Defined Pension Plans

9 Months Ended

Sep. 30, 2020

Retirement Benefits [Abstract]

Defined Pension Plans

Note 9 – Defined Pension Plans

The Company has a noncontributory defined-benefit pension plan, which covers eligible 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. 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:

(In thousands)	Estimated 2020		Actual 2019
Service cost – benefits earned during the year	$	4,329	$	3,555
Interest cost on projected benefit obligations		3,908		4,103
Expected return on plan assets		(6,049)		(4,753)
Net amortization		1,946		1,559
Net periodic pension cost	$	4,134	$	4,464

Pension costs recorded to expense were $1,103,000 and $1,178,000 for the three-month periods ended September 30, 2020 and 2019, respectively, and totaled $3,159,000 and $3,543,000 for the nine-month periods ended September 30, 2020 and 2019, respectively. Pension costs decreased in 2020 primarily due to improved asset performance and a contribution made during 2019, which were partially offset by a decrease in the discount rate. The Company made no contribution to the plan during the nine-month period ended September 30, 2020 and is evaluating the amount of additional contributions, if any, in the remainder of 2020.

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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 2019 and an estimate for 2020:

(In thousands)	Estimated 2020		Actual 2019
Service cost – benefits earned during the year	$	121	$	97
Interest cost on projected benefit obligation		347		408
Net amortization		112		276
Net periodic pension cost	$	580	$	781

Pension costs recorded to expense were $145,000 and $195,000 for the three-month periods ended September 30, 2020 and 2019, respectively, and were $435,000 and $586,000 for the nine-month periods ended September 30, 2020 and 2019, respectively. Pension costs decreased primarily due to the unrecognized loss being amortized over the remaining expected life of the participants rather than the remaining expected service period as almost all of the plan’s participants are inactive. This was partially offset by a decrease in the discount rate.