Components of Net Periodic Pension Cost

9 Months Ended

Sep. 30, 2012

Components of Net Periodic Pension Cost [Abstract]

Components of Net Periodic Pension Cost

Note 11.  Components of Net Periodic Pension Cost

The Corporation maintained a non-contributory pension plan for substantially all of its employees until September 30, 2007, at which time the Corporation froze its defined benefit pension plan. The following table sets forth the net periodic pension cost of the Corporation's pension plan for the periods indicated.

	Three Months Ended September 30,						Nine Months Ended   September 30,
	2012			2011			2012			2011
	(in thousands)
Interest cost	$	139		$	147		$	417		$	441
Net amortization and deferral		(21	)		(51	)		(63	)		(151	)
Net periodic pension cost	$	118		$	96		$	354		$	290

Contributions

The Corporation presently estimates it will contribute $450,000 to its Pension Trust for the 2012 plan year.

The Preservation of Access to Care for Medical Beneficiaries and Pension Relief Act of 2010, signed into law on June 25, 2010, permits single employer and multiple employer defined benefit plan sponsors to elect to extend the plan's amortization period of a Shortfall Amortization Base over either a nine year period or a fifteen year period, rather than the seven year period required under the Pension Protection Act of 2006. The Bank had elected to apply the Pension Relief Act Fifteen Year amortization of the Shortfall Amortization Base for its 2011 minimum funding requirement. The minimum amount to be funded was $453,000, as noted above, by December 31, 2012 with the understanding that fully funding the plan earlier than this date would lower this amount and that funding the plan after this date would increase this amount. As noted, this amount is the minimum required funding amount. The Corporation does have the option of funding above this amount but has contributed the minimum historically.

The Moving Ahead for Progress in the 21^st Century Act which was enacted on July 6, 2012 contained special rules related to funding stabilization for single employer defined benefit plans. Under these provisions, the interest rates used to calculate the plan's funding percentages and minimum required contribution are adjusted as necessary to fall within a specified range that is determined based on an average of rates for the 25 year period ending on September 30 of the calendar year preceding the first day of the Plan Year. For Plan years beginning in 2012, the range is 90% - 110% of the 25 year average. The effect of the application of the adjusted rates was to reduce the 2012 required minimum contribution to the Plan to approximately $300,000. However, the actuary has recommended that the contribution for the 2012 plan year be at least $450,000 in order to continue to make progress toward fully funding Plan liabilities.