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 2016 and 2015, interest accrued on employees' account balances at a variable rate tied to the five-year trailing average of five-year U.S. Treasury securities plus 1.5%. The rate has a floor of 3.0% and a ceiling of 5.0%. The 2016 quarterly variable rates remained at 3.00%.

The following table presents information regarding this plan (in thousands):



	December 31,
	2016			2015
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	38,797		$	45,224
Interest cost	1,309			1,487
Actuarial loss (gain)	(55		)	(2,702		)
Benefits paid	(5,087		)	(5,212		)
Projected benefit obligation at end of year^1,2	$	34,964		$	38,797
Change in plan assets:
Plan assets at fair value at beginning of year	$	44,190		$	49,443
Actual return on plan assets	2,666			(41		)
Benefits paid	(5,087		)	(5,212		)
Plan assets at fair value at end of year	$	41,769		$	44,190

Funded status of the plan	$	6,805		$	5,393
Components of net periodic benefit costs:
Interest cost	$	1,309		$	1,487
Expected return on plan assets	(2,167		)	(2,706		)
Other	(741		)	1,849
Net benefit cost	$	(1,599	)	$	630


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:	2016		2015
Discount rate	3.43	%	3.54	%
Expected return on plan assets	5.00	%	5.00	%

As of December 31, 2016, expected future benefit payments related to the Pension Plan were as follows (in thousands):



2017	$	2,706
2018	3,072
2019	3,402
2020	3,090
2021	2,934
Thereafter	28,044
Total estimated future benefit payments	$	43,248

Assets of the Pension Plan consist primarily of shares in the Cavanal Hill Active Core Fund. The stated objective of this fund is to provide an attractive total return with a well-balanced 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. Management considers the Fund's recent and long-term performance as indicators when setting the expected return on plan assets. As of December 31, 2016, the expected return on plan assets for 2017 is 5.00%. The maximum tax deductible Pension Plan contribution for 2016 was $12 million. No minimum contribution was required for 2016, 2015 or 2014.

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 4 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 per participant is provided for employees whose annual base compensation is less than $40,000. Total non-elective contributions were $530 thousand for 2016, $605 thousand for 2015 and $662 thousand for 2014.

Participants may direct investments in their accounts to a variety of options, including a BOK Financial common stock fund and Cavanal Hill funds. Employer contributions, which are invested in accordance with the participant’s investment options, vest over five years. Thrift Plan expenses were $22.4 million for 2016, $20.6 million for 2015 and $18.6 million for 2014.

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 $128.1 million in 2016, $114.3 million in 2015, and $111.7 million in 2014 for cash incentive compensation.