Assurant 2014 Annual Report Download - page 139

ASSURANT, INC. – 2014 Form 10-K F-51
21 Retirement and Other Employee Benefi ts
are expressed as a ratio of a company’s total adjusted capital
(“TAC”) to its risk-based capital (“RBC”) (the “RBC Ratio”).
TAC is equal to statutory surplus adjusted to exclude certain
statutory liabilities. RBC is calculated by applying specifi ed
factors to various asset, premium, expense, liability, and
reserve items.
Generally, if a company’s RBC Ratio is below 100% (the
“Authorized Control Level”), the insurance commissioner of
the company’s state of domicile is authorized to take control
of the company, to protect the interests of policyholders.
If the RBC Ratio is greater than 100% but less than 200%
(the “Company Action Level”), the company must submit
a RBC plan to the commissioner of the state of domicile.
Corrective actions may also be required if the RBC Ratio is
greater than the Company Action Level but the company
fails certain trend tests.
As of December 31, 2014, the TAC of each of our insurance
subsidiaries exceeded the Company Action Level and no trend
tests that would require regulatory action were violated.
As of December 31, 2014, the TAC of our life and health
entities subject to RBC requirements was $1,136,294. The
corresponding Authorized Control Level was $190,231. As
of December 31, 2014, the TAC of our P&C entities subject
to RBC requirements was $1,396,305. The corresponding
Authorized Control Level was $279,349.
21. Retirement and Other Employee Benefi ts
Defi ned Benefi t Plans
The Company and its subsidiaries participate in a non-
contributory, qualifi ed defi ned benefi t pension plan (“Assurant
Pension Plan”) covering substantially all employees. The Assurant
Pension Plan is considered “qualifi ed” because it meets the
requirements of Internal Revenue Code Section 401(a) (“IRC
401(a)”) and the Employee Retirement Income Security Act of
1974 (“ERISA”). The Assurant Pension Plan is a pension equity
plan with a grandfathered fi nal average earnings plan for a
certain group of employees. Benefi ts are based on certain years
of service and the employee’s compensation during certain such
years of service. The Company’s funding policy is to contribute
amounts to the Assurant Pension Plan suffi cient to meet the
minimum funding requirements in ERISA, plus such additional
amounts as the Company may determine to be appropriate
from time to time up to the maximum permitted. The funding
policy considers several factors to determine such additional
amounts, including items such as the amount of service cost
plus 15% of the Assurant Pension Plan defi cit and the capital
position of the Company. During 2014, we contributed $30,000
in cash to the Assurant Pension Plan. We expect to contribute
up to $43,000 in cash to the Assurant Pension Plan over the
course of 2015. Contributions are intended to provide not
only for benefi ts attributed to service to date, but also for
those expected to be earned in the future. Assurant Pension
Plan assets are maintained in a separate trust and as such
are not included in the consolidated balance sheets of the
Company. Plan assets and benefi t obligations are measured
as of December 31, 2014.
As of January 1, 2014, the Assurant Pension and Executive
Pension Plans are no longer offered to new hires. Current
employees will not be affected and will continue to accrue
benefi ts under the Assurant Pension and Executive Pension Plans.
Employees who are currently eligible but not yet participating
in the Assurant Pension Plan will remain eligible to participate
in the future once they meet the Assurant Pension Plan and
Executive Pension Plan requirements.
The Company also has various non-contributory, non-qualifi ed
supplemental plans covering certain employees. Since these
plans are “non-qualifi ed” they are not subject to the laws and
regulations of IRC 401(a) and ERISA. As such, the Company is
not required, and does not, fund these plans. The qualifi ed
and nonqualifi ed plans are referred to as “Pension Benefi ts”
unless otherwise noted. The Company has the right to modify
or terminate these benefi ts; however, the Company will not
be relieved of its obligation to plan participants for their
vested benefi ts.
In addition, the Company provides certain life and health care
benefi ts (“Retirement Health Benefi ts”) for retired employees
and their dependents. On July 1, 2011, the Company terminated
certain health care benefi ts for employees who did not qualify
for “grandfathered” status and no longer offers these benefi ts
to new hires. The Company contribution, plan design and
other terms of the remaining benefi ts will not change for
those grandfathered employees. The Company has the right
to modify or terminate these benefi ts.