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Employee Benefits
 12 Months Ended
Dec. 31, 2012
Compensation and Retirement Disclosure [Abstract]  
Employee Benefits
(11) Employee Benefits

BOK Financial sponsors a defined benefit cash balance Pension Plan for all employees who satisfy certain age and service requirements. Pension Plan benefits were curtailed as of April 1, 2006. No participants may be added to the plan and no additional service benefits will be accrued. During 2012, interest accrued on employees’ account balances at 5.25%. Effective in the first quarter of 2013, interest will accrue at a variable rate tied to the five-year trailing average of five-year Treasury Securities plus 1.5%. The new rate will have a floor of 2.5% and a ceiling of 5.0%.

The following table presents information regarding this plan (dollars in thousands):
 
 
December 31,
 
 
2012
 
2011
Change in projected benefit obligation:
 
 
 
 
Projected benefit obligation at beginning of year
 
$
50,213

 
$
48,373

Interest cost
 
1,925

 
2,157

Actuarial loss
 
2,786

 
2,461

Benefits paid
 
(2,194
)
 
(2,778
)
Plan amendments
 
$
(4,702
)
 
—

Projected benefit obligation at end of year1,2
 
$
48,028

 
$
50,213

Change in plan assets:
 
 
 
 

Plan assets at fair value at beginning of year
 
$
43,859

 
$
44,477

Actual return on plan assets
 
4,255

 
2,160

Benefits paid
 
(2,194
)
 
(2,778
)
Plan assets at fair value at end of year
 
$
45,920

 
$
43,859

 
 
 
 
 
Funded status of the plan
 
$
(2,108
)
 
$
(6,354
)
Components of net periodic benefit costs:
 
 
 
 

Interest cost
 
$
1,925

 
$
2,157

Expected return on plan assets
 
(2,062
)
 
(1,957
)
Amortization of unrecognized net loss
 
3,461

 
3,659

Net periodic pension cost
 
$
3,324

 
$
3,859


1 
Projected benefit obligation equals accumulated benefit obligation.
2 
Projected benefit obligation is based on January 1 measurement date.

Weighted-average assumptions as of December 31:
 
2012
 
2011
Discount rate
 
3.36
%
 
4.11
%
Expected return on plan assets
 
5.25
%
 
5.25
%


As of December 31, 2012, expected future benefit payments related to the Pension Plan were as follows (in thousands):
2013
$
3,629

2014
3,298

2015
3,372

2016
3,771

2017
3,488

Thereafter
16,227

 
$
33,785



Assets of the Pension Plan consist primarily of shares in the Cavanal Hill Balanced Fund. The stated objective of this fund is to provide an attractive total return through a broadly diversified mix of equities and bonds. The typical portfolio mix is approximately 60% equities and 40% bonds. The net asset value of shares in the Cavanal Hill Funds is reported daily based on market quotations for the Fund’s securities. If market quotations are not readily available, the securities’ fair values are determined by the Fund’s pricing committee. The inception-to-date return on the fund, which is used as an indicator when setting the expected return on plan assets, was 6.96%. As of December 31, 2012, the expected return on plan assets for 2012 is 5.25%. The maximum allowed Pension Plan contribution for 2012 was $28 million. No minimum contribution was required for 2012 or 2011. The minimum contribution was made for 2010. We expect approximately $1.3 million of net pension costs currently in accumulated other comprehensive income to be recognized as net periodic pension cost in 2013.

Employee contributions to the Thrift Plan are eligible for Company matching equal to 6% of base compensation, as defined in the plan. The Company-provided matching contribution rates range from 50% for employees with less than four years of service to 200% for employees with 15 or more years of service. Additionally, a maximum Company-provided, non-elective annual contribution of up to $750 is made for employees whose annual base compensation is less than $40,000. Total non-elective contributions were $802 thousand for 2012, $933 thousand for 2011 and $1.0 million for 2010.

Participants may direct investments in their accounts to a variety of options, including a BOK Financial common stock fund. Employer contributions, which are invested in accordance with the participant’s investment options, vest over five years. Thrift Plan expenses were $16.8 million for 2012, $15.4 million for 2011 and $14.3 million for 2010.

BOK Financial also sponsors a defined benefit post-retirement employee medical plan, which pays 50% of annual medical insurance premiums for retirees who meet certain age and service requirements. Assets of the retiree medical plan consist primarily of shares in a cash management fund. The post-retirement medical plan is limited to current retirees and certain employees who were age 60 or older at the time the plan was frozen in 1993. The net obligation recognized under the plan was $1.1 million at December 31, 2012 and $2.2 million at December 31, 2011. A 1% change in medical expense trends would not significantly affect the net obligation or cost of this plan.

BOK Financial offers numerous incentive compensation plans that are aligned with the Company’s growth strategy. Compensation awarded under these plans may be based on defined formulas, other performance criteria or discretionary. Incentive compensation is designed to motivate and reinforce sales and customer service behavior in all markets. Earnings were charged $153.9 million in 2012, $117.8 million in 2011, and $104.0 million in 2010 for incentive compensation plans.