Defined Benefit Post-Retirement Plans

9 Months Ended

Sep. 30, 2023

Defined Benefit Post-Retirement Plans [Abstract]

Defined Benefit Post-Retirement Plans

7. Defined Benefit Post-Retirement Plans

The Company has a qualified, noncontributory, defined benefit pension plan (the “Plan”) covering substantially all of its employees at September 30, 2023. Benefits paid from the Plan are based on age, years of service, compensation and social security benefits and are determined in accordance with defined formulas. The Company’s policy is to fund the Plan in accordance with Employee Retirement Income Security Act of 1974 standards. Assets of the Plan are invested in publicly traded stocks, bonds and mutual funds. In addition to the Plan, the Company provides supplemental employee retirement plans to certain current and former executives. The Company also assumed supplemental retirement plans for former executives of Alliance Financial Corporation (“Alliance”) when the Company acquired Alliance. These supplemental employee retirement plans and the Plan are collectively referred to herein as “Pension Benefits.”

In addition, the Company provides certain health care benefits for retired employees. Benefits were accrued over the employees’ active service period. Only employees that were employed by the Company on or before January 1, 2000 are eligible to receive post-retirement health care benefits. In addition, the Company assumed post-retirement medical life insurance benefits for certain Alliance employees, retirees and their spouses, if applicable, in the Alliance acquisition. These post-retirement benefits are referred to herein as “Other Benefits.”

Accounting standards require an employer to: (1) recognize the overfunded or underfunded status of defined benefit post-retirement plans, which is measured as the difference between plan assets at fair value and the benefit obligation, as an asset or liability in its balance sheet; (2) recognize changes in that funded status in the year in which the changes occur through comprehensive income; and (3) measure the defined benefit plan assets and obligations as of the date of its year-end balance sheet.

The Company made no voluntary contributions to the pension and other benefits plans during the three and nine months ended September 30, 2023 and 2022.

The components of expense for Pension Benefits and Other Benefits are set forth below:

	Pension Benefits						Other Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Components of net periodic cost (benefit):
Service cost	$	476		$	506		$	1		$	2
Interest cost		999			690			56			42
Expected return on plan assets		(1,844	)		(2,220	)		-			-
Net amortization		669			183			(21	)		2
Total net periodic cost (benefit)	$	300		$	(841	)	$	36		$	46

	Pension Benefits						Other Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Components of net periodic cost (benefit):
Service cost	$	1,440		$	1,574		$	3		$	6
Interest cost		3,019			2,078			168			124
Expected return on plan assets		(5,550	)		(6,676	)		-			-
Net amortization		2,009			553			(63	)		4
Total net periodic cost (benefit)	$	918		$	(2,471	)	$	108		$	134

The service cost component of the net periodic cost (benefit) is included in Salaries and Employee Benefits and the interest cost, expected return on plan assets and net amortization components are included in Other Noninterest Expense on the unaudited interim consolidated statements of income.