Retirement Plans

12 Months Ended

Dec. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Retirement Plans

Retirement Plans

First Commonwealth has a savings plan pursuant to the provisions of section 401(k) of the Internal Revenue code. Effective January 1, 2013, a participating employee can receive a maximum matching contribution of 6% of their compensation. In addition, each participating employee may contribute up to 80% of their eligible compensation to the plan. The 401(k) plan expense was $2.6 million in 2013, $2.6 million in 2012, and $2.5 million in 2011.

First Commonwealth maintains a Non-Qualified Deferred Compensation Plan ("NQDC Plan") to provide deferred compensation for those employees whose total annual or annualized Plan compensation for a calendar year is at least $110,000. Prior to 2012, the NQDC Plan was called the Supplemental Executive Retirement Plan (“SERP”). The NQDC Plan provides participants whose maximum retirement contribution is limited by IRS rules to defer additional compensation.

Participants in the NQDC Plan are eligible to defer (on a pre-tax basis) from 1% to 25% of their eligible Plan compensation. There was no NQDC Plan expense in 2013 and 2012. In 2011 there was $86 thousand in expense recognized related to the SERP.

Select employees from former acquisitions were covered by postretirement benefit plans which provide medical and life insurance coverage. The measurement date for these plans was December 31.

Postretirement Benefits Other than Pensions from Prior Acquisitions

Net periodic benefit cost of these plans for the years ended December 31, was as follows:

	2013			2012			2011
	(dollars in thousands)
Service cost	$	—		$	—		$	—
Interest cost on projected benefit obligation	62			75			86
Amortization of transition obligation	—			2			2
Gain amortization	(7		)	(32		)	(50		)
Net periodic benefit cost	$	55		$	45		$	38

The following table sets forth the change in the benefit obligation and plan assets as of December 31:

	2013			2012
	(dollars in thousands)
Change in Benefit Obligation
Benefit obligation at beginning of year	$	1,986		$	1,892
Service cost	—			—
Interest cost	62			75
Amendments	—			—
Actuarial (gain) loss	(225		)	269
Net benefits paid	(179		)	(250		)
Benefit obligation at end of year	1,644			1,986
Change in Plan Assets
Fair value of plan assets at beginning of year	—			—
Actual return on plan assets	—			—
Employer contributions	179			250
Net benefits paid	(179		)	(250		)
Fair value of plan assets at end of year	—			—
Funded Status at End of Year	1,644			1,986
Unrecognized transition obligation	—			—
Unrecognized net gain	430			212
Amounts recognized in retained earnings	$	2,074		$	2,198

As of December 31, the funded status of the plan is:

	2013		2012
	(dollars in thousands)
Amounts Recognized in the Statement of Financial Condition as Other liabilities	$	1,644	$	1,986

The following table sets forth the amounts recognized in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit costs as of December 31:

	2013			2012			2011
	(dollars in thousands)
Amounts recognized in accumulated other comprehensive income, net of tax:
Net (gain) loss	$	(280	)	$	(138	)	$	(333	)
Transition obligation	—			—			1
Total	$	(280	)	$	(138	)	$	(332	)

Weighted-average assumptions used to determine the benefit obligation as of December 31 are as follows:

	2013		2012		2011
Weighted-average Assumptions
Discount rate	4.01	%	3.31	%	4.22	%
Health care cost trend: Initial	6.75	%	7.00	%	8.00	%
Health care cost trend: Ultimate	4.75	%	4.75	%	4.75	%
Year ultimate reached	2022		2022		2016

Weighted-average assumptions used to determine the net benefit costs as of December 31 are as follows:

	2013		2012		2011
Weighted Average Assumptions for Net Periodic Cost
Discount rate	3.31	%	4.22	%	4.71	%
Health care cost trend: Initial	7.00	%	8.00	%	9.00	%
Health care cost trend: Ultimate	4.75	%	4.75	%	4.75	%
Year ultimate reached	2022		2016		2016
Corridor	10.00	%	10.00	%	10.00	%
Recognition period for gains and losses	11.0		12.0		12.7

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) introduced a prescription drug benefit under Medicare Part D and a federal subsidy to sponsors of retiree health care benefit plans that provide a prescription drug benefit that is at least actuarially equivalent to Medicare Part D. The postretirement plans of First Commonwealth are provided through insurance coverage; therefore, First Commonwealth will not receive a direct federal subsidy. The preceding measures of the accumulated postretirement benefit cost assume that First Commonwealth will not receive the subsidy due to the relatively small number of retirees.

The health care cost trend rate assumption can have a significant impact on the amounts reported for this plan. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	One-Percentage- Point Increase		One-Percentage- Point Decrease
	(dollars in thousands)
Effect on postretirement benefit obligation	$	43	$	(39	)
Effect on total of service and interest cost components	2		(2		)

As of December 31, 2013, the projected benefit payments for the next ten years are as follows:

	Projected Benefit         Payments
	(dollars in thousands)
2014	$	198
2015	193
2016	187
2017	181
2018	163
2019 - 2023	564

The projected payments were calculated using the same assumptions as those used to calculate the benefit obligations included in this note.

The estimated costs that will be amortized from accumulated other comprehensive income into net periodic cost for 2014 are as follows (dollars in thousands):

	Postretirement Benefits
	(dollars in thousands)
Net gain	$	(29	)
Transition obligation	—
Total	$	(29	)