Benefit Plans

Executive Retirement Plan

The Company has an Executive Retirement Plan under which three founding officers may receive pension benefits upon normal retirement (defined to be when the officer reaches age 65 and has completed five years of service with the Company) at an amount equal to 60% of the officer’s final average earnings (defined as the average of the executive’s highest three years’ earnings) plus 6% of final average earnings multiplied by the years of service after age 60 (but not more than five years), less 100% of certain other retirement benefits received by the officer to be paid either in lump sum or in monthly installments over a period not to exceed the greater of the life of the retired officer or his surviving spouse.

In December 2008, the Company froze the maximum annual benefits payable to a single participant under the plan at $0.9 million, plus cost of living increases, which resulted in a curtailment of benefits under the retirement plan for the Company’s chief executive officer. In 2008, the officers under the plan elected the manner in which they would receive retirement benefits upon retirement. The Company’s chief executive officer agreed to receive his retirement benefits under the plan in installment payments upon retirement, rather than in a lump sum. Of the two remaining officers in the plan, one has elected to receive benefits in monthly installments and one has elected a lump-sum payment upon retirement.

As of December 31, 2014, only the Company’s chief executive officer was eligible to retire under the plan. Upon retirement, the chief executive officer will be paid annual installments of approximately $0.9 million, increasing annually based on CPI.

Net periodic benefit cost for the Executive Retirement Plan for the three years in the period ended December 31, 2014 is comprised of the following:



	Year Ended December 31,
(Dollars in thousands)	2014			2013			2012
Service cost	$	88		$	86		$	77
Interest cost	687			597			725
Amortization of prior service cost	(1,189		)	(1,189		)	(723		)
Amortization of net gain	469			1,380			990
	55			874			1,069
Net (gain) loss recognized in Accumulated other comprehensive income (loss)	2,570			(2,143		)	(1,240		)
Total recognized in net periodic benefit gain and Accumulated other comprehensive income (loss)	$	2,625		$	(1,269	)	$	(171	)

The Company estimates that approximately $0.4 million of the amounts included in Accumulated other comprehensive income (loss) will be amortized to expense in 2015.

The Executive Retirement Plan is unfunded, and benefits will be paid from earnings of the Company. The following table sets forth the benefit obligations as of December 31, 2014 and 2013.



	Year Ended December 31,
(Dollars in thousands)	2014			2013
Benefit obligation at beginning of year	$	13,890		$	15,201
Service cost	88			86
Interest cost	687			597
Benefits paid	(42		)	(42		)
Actuarial (gain) loss, net	1,850			(1,952		)
Benefit obligation at end of year	$	16,473		$	13,890

Amounts recognized in the Consolidated Balance Sheets are as follows:



	Year Ended December 31,
(Dollars in thousands)	2014			2013
Net liabilities included in other liabilities	$	(13,954	)	$	(13,941	)
Amounts recognized in accumulated other comprehensive income (loss)	(2,519		)	51

The Company's assumed discount rates and compensation increases, which are used to measure the year-end benefit obligations and earnings for the subsequent year related to the Executive Retirement Plan are detailed in the following table for the three years ended December 31, 2014:



	2014		2013		2012
Discount rates	4.08	%	4.92	%	3.91	%
Compensation increases	2.7	%	2.7	%	2.7	%