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 Benefit Plan in accordance with the Employee Retirement Income Security Act of 1974 (ERISA) and the Pension Protection Act. The Company in April 2017, froze the Benefit Plan as it relates to future benefit accruals for participants. The Benefit Plan was closed to new participants in February 2007. The benefit accrual freeze resulted in an adjustment to the Benefit Plan, improving our other comprehensive loss position by $1,139,000. The Company contributed $165,000 to the Benefit Plan during 2017.

Benefit Plan assets consist of equity, debt and short-term money market investment funds. The Benefit Plan’s current investment policy targets 65% equities, 25% debt and 10% money market funds. Equity and debt investment percentages are generally allowed to fluctuate plus or minus 20% to take advantage of market conditions. As an example, equities could fluctuate from 78% to 52% of plan assets. At September 30, 2017, the investment mix was approximately 57% equity, 39% debt, and 4% money market funds. At December 31, 2016, the investment mix was approximately 60% equity, 29% debt and 11% 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 rates used in determining periodic pension cost were 3.9% and 4.3% in 2017 and 2016, respectively. The expected long-term rate of return on plan assets is 7.5% in 2017 and 2016. The long-term rate of return on Benefit 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:



	Nine Months Ended September 30,
($ in thousands)	2017			2016
Cost components:
Service cost-benefits earned during the period	$	(30	)	$	(167	)
Interest cost on projected benefit obligation	(292		)	(305		)
Expected return on plan assets	397			387
Net amortization and deferral	(74		)	(138		)
Total net periodic pension cost	$	1		$	(223	)

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 Company in April 2017, froze the SERP plan as it relates to the accrual of additional benefits resulting in a SERP liability adjustment, improving our other comprehensive loss position by $487,000. The pension and retirement expense for the SERP was as follows:



	Nine Months Ended September 30,
($ in thousands)	2017			2016
Cost components:
Interest cost on projected benefit obligation	$	(216	)	$	(242	)
Net amortization and deferral	(189		)	(257		)
Total net periodic pension cost	$	(405	)	$	(499	)