RETIREMENT AND POSTRETIREMENT PLANS

3 Months Ended

Mar. 31, 2021

RETIREMENT AND POSTRETIREMENT PLANS

RETIREMENT AND POSTRETIREMENT PLANS

15.RETIREMENT AND POSTRETIREMENT PLANS

As of March 31, 2021, the Company maintains one Legacy Dime employee benefit plan, the Retirement Plan of Dime Community Bank (the "Employee Retirement Plan").

The Company also maintains the two Bridge employee benefit plans that existed before the Merger: (i) the BNB Bank 401(k) Plan (the “401(k) Plan”) and (ii) the BNB Bank Pension Plan.

The Dime Community Bank KSOP Plan (“Dime KSOP Plan”) was terminated by resolution of the Board of Directors.  The effective date of the plan termination was January 31, 2021, the day immediately prior to the closing of the Merger. As such, all plan assets will be liquidated and transferred into the 401(k) Plan prior to July 31, 2021. The 401(k) Plan is available to all former Dime employees that continue to be employed following the Merger Date, that meet eligibility requirements, and provides tax deferred salary deductions and alternative investment options. Under the provisions of the 401(k) plan, employee contributions are partially matched by the Bank as follows: 100% of each employee’s contributions up to 1% of each employee’s compensation plus 50% of each employee’s contributions over 1% but not in excess of 6% of each employee’s compensation for a maximum contribution of 3.5% of a participating employee’s compensation. Participants can invest their account balances into several investment alternatives. While the Company does not allow for the investment of plan contributions in the Company’s common stock, former Dime employees that continue to be employed following the Merger Date may rollover and hold shares in-kind held in the Dime KSOP Plan to the 401(k) plan and hold the shares in the 401(k) plan. The 401(k) plan also includes a discretionary profit-sharing component.

The following table represents the components of net periodic benefit credits included in other non-interest expense, except for service cost which is reported in salaries and employee benefits expense, in the Consolidated Statements of Income for the Employee Retirement Plan and the BNB Bank Pension Plan. Net expenses associated with these plans were comprised of the following components:

	BNB Bank		Employee Retirement
	Pension Plan		Plan
	Three Months Ended March 31,
(In thousands)	2021		2020
Service cost	$	148	$	—
Interest cost		249		183
Expected return on assets		(984)		(428)
Amortization of unrealized loss		206		229
Net periodic benefit credit	$	(381)	$	(16)

There was no contribution to the BNB Bank Pension Plan for the three months ended March 31, 2021.  

In connection with the Merger, the Outside Director Retirement Plan and the BMP were terminated resulting in lump sum payments to the participants in the amounts of $2.8 million for the Outside Director Retirement Plan and $6.2 million for the BMP. The total expense recognized as a curtailment loss in the three months ended March 31, 2021 was $1.5 million.

During the three months ended March 31, 2021, the Company made gross lump-sum distributions totaling $11.6 million. These distributions were satisfied by 88,081 shares of Common Stock with a market value of $2.4 million, held by the

previous ESOP component of the BMP, of which 41,101 shares were returned to Treasury Stock to cover income tax liabilities, and cash of $9.2 million. As a result of the distribution, a non-cash tax benefit of $301 thousand was recognized as a discrete item in income tax expense in accordance to ASU 2016-09 for the difference between the market value and the cost basis of the Common Stock held by the BMP.