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Employee Benefit Plans
 12 Months Ended
Dec. 31, 2015
Defined Contribution Plan Disclosure [Line Items]  
Employee Benefit Plans
NOTE 15 - EMPLOYEE BENEFIT PLANS
The Company sponsors various short-term incentive and LTI plans for eligible employees, which may be delivered through various programs, such as RSUs, restricted stock, performance stock units, and AIP and LTI cash. All incentive awards are subject to clawback provisions. Awards for performance stock units vest over a period of three years and are paid in cash. AIP is the Company's short-term cash incentive plan for key employees that provides for potential annual cash awards based on the Company's performance and/or the achievement of business unit and individual performance objectives. Awards under the LTI cash plan generally cliff vest after three years from the date of the award and are paid in cash. Compensation expense for incentive plans with cash payouts was $245 million, $203 million, and $150 million for the years ended December 31, 2015, 2014, and 2013, respectively.
Stock-Based Compensation
The Company provides stock-based awards through the 2009 Stock Plan under which the Compensation Committee of the Board of Directors has the authority to grant stock options, stock appreciation rights, restricted stock, performance stock units, and RSUs to key employees of the Company. Award vesting may be conditional based upon individual, business unit, Company, and/or performance relative to peer group metrics.
As amended and restated effective January 1, 2014, following approval by the Compensation Committee of the Board, shareholders approved an amendment to the 2009 Stock Plan to remove the sub-limit on shares available for grant that may be issued as restricted stock or RSUs. Accordingly, all 17 million remaining authorized shares previously under the Plan became available for grant as stock options, stock appreciation rights, restricted stock, or RSUs. Prior to the amendment, only a portion of such shares were available to be granted as either restricted stock or RSUs. At December 31, 2015, approximately 16 million shares were available for grant.
Shares or units of restricted stock may be granted to employees and directors. Generally, grants to employees either cliff vest after three years or vest pro-rata annually over three years. Restricted stock grants may be subject to one or more criteria, including employment, performance, or other conditions as established by the Compensation Committee at the time of grant. Any shares of restricted stock that are forfeited will again become available for issuance under the Stock Plan. An employee or director has the right to vote the shares of restricted stock after grant until they are forfeited. Compensation cost for restricted stock and RSUs is generally equal to the fair market value of the shares on the grant date of the award and is amortized to compensation expense over the vesting period. Dividends are paid on awarded, unvested restricted stock.
The Company accrues and reinvests dividends in equivalent shares of SunTrust common stock for unvested RSU awards, which are paid out when the underlying RSU award vests. Generally, RSU awards are classified as equity. However, during 2012 there were 574,257 RSUs granted that were classified as a liability because the grant date had not been achieved as defined under U.S. GAAP. These awards were granted with a fair value of $21.67 per unit on the grant date. The balance of RSUs classified as a liability at December 31, 2015 and 2014 was $23 million and $21 million, respectively.
Consistent with the Company's 2014 decision to discontinue the issuance of stock options, no stock options were granted during the years ended December 31, 2015 and 2014. For options issued in 2013 the fair value of option grants was estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions presented in the following table.
 
Year Ended December 31
 
 2015 1
 
 2014 1
 
2013
Dividend yield
N/A
 
N/A
 
1.28
%
Expected stock price volatility
N/A
 
N/A
 
30.98

Risk-free interest rate (weighted average)
N/A
 
N/A
 
1.02

Expected life of options
N/A
 
N/A
 
6 years


1 Assumptions are not applicable ("N/A") as the Company discontinued the issuance of stock options and no stock options were granted for the years ended December 31, 2015 and 2014.
The Company used the projected dividend to be paid as the dividend yield assumption. The expected stock price volatility represented the implied volatility of SunTrust stock. The risk-free interest rate was derived from the U.S. Treasury yield curve in effect at the time of grant based on the expected life of the option. The expected life of options represented the period of time that the stock options were expected to be outstanding and was derived from historical data that was used to evaluate patterns such as stock option exercise and employee termination.
Stock options were granted at an exercise price that was no less than the fair market value of a share of SunTrust common stock on the grant date and were either tax-qualified incentive stock options or non-qualified stock options. Stock options typically vest pro-rata over three years and generally have a maximum contractual life of ten years. Upon exercise, shares are generally issued from treasury stock. The weighted average fair value of options granted during year ended December 31, 2013 was $7.37 per share.

The following table presents a summary of stock options, restricted stock, and RSU activity for the years ended December 31:
 
Stock Options
 
Restricted Stock
 
Restricted Stock Units
(Dollars in millions, except per share data)
Shares
 
Price
Range
 
Weighted
Average
Exercise
Price
 
Shares
 
Deferred
Compensation
 
Weighted
Average
Grant
Price
 
Shares
 
Weighted
Average
Grant
Price
Balance, January 1, 2013
13,311,652

 
$9.06 - 150.45

 

$50.15

 
3,686,321

 

$48

 

$25.56

 
1,930,646

 

$25.16

Granted
552,998

 
27.41

 
27.41

 
1,314,277

 
39

 
29.58

 
593,093

 
24.65

Exercised/vested
(712,981
)
 
9.06 - 27.79

 
16.94

 
(821,636
)
 
—

 
25.95

 
(41,790
)
 
28.73

Cancelled/expired/forfeited
(2,222,298
)
 
21.67 - 118.18

 
56.55

 
(195,424
)
 
(5
)
 
27.41

 
14,229

 
20.54

Amortization of restricted stock compensation
—

 
—

 
—

 
—

 
(32
)
 
—

 
—

 
—

Balance, December 31, 2013
10,929,371

 
9.06 - 150.45

 
49.86

 
3,983,538

 
50

 
27.04

 
2,496,178

 
26.69

Granted
—

 
—

 
—

 
21,427

 
—

 
39.20

 
1,590,075

 
36.67

Exercised/vested
(426,889
)
 
9.06 - 32.27

 
20.86

 
(957,308
)
 
—

 
29.31

 
(338,196
)
 
32.80

Cancelled/expired/forfeited
(2,774,725
)
 
23.70 - 149.81

 
71.10

 
(117,798
)
 
(2
)
 
25.60

 
(58,793
)
 
37.73

Amortization of restricted stock compensation
—

 
—

 
—

 
—

 
(27
)
 
—

 
—

 
—

Balance, December 31, 2014
7,727,757

 
9.06 - 150.45

 
43.84

 
2,929,859

 
21

 
26.45

 
3,689,264

 
31.15

Granted
—

 
—

 
—

 
20,412

 
1

 
41.15

 
1,670,587

 
40.54

Exercised/vested
(687,832
)
 
9.06 - 32.27

 
20.38

 
(1,510,045
)
 
—

 
22.86

 
(883,621
)
 
26.39

Cancelled/expired/forfeited
(1,821,667
)
 
23.70 - 150.45

 
73.01

 
(106,151
)
 
(4
)
 
29.95

 
(157,390
)
 
39.19

Amortization of restricted stock compensation
—

 
—

 
—

 
—

 
(16
)
 
—

 
—

 
—

Balance, December 31, 2015
5,218,258

 
$9.06 - 85.34

 

$36.75

 
1,334,075

 

$2

 

$30.44

 
4,318,840

 

$35.44

Exercisable,
December 31, 2015
5,033,948

 
 
 

$37.09

 
 
 
 
 
 
 
 
 
 


The following table presents stock option information at December 31, 2015:
 
 
Options Outstanding
 
Options Exercisable
(Dollars in millions, except per share data)
 
Number
Outstanding
at
December 31, 2015
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life (Years)
 
Total
Aggregate
Intrinsic
Value
 
Number
Exercisable
at
December 31, 2015
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life (Years)
 
Total
Aggregate
Intrinsic
Value
Range of Exercise Prices:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$9.06 to 49.46
 
3,482,672

 

$19.47

 
4.2
 

$81

 
3,298,362

 

$19.03

 
4.1
 

$79

$49.47 to 64.57
 
781

 
56.34

 
1.8
 
—

 
781

 
56.34

 
1.8
 
—

$64.58 to 85.34
 
1,734,805

 
71.42

 
1.2
 
—

 
1,734,805

 
71.42

 
1.2
 
—

 
 
5,218,258

 

$36.75

 
3.2
 

$81

 
5,033,948

 

$37.09

 
3.1
 

$79



The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of 2015 and the exercise price, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all option holders exercised their options on December 31, 2015. Additional option and stock-based compensation information at December 31 is shown in the following table.
(Dollars in millions)
2015
 
2014
 
2013
Intrinsic value of options exercised 1

$15

 

$8

 

$11

Fair value of vested restricted shares 1
35

 
28

 
21

Fair value of vested RSUs 1
23

 
11

 
1

1 Measured as of the grant date.
At December 31, 2015 and 2014, there was $54 million and $61 million, respectively, of unrecognized stock-based compensation expense related to unvested stock options, restricted stock, and RSUs. The unrecognized stock compensation expense for December 31, 2015 is expected to be recognized over a weighted average period of 1.8 years.

Stock-based compensation and the related tax benefit was as follows:
 
Years Ended December 31
(Dollars in millions)
2015
 
2014
 
2013
Stock options

$1

 

$2

 

$6

Restricted stock
16

 
27

 
32

Performance stock units
32

 
13

 
—

RSUs
46

 
34

 
18

Total stock-based compensation

$95

 

$76

 

$56

Stock-based compensation tax benefit

$36

 

$29

 

$21



Retirement Plans
Noncontributory Pension Plans
The Company maintains a funded, noncontributory qualified retirement plan ("Retirement Plan") covering employees meeting certain service requirements. The plan provides benefits based on salary and years of service, and based on either a traditional pension benefit formula, a cash balance formula for the PPAs, or a combination of both. Participants are 100% vested after three years of service. The interest crediting rate applied to each PPA was 3.00% for 2015. The Company monitors the funding status of the plan closely and due to the current funded status, the Company did not make a contribution to its noncontributory qualified retirement plan for the 2015 plan year.
The Company also maintains unfunded, noncontributory nonqualified supplemental defined benefit pension plans that cover key executives of the Company (the "SERP", the "ERISA Excess Plan", and the "Restoration Plan"). The plans provide defined benefits based on years of service and salary.
The SunTrust Banks, Inc. Restoration Plan (“Restoration Plan”), effective January 1, 2011, is a nonqualified defined benefit cash balance plan designed to restore benefits to certain employees who are limited under provisions of the Internal Revenue Code and are not otherwise provided for under the ERISA Excess Plan. The benefit formula under the Restoration Plan is the same as what is used for PPAs under the Retirement Plan.
On October 1, 2004, the Company acquired NCF. Prior to the acquisition, NCF sponsored a funded qualified retirement plan ("NCF Retirement Plan") and an unfunded nonqualified retirement plan, and certain other postretirement health benefits plans for its employees ("NCF Retirement Plan"). Due to the current funding status of the NCF qualified Retirement Plan, the Company did not make a contribution for the 2015 plan year.
The Retirement Plan, the SERP, the ERISA Excess Plan, and the Restoration Plan were each amended on November 14, 2011 to cease all future benefit accruals. Additionally, the NCF Retirement Plan was amended to cease any adjustments for pay increases after December 31, 2011.

Other Postretirement Benefits
The Company provides certain health care and life insurance benefits (“Other Postretirement Benefits”) to retired employees. At the option of the Company, retirees may continue certain health and life insurance benefits if they meet specific age and service requirements at the time of retirement. The health care plans are contributory with participant contributions adjusted annually, and the life insurance plans are noncontributory. Certain retiree health benefits are funded in a Retiree Health Trust. Additionally, certain retiree life insurance benefits are funded in a VEBA. Effective April 1, 2014, the Company amended the plan which now requires retirees age 65 and older to enroll in individual Medicare supplemental plans. In addition, the Company will fund a tax-advantaged HRA to assist some retirees with medical expenses.

Changes in Benefit Obligations and Plan Assets
The following table presents the change in benefit obligations, change in fair value of plan assets, funded status, accumulated benefit obligation, and the weighted average discount rate for the pension and other postretirement benefits plans for the years ended December 31:
 
Pension Benefits 1
 
Other Postretirement Benefits
(Dollars in millions)
2015
 
2014
 
2015
 
2014
Benefit obligation, beginning of year

$2,935

 

$2,575

 

$69

 

$81

Service cost
5

 
5

 
—

 
—

Interest cost
116

 
124

 
2

 
3

Plan participants’ contributions
—

 
—

 
6

 
11

Actuarial (gain)/loss
(171
)
 
401

 
(2
)
 
(10
)
Benefits paid
(164
)
 
(165
)
 
(10
)
 
(16
)
Administrative expenses paid from pension trust
(5
)
 
(5
)
 
—

 
—

Benefit obligation, end of year 2

$2,716

 

$2,935

 

$65

 

$69

 
 
 
 
 
 
 
 
Change in plan assets:
 
 
 
 
 
 
 
Fair value of plan assets, beginning of year

$3,080

 

$2,873

 

$160

 

$158

Actual return on plan assets
(37
)
 
371

 
1

 
8

Employer contributions 3
5

 
6

 
—

 
—

Plan participants’ contributions
—

 
—

 
5

 
11

Benefits paid
(164
)
 
(165
)
 
(10
)
 
(17
)
Administrative expenses paid from pension trust
(5
)
 
(5
)
 
—

 
—

Fair value of plan assets, end of year 4

$2,879

 

$3,080

 

$156

 

$160

 
 
 
 
 
 
 
 
Funded status at end of year 5, 6

$163

 

$145

 

$91

 

$91

Funded status at end of year (%)
106
%
 
105
%
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated benefit obligation

$2,716

 

$2,935

 
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.44
%
 
4.09
%
 
3.95
%
 
3.60
%

1 Employer contributions represent the benefits that were paid to nonqualified plan participants. Unfunded nonqualified supplemental pension plans are not funded through plan assets.
2 Includes $81 million and $85 million of benefit obligations for the unfunded nonqualified supplemental pension plans at December 31, 2015 and 2014, respectively.
3 The Company contributed less than $1 million to the other postretirement benefits plans during both 2015 and 2014.
4 Includes $1 million of the Company's common stock acquired by the asset manager and held as part of the equity portfolio for pension benefits at both December 31, 2015 and 2014. During 2015 and 2014, there was no SunTrust common stock held in the other postretirement benefit plans.
5 Pension benefits recorded in the Consolidated Balance Sheets included other assets of $244 million and $230 million, and other liabilities of $81 million and $85 million, at December 31, 2015 and 2014, respectively.
6 Other postretirement benefits recorded in the Consolidated Balance Sheets included other assets of $91 million at both December 31, 2015 and 2014.

Net Periodic Benefit
Components of net periodic benefit for the years ended December 31 were as follows:
 
Pension Benefits 1
 
Other Postretirement Benefits
 
(Dollars in millions)
2015
 
2014
 
2013
 
2015
 
2014
 
2013
 
Service cost

$5

 

$5

 

$5

 

$—

 

$—

 

$—

 
Interest cost
116

 
124

 
113

 
2

 
3

 
6

 
Expected return on plan assets
(206
)
 
(200
)
 
(192
)
 
(5
)
 
(5
)
 
(6
)
 
Amortization of prior service credit
—

 
—

 
—

 
(6
)
 
(6
)
 
—

 
Amortization of actuarial loss
21

 
16

 
26

 
—

 
—

 
—

 
Net periodic benefit

($64
)
 

($55
)
 

($48
)
 

($9
)
 

($8
)
 

$—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average assumptions used to determine net periodic benefit:
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.09
%
 
4.98
%
 
4.08
%
 
3.60
%
 
4.15
%
 
3.45
%
 
Expected return on plan assets
6.91

 
7.17

 
7.00

 
3.50

2 
3.68

2 
3.49

2 
1 Administrative fees are recognized in service cost for each of the periods presented.
2 The weighted average shown is determined on an after-tax basis.

Amounts Recognized in AOCI
Components of the benefit obligations AOCI balance at December 31 were as follows:
 
Pension Benefits
 
Other 
Postretirement
Benefits    
(Dollars in millions)
2015
 
2014
 
2015
 
2014
Prior service credit

$—

 

$—

 

($64
)
 

($70
)
Net actuarial loss/(gain)
1,072

 
1,021

 
(11
)
 
(14
)
Total AOCI, pre-tax

$1,072

 

$1,021

 

($75
)
 

($84
)

Other changes in plan assets and benefit obligations recognized in AOCI during 2015 were as follows:
(Dollars in millions)
Pension Benefits
 
Other Postretirement Benefits
Current year actuarial loss

$72

 

$3

Amortization of prior service credit
—

 
6

Amortization of actuarial loss
(21
)
 
—

Total recognized in AOCI, pre-tax

$51

 

$9

Total recognized in net periodic benefit and AOCI, pre-tax

($13
)
 

$—



For pension plans, the estimated actuarial loss that will be amortized from AOCI into net periodic benefit in 2016 is $25 million. For other postretirement benefit plans, the estimated prior service credit to be amortized from AOCI into net periodic benefit in 2016 is $6 million.

Plan Assumptions
Each year, the SBFC, which includes several members of senior management, reviews and approves the assumptions used in the year-end measurement calculations for each plan. The discount rate for each plan, used to determine the present value of future benefit obligations, is determined by matching the expected cash flows of each plan to a yield curve based on long-term, high quality fixed income debt instruments available as of the measurement date. A series of benefit payments projected to be paid by the plan is developed based on the most recent census data, plan provisions, and assumptions. The benefit payments at each future maturity date are discounted by the year-appropriate spot interest rates. The model then solves for the discount rate that produces the same present value of the projected benefit payments as generated by discounting each year’s payments by the spot interest rate.
On December 31, 2015, the Company refined the calculation of the service and interest cost components of net periodic benefit expense for pension and other postretirement benefit plans. Previously the Company estimated service and interest cost components utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. Under the refined method, the Company utilized a full yield curve approach to estimate these components by applying specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The Company made this change to more closely match the projected benefit cash flows and the corresponding yield curve spot rates, and to provide a more precise measurement of service and interest costs. This change had no impact on the measurement of the Company’s total benefit obligations recorded at December 31, 2015 or any other prior period. The Company accounted for this service and interest cost methodology refinement as a change in estimate that is inseparable from a change in accounting principle, and, accordingly, will recognize its effect prospectively beginning in 2016.
Actuarial gains and losses are created when actual experience deviates from assumptions. The actuarial losses on plan assets generated within the pension plans during 2015 resulted primarily from asset experience. The actuarial losses on obligations generated within the pension plans during 2014 resulted primarily from lower interest rates.
The SBFC establishes investment policies and strategies and formally monitors the performance of the investments throughout the year. The Company’s investment strategy with respect to pension assets is to invest the assets in accordance with ERISA and related fiduciary standards. The long-term primary investment objectives for the pension plans are to provide a commensurate amount of long-term growth of principal and income in order to satisfy the pension plan obligations without undue exposure to risk in any single asset class or investment category. The objectives are accomplished through investments in equities, fixed income, and cash equivalents using a mix that is conducive to participation in a rising market while allowing for protection in a declining market. The portfolio is viewed as long-term in its entirety, avoiding decisions regarding short-term concerns and any single investment. Asset allocation, as a percent of the total market value of the total portfolio, is set with the target percentages and ranges presented in the investment policy statement. Rebalancing occurs on a periodic basis to maintain the target allocation, but normal market activity may result in deviations.
The basis for determining the overall expected long-term rate of return on plan assets considers past experience, current market conditions, and expectations on future trends. A building block approach is used that considers long-term inflation, real returns, equity risk premiums, target asset allocations, market corrections, and expenses. Capital market simulations from internal and external sources, survey data, economic forecasts, and actuarial judgment are all used in this process. The expected long-term rate of return for pension obligations is 6.68% for 2016.
The investment strategy for the other postretirement benefit plans is maintained separately from the strategy for the pension plans. The Company’s investment strategy is to create a series of investment returns sufficient to provide a commensurate amount of long-term principal and income growth in order to satisfy the other postretirement benefit plan's obligations. Assets are diversified among equity funds and fixed income investments according to the mix approved by the SBFC. Due to other postretirement benefits having a shorter time horizon, a lower equity profile is appropriate. The expected long-term rate of return for other postretirement benefits is 3.13% for 2016.
Plan Assets Measured at Fair Value
The following tables present combined pension and other postretirement benefit plan assets measured at fair value. See Note 18, "Fair Value Election and Measurement" for level definitions within the fair value hierarchy.
 
 
 
Fair Value Measurements at December 31, 2015 1
(Dollars in millions)
Total
Level 1
 
Level 2
 
Level 3
Money market funds 2

$83

 

$83

 

$—

 

$—

Equity securities
1,416

 
1,416

 
—

 
—

Mutual funds 3:
 
 
 
 
 
 
 
Equity index fund
48

 
48

 
—

 
—

Tax exempt municipal bond funds
84

 
84

 
—

 
—

Taxable fixed income index funds
13

 
13

 
—

 
—

Futures contracts
(11
)
 
—

 
(11
)
 
—

Fixed income securities
1,381

 
—

 
1,381

 
—

Other assets
11

 
11

 
—

 
—

Total plan assets

$3,025

 

$1,655

 

$1,370

 

$—

1 Fair value measurements do not include pension benefits accrued income amounting to less than 0.4% of total plan assets.
2 Includes $11 million for other postretirement benefit plans.
3 Relates exclusively to other postretirement benefit plans.

 
 
 
Fair Value Measurements at December 31, 2014 1
(Dollars in millions)
Total
Level 1
 
Level 2
 
Level 3
Money market funds 2

$135

 

$135

 

$—

 

$—

Equity securities
1,467

 
1,467

 
—

 
—

Mutual funds 3:
 
 
 
 
 
 
 
Equity index fund
51

 
51

 
—

 
—

Tax exempt municipal bond funds
82

 
82

 
—

 
—

Taxable fixed income index funds
14

 
14

 
—

 
—

Futures contracts
(21
)
 
—

 
(21
)
 
—

Fixed income securities
1,478

 
107

 
1,371

 
—

Other assets
17

 
17

 
—

 
—

Total plan assets

$3,223

 

$1,873

 

$1,350

 

$—

1 Fair value measurements do not include pension benefits accrued income amounting to less than 0.6% of total plan assets.
2 Includes $13 million for other postretirement benefit plans.
3 Relates exclusively to other postretirement benefit plans.
The target allocations for pension and other postretirement benefit assets, by asset category, at December 31 are as follows:
 
Pension Benefits
 
Other Postretirement Benefits
 
Target Allocation
 
% of plan assets
 
Target Allocation
 
% of plan assets
 
 
2015
 
2014
 
 
2015
 
2014
Cash equivalents
0-10
%
 
3
%
 
4
%
 
5-15
%
 
7
%
 
8
%
Equity securities
0-50
 
 
49

 
48

 
20-40
 
 
31

 
32

Debt securities
50-100
 
 
48

 
48

 
50-70
 
 
62

 
60

Total
 
 
 
100
%
 
100
%
 
 
 
 
100
%
 
100
%


The Company sets pension asset values equal to their market value, reflecting gains and losses immediately rather than deferring over a period of years, which provides a more realistic economic measure of the plan’s funded status and cost. Assumed healthcare cost trend rates have a significant effect on the amounts reported for the other postretirement benefit plans. At December 31, 2015, the Company assumed that pre-65 retiree healthcare costs will increase at an initial rate of 7.25% per year. The Company expects this annual cost increase to decrease over a 9-year period to 5.00% per year. The effect of a 1% increase/decrease in the healthcare cost trend rate for other postretirement benefit obligations, service cost, and interest cost are less than $1 million, respectively. Assumed discount rates and expected returns on plan assets affect the amounts of net periodic benefit. A 25 basis point increase/decrease in the expected long-term return on plan assets would increase/decrease the net periodic benefit by $8 million for pension and other postretirement benefits plans. A 25 basis point increase/decrease in the discount rate would change the net periodic benefit by less than $1 million for pension and other postretirement benefits plans.
Expected Cash Flows
Expected cash flows for the pension and other postretirement benefit plans is as follows:
(Dollars in millions)
Pension Benefits 1
 
Other Postretirement Benefits (excluding Medicare Subsidy) 2
Employer Contributions:
 
 
 
2016 (expected) to plan trusts

$—

 

$—

2016 (expected) to plan participants 3
8

 
—

 
 
 
 
Expected Benefit Payments:
 
 
 
2016
191

 
7

2017
172

 
7

2018
166

 
6

2019
165

 
5

2020
167

 
5

2021 - 2025
819

 
20

1 Based on the funding status and ERISA limitations, the Company anticipates contributions to the Retirement Plan will not be required during 2016.
2 Expected payments under other postretirement benefit plans are shown net of participant contributions.
3 The expected benefit payments for the SERP will be paid directly from the Company's corporate assets.


Defined Contribution Plans
SunTrust's employee benefit program includes a qualified defined contribution plan. For years ended December 31, 2015, 2014, and 2013, the 401(k) plan provided a dollar-for-dollar match on the first 6% of eligible pay that a participant, including executive participants, elected to defer. The related 401(k) Company expense was $102 million, $98 million, and $96 million for the years ended December 31, 2015, 2014, and 2013, respectively.
SunTrust also maintains the SunTrust Banks, Inc. Deferred Compensation Plan in which key executives of the Company are eligible. Matching contributions for the deferred compensation plan are the same percentage as provided in the 401(k) plan, subject to limitations imposed by the plans' provisions and applicable laws and regulations.
Matching contributions for both the Company's 401(k) plan and the deferred compensation plan fully vest upon two years of completed service. Furthermore, both plans permit an additional discretionary Company contribution equal to a fixed percentage of eligible pay. Discretionary contributions to the 401(k) plan and the deferred compensation plan are shown in the following table.
 
Performance Year 1
(Dollars in millions)
2015
 
2014
 
2013
Contribution

$19

 

$19

 

$19

Percentage of eligible pay
1
%
 
1
%
 
1
%
1 Contributions for each of these performance years are paid in the first quarter of the following performance year.