Postretirement Benefits

3 Months Ended

Mar. 31, 2013

Postretirement Benefits

Postretirement Benefits

Note 13.  Postretirement Benefits

The Company has a supplemental nonqualified retirement plan, which generally vests over five-year periods beginning in 2003, pursuant to which it will pay supplemental pension benefits to key employees upon retirement. In connection with this plan, the Company has purchased cost-recovery life insurance on the lives of certain employees. Insurance contracts associated with the plan are held by trusts established as part of the plan to implement and carry out its provisions and to finance its related benefits. The trusts are owners and beneficiaries of such contracts. The amount of coverage is designed to provide sufficient revenue to cover all costs of the plan if assumptions made as to employment term, mortality experience, policy earnings and other factors are realized. At March 31, 2013, the value of the assets held in trust totaled $13.8 million, compared to $13.1 million at December 31, 2012, and was included in “Other” assets within the Consolidated Balance Sheets.

The net periodic benefit income of this plan for the three months ended March 31, 2013, totaled $481,000, which included an investment gain of $705,000 on the cash surrender value of the insurance contracts, offset by interest costs of $214,000 and by service costs of $10,000. The net periodic benefit income of this plan for the three months ended March 31, 2012, totaled $706,000, which included an investment gain of $936,000, offset by interest costs of $200,000 and by service costs of $30,000. The $12.9 million and $12.7 million projected benefit obligations at March 31, 2013 and December 31, 2012, respectively, were equal to the net liabilities recognized in the Consolidated Balance Sheets at those dates. The weighted-average discount rates used for the plan were 6.8 percent and 7.0 percent for the quarters ended March 31, 2013 and 2012, respectively.