The nonqualified plan is funded as the benefits are paid ; therefore , there are no assets in the plan and the unfunded liability is equal to the projected benefit obligation . Beginning in 2017 , the recognition of the unfunded liability includes the impact of prior service cost and unamortized gain / loss . The increase in the liability was offset against accumulated other comprehensive income and had no impact to net income . The amount of the pension benefits funding status is subject to many variables including interest rate levels . Therefore , changes in assumptions could significantly affect these estimates .
Costs are determined for each individual employer based on costs directly related to their participants in the plan . Our allocated share of plan expenses is included in “ Salaries and employee benefits ” in the Consolidated Statements of Income . The Pension Restoration Plan is unfunded and we make annual contributions to fund benefits paid to our retirees covered by the plan . Our cash contributions are equal to the benefits paid . There were no benefits paid under the Pension Restoration Plan to our senior officers who were actively employed during the year .
Retiree Medical Plans : District employers also provide certain health insurance benefits to eligible retired employees according to the terms of the benefit plans . The anticipated costs of these benefits are accrued during the period of the employee ’ s active status .
|
Retiree Medical Plan Information
( in thousands ) For the year ended December 31
|
2017 |
2016 |
2015 |
Postretirement benefit expense |
$ 109 |
$ 143 |
$ 325 |
Our cash contributions |
131 |
149 |
160 |
Postretirement benefit costs are included in “ Salaries and employee benefits ” in the Consolidated Statements of Income . Our cash contributions are equal to the benefits paid .
Defined Contribution Plans
We participate in a District-wide defined contribution plan . For employees hired before January 1 , 2007 , employee contributions are matched dollar for dollar up to 2.0 % and 50 cents on the dollar on the next 4.0 % on both pre-tax and post-tax contributions . The maximum employer match is 4.0 %. For employees hired after December 31 , 2006 , we contribute 3.0 % of the employee ’ s compensation and will match employee contributions dollar for dollar up to a maximum of 6.0 % on both pre-tax and post-tax contributions . The maximum employer contribution is 9.0 %.
We also participate in a District-wide Nonqualified Deferred Compensation Plan . Eligible participants must meet one of the following criteria : certain salary thresholds as determined by the IRS , are either a Chief Executive Officer or President of a participating employer , or have previously elected pretax deferrals in 2006 under predecessor nonqualified deferred compensation plans . Under this plan the employee may defer a portion of his / her salary , bonus , and other compensation . Additionally , the plan provides for supplemental employer matching contributions related to any compensation deferred by the employee that would have been eligible for a matching contribution under the defined contribution plan if it were not for certain IRS limitations .
Employer contribution expenses for the defined contribution plan , included in “ Salaries and employee benefits ” in the Consolidated Statements of Income , were $ 1.3 million , $ 1.2 million , and $ 1.1 million in 2017 , 2016 , and 2015 , respectively . These expenses were equal to our cash contributions for each year .
NOTE 10 : RELATED PARTY TRANSACTIONS
In the ordinary course of business , we may enter into loan transactions with our officers , directors , their immediate family members , and other organizations with which such persons may be associated . Such transactions may be subject to special approval requirements contained in the FCA Regulations and are made on the same terms , including interest rates , amortization schedules , and collateral , as those prevailing at the time for comparable transactions with other persons . In our opinion , none of these loans outstanding at December 31 , 2017 , involved more than a normal risk of collectability .
Related Party Loans Information
( in thousands ) |
|
|
|
As of December 31 |
2017 |
2016 |
2015 |
Total related party loans $ 16,061 $ 13,930 $ 13,696 For the year ended December 31 2017 2016 2015
Advances to related parties $ 10,541 $ 9,118 $ 11,670 Repayments by related parties 8,721 8,543 9,922
The related parties can be different each year end primarily due to changes in the composition of the Board of Directors and the mix of organizations with which such persons may be associated . Advances and repayments on loans in the preceding chart are related to those considered related parties at year end .
As discussed in Note 6 , we borrow from AgriBank , in the form of a line of credit , to fund our loan portfolio .
We purchase various services from AgriBank including certain financial and retail systems , financial reporting services , tax reporting services , technology services , and insurance services . The total cost of services we purchased from AgriBank was $ 1.2 million in each of 2017 , 2016 , and 2015 .
We also purchase human resource information systems , benefit , payroll , and workforce management services from Farm Credit Foundations ( Foundations ). As of December 31 , 2017 , 2016 , and 2015 , our investment in Foundations was $ 32 thousand . The total cost of services purchased from Foundations was $ 187 thousand , $ 197 thousand , and $ 168 thousand in 2017 , 2016 , and 2015 , respectively .
34