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Benefit Plan
 12 Months Ended
Dec. 31, 2020
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Benefit Plans Benefit Plans
The Corporation has a noncontributory Defined Benefit Pension Plan (the “Pension Plan”) covering substantially all of the employees of the Corporation and its subsidiaries. The Pension Plan provides benefits based on an employee’s years of service and compensation.

There was no pension contribution in 2020 or 2019 and there is no contribution expected to be made in 2021.
 
Using accrual measurement dates of December 31, 2020 and 2019, plan assets and benefit obligation activity for the Pension Plan are listed below:

(In thousands)20202019
Change in fair value of plan assets
Fair value at beginning of measurement period$210,623 $177,077 
Actual return on plan assets27,800 42,402 
Employer contributions— — 
Benefits paid(7,981)(8,856)
Fair value at end of measurement period$230,442 $210,623 
Change in benefit obligation
Projected benefit obligation at beginning of measurement period$154,419 $123,528 
Service cost8,319 5,873 
Interest cost5,283 5,491 
Plan amendments— (168)
Actuarial loss 24,370 28,551 
Benefits paid(7,981)(8,856)
Projected benefit obligation at the end of measurement period$184,410 $154,419 
Funded status at end of year (fair value of plan assets less benefit obligation)$46,032 $56,204 
 
The increase in the projected benefit obligation ("PBO") from $154.4 million as of December 31, 2019 to $184.4 million as of December 31, 2020, was largely the result of a decrease in the discount rate from 3.53% to 3.00%. Additionally, the PBO increased due to updated assumptions for withdrawal rates, retirement rates, optional payment form elections, and salary increases as well as assumptions for lump sum determinations. These losses were partially offset by the adoption of the MP 2020 mortality projection scale.

The asset allocation for the Pension Plan as of each measurement date, by asset category, was as follows:
 
Percentage of Plan Assets
Asset categoryTarget Allocation20202019
Equity securities50% - 100%84 %81 %
Fixed income and cash equivalentsremaining balance16 %19 %
Total100 %100 %
 
The investment policy, as established by the Retirement Plan Committee, is to invest assets according to the target allocation stated above. Assets will be reallocated periodically based on the investment strategy of the Retirement Plan Committee. The investment policy is reviewed periodically.

The expected long-term rate of return on plan assets used to measure the benefit obligation was 7.00% at both December 31, 2020 and December 31, 2019. This return was based on the expected long-term return of each of the asset categories, weighted based on the median of the target allocation for each class.

The accumulated benefit obligation for the Pension Plan was $149.5 million and $129.3 million at December 31, 2020 and 2019, respectively.
 
On November 17, 2009, the Park Pension Plan completed the purchase of 115,800 common shares of Park for $7.0 million or $60.45 per share. At December 31, 2020 and 2019, the fair value of the 115,800 common shares held by the Pension Plan was $12.2 million, or $105.01 per share and $11.9 million, or $102.38 per share, respectively.
 
The weighted average assumptions used to determine benefit obligations at December 31, 2020, 2019 and 2018 were as follows:
 
202020192018
Discount rate3.00 %3.53 %4.60 %
Rate of compensation increase
Under age 308.25 %10.00 %10.00 %
Ages 30-396.00 %6.00 %6.00 %
Ages 40-495.00 %4.00 %4.00 %
Ages 50-544.25 %3.00 %3.00 %
Ages 55-593.75 %3.00 %3.00 %
Ages 60-643.50 %3.00 %3.00 %
Ages 65 and over3.25 %3.00 %3.00 %

The estimated future pension benefit payments reflecting expected future service for the next ten years are shown below (in thousands):

2021$11,582 
202211,798 
202311,672 
202412,613 
202512,758 
2026-2030 62,929 
Total$123,352 
 
The following table shows ending balances of accumulated other comprehensive loss at December 31, 2020 and 2019.
 
(In thousands)20202019
Prior service credit$152 $168 
Net actuarial loss(43,723)(33,933)
Total(43,571)(33,765)
Deferred taxes9,150 7,091 
Accumulated other comprehensive loss$(34,421)$(26,674)
Using actuarial measurement dates of December 31 for 2020, 2019 and 2018, components of net periodic benefit income and other amounts recognized in other comprehensive income were as follows:
 
(In thousands)202020192018Affected Line Item in the Consolidated Statements of Income
Components of net periodic benefit income (loss) and other amounts recognized in other comprehensive income (loss)
Service cost$(8,319)$(5,873)$(6,547)Employee benefits
Interest cost(5,283)(5,491)(5,236)Other components of net periodic benefit income
Expected return on plan assets14,410 12,105 13,417 Other components of net periodic benefit income
Recognized net actuarial loss and prior service cost(1,175)(1,882)(1,361)Other components of net periodic benefit income
Net periodic benefit (loss) income$(367)$(1,141)$273 
Net actuarial (loss) gain and prior service cost$(10,981)$1,913 $(5,122)
Amortization of net loss1,175 1,882 1,361 
Total recognized in other comprehensive (loss) income(9,806)3,795 (3,761)
Total recognized in net benefit (loss) income and other comprehensive (loss) income$(10,173)$2,654 $(3,488)
 
There are $16,000 in estimated prior service costs for the Pension Plan to be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next year. The estimated net actuarial loss expected to be recognized in the next year is $2.2 million.

The weighted average assumptions used to determine net periodic benefit income (loss) for the years ended December 31, 2020, 2019 and 2018 are listed below:
 
202020192018
Discount rate3.53 %4.60 %3.89 %
Rate of compensation increase
     Under age 3010.00 %10.00 %10.00 %
     Ages 30-396.00 %6.00 %6.00 %
     Ages 40-494.00 %4.00 %4.00 %
     Ages 50 and over3.00 %3.00 %3.00 %
Expected long-term return on plan assets7.00 %7.00 %7.00 %
 
The Pension Plan maintains cash in a PNB savings account. The Pension Plan cash balance was $2.5 million at December 31, 2020.
 
U.S. GAAP defines fair value as the price that would be received by Park for an asset or paid by Park to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date, using the most advantageous market for the asset or liability. The fair values of equity securities, consisting of mutual fund investments and common stock (U.S. large cap) held by the Pension Plan and the fixed income and cash equivalents, are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs). The fair value of Pension Plan assets at December 31, 2020 was $230.4 million. At December 31, 2020, $195.0 million of equity investments and cash in the Pension Plan were categorized as Level 1 inputs; $35.4 million of Pension Plan investments in corporate (U.S. large cap), U.S. Government sponsored entity bonds and marketable CDs were categorized as Level 2 inputs, as fair value was based on quoted market prices of comparable instruments; and no investments were categorized as Level 3 inputs. The fair value of Pension Plan assets was $210.6 million at December 31, 2019. At December 31, 2019, $180.0 million of investments in the Pension Plan were categorized as Level 1 inputs; $30.6 million were categorized as Level 2; and no investments were categorized as Level 3.
Salary Deferral Plan

The Corporation has a voluntary salary deferral plan (the Corporation's Employees Stock Ownership Plan) covering substantially all of the employees of the Corporation and its subsidiaries. Eligible employees may contribute a portion of their compensation subject to a maximum statutory limitation. The Corporation provides a matching contribution established annually by the Corporation. Contribution expense for the Corporation was $4.2 million, $3.9 million, and $3.0 million for 2020, 2019 and 2018, respectively.

Supplemental Executive Retirement Plan

The Corporation has entered into Supplemental Executive Retirement Plan Agreements (the "SERP Agreements") with certain key officers of the Corporation and its subsidiaries which provide defined pension benefits in excess of limits imposed by federal income tax law. The accrued benefit cost for the SERP Agreements totaled $12.3 million and $11.0 million for 2020 and 2019, respectively. The expense for the Corporation was $2.1 million for 2020, $1.3 million for 2019 and $1.0 million for 2018.