Employee Benefit Plans

401(k)/Profit Sharing Plan

The Company has a 401(k)/profit sharing plan and the majority of employees participate in the plan. Employees may contribute pre-tax contributions to the 401(k)/profit sharing plan up to the maximum amount allowed by federal tax laws. The Company makes matching contributions of up to 4% of an employee’s eligible compensation. The Company may make additional matching contributions subject to the discretion of the board of directors. For the years ended December 31, 2015, 2014, and 2013, these contributions amounted to 3% of pre-tax compensation, respectively. For the years ended December 31, 2015, 2014 and 2013, expenses under the 401(k)/Profit Sharing plan amounted to $1.5 million, $1.4 million, and $1.4 million, respectively.

SERP and Other Postretirement Benefit Plan

The Company sponsors unfunded, non-qualified SERPs for certain officers. These agreements are designed to make up the shortfall (when compared to a non-highly compensated employee) in replacing income at retirement due to IRS compensation and benefit limits under the 401(k) plan and Social Security. With a SERP in place, participants should be able to replace 65 –75% of their final average compensation. For those eligible for benefits, the SERP provides for a minimum 15-year guaranteed benefit for all vested participants. In addition, the Company provides medical and life insurance to certain eligible retired employees under the other postretirement benefit plan.

The following table summarizes changes in the benefit obligation and plan assets for (i) SERP and (ii) the other postretirement benefit plan as of December 31, 2015 and 2014:



	SERP						Other Postretirement Benefits
	2015			2014			2015			2014
Benefit obligations:
Beginning of year	$	10,834		$	9,927		$	2,997		$	3,094
Service cost	307			270			62			45
Interest cost	424			456			117			132
Actuarial (gain) loss	(32		)	777			92			(134		)
Business combinations⁽¹⁾	—			—			312			—
Benefits paid	(481		)	(596		)	(133		)	(140		)
End of year	11,052			10,834			3,447			2,997
Fair value of plan assets:
Beginning of year	—			—			—			—
Employer contributions	481			596			133			140
Benefits paid	(481		)	(596		)	(133		)	(140		)
End of year	—			—			—			—
Funded status at end of year⁽²⁾	$	11,052		$	10,834		$	3,447		$	2,997
Amounts recognized in AOCI, net of tax:
Net actuarial loss	$	1,789		$	1,953		$	423		$	378
Prior service cost (credit)	5			17			(170		)	(185		)
Total	$	1,794		$	1,970		$	253		$	193


(1)	In connection with the SBM acquisition, the Company assumed its post-retirement benefits for certain former employees and their spouses whereby the Company will cover 100% of healthcare premiums.


(2)	Reported within other liabilities on the consolidated statements of condition.

The accumulated benefit obligation for the SERP was $8.5 million at December 31, 2015 and 2014. In 2016, approximately $220,000 and $7,000 in net actuarial losses and prior service cost, respectively, are expected to be recognized as components of net period benefit cost for the SERP, and approximately $30,000 and $22,000 in net actuarial loss and prior service credit, respectively, are expected to be recognized for the other postretirement benefit plan.

The components of net period benefit cost and other amounts recognized in OCI, before taxes, were as follows:



	SERP									Other Postretirement Benefits
	2015			2014			2013			2015			2014			2013
Net period benefit cost:
Service cost	$	307		$	270		$	326		$	62		$	45		$	42
Interest cost	424			456			377			117			132			173
Recognized net actuarial loss	218			140			224			24			10			48
Amortization of prior service cost (credit)	19			19			19			(22		)	(22		)	(23		)
Net period benefit cost	968			885			946			181			165			240
Changes in funded status recognized in OCI, before taxes:
Net actuarial (gain) loss	(32		)	777			(579		)	92			(134		)	(538		)
Reclassifications to net period benefit cost:
Amortization of net unrecognized actuarial loss	(218		)	(140		)	(224		)	(24		)	(10		)	(48		)
Amortization of prior service (cost) credit	(19		)	(19		)	(19		)	22			22			23
Total recognized in OCI, before taxes	(269		)	618			(822		)	90			(122		)	(563		)
Total recognized in net period benefit cost and OCI, before taxes	$	699		$	1,503		$	124		$	271		$	43		$	(323	)

In the first quarter of 2014, the Company amended the terms of its other postretirement benefit plan impacting the eligibility of employees. The amendment to the plan reduced the Company's benefit obligation by $308,000 at December 31, 2014 and is reflected within the year ended December 31, 2014 other postretirement benefits plan net actuarial gain.

The following assumptions were used in determining benefit obligations and net period benefit costs:



	SERP						Other Postretirement Benefits
	2015		2014		2013		2015		2014		2013
Weighted-average assumptions as of end of year:
Discount rate for benefit obligation	4.00	%	4.00	%	4.75	%	4.50	%	4.00	%	5.02	%
Discount rate for net period benefit cost	4.00	%	4.75	%	3.75	%	4.00	%	5.02	%	4.05	%
Rate of compensation increase for benefit obligation	4.00	%	4.00	%	4.50	%	—		—		—
Rate of compensation increase for net periodic benefit cost	4.00	%	4.50	%	4.50	%	—		—		—
Health care cost trend rate assumed for future years	—		—		—		7.00	%	7.00	%	7.00	%

A 1.0% increase or decrease in the assumed health care cost trend rate would not materially increase or decrease the Company's accumulated postretirement benefit obligation and the related service and interest cost at December 31, 2015. The postretirement plan has a built-in cap on annual benefits to participants and, thus, the accumulated postretirement benefit obligation and the assumed health care cost trend are relatively stable each period.

In 2016, the expected contribution is $489,000 for the SERP and $163,000 for the other postretirement benefits plan. The expected benefit payments for the next ten years are presented in the following table:



	SERP		Other Postretirement Benefits
2016	$	489	$	163
2017	473		160
2018	473		165
2019	477		169
2020	476		173
2021-2025	2,809		1,027