CHFC 2017 Annual Report

Weighted-average rate assumptions of the Corporation's Plans follow: Pension Plan Postretirement Plan SERP 2017 2016 2015 2017 2016 2015 2017 2016 2015 Discount rate used in determining benefit obligation — December 31 3.68% 4.22% 4.55% 3.41% 3.79% 4.23% 3.38% 3.63% 4.51% Discount rate used in determining expense 4.22 4.55 4.15 3.79 4.23 3.75 — 4.51 4.07 Discount rate used in determining expense — prior to remeasurement 3.81 — — — — — 3.63 2.87 — Expected long-term return on Pension Plan assets 6.75 6.75 6.75 — — — — — — Rate of compensation increase used in determining benefit obligation — December 31 — 3.50 3.50 — — — — 3.50 3.50 Rate of compensation increase used in determining pension expense 3.50 3.50 3.50 — — — 3.50 3.50 3.50 Year 1 increase in cost of postretirement benefits — — — 6.5 7.0 7.5 — — — Net periodic pension cost (income) of the Corporation's Plans was as follows for the years ended December 31: Pension Plan Postretirement Plan SERP (Dollars in thousands) 2017 2016 2015 2017 2016 2015 2017 2016 2015 Service cost $ 639 $ 1,041 $ 1,021 $ 5 $ 9 $ 16 $ 61 $ 77 $ 70 Interest cost 4,966 5,335 5,242 94 132 133 69 92 85 Expected return on plan assets (8,938) (8,562) (8,645) — — — — — — Amortization of prior service credit — — (5) — 117 130 — — — Amortization of net actuarial loss (gain) 1,837 2,259 3,962 (162) (100) (1) 77 78 262 Curtailment 1 — — — — — — — — Settlement (1) — — — — — — 322 120 — Net cost (income) $ (1,495) $ 73 $ 1,575 $ (63) $ 158 $ 278 $ 529 $ 367 $ 417 (1) The settlement charge relates to the settlement of liabilities under the SERP for the retirement of the plan participant during the third quarter of 2017 and the change in control as a result of the merger with Talmer as of August 31, 2016. Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2017 149