The Plan held a fully benefit-responsive investment contract with Massachusetts Mutual Life Insurance Company (“Mass Mutual”; Issuer). Mass Mutual maintains the contributions in its general account. The Issuer guarantees the Plan a return of principal and interest under the terms of the contract. The interest crediting rate is updated quarterly based upon contract provisions, and it may not be less than 2.25%. Mass Mutual’s general account is credited with earnings on the underlying investments and is charged for participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investments at contract value.
The Plan’s investment contract specifies certain conditions under which distributions from the contract would be payable at amounts below contract value. Such circumstances include Plan termination, Plan merger, premature contract termination initiated by the Bank, and certain other Bank-initiated events that result in distributions exceeding a set amount. The contract limits the circumstances under which the Issuer may terminate the contract. Examples of circumstances which would allow the Issuer to terminate the contract include the Plan’s loss of its qualified status, uncured material breaches of responsibilities, or material and adverse changes to the provisions of the Plan. If one of these events were to occur, the Issuer could terminate the contract at an amount less than contract value. Currently, management believes that the occurrence of an event that would cause the Plan to transact contract at less than contract value is not probable.
NOTE 6 – PARTY-IN-INTEREST TRANSACTIONS
Parties-in-interest are defined under Department of Labor regulations as any fiduciary of the Plan, any party rendering service to the Plan, the employer, and certain others.
Effective May 1, 2019, all assets were transferred from Mass Mutual to Pentegra Trust Company, and Pentegra Trust Company became the trustee and Pentegra Services, Inc. became the recordkeeper of the Plan. Certain Plan investments are shares of MetLife Stable Value Fund Series 25053 that is a collective investment fund. Reliance Trust Company, who is custodian for the Plan, is also the trustee and custodian for the fund. Pentegra Retirement Services, Inc., the record keeper of the Plan, provides investment sub-advisory services for the fund. Transactions in the fund qualify as party-in-interest transactions.
Certain Plan investments were shares of mutual funds managed by MassMutual Financial Group (“MMFG”), and a fully benefit-responsive investment contract issued by Mass Mutual, a service provider of the Plan, and therefore these transactions qualified as party-in-interest transactions.
Effective beginning in July 2019, the Plan provided participants the election of an investment in Pioneer Bancorp, Inc.’s common stock (employer common stock). As of December 31, 2019, the Plan held 355,296 shares of Pioneer Bancorp, Inc. common stock with a market value of $5,439,582 at a price per share of $15.31. Transactions in the employer common stock qualify as party-in-interest transactions.
Notes receivable from participants held by the Plan are considered party-in-interest transactions.
Certain administrative functions are performed by officers or employees of the Bank. No such officer or employee receives compensation from the Plan. Some administrative expenses of the Plan are paid directly by the Bank. The administrative expenses paid directly by the Plan, as well as indirectly through the reduction of investment return, are considered party-in-interest transactions.