ended in December 2023.

In the fourth quarter of 2023, the Corporation’s Board of Directors approved a resolution to terminate the qualified pension plan effective December 31, 2023 and participants were notified of the termination. In the first quarter of 2025, the qualified pension plan liability will be settled after plan assets are distributed through a combination of lump sum payments to participants and the purchase of a group annuity contract from a highly-rated insurance company. This results in a pre-tax non-cash pension settlement charge of approximately $6.4 million being recognized in the Consolidated Statements of Income (Loss) the first quarter of 2025. The settlement charge includes the recognition of pre-tax actuarial losses accumulated in AOCL and the effects of the remeasurement of plan assets and and liability upon settlement. As a result of the plan’s over-funded status, remaining surplus plan assets of approximately $10.3 million are expected to be transferred directly to the Corporation’s 401(k) Plan (a qualified replacement plan) to fund future non-elective employer contributions.

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 actuarial assumptions also included considerations for the termination of the qualified pension plan.
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, 2024202320242023
Change in Benefit Obligation:
Benefit obligation at beginning of period
$75,284 $66,656 $13,195 $13,562 
Service cost (1)
500 1,403 — 156 
Interest cost
3,331 3,540 649 706 
Actuarial (gain) loss(3,021)8,522 (176)(279)
Benefits paid
(5,586)(4,570)(948)(950)
Administrative expenses
(841)(267)— — 
Benefit obligation at end of period
69,667 75,284 12,720 13,195 
Change in Plan Assets:
Fair value of plan assets at beginning of period
82,837 81,553 — — 
Actual return on plan assets
991 6,121 — — 
Employer contributions
— — 948 950 
Benefits paid
(5,586)(4,570)(948)(950)
Administrative expenses
(841)(267)— — 
Fair value of plan assets at end of period
77,401 82,837 — — 
Funded (unfunded) status at end of period (2)
$7,734 $7,553 ($12,720)($13,195)
(1)Service cost for 2024 represents administrative expenses related to the termination of the qualified pension plan.
(2)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 $13.0 million and $13.6 million are included in the Consolidated Balance Sheets at December 31, 2024 and 2023, respectively.

The following table presents the amounts included in 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, 2024202320242023
Net actuarial loss included in AOCL, pre-tax
$8,936 $8,837 $2,640 $2,939 

The accumulated benefit obligation for the qualified pension plan was $69.7 million and $75.3 million, respectively, at December 31, 2024 and 2023.  The accumulated benefit obligation for the non-qualified retirement plans amounted to $12.7 million and $13.2 million, respectively, at December 31, 2024 and 2023.
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, 202420232022202420232022
Net Periodic Benefit Cost:
Service cost (1)
$500 $1,403 $2,062 $— $156 $218 
Interest cost (2)
3,331 3,540 2,368 649 706 423 
Expected return on plan assets (2)
(4,111)(4,590)(4,634)— — — 
Recognized net actuarial loss (2)
— — 1,020 123 237 692 
Net periodic benefit cost
(280)353 816 772 1,099 1,333 
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) (on a pre-tax basis):
Net loss (gain)99 6,991 (2,074)(299)(516)(4,572)
Recognized in other comprehensive income (loss)
99 6,991 (2,074)(299)(516)(4,572)
Total recognized in net periodic benefit cost and other comprehensive income (loss)
($181)$7,344 ($1,258)$473 $583 ($3,239)
(1)Included in salaries and employee benefits expense in the Consolidated Statements of Income (Loss). Service cost for 2024 represents administrative expenses related to the termination of the qualified pension plan.
(2)Included in other expenses in the Consolidated Statements of Income (Loss).

Assumptions
The following table presents the measurement date and weighted-average assumptions used to determine benefit obligations at December 31, 2024 and 2023:
Qualified
Pension Plan		Non-Qualified Retirement Plans
2024202320242023
Measurement dateDec 31, 2024Dec 31, 2023Dec 31, 2024Dec 31, 2023
Discount rate4.53 %4.51 %5.60 %5.10 %
Rate of compensation increaseN/A0.50 N/AN/A

The following table presents the measurement date and weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2024, 2023 and 2022:
Qualified Pension PlanNon-Qualified Retirement Plans
202420232022202420232022
Measurement dateDec 31, 2023Dec 31, 2022Dec 31, 2021Dec 31, 2023Dec 31, 2022Dec 31, 2021
Equivalent single discount rate for benefit obligations
4.51 %5.54 %3.00 %5.15 %5.50 %2.89 %
Equivalent single discount rate for service cost
N/A5.60 3.11 5.275.61 3.16 
Equivalent single discount rate for interest cost
4.51 5.43 2.67 5.11 5.40 2.48 
Expected long-term return on plan assets
4.75 5.25 5.25 N/AN/AN/A
Rate of compensation increase
0.50 5.00 3.75 N/A5.00 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. 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, 2024Level 1Level 2Level 3
Assets:
Cash and cash equivalents$29,950 $— $— $29,950 
Obligations of U.S. government-sponsored enterprises— 42,052 — 42,052 
Obligations of states and political subdivisions— 816 — 816 
Corporate bonds— 496 — 496 
Mutual funds4,087 — — 4,087 
Total plan assets$34,037 $43,364 $— $77,401 

(Dollars in thousands)Fair Value Measurements Using
Fair Value
December 31, 2023Level 1Level 2Level 3
Assets:
Cash and cash equivalents$16,820 $— $— $16,820 
Obligations of U.S. government-sponsored enterprises
— 58,147 — 58,147 
Obligations of states and political subdivisions— 1,459 — 1,459 
Corporate bonds— 1,974 — 1,974 
Mutual funds4,437 — — 4,437 
Total plan assets$21,257 $61,580 $— $82,837 

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 exchange-traded mutual funds.

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, 2024 and 2023, 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 31,20242023
Asset Category:
Cash and cash equivalents38.7 %20.3 %
Fixed income securities (1)
56.0 74.3 
Mutual funds5.3 5.4 
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.

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 and expense by aligning the characteristics of the plan assets to that of the plan liabilities. At December 31, 2024, the qualified pension plan was well-funded. In addition, the plan termination process is expected to be completed in 2025 after the plan assets are distributed through lump sum payments to participants and the purchase of a group annuity contract from a highly-rated insurance company. Our investment approach took into consideration the expected distribution of plan assets in the first quarter of 2025, and as a result we increased our allocation in cash and cash equivalents and reduced fixed income securities balances to more closely align with lump sum payments expected to be paid to plan participants.

Cash inflow includes investment income from portfolio holdings, 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 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 contributions to the qualified pension plan in the future due to the plan’s termination that is expected to be completed in 2025 and the plan’s funded status.  In addition, the Corporation expects to contribute $859 thousand in benefit payments to the non-qualified retirement plans in 2025.

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 31,2025(1)$69,667 $978 
2026— 1,015 
2027— 1,029 
2028— 1,014 
2029— 1,017 
2030 and thereafter— 4,806 
(1)As noted above, the termination of the qualified pension plan is expected to be completed in 2025.

401(k) Plan
The Corporation’s 401(k) Plan, which covers substantially all employees, provides a matching contribution of up to a maximum of 3% of an employee’s eligible compensation. In addition, effective January 1, 2024, participating employees receive a non-elective employer contribution of 4% of eligible compensation.  Prior to January 1, 2024, only employees who were ineligible for participation in the qualified defined benefit pension plan received the non-elective employer contribution of 4%. Total employer contributions under this plan amounted to $4.2 million, $3.5 million and $3.2 million in 2024, 2023 and 2022, 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 $21.5 million and $20.6 million, respectively, at December 31, 2024 and 2023, 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.