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Retirement Plans
 6 Months Ended
Jun. 30, 2013
Compensation and Retirement Disclosure [Abstract]  
RETIREMENT PLANS
RETIREMENT PLANS
The Company has a defined benefit plan that covers many of its employees, or the Benefit Plan. The benefits are based on years of service and the employee’s five-year final average salary. Contributions are intended to provide for benefits attributable to service both to date and expected to be provided in the future. The Company funds the plan in accordance with the Employee Retirement Income Security Act of 1974 (ERISA) and the Pension Protection Act. The Company anticipates contributing approximately $850,000 to the plan during 2013.
The Benefit Plan assets consist of equity, debt and short-term money market investment funds. The plan’s current investment policy targets 65% equities, 25% debt and 10% money market funds. Equity and debt investment percentages are allowed to fluctuate plus or minus 20% around the respective targets to take advantage of market conditions. As an example, equities can fluctuate from 78% to 52% of plan assets. At June 30, 2013, the investment mix was approximately 61% equity, 32% debt, and 7% money market funds. At December 31, 2012, the investment mix was approximately 71% equity, 26% debt and 3% money market funds. Equity investments consist of a combination of individual equity securities plus value funds, growth funds, large cap funds and international stock funds. Debt investments consist of U.S. Treasury securities and investment grade corporate debt. The weighted-average discount rate and rate of increase in future compensation levels used in determining the periodic pension cost is 4.0% in 2013 and 2012. The expected long-term rate of return on plan assets is 7.5% in 2013 and 2012. The long-term rate of return on plan assets is based on the historical returns within the plan and expectations for future returns.
The expected total pension and retirement expense for the Benefit Plan was as follows:
 
Six Months Ended
(In thousands)
2013
 
2012
Cost components:
 
 
 
Service cost-benefits earned during the period
$
(142
)
 
$
(126
)
Interest cost on projected benefit obligation
(188
)
 
(192
)
Expected return on plan assets
228

 
222

Net amortization and deferral
(96
)
 
(210
)
Total net periodic pension cost
$
(198
)
 
$
(306
)

The Company has a Supplemental Executive Retirement Plan, or SERP, to restore to executives designated by the Compensation Committee of the Board of Directors the full benefits under the pension plan that would otherwise be restricted by certain limitations now imposed under the Internal Revenue Code. The SERP is currently unfunded. The expected total pension and retirement expense for SERP was as follows:
 
Six Months Ended
(In thousands)
2013
 
2012
Cost components:
 
 
 
Service cost-benefits earned during the period
$
(86
)
 
$
(86
)
Interest cost on projected benefit obligation
(108
)
 
(108
)
Net amortization and deferral
(144
)
 
(32
)
Total net periodic pension cost
$
(338
)
 
$
(226
)