Pension and Postretirement Benefits

9 Months Ended

Sep. 30, 2013

Pension and Postretirement Benefits [Abstract]

Pension and Postretirement Benefits

(5)  Pension and Postretirement Benefits

The Company had a non-contributory defined benefit pension plan that covered substantially all employees. On May 14, 2012, the Company informed its employees of its decision to freeze participation and benefit accruals under the plan, primarily to reduce some of the volatility in earnings that can accompany the maintenance of a defined benefit plan.  The freeze became effective June 30, 2012.  Compensation earned by employees up to June 30, 2012 is used for purposes of calculating benefits under the plan but there will be no future benefit accruals after this date.  Participants as of June 30, 2012, who continue to be employed by the Bank, will continue to earn vesting credit with respect to their frozen accrued benefits.

Prior to being frozen, the plan provided defined benefits based on years of service and final average salary. Although the plan was frozen, the Company maintains the responsibility for funding the plan, and its funding practice is to contribute at least the minimum amount annually to meet minimum funding requirements.  The funded status of the plan has and will continue to be affected by market conditions.  The Company expects to continue to fund this plan on an as needed basis and does not foresee any issues or conditions that could negatively impact the payment of benefit obligations to plan participants.  In addition, the Company provides certain health and life insurance benefits for eligible retired employees.  The healthcare plan is contributory with participants’ contributions adjusted annually; the life insurance plan is noncontributory.  Employees with less than 14 years of service as of January 1, 1995, are not eligible for the health and life insurance retirement benefits.

The composition of net periodic pension plan and postretirement plan costs for the indicated periods is as follows:

	Pension Benefits						Postretirement Benefits				Pension Benefits						Postretirement Benefits
	For the three months ended September 30,										For the nine months ended September 30,
(In thousands)	2013			2012			2013		2012		2013			2012			2013		2012
Service cost	$	-		$	-		$	-	$	-	$	-		$	166		$	-	$	-
Interest cost		95			93			4		4		284			305			13		13
Expected return on plan assets		(214	)		(205	)		-		-		(640	)		(604	)		-		-
Amortization of net losses		90			74			5		4		270			307			15		11
Net periodic plan (benefit) cost	$	(29	)	$	(38	)	$	9	$	8	$	(86	)	$	174		$	28	$	24

The Company made a contribution in the amount of $2.6 million to the defined benefit pension plan in January of 2012.  The Company will evaluate the need for further contributions to the defined benefit pension plan during 2013, and has determined that no contribution was necessary during the nine months ended September 30, 2013.  The prepaid pension asset is recorded in other assets on the statement of condition as of September 30, 2013.