Defined Pension Plans

6 Months Ended

Jun. 30, 2015

Note 9 – Defined Pension Plans

The Company has a noncontributory defined-benefit pension plan, which covers most of its employees. The Company accrues and makes contributions designed to fund normal service costs on a current basis using the projected unit credit with service proration method to amortize prior service costs arising from improvements in pension benefits and qualifying service prior to the establishment of the plan over a period of approximately 30 years. Disclosure information is based on a measurement date of December 31 of the corresponding year. The following table represents the components of the net periodic pension costs for 2014 and an estimate for 2015:

	Estimated			Actual
*(In thousands)*	2015			2014
Service cost – benefits earned during the year	$	3,977		$	3,003
Interest cost on projected benefit obligations		3,217			3,037
Expected return on plan assets		(4,863	)		(4,711)
Net amortization and deferral		1,605			244
Net periodic pension cost	$	3,936		$	1,573

Pension costs recorded to expense were $977,000 and $410,000 for the three-month periods ended June 30, 2015 and 2014, respectively, and totaled $1,968,000 and $820,000 for the six-month periods ended June 30, 2015 and 2014, respectively. Pension costs increased significantly in 2015 due to a decrease in the discount rate assumption and the use of the updated mortality tables. The Company made no contribution to the plan during the six-month period ended June 30, 2015 and is evaluating the amount of additional contributions, if any, in 2015.

In addition to the above funded benefit plan, the Company has an unfunded supplemental executive retirement plan which covers key executives of the Company. This is a noncontributory plan in which the Company and its subsidiaries make accruals designed to fund normal service costs on a current basis using the same method and criteria as its defined benefit plan. The following table represents the components of the net periodic pension costs for 2014 and an estimate for 2015:

	Estimated		Actual
*(In thousands)*	2015		2014
Service cost – benefits earned during the year	$	140	$	136
Interest cost on projected benefit obligation		348		377
Net amortization		654		431
Net periodic pension cost	$	1,142	$	944

Pension costs recorded to expense were $286,000 and $236,000 for the three-month periods ended June 30, 2015 and 2014, respectively, and were $571,000 and $472,000 for the six-month periods ended June 30, 2015 and 2014, respectively.