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PENSION AND OTHER POSTRETIREMENT PLANS
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
PENSION AND OTHER POSTRETIREMENT PLANS PENSION AND OTHER POSTRETIREMENT PLANS
In April 2000, the Lakeland Financial Corporation Pension Plan was frozen. The Company also maintains a Supplemental Executive Retirement Plan (“SERP”) for select officers that was established as a funded, non-qualified deferred compensation plan. Currently, six retired officers are the only participants in the SERP. The measurement date for both the pension plan and SERP is December 31, 2021 and 2020.
Information as to the Company’s employee benefit plans at December 31, 2021 and 2020 is as follows:
Pension BenefitsSERP Benefits
(dollars in thousands)2021202020212020
Change in benefit obligation:        
Beginning benefit obligation$2,710 $2,715 $968 $991 
Interest cost52 75 18 27 
Actuarial (gain) loss(153)276 13 84 
Benefits paid(311)(356)(132)(134)
Ending benefit obligation2,298 2,710 867 968 
Change in plan assets (primarily equity and fixed income investments and money market funds), at fair value:
Beginning plan assets2,349 2,472 879 914 
Actual return265 233 101 99 
Employer contribution0 0 0 0 
Benefits paid(311)(356)(132)(134)
Ending plan assets2,303 2,349 848 879 
Funded status at end of year$5 $(361)$(19)$(89)
Amounts recognized in the consolidated balance sheets consist of:
Pension BenefitsSERP Benefits
(dollars in thousands)2021202020212020
Funded status included in other liabilities$5 $(361)$(19)$(89)
Amounts recognized in accumulated other comprehensive income consist of:
Pension BenefitsSERP Benefits
(dollars in thousands)2021202020212020
Net actuarial loss$852 $1,362 $431 $553 
The accumulated benefit obligation for the pension plan was $2.3 million and $2.7 million for December 31, 2021 and 2020, respectively. The accumulated benefit obligation for the SERP was $0.9 million and $1.0 million for December 31, 2021 and 2020, respectively.
NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued)
Net period benefit cost and other amounts recognized in other comprehensive income (loss) include the following:
Pension BenefitsSERP Benefits
(dollars in thousands)202120202019202120202019
Net pension expense:            
Service cost$0 $0 $0 $0 $0 $0 
Interest cost52 75 87 18 27 37 
Expected return on plan assets(133)(140)(137)(47)(51)(55)
Recognized net actuarial (gain) loss160 171 132 82 80 73 
Settlement cost65 115 0 0 0 0 
Net pension expense$144 $221 $82 $53 $56 $55 
Net (gain) loss$(350)$69 $353 $(40)$36 $56 
Amortization of net loss(160)(171)(132)(82)(80)(73)
Total recognized in other comprehensive income (loss)(510)(102)221 (122)(44)(17)
Total recognized in net pension expense and other comprehensive income (loss)$(366)$119 $303 $(69)$12 $38 
The estimated net loss (gain) for the defined benefit pension plan and SERP that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year is $99,000 for the pension plan and $44,000 for the SERP. The settlement costs in 2021 and 2020 were related to participants taking lump sum distributions from the pension plan during those years.
For 2021, 2020 and 2019, the assumed form of payment elected by active participants upon retirement was a lump sum to reflect participant trends. The lump sum assumed interest rates, below, for December 31, 2021, 2020 and 2019 reflect the mortality table in effect for 2021, 2020 and 2019, respectively. For 2021, the mortality assumption was changed to the PRI-2012 White Collar Mortality Table, with full generational Projection Scale MP-2021 as of December 31, 2021, to reflect improved mortality expectations. For 2020, the mortality assumption was the PRI-2012 White Collar Mortality Table, with full generational Projection Scale MP-2020 as of December 31, 2020. For 2019, the mortality assumption was the PRI-2012 White Collar Mortality Table, with full generational Projection Scale MP-2019 as of December 31, 2019.
NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued)
Pension BenefitsSERP Benefits
202120202019202120202019
The following assumptions were used in calculating the net benefit obligation:
Weighted average discount rate2.49 %2.08 %2.98 %2.49 %2.08 %2.98 %
Rate of increase in future compensationN/AN/AN/AN/AN/AN/A
Lump sum assumed interest rates First 5 years0.87 %0.53 %2.01 %N/AN/AN/A
Next 15 years2.74 %2.31 %3.06 %N/AN/AN/A
All future years3.16 %3.09 %3.65 %N/AN/AN/A
The following assumptions were used in calculating the net pension expense:
Weighted average discount rate2.08 %2.98 %4.08 %2.08 %2.98 %4.08 %
Rate of increase in future compensationN/AN/AN/AN/AN/AN/A
Expected long-term rate of return6.50 %6.50 %6.50 %6.50 %6.50 %6.50 %
Pension Plan and SERP Assets
The Company’s investment strategies are to invest in a prudent manner for the purpose of providing benefits to participants in the pension plan and the SERP. The investment strategies are targeted to maximize the total return of the portfolio net of inflation, spending and expenses. Risk is controlled through diversification of asset types and investments in domestic and international equities and fixed income securities. The target allocations for plan assets are shown in the tables below. Equity securities primarily include investments in common stocks. Debt securities include government agency and commercial bonds. Other investments consist of money market mutual funds.
The weighted average expected long-term rate of return on pension plan and SERP assets is developed in consultation with the plans actuary. It is primarily based upon industry trends and consensus rates of return which are then adjusted to reflect the specific asset allocations and historical rates of return of the Company’s plan assets. The following assumptions were used in determining the total long-term rate of return: equity securities were assumed to have a long-term rate of return of approximately 8.85% and debt securities were assumed to have a long-term rate of return of approximately 3.00%. These rates of return were adjusted to reflect an approximate target allocation of 60% equity securities and 40% debt securities with a small downward adjustment due to investments in the “Other” category, which consist of low yielding money market mutual funds.
Certain asset types and investment strategies are prohibited including, the investment in commodities, options, futures, short sales, margin transactions and non-marketable securities.
The Company’s pension plan asset allocation at year end 2021 and 2020, target allocation for 2021, and expected long-term rate of return by asset category are as follows:
NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued)
Target
Allocation		Percentage of Plan
Assets
at Year End		Weighted
Average Expected
Long-Term Rate
of Return
Asset Category202220212020
Equity securities55 -65 %61 %65 %8.85 %
Debt securities35 -45 %37 %31 %3.00 %
Other5 -10 %2 %4 %0.10 %
Total100 %100 %6.50 %
The Company’s SERP plan asset allocation at year end 2021 and 2020, target allocation for 2021, and expected long-term rate of return by asset category are as follows:
Target
Allocation		Percentage of Plan
Assets
at Year End		Weighted
Average Expected
Long-Term Rate
of Return
Asset Category202220212020
Equity securities55 -65 %59 %64 %8.85 %
Debt securities35 -45 %36 %34 %3.00 %
Other5 -10 %5 %2 %0.10 %
Total100 %100 %6.50 %
Fair Value of Pension Plan and SERP Assets
Fair value is the exchange price that would be received for an asset in the principal or most advantageous market for the asset in an orderly transaction between market participants on the measurement date. Also, a fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:
Equity and debt securities:  The fair values of securities are determined on a recurring basis by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or pricing models, which utilize significant observable inputs such as matrix pricing. This is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).
NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued)

The fair values of the Company’s pension plan assets at December 31, 2021, by asset category are as follows:
Asset CategoryTotalQuoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
(dollars in thousands)
Equity securities - US large cap common stocks$923 $923 $0 $0 
Equity securities - US mid cap stock mutual funds104 104 0 0 
Equity securities - US small cap stock mutual funds106 106 0 0 
Equity securities - international stock mutual funds193 193 0 0 
Equity securities - emerging markets stock mutual funds73 73 0 0 
Debt securities - intermediate term bond mutual funds273 273 0 0 
Debt securities - short term bond mutual funds572 572 0 0 
Cash - money market account59 59 0 0 
Total$2,303 $2,303 $0 $0 
The fair values of the Company’s pension plan assets at December 31, 2020, by asset category are as follows:
Asset CategoryTotalQuoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Observable
Inputs
(Level 2 )		Significant
Unobservable
Inputs
(Level 3)
(dollars in thousands)        
Equity securities - US large cap common stocks$962 $962 $0 $0 
Equity securities - US mid cap stock mutual funds124 124 0 0 
Equity securities - US small cap stock mutual funds129 129 0 0 
Equity securities - international stock mutual funds202 202 0 0 
Equity securities - emerging markets stock mutual funds105 105 0 0 
Debt securities - intermediate term bond mutual funds526 526 0 0 
Debt securities - short term bond mutual funds205 205 0 0 
Cash - money market account93 93 0 0 
Total$2,346 $2,346 $0 $0 
Total pension plan assets available for benefits also include $3,000 in accrued interest and dividend income.
There were no Level 2 or 3 securities during either year.
NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued)

The fair values of the Company’s SERP assets at December 31, 2021, by asset category are as follows:
Asset CategoryTotalQuoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
(dollars in thousands)        
Equity securities - US large cap common stocks$327 $327 $0 $0 
Equity securities - US mid cap stock mutual funds38 38 0 0 
Equity securities - US small cap stock mutual funds38 38 0 0 
Equity securities - emerging markets stock mutual funds27 27 0 0 
Equity securities - international stock mutual funds71 71 0 0 
Debt securities - intermediate term bond mutual funds85 85 0 0 
Debt securities - short term bond mutual funds222 222 0 0 
Cash - money market account40 40 0 0 
Total$848 $848 $0 $0 
The fair values of the Company’s SERP assets at December 31, 2020, by asset category are as follows:
Asset CategoryTotalQuoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
(dollars in thousands)        
Equity securities - US large cap common stocks$360 $360 $0 $0 
Equity securities - US mid cap stock mutual funds23 23 0 0 
Equity securities - US small cap stock mutual funds72 72 0 0 
Equity securities - emerging markets stock mutual funds37 37 0 0 
Equity securities - international stock mutual funds72 72 0 0 
Debt securities - intermediate term bond mutual funds216 216 0 0 
Debt securities - short term bond mutual funds82 82 0 0 
Cash - money market account16 16 0 0 
Total$878 $878 $0 $0 
Total SERP plan assets available for benefits also include $1,000 in accrued interest and dividend income.
There were no Level 2 or 3 securities during either year.
Contributions
The Company does not expect to contribute to its pension or SERP plans in 2021.
NOTE 11 – PENSION AND OTHER POSTRETIREMENT PLANS (continued)
Estimated Future Benefit Payments
The following benefit payments are expected to be paid over the next ten years:
Plan YearPension
Benefits		SERP
Benefits
(dollars in thousands)
2022$193 $130 
2023209 123 
2024182 115 
2025190 105 
2026191 94 
2027-2031703 294