v3.26.1
Employee Benefit Plans
 9 Months Ended
Mar. 31, 2026
Employee Benefit Plans [Abstract]  
Employee Benefit Plans
(9)
Employee Benefit Plans
 
Defined Benefit Plan
 
The Bank maintained a single-employer defined benefit pension plan (the “Pension Plan”). Effective January 1, 2006, the Board of Directors of the Bank resolved to exclude from membership in the Pension Plan employees hired on or after January 1, 2006, and elected to cease additional benefit accruals to existing Pension Plan participants effective July 1, 2006. Substantially all Bank employees who were hired before January 1, 2006, and attained the age of 21 were covered by the Pension Plan. Under the Pension Plan, retirement benefits were primarily a function of both years of service and level of compensation, at July 1, 2006. The Pension Plan was frozen.
 
On September 16, 2025, the Board of Directors approved the termination of the Pension Plan effective as of September 30, 2025. The Pension Plan assets were sufficient to cover the estimated Pension Plan obligations.
During the quarter ended December 31, 2025, the Company initiated the Pension Plan termination process and partially settled benefit obligations, recognizing a settlement charge of $199,000. The charge was included in other expenses in the accompanying consolidated statements of income.
 
During the quarter ended March 31, 2026, the Company settled the remaining Pension Plan obligations with the purchase of annuities from a third-party insurer for approximately $3.5 million. As a result of the final settlement, the Company recognized an additional non-cash settlement charge of approximately $706,000, during the quarter ended March 31, 2026. The charge was included in other expense on the consolidated statements of income.
 
Information regarding the Pension Plan at period end are as follows:
 
         
(In thousands)          
Change in projected benefit obligation:   March 31, 2026    June 30, 2025 
Benefit obligation at beginning of period  $3,994   $4,119 
Interest cost   8    213 
Actuarial loss   (450)    (1) 
Benefits paid   (3,552)    (256) 
Benefit obligation at end of period    -     4,075 
           
Change in fair value of plan assets:          
Fair value of plan assets at beginning of period   3,990    4,654 
Actual return on plan assets   (104)    348 
Employer contributions    -      -  
Benefits paid   (3,552)    (256) 
Fair value of plan assets at end of period   334    4,746 
Over funded status at end of period included in other liabilities  $(334)   $(671) 
 
The components of net periodic pension cost related to the Pension Plan during the three and nine months ended March 31, 2026 and 2025 were as follows:
 
         
  For the three months ended March 31,  
(In thousands)    2026      2025  
Interest cost  $
8
   $
53
 
Expected return on plan assets   
(10
)    
(57
) 
Amortization of net loss   
8
    
8
 
Effect of settlement   
706
    
-
 
Net periodic pension expense  $712   $4 
 
         
  For the nine months ended March 31,  
(In thousands)    2026      2025  
Interest cost  $
115
   $
159
 
Expected return on plan assets   
(126
)    
(171
) 
Amortization of net loss   
13
    
24
 
Effect of settlement   
905
    
-
 
Net periodic pension expense  $907   $12 
 
The accumulated benefit obligation for the Pension Plan was zero and $4.1 million at March 31, 2026 and June 30, 2025, respectively.
Changes in plan assets and benefit obligations recognized in other comprehensive income during the three and nine months ended March 31, 2026 consisted of the following:
 
         
(In thousands)   Three months ended
March 31, 2026		     Nine months ended
March 31, 2026		  
Actuarial loss on plan assets and benefit obligations
 $ 1,048   $ 569 
Deferred tax expense
   280     152 
Net change in plan assets and benefit obligations recognized in other comprehensive income
 $ 768   $ 417 
 
For the three and nine months ended March 31, 2025, there were no changes in plan assets and benefit obligations recognized in other comprehensive income.
 
Amounts recognized in the consolidated statements of financial condition related to the Pension Plan for the period ended, presented as follows:
 
       
(In thousands)
 
Other liabilities:   June 30, 2025  
Projected benefit obligation in surplus of fair value of pension plan
 $ (671) 
Accumulated other comprehensive loss, net of taxes:
     
Net losses and past service liability
 $ (417) 
 
As of March 31, 2026, there was $334,000 remaining in plan assets after the final termination, included in other liabilities on the Company’s consolidated statements of financial condition.
 
The principal actuarial assumptions used at June 30, 2025:
 
       
Projected benefit obligation:   June 30, 2025  
Discount rate   5.37 %
Net periodic pension expense:      
Amortization period, in years   11  
Discount rate   5.30 %
Expected long-term rate of return on plan assets   5.00 %
 
The discount rate used in the measurement of the Bank’s pension obligation was based on the FTSE Pension Discount Curve and Liability index based on expected benefit payments of the pension plan. The discount rates are evaluated at each measurement date to give effect to changes in the general interest rates. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The selected rate considers the historical and expected future investment trends of the present and expected assets in the plan.
 
The weighted average asset allocation and fair value of our pension plan assets at March 31, 2026 and June 30, 2025 was as follows:
 
                         
    March 31, 2026     June 30, 2025  
(Dollars in thousands)    Fair Value      Fair Value  
Money market  $ 334    100.0 %  $ 1,382    29.1 %
Mutual funds – fixed income       -     0.00      3,364    70.9  
Total plan assets  $ 334    100.0 %  $ 4,746    100.0 %
 
The fair value of assets within the pension plan was determined utilizing a quoted price in active markets at the measurement date. As such, these assets are classified as Level 1 within the “Fair Value Measurement” hierarchy.
 
The target allocation for investment in mutual funds was 100.0%, consisting of short-term and intermediate-term fixed income bond funds. This allocation was consistent with the Company’s goal of preserving capital while achieving investment results that contributed to the proper funding of pension obligations and cash flow requirements.
SERP
 
The Board of Directors of the Bank of Greene County adopted The Bank of Greene County Supplemental Executive Retirement Plan (the “SERP”), effective as of July 1, 2010. The SERP benefits certain key senior executives of the Bank who have been selected by the Board to participate. The SERP is intended to provide a benefit from the Bank upon vested retirement, death or disability or voluntary or involuntary termination of service (other than “for cause”). The SERP is more fully described in Note 9, Employee Benefits Plans of the consolidated financial statements presented in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
 
The net periodic pension costs related to the SERP for the three and nine months ended March 31, 2026 was $567,000, and $1.7 million, respectively, consisting primarily of service and interest costs, included within salaries and benefits expense on the consolidated statements of income. The total liability for the SERP was $19.3 million at March 31, 2026, and $17.6 million at June 30, 2025, and is included in accrued expenses and other liabilities on the consolidated statements of financial condition. The total liability for the SERP includes both accumulated net periodic pension costs and participant contributions.