CHFC 2018 Annual Report

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) 2018 2017 2016 2018 2017 2016 2018 2017 2016 Service cost $ — $ 639 $ 1,041 $ 3 $ 5 $ 9 $ — $ 61 $ 77 Interest cost 4,356 4,966 5,335 82 94 132 12 69 92 Expected return on plan assets (8,879) (8,938) (8,562) — — — — — — Amortization of prior service credit — — — — — 117 — — — Amortization of net actuarial loss (gain) 710 1,837 2,259 (143) (162) (100) (7) 77 78 Curtailment — 1 — — — — — — — Settlement (1) — — — — — — — 322 120 Net cost (income) $ (3,813) $ (1,495) $ 73 $ (58) $ (63) $ 158 $ 5 $ 529 $ 367 (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. The following schedule presents estimated future benefit payments for the next 10 years under the Corporation's Plans for retirees already receiving benefits and future retirees, assuming they retire and begin receiving unreduced benefits as soon as they are eligible: (Dollars in thousands) Pension Plan Postretirement Plan SERP 2019 $ 6,387 $ 241 $ 22 2020 6,522 237 22 2021 6,680 231 22 2022 6,795 221 22 2023 6,895 209 22 2024 - 2028 35,908 853 106 Total $ 69,187 $ 1,992 $ 216 For measurement purposes for the Postretirement Plan, the annual rates of increase in the per capita cost of covered health care benefits and dental benefits for 2019 were each assumed at 7.5%. These rates were assumed to decrease gradually to 5.0% in 2020 and remain at that level thereafter. The assumed health care and dental cost trend rates could have a significant effect on the amounts reported for the Postretirement Plan. A one percentage-point change in these rates would have the following effects: One Percentage-Point (Dollars in thousands) Increase Decrease Effect on total of service and interest cost component in 2017 $ 7 $ (6) Effect on postretirement benefit obligation as of December 31, 2017 157 (143) Pension Plan Assets The assets of the Pension Plan are invested by the Wealth Management department of Chemical Bank. The investment policy and allocation of the assets of the pension trust were approved by the Compensation and Pension Committee of the board of directors of the Corporation. Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2018 156