EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

EMPLOYEE BENEFIT PLANS

NOTE 7 — EMPLOYEE BENEFIT PLANS

Pension Plan — In December 2012, the Cooperative approved a change to freeze the Cooperative’s defined benefit pension plan as of January 1, 2013. As a result, no additional benefits will accrue to participants in the plan and no new employees are eligible for the plan. During the years ended December 31, 2023, 2022 and 2021, there were no pension expenses.

In December 2022, the Cooperative approved a resolution to terminate the plan on March 31, 2023. The process of terminating the plan includes the purchase of annuities from the assets of the plan to satisfy payment of vested benefits to participants as prescribed by the Pension Benefit Guarantee Corporation’s standard termination process. As of December 31, 2023, the pension plan was funded as required by the funding standards set forth by the Employee Retirement Income Security Act (ERISA). While there are currently sufficient funds to purchase annuities for the plan’s two (2) participants to pay all of the benefits owed under the plan, if conditions worsen, the Cooperative is liable to pay the difference between the pension assets and the cost of annuities for participants to cover all benefit liabilities. The Cooperative anticipates that the process of terminating the plan will conclude in July 2024.

The Cooperative’s Compensation Committee has the responsibility of managing the operations and administration of the Cooperative’s retirement plans. The Cooperative has an investment policy that establishes target asset allocations to reduce the risk of large losses. Asset classes are diversified to reduce risk, and equity exposure is limited to 50% of the total portfolio value. The investment objective is to achieve a rate of return sufficient to fully fund the pension obligation of the plan without assuming undue risk through investment vehicles with no greater than average variability of the markets themselves.

Substantially all of the Plan’s assets consist of Collective Investment Trusts or Mutual Funds (Fund) and are valued based on Level I or Level II inputs, as determined from the Fund’s ASC 715-30 footnote included in the Fund’s audited financial statements. The Fund’s valuation techniques include market matrix pricing and market inputs, including bench mark yields, reported trades, broker/dealer quotes and others. There has been no changes in valuation techniques and inputs in 2023, 2022 and 2021.

The assumptions used in the measurement of the Cooperative’s benefit obligations are shown below:

	2023		2022
Discount Rate	4.92	%	4.50	%
Expected Return on Plan Assets	5.78	%	2.91	%
Rate of Compensation Increase	n/a	%	n/a	%

The following schedule reflects the expected cost to purchase of annuities for the one beneficiary in 2024 associated with the termination of the pension (in thousands).

		Expected
		Benefit
		Payments
2024	$	680
Total	$	680

The Cooperative does not expect to contribute to the defined benefit pension plan during the next fiscal year.

The following schedules provide the components of the Net Periodic Pension Costs for the periods ended December 31, 2023, 2022 and 2021 (in thousands):

		2023			2022			2021
Interest Cost	$	2		$	27		$	24
Expected Return on Plan Assets		(3	)		(19	)		(38	)
Amortization of Net (Gain) Loss		1			2			—
Net Periodic Pension Cost	$	—		$	10		$	(14	)

The following schedules set forth a reconciliation of the changes in the plan’s benefit obligation and fair value of assets for the periods ending December 31, 2023 and 2022 and a statement of the funded status and amounts recognized in the Balance Sheets and Accumulated Other Comprehensive Income as of December 31, 2023 and 2022 (in thousands):

		December 31,			December 31,
		2023			2022
Change in Benefit Obligation
Obligation at the Beginning of the Period	$	636		$	718
Service Cost		—			—
Interest Cost		27			24
Actuarial (Gain) Loss		68			(51	)
Benefits Paid		(51	)		(55	)
Obligation at the End of the Period	$	680		$	636
Change in Plan Assets
Fair Value at the Beginning of the Period	$	704		$	910
Actual Returns on Plan Assets		41			(151	)
Employer Contributions		—			—
Benefits Paid		(51	)		(55	)
Fair Value at the End of the Period	$	694		$	704
Funded Status
Funded Status as of Period Ended	$	15		$	68
Net Amount Recognized	$	—		$	—

401(k) Plan — The Cooperative has a 401(k) plan that covers employees that meet eligibility requirements. The Cooperative’s contributions to the plan totaled $7,693, $7,325, and $6,959 for the years ended December 31, 2023, 2022 and 2021, respectively.