ASSOCIATE BENEFIT PLANS

9 Months Ended

Sep. 30, 2019

12. ASSOCIATE BENEFIT PLANS

Postretirement Medical Benefits

We share certain costs of providing health and life insurance benefits to eligible retired Associates (employees) and their eligible dependents. Previously, all Associates were eligible for these benefits if they reached normal retirement age while working for us. Effective March 31, 2014, we changed the eligibility of this plan to include only those Associates who have achieved ten years of service with us as of March 31, 2014. As of December 31, 2014, we began to use the mortality table issued by the Office of the Actuary of the U.S. Bureau of Census in our calculation.

We account for our obligations under the provisions of ASC 715, Compensation - Retirement Benefits (ASC 715). ASC 715 requires that we recognize the costs of these benefits over an Associate’s active working career. Amortization of unrecognized net gains or losses resulting from experience different from that assumed and from changes in assumptions is included as a component of net periodic benefit cost over the remaining service period of active employees to the extent that such gains and losses exceed 10% of the accumulated postretirement benefit obligation, as of the beginning of the year. We recognize our net periodic benefit cost in Salaries, benefits and other compensation in our unaudited Consolidated Statements of Income.

The following table presents the components of net periodic benefit cost related to our postretirement medical benefits plan measured at January 1, 2019 and 2018.


	Three months ended September 30,						Nine months ended September 30,
(Dollars in thousands)	2019		2018		2019		2018
Service cost	$	13	$	15	$	40	$	45
Interest cost	20		18		58		53
Prior service cost amortization	(19)		(19)		(57)		(57)
Net gain recognition	(16)		(11)		(47)		(34)
Net periodic (benefit) cost	$	(2)	$	3	$	(6)	$	7

Alliance Associate Pension Plan

During the fourth quarter of 2015, we completed the acquisition of Alliance. At the time of the acquisition, we assumed the Alliance pension plan offered to its current Associates.

The following table presents the components of net periodic benefit cost related to the Alliance Associate Pension Plan measured at January 1, 2019 and 2018.


	Three months ended September 30,						Nine months ended September 30,
(Dollars in thousands)	2019		2018		2019		2018
Service cost	$	10	$	10	$	30	$	30
Interest cost	70		75		208		222
Expected return on plan assets	(150)		(138)		(445)		(410)
Prior service cost amortization	—		—		—		—
Net gain recognition	—		—		—		—
Net periodic benefit	$	(70)	$	(53)	$	(207)	$	(158)

During the fourth quarter of 2018, the Company notified the Alliance pension plan participants, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation of its intention to terminate the plan. The Company currently anticipates completing the pension plan termination during the first quarter of 2020. As of September 30, 2019, the valuation of the benefit obligations and estimated future benefit payments did not include termination assumptions.

Beneficial Associate Pension and other postretirement benefits plans

On March 1, 2019, we closed our acquisition of Beneficial. At the time of the acquisition, we assumed the pension plan covering certain eligible Beneficial Associates. The plan was frozen in 2008.

The following table presents the components of net periodic benefit cost related to the Beneficial pension benefits and other postretirement benefit plans.


	Three months ended September 30, 2019		Nine months ended September 30, 2019		Three months ended September 30, 2019		Nine months ended September 30, 2019
(Dollars in thousands)	Pension Benefits						Other Postretirement Benefits
Service cost	$	—	$	—	$	23	$	53
Interest cost	857		1,999		177		413
Expected return on plan assets	(1,442)		(3,365)		—		—
Prior service cost amortization	—		—		—		—
Net gain recognition	—		—		—		—
Net periodic (benefit) cost	$	(585)	$	(1,366)	$	200	$	466