Employee Benefits

6 Months Ended

Jun. 30, 2021

Retirement Benefits [Abstract]

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS

Our qualified and nonqualified defined benefit plans were amended to freeze benefit accruals for all persons entitled to benefits under the plans in 2016. We will continue recording pension expense related to these plans, primarily representing interest costs on the projected benefit obligation and amortization of actuarial losses accumulated in the plans, as well as income from expected investment returns on pension assets. Since the plans have been frozen, no service costs are included in net periodic pension expense.

The investment policy for S&T's defined benefit plan is 90 percent fixed income and 10 percent equity and cash. The expected long-term rate of return on plan assets is 2.42 percent as of June 30, 2021 compared to 3.45 percent for the same period in 2020.

We remeasured our pension obligation and recognized a pension settlement charge of $0.2 million and $0.9 million for the three and six months ended June 30, 2021. A settlement charge is incurred when the aggregate amount of lump-sum distributions during the year is greater than the sum of the interest cost component of the annual net periodic pension cost.

The following table summarizes the components of net periodic pension cost for the periods presented:

	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	2021			2020			2021			2020
Components of Net Periodic Pension Cost
Interest cost on projected benefit obligation		$	797		$	890		$	1,500		$	1,781
Expected return on plan assets		(645)			(971)			(1,361)			(1,943)
Net amortization		298			385			546			769
Settlement Charge		177			—			926			—
Net Periodic Pension Expense		$	627		$	304		$	1,611		$	607

The components of net periodic pension expense are included in salaries and employee benefits on the Condensed Consolidated Statements of Comprehensive Income.