NOTE 11- Benefit Plans  

 

Defined Contribution Plan

PeoplesBank maintains a 401(k) savings and investment plan covering substantially all employees.  Under the plan, employees can contribute a percentage of their compensation subject to certain limits based on federal tax law.  In 2014 and 2013, the Bank made 100 percent matching contributions up to the first 4 percent of each employee’s compensation contributed to the plan, and both the employee and employer contributions vest immediately. In 2012, the Bank made matching contributions of 50 percent up to the first 6 percent of an employee's compensation contributed to the plan.  Employee contributions vested immediately and employer contributions vested 100% after three years of service.  The Bank's expense for the 401(k) savings and investment plan was $398,000 for 2014, $366,000 for 2013 and $237,000 for 2012.

 

Supplemental Benefit Plans

PeoplesBank maintains supplemental retirement plans for selected executives.  The expense associated with these plans was approximately $242,000 for 2014, $239,000 for 2013 and $296,000 for 2012.  The accrued liability for the supplemental retirement plans was $3,901,000 at December 31, 2014 and $3,714,000 at December 31, 2013.  Income earned from bank owned life insurance policies was used to finance the cost of supplemental benefit plans, and provide a tax-exempt return to PeoplesBank.

 

Director’s Post Retirement Split-dollar Life Insurance Benefit

PeoplesBank recorded net expense of $15,000 in 2014, net expense of $7,000 in 2013 and net income of $1,000 in 2012, respectively, on bank owned life insurance policies with a post retirement split-dollar life insurance benefit.  The accrued liability for the post retirement split-dollar benefit was $257,000 at December 31, 2014 and $242,000 at December 31, 2013.