Employee Benefit Plans

12 Months Ended

Dec. 31, 2017

Retirement Benefits [Abstract]

Employee Benefit Plans

Note 10
Employee Benefit Plans

Defined Benefit Plan
The Company has a noncontributory defined-benefit pension plan (the “Plan”), which covers most of its employees. Effective December 31, 2016, the Plan was closed to all new participants. 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.

A summary of the activity in the Plan’s projected benefit obligation, assets, funded status and amounts recognized in the Company’s consolidated balance sheets is as follows:

(In thousands)	2017			2016
Projected benefit obligation:
Balance, January 1	$	85,551		$	78,369
Service cost		3,733			3,559
Interest cost		3,621			3,505
Actuarial (gain) loss		7,916			2,003
Benefits paid		(2,031	)		(1,885	)
Balance, December 31	$	98,790		$	85,551
Plan assets:
Fair value, January 1	$	73,168		$	71,174
Actual return		10,290			3,879
Employer contribution		—			—
Benefits paid		(2,031	)		(1,885	)
Fair value, December 31	$	81,427		$	73,168
Funded status:
Accrued pension liability	$	(17,363	)	$	(12,383	)

The following represent the major assumptions used to determine the projected benefit obligation of the Plan. For 2017, 2016 and 2015, the Plan’s expected benefit cash flows were discounted using the Citibank Above Median Curve. For 2017, the RP-2014 Mortality Table and the MP-2017 Mortality Improvement Table were used. For 2016, the RP-2014 Mortality Table and MP-2016 Mortality Improvement Table were used. For 2015, the RP-2014 Mortality Table and MP-2015 Mortality Improvement Table were used.

	2017		2016		2015
Weighted average discount rate	3.75	%	4.25	%	4.50	%
Rate of increase in compensation levels	(a)		(a)		(a)

(a) 6.0% graded down to 3.25% over the first seven years of service

The accumulated benefit obligation was $85,236,000 and $74,425,000 as of December 31, 2017 and 2016, respectively. The Company does not expect to make a contribution to the Plan in 2018. The following pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the Plan:

	Amount
2018	$	2,679,000
2019		2,823,000
2020		3,045,000
2021		3,300,000
2022		3,693,000
2023-2027		23,682,000

The Plan’s pension cost included the following components:

	For the Year Ended
	December 31,
(In thousands)	2017			2016			2015
Service cost – benefits earned during the year	$	3,733		$	3,559		$	3,796
Interest cost on projected benefit obligations		3,621			3,505			3,178
Expected return on plan assets		(4,681	)		(4,734	)		(4,864	)
Net amortization and deferral		1,382			1,259			1,542
Net periodic pension cost	$	4,055		$	3,589		$	3,652

The following represent the major assumptions used to determine the net pension cost of the Plan:

	2017		2016		2015
Weighted average discount rate	4.25	%	4.50	%	4.00	%
Rate of increase in compensation levels	(a)		(a)		(a)
Expected long-term rate of return on assets	6.50	%	6.75	%	6.75	%

(a) 6.0% graded down to 3.25% over the first seven years of service

For 2017, the RP-2014 Mortality Table and the MP-2016 Mortality Improvement Table were used. For 2016, the RP-2014 Mortality Table and the MP-2015 Mortality Improvement Table were used. For 2015, the RP-2014 Mortality Tables and the MP-2014 Mortality Improvement scale were used.

The investment objective for the Plan is to maximize total return with a tolerance for average risk. Asset allocation is a balance between fixed income and equity investments, with a target allocation of approximately 45% fixed income, 25% U.S. equity and 30% non-U.S. equity. Due to volatility in the market, this target allocation is not always desirable and asset allocations can fluctuate between acceptable ranges. The fixed income component is invested in pooled investment grade securities. The equity components are invested in pooled large cap, small/mid cap and non-U.S. stocks. The expected one-year nominal returns and annual standard deviations are shown by asset class below:

			One-Year Nominal		Annual Standard
Asset Class	% of Total Portfolio		Return		Deviation
Core Fixed Income	51	%	4.55	%	4.55	%
Large Cap U.S. Equities	14	%	7.00	%	15.85	%
Small Cap U.S. Equities	5	%	8.10	%	19.70	%
International (Developed)	25	%	7.99	%	17.93	%
International (Emerging)	5	%	10.56	%	27.35	%

Applying appropriate correlation factors between each of the asset classes the long-term rate of return on assets is estimated to be 6.50%.

A summary of the fair value measurements by type of asset is as follows:

	Fair Value Measurements as of December 31,
	2017						2016
			Quoted Prices						Quoted Prices
			in Active						in Active
			Markets for		Significant				Markets for		Significant
			Identical		Observable				Identical		Observable
			Assets		Inputs				Assets		Inputs
(In thousands)	Total		(Level 1)		(Level 2)		Total		(Level 1)		(Level 2)
Cash	$	374	$	374	$	—	$	340	$	340	$	—
Equity securities
U.S. Large Cap Growth		—		—		—		13,306		—		13,306
U.S. Small/Mid Cap Growth		4,111		—		4,111		5,655		—		5,655
Non-U. S. Core		21,065		—		21,065		10,588		—		10,588
U.S. Large Cap Passive		11,717		—		11,717		7,364		—		7,364
Emerging Markets		4,052		—		4,052		652		—		652
Fixed Income
U.S. Core		11,284		—		11,284		24,438		—		24,438
U.S. Passive		24,345		—		24,345		9,571		—		9,571
Opportunistic		4,479				4,479		1,254				1,254
Total	$	81,427	$	374	$	81,053	$	73,168	$	340	$	72,828

Supplemental Executive Retirement Plan
The Company also has an unfunded supplemental executive retirement plan (“SERP”) which covers key executives of the Company whose benefits are limited by the Internal Revenue Service under the Company’s qualified retirement plan. The SERP is a noncontributory plan in which the Company’s subsidiaries make accruals designed to fund normal service costs on a current basis using the same method and criteria as the Plan.

A summary of the activity in the SERP’s projected benefit obligation, funded status and amounts recognized in the Company’s consolidated balance sheets is as follows:

	December 31,
(In thousands)	2017			2016
Benefit obligation:
Balance, January 1	$	9,132		$	8,748
Service cost		143			133
Interest cost		360			367
Benefits paid		(247	)		(247	)
Actuarial (gain) loss		706			131
Balance, December 31	$	10,094		$	9,132

The following represent the major assumptions used to determine the projected benefit obligation of the SERP. For 2017, 2016 and 2015, the SERP’s expected benefit cash flows were discounted using the Citigroup Above Median Curve.

	2017		2016		2015
Weighted average discount rate	3.50	%	4.00	%	4.25	%
Rate of increase in compensation levels	(a)		(a)		(a)

(a) 6.00% graded down to 3.25% over the first seven years of service.

The accumulated benefit obligation was $8,734,000 and $7,904,000 as of December 31, 2017 and 2016, respectively. Since this is an unfunded plan, there are no plan assets. Benefits paid were $247,000 in both 2017 and 2016 and $243,000 in 2015.

Expected future benefits payable by the Company over the next ten years are as follows:

	Amount
2018	$	314,000
2019		313,000
2020		311,000
2021		367,000
2022		711,000
2023-2027		3,813,000

The SERP’s pension cost included the following components:

	For the Year Ended December 31,
(In thousands)	2017		2016		2015
Service cost – benefits earned during the year	$	143	$	133	$	140
Interest cost on projected benefit obligations		360		367		348
Net amortization and deferral		324		295		654
Net periodic pension cost	$	827	$	795	$	1,142

The pretax amounts in accumulated other comprehensive loss as of December 31 were as follows:

	The Plan				SERP
(In thousands)	2017		2016		2017		2016
Prior service cost	$	—	$	—	$	—	$	—
Net actuarial loss		23,160		22,237		2,388		2,005
Total	$	23,160	$	22,237	$	2,388	$	2,005

The estimated pretax prior service cost and net actuarial loss in accumulated other comprehensive loss at December 31, 2017 expected to be recognized as components of net periodic benefit cost in 2018 for the Plan are $0 and $1,409,000, respectively. The estimated pretax prior service cost and net actuarial loss in accumulated other comprehensive loss at December 31, 2017 expected to be recognized as components of net periodic benefit cost in 2018 for the SERP are $0 and $582,000, respectively.

The Company also maintains a noncontributory profit sharing program, which covers most of its employees. Employer contributions are calculated based upon formulas which relate to current operating results and other factors. Profit sharing expense recognized in the consolidated statements of income in 2017, 2016 and 2015 was $5,799,000, $5,367,000, and $5,211,000, respectively.

The Company also sponsors a defined contribution 401(k) plan to provide additional retirement benefits to substantially all employees. Contributions under the 401(k) plan for 2017, 2016 and 2015 were $925,000, $658,000, and $623,000, respectively.