Travelers 2014 Annual Report Download - page 134

Table of Contents
more restrictive, limitations on the payment of dividends. A maximum of $3.25 billion is available by the end of 2015 for such dividends to the
holding company, TRV, without prior approval of the Connecticut Insurance Department. The Company may choose to accelerate the timing within
2015 and/or increase the amount of dividends from its insurance subsidiaries in 2015, which could result in certain dividends being subject to
approval by the Connecticut Insurance Department.
In addition to the regulatory restrictions on the availability of dividends that can be paid by the Company's U.S. insurance subsidiaries, the
maximum amount of dividends that may be paid to the Company's shareholders is limited, to a lesser degree, by certain covenants contained in its
line of credit agreement with a syndicate of financial institutions that require the Company to maintain a minimum consolidated net worth as
described in note 8 of notes to the Company's consolidated financial statements.
TRV is not dependent on dividends or other forms of repatriation from its foreign operations to support its liquidity needs. The undistributed
earnings of the Company's foreign operations are not material and are intended to be permanently reinvested in those operations.
TRV and its two non
- insurance holding company subsidiaries received $4.10 billion of dividends in 2014 from their U.S. insurance subsidiaries.
Pension and Other Postretirement Benefit Plans
The Company sponsors a qualified non - contributory defined benefit pension plan (the Qualified Plan), which covers substantially all U.S.
domestic employees and provides benefits primarily under a cash balance formula. In addition, the Company sponsors a nonqualified defined
benefit pension plan which covers certain highly
- compensated employees, pension plans for employees of its foreign subsidiaries, and a
postretirement health and life insurance benefit plan for employees satisfying certain age and service requirements and for certain retirees.
The Qualified Plan is subject to regulations under the Employee Retirement Income Act of 1974 as amended (ERISA), which requires plans to
meet minimum standards of funding and requires such plans to subscribe to plan termination insurance through the Pension Benefit Guaranty
Corporation (PBGC). The Company does not have a minimum funding requirement for the Qualified Plan for 2015 and does not anticipate having a
minimum funding requirement in 2016. The Company has significant discretion in making contributions above those necessary to satisfy the
minimum funding requirements. In 2014, 2013 and 2012, there was no minimum funding requirement for the Qualified Plan. In 2014 and 2012, the
Company voluntarily made contributions totaling $200 million and $217 million, respectively, to the Qualified Plan. In determining future
contributions, the Company will consider the performance of the plan's investment portfolio, the effects of interest rates on the projected benefit
obligation of the plan and the Company's other capital requirements. The Company has not determined whether or not additional voluntary funding
will be made in the 2015. However, the Company currently believes, subject to actual plan performance and funded status at the time, that it may
make voluntary pension contributions of approximately $75 million to $100 million annually beginning in 2015 as well as over the following several
years.
At December 31, 2014, the Company updated its mortality assumptions for estimating its qualified pension plan liabilities utilizing a new
mortality table and related improvement scale issued by the Society of Actuaries in October 2014. The adoption of the new mortality table and
related improvement scale increased the projected benefit obligation by $150 million at December 31, 2014.
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