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Benefit Plan
 12 Months Ended
Dec. 31, 2023
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 Park National 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 2023 or 2022 and no contribution is expected to be made in 2024.
 
Using accrual measurement dates of December 31, 2023 and 2022, plan assets and benefit obligation activity for the Pension Plan are listed below:

(In thousands)20232022
Change in fair value of plan assets
Fair value at beginning of measurement period$209,138 $263,473 
Actual return on plan assets34,764 (37,319)
Benefits paid(11,008)(17,016)
Fair value at end of measurement period$232,894 $209,138 
Change in benefit obligation
Projected benefit obligation at beginning of measurement period$127,394 $182,964 
Service cost6,236 9,749 
Interest cost6,523 5,705 
Plan amendments— 558 
Actuarial loss (gain)10,072 (54,566)
Benefits paid(11,008)(17,016)
Projected benefit obligation at the end of measurement period$139,217 $127,394 
Funded status at end of year (fair value of plan assets less benefit obligation)$93,677 $81,744 
 
The increase in the projected benefit obligation ("PBO") from $127.4 million as of December 31, 2022 to $139.2 million as of December 31, 2023, was the result of demographic losses driven by salary increases greater than assumed and a decrease in the discount rate from 5.32% to 5.14%, partially offset by assumption updates for a change in the mortality table for lump sum distributions, reflecting updates for the 2023 assumption study, and a decrease in the interest credit rate.

The asset allocation for the Pension Plan as of each measurement date, by asset category, was as follows:
 
Percentage of Plan Assets
Asset categoryTarget Allocation20232022
Equity securities50% - 100%85 %84 %
Fixed income and cash equivalentsremaining balance15 %16 %
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 6.92% at both December 31, 2023 and December 31, 2022. 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 $113.4 million and $106.3 million at December 31, 2023 and 2022, 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, 2023 and 2022, the fair value of the 115,800 common shares held by the Pension Plan was $15.4 million, or $132.86 per share and $16.3 million, or $140.75 per share, respectively.
 
The weighted average assumptions used to determine benefit obligations at December 31, 2023, 2022 and 2021 were as follows:
 
202320222021
Discount rate5.14 %5.32 %3.23 %
Rate of compensation increase
Under age 25 (under age 30 for 2022 and 2021)7.50 %8.25 %8.25 %
Ages 25-29 (ages 30-39 for 2022 and 2021)7.00 %6.00 %6.00 %
Ages 30-34 (ages 40-49 for 2022 and 2021)6.75 %5.00 %5.00 %
Ages 35-39 (ages 50-54 for 2022 and 2021)6.00 %4.25 %4.25 %
Ages 40-44 (ages 55-59 for 2022 and 2021)5.25 %3.75 %3.75 %
Ages 45-54 (ages 60-64 for 2022 and 2021)4.75 %3.50 %3.50 %
Ages 55-69 (ages 65 and over for 2022 and 2021)3.75 %3.25 %3.25 %
Ages 70 and over (for 2023)3.00 %N/AN/A
Interest crediting rate3.89 %4.07 %N/A

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

2024$10,966 
202511,164 
202611,246 
202711,245 
202810,896 
2029-203354,844 
Total$110,361 
 
The following table shows ending balances of accumulated other comprehensive income (loss) at December 31, 2023 and 2022.
 
(In thousands)20232022
Prior service cost$(388)$(436)
Net actuarial gain (loss)2,529 (8,020)
Total2,141 (8,456)
Deferred tax (liability) asset(449)1,776 
Accumulated other comprehensive income (loss)$1,692 $(6,680)
Using actuarial measurement dates of December 31 for 2023, 2022 and 2021, components of net periodic benefit income (loss) and other amounts recognized in other comprehensive income (loss) were as follows:
 
(In thousands)202320222021Affected 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$(6,236)$(9,749)$(9,916)Employee benefits
Interest cost(6,523)(5,705)(5,359)Other components of net periodic benefit income
Expected return on plan assets14,143 17,798 15,731 Other components of net periodic benefit income
Recognized net actuarial loss and prior service cost(48)15 (2,220)Other components of net periodic benefit income
Net periodic benefit income (loss)$1,336 $2,359 $(1,764)
Net actuarial gain (loss) and prior service credit (cost)$10,549 $(1,109)$34,019 
Amortization of net loss (gain) 48 (15)2,220 
Total recognized in other comprehensive income (loss) 10,597 (1,124)36,239 
Total recognized in net benefit income (loss) and other comprehensive income (loss)$11,933 $1,235 $34,475 
 
The weighted average assumptions used to determine net periodic benefit income (loss) for the years ended December 31, 2023, 2022 and 2021 are listed below:
 
202320222021
Discount rate5.32 %3.23 %3.00 %
Rate of compensation increase
     Under age 308.25 %8.25 %8.25 %
     Ages 30-396.00 %6.00 %6.00 %
     Ages 40-495.00 %5.00 %5.00 %
  Ages 50-54 4.25 %4.25 %4.25 %
Ages 55-593.75 %3.75 %3.75 %
Ages 60-64 3.50 %3.50 %3.50 %
Ages 65 and over 3.25 %3.25 %3.25 %
Expected long-term return on plan assets6.92 %6.92 %7.00 %
 
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 held by the Pension Plan, are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs). Additionally, due to their short-term nature, the fair value of interest bearing demand deposits is determined by reference to their face value (Level 1 inputs). Interest bearing time deposits, United States Government agency obligations and corporate bonds are valued by the trustee based on yields available on comparable securities of issuers with similar credit ratings as of the end of the year (Level 2 inputs). No investments were categorized as Level 3 inputs.
The fair value of the plan assets at December 31, 2023 and December 31, 2022, by asset class, is as follows.
Fair Value MeasurementsFair Value Measurements
at December 31, 2023, Usingat December 31, 2022, Using
(In thousands)(Level 1)(Level 2)(Level 1)(Level 2)
Interest-bearing account$1,395 $4,758 $1,959 $3,910 
Mutual funds49,740 — 46,093 — 
U.S. Government agency obligations— 12,466 — 12,513 
Corporate bonds— 15,572 — 12,562 
Common stocks148,963 — 132,101 — 
Total$200,098 $32,796 $180,153 $28,985 

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 $5.0 million, $4.6 million, and $4.3 million for 2023, 2022 and 2021, respectively.

Supplemental Executive Retirement Plan

The Corporation has entered into Supplemental Executive Retirement Plan Agreements (the "SERP Agreements") with certain key officers of Park National 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 $15.2 million and $14.2 million for 2023 and 2022, respectively, and is recorded within "Other liabilities" on the Consolidated Balance Sheet. The expense for the Corporation was as follows:

(In thousands)202320222021Affected Line Item in the Consolidated
Statements of Income
Service cost$1,224 $1,091 $1,345 Employee benefits
Interest cost567 564 510 Miscellaneous expense
Total SERP expense$1,791 $1,655 $1,855