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ASSOCIATE BENEFIT PLANS
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
ASSOCIATE BENEFIT PLANS
14. ASSOCIATE BENEFIT PLANS
Associate 401(k) Savings Plan
Certain subsidiaries of ours maintain a qualified plan in which Associates may participate. Participants in the plan may elect to direct a portion of their wages into investment accounts that include professionally managed mutual and money market funds and the Company's common stock. Generally, the principal and related earnings are tax deferred until withdrawn. The Company matches a portion of the Associates’ contributions. As a result, the Company's total cash contributions to the plan on behalf of its Associates resulted in an expense of $10.7 million, $10.1 million, and $9.1 million for 2024, 2023, and 2022, respectively.
All contributions are invested in accordance with the Associates’ selection of investments. If Associates do not designate how discretionary contributions are to be invested, 100% is invested in target-date fund that corresponds with the participant’s age. Associates may generally make transfers to various other investment vehicles within the plan. The plan’s yearly activity includes net sales of 65,000, 14,000 and 8,000 shares of the Company's common stock in 2024, 2023 and 2022 respectively. There were no purchases in 2024, 2023 or 2022.
Postretirement Medical Benefits
The Company shares certain costs of providing health and life insurance benefits to eligible retired Associates (employees) and their eligible dependents. Previously, all Associates were eligible for these benefits if they reached normal retirement age while working for the Company. Effective March 31, 2014, the Company changed the eligibility of this plan to include only those Associates who have achieved ten years of service as of March 31, 2014. The Company uses the mortality table issued by the Office of the Actuary of the U.S. Bureau of Census in its calculation.
The Company accounts for its obligations under the provisions of ASC 715, Compensation - Retirement Benefits (ASC 715). ASC 715 requires that the Company recognized the costs of these benefits over an Associate's active working career. Amortization of unrecognized net gains or losses resulting from experience different from that assumed and from changes in assumptions is included as a component of net periodic benefit cost over the remaining service period of active employees to the extent that such gains and losses exceed 10% of the accumulated postretirement benefit obligation, as of the beginning of the year. The Company recognizes its service cost in Salaries, benefits and other compensation and the other components of net periodic benefit cost in Other operating expenses in the Consolidated Statements of Income.
ASC 715 requires that the Company recognizes the funded status of its defined benefit postretirement plan in the statement of financial condition, with a corresponding adjustment to accumulated other comprehensive income (loss), net of tax. The adjustment to accumulated other comprehensive income (loss) at adoption represented the net unrecognized actuarial losses and unrecognized transition obligation remaining from the initial adoption of ASC 715, all of which were previously netted against the plan’s funded status in the statement of financial condition pursuant to the provisions of ASC 715. These amounts will be subsequently recognized as net periodic pension costs pursuant to the Company's historical accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods, and are not recognized as net periodic pension cost in the same periods, will be recognized as a component of other comprehensive income (loss). Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in accumulated other comprehensive income (loss) at adoption of ASC 715.
The following disclosures relating to postretirement medical benefits were measured at December 31:
 
(Dollars in thousands)202420232022
Change in benefit obligation:
Benefit obligation at beginning of year$1,311 $1,331 $2,138 
Service cost32 33 52 
Interest cost66 65 51 
Actuarial gain(40)(68)(833)
Benefits paid(83)(50)(77)
Benefit obligation at end of year$1,286 $1,311 $1,331 
Change in plan assets:
Fair value of plan assets at beginning of year$— $— $— 
Employer contributions83 50 77 
Benefits paid(83)(50)(77)
Fair value of plan assets at end of year$— $— $— 
Unfunded status$(1,286)$(1,311)$(1,331)
Amounts recognized in accumulated other comprehensive income(1):
Net prior service credit$131 $207 $283 
Net gain1,132 1,263 1,625 
Net amount recognized$1,263 $1,470 $1,908 
Components of net periodic benefit income:
Service cost$32 $33 $52 
Interest cost66 65 51 
Amortization of prior service credit(76)(76)(76)
Net gain recognition(147)(160)(84)
Net periodic benefit income$(125)$(138)$(57)
Assumption used to determine net periodic benefit cost:
Discount rate4.80 %5.00 %2.80 %
Assumption used to value the Accumulated Postretirement Benefit Obligation (APBO):
Discount rate5.50 %5.30 %5.00 %
(1)Before tax effects
Estimated future benefit payments:
The following table shows the expected future payments for the next 10 years:
(Dollars in thousands)
During 2025$57 
During 202660 
During 202764 
During 202867 
During 202969 
During 2029 through 2033406 
$723 
The Company assumes medical benefits will increase at an average rate of less than 10% per annum. The costs incurred for retirees’ health care are limited since certain current and all future retirees are restricted to an annual medical premium cap indexed (since 1995) by the lesser of 4% or the actual increase in medical premiums paid by us. For 2024, this annual premium cap amounted to $4,496 per retiree. The Company estimates that it will contribute approximately $4,676 per retiree to the plan during fiscal 2025.
Beneficial Associate Pension and other postretirement benefit plans
On March 1, 2019, the Company closed the acquisition of Beneficial. At the time of acquisition, the Company assumed the pension plan covering certain eligible Beneficial Associates. The plan was frozen in 2008.
The following disclosures relating to Beneficial pension benefits and other postretirement benefit plans were measured at December 31:
202420232022
(Dollars in thousands)Pension BenefitsOther Postretirement BenefitsPension BenefitsOther Postretirement BenefitsPension BenefitsOther Postretirement Benefits
Change in benefit obligation:
Benefit obligation at beginning of year$76,119 $13,471 $75,151 $13,894 $104,695 $18,105 
Service cost— 8 — 14 — 33 
Interest cost3,581 648 3,700 659 2,425 383 
Plan participants' contributions— 41 — 63 — 55 
Actuarial (gain) loss(5,481)68 1,604 256 (26,233)(3,346)
Benefits paid(5,035)(1,382)(4,336)(1,415)(5,736)(1,336)
Benefit obligation at end of year$69,184 $12,854 $76,119 $13,471 $75,151 $13,894 
Change in plan assets:
Fair value of plan assets at beginning of year$82,090 $— $79,287 $— $108,242 $— 
Actual return on plan assets1,439 — 7,499 — (22,867)— 
Employer contribution126 1,341 240 1,352 225 1,281 
Participants' contributions— 41 — 63 — 55 
Benefits paid(5,035)(1,382)(4,336)(1,415)(5,736)(1,336)
Administrative expenses(571)— (600)— (577)— 
Fair value of plan assets at end of year$78,049 $— $82,090 $— $79,287 $— 
Funded (unfunded) status$8,865 $(12,854)$5,971 $(13,471)$4,136 $(13,894)
Amounts recognized in accumulated other comprehensive income(1):
Net loss (gain)$8,370 $(2,386)$9,920 $(2,612)$10,658 $(3,259)
Components of net periodic benefit (income) cost:
Service cost$— $8 $— $14 $— $33 
Interest cost3,581 648 3,700 659 2,425 383 
Expected return on plan assets(4,924)— (4,793)— (6,586)— 
Net loss (gain) recognition129 (158)281 (392)16 — 
Net periodic benefit (income) cost$(1,214)$498 $(812)$281 $(4,145)$416 
(1)Before tax effects
Significant assumptions used to calculate the net periodic benefit cost and obligation for Beneficial postretirement plans as of December 31, 2024 are as follows:
Consolidated Pension Plan202420232022
Discount rate for net periodic benefit cost5.01 %5.24 %2.82 %
Expected return on plan assets6.25 %6.25 %6.25 %
Discount rate for disclosure obligations5.60 %5.01 %5.24 %
Beneficial Bank Other Postretirement
Discount rate for net periodic benefit cost4.96 %5.18 %2.69 %
Discount rate for disclosure obligations5.51 %4.96 %5.18 %
FMS Other Postretirement
Discount rate for net periodic benefit cost4.73 %4.93 %2.07 %
Discount rate for disclosure obligations5.15 %4.73 %4.93 %
Split-Dollar Plan
Discount rate for net periodic benefit cost4.72 %4.92 %2.05 %
Discount rate for disclosure obligations5.13 %4.73 %4.92 %
Estimated future benefit payments:
The following table shows the expected future payments for the next 10 years:
(Dollars in thousands)Pension BenefitsOther Postretirement Benefits
During 2025$4,536 $1,228 
During 20265,120 1,220 
During 20275,497 1,202 
During 20285,020 1,185 
During 20294,641 1,150 
During 2029 through 203325,894 5,129 
$50,708 $11,114 
The fair values and weighted average asset allocations in plan assets of all pension and postretirement plan assets at December 31, 2024 and 2023 by asset category are as follows:
Category Used for Fair Value Measurement
December 31, 2024
(Dollars in thousands)Level 1Level 2Level 3TotalPercent
Assets:
Mutual Funds:
Large cap$3,406 $— $— $3,406 4.4 %
International6,252 — — 6,252 8.0 
Global Managed Volatility5,546 — — 5,546 7.1 
U.S. Managed Volatility2,070 — — 2,070 2.7 
Fixed Income51,592 — — 51,592 66.1 
U.S. Government Agencies— 8,958 — 8,958 11.5 
Pooled separate accounts13 — — 13 — 
Accrued Income212 — — 212 0.2 
Total$69,091 $8,958 $— $78,049 100.0 %
Category Used for Fair Value Measurement
December 31, 2023
(Dollars in thousands)Level 1Level 2Level 3TotalPercent
Assets:
Mutual Funds:
Large cap$3,215 $— $— $3,215 3.9 %
International5,839 — — 5,839 7.1 
Global Managed Volatility5,177 — — 5,177 6.3 
U.S. Managed Volatility1,932 — — 1,932 2.4 
Fixed Income54,878 — — 54,878 66.9 
U.S. Government Agencies— 10,743 — 10,743 13.1 
Pooled Separate Accounts98 — — 98 0.1 
Accrued Income208 — — 208 0.2 
Total$71,347 $10,743 $— $82,090 100.0 %
As of December 31, 2024, pension and postretirement plan assets were comprised of investments in equity mutual funds, fixed income mutual funds, and pooled separate accounts. The Bank’s consolidated pension plan investment policy provides that assets are to be managed over a long-term investment horizon to ensure that the chances and duration of investment losses are carefully weighed against the long-term potential for asset appreciation. The primary objective of managing a plan’s assets is to improve the plan’s funded status. A secondary financial objective is, where possible, to minimize pension expense volatility. The Company’s pension plan allocates assets based on the plan’s funded status to risk management and return enhancement asset classes. The risk management class is comprised of a long duration fixed income fund while the return enhancement class consists of equity and other fixed income funds. Asset allocation ranges are generally 40% to 80% for risk management and 20% to 60% for return enhancement when the funded status is less than 110%, and 50% to 90% in risk management and 10% to 50% for return enhancement when the funded status reaches 110%, subject to the discretion of the Company. Also, a small portion is maintained in cash reserves when appropriate.
The Company has four additional plans which are no longer being provided to current Associates: (1) a Supplemental Pension Plan with a corresponding liability of $0.1 million and $0.2 million for December 31, 2024 and 2023 respectively; (2) an Early Retirement Window Plan with a corresponding liability of $0.1 million for both December 31, 2024 and 2023; (3) a Supplemental Executive Retirement Plan with a corresponding liability of $1.3 million for both December 31, 2024 and 2023, and; (4) a Post-Retirement Medical Plan with a corresponding liability of less than $0.1 million and $0.1 million for December 31, 2024 and 2023, respectively.