Unum 2014 Annual Report Download - page 148

146 UNUM • 2014 ANNUAL REPORT
Notes To Consolidated Financial Statements
A one percent increase or decrease in the assumed health care cost trend rate at December 31, 2014 would have increased
(decreased) the service cost and interest cost by $0.1 million and $(0.1) million, respectively, and the postretirement benefit obligation by
$4.7 million and $(3.4) million, respectively.
The unrecognized net actuarial loss included in accumulated other comprehensive income and expected to be amortized and included
in net periodic pension cost for our pension plans during 2015 is $11.9 million before tax.
Benefit Payments
The following table provides expected benefit payments, which reflect expected future service, as appropriate.
(in millions of dollars) Pension Benefits OPEB
Year U.S. Plans U.K. Plan Gross Subsidy Payments Net
2015 $ 49.8 $ 5.5 $15.9 $ 1.9 $14.0
2016 54.1 6.0 15.6 2.1 13.5
2017 58.2 6.2 15.3 2.3 13.0
2018 62.6 6.4 14.9 2.4 12.5
2019 67.0 7.0 14.6 2.7 11.9
2020–2024 409.6 39.4 65.4 15.5 49.9
Funding Policy
The funding policy for our U.S. qualified defined benefit plan is to contribute annually an amount at least equal to the minimum annual
contribution required under ERISA and other applicable laws, but generally not greater than the maximum amount that can be deducted for
federal income tax purposes. We had no regulatory contribution requirements for our U.S. qualified defined benefit plan in 2014 and made
no voluntary contributions during 2014. We do not expect to make any contributions in 2015. The funding policy for our U.S. non-qualified
defined benefit pension plan is to contribute the amount of the benefit payments made during the year. Our expected return on plan assets
and discount rate will not affect the cash contributions we are required to make to our U.S. pension and OPEB plans because we have met
all minimum funding requirements required under ERISA.
We made required contributions to our U.K. plan of $2.3 million, or approximately £1.4 million, during 2014. Effective October 1, 2013,
we increased contributions to our U.K. plan from 24.8 percent to 30.0 percent of pensionable earnings for plan participants. We do not expect
to make any contributions in 2015, either voluntary or those required to meet the minimum funding requirements under U.K. legislation.
Our OPEB plan represents a non-vested, non-guaranteed obligation, and current regulations do not require specific funding levels
for these benefits, which are comprised of retiree life, medical, and dental benefits. It is our practice to use general assets to pay medical
and dental claims as they come due in lieu of utilizing plan assets for the medical and dental benefit portions of our OPEB plan.
Defined Contribution Plans
We offer a 401(k) plan to all eligible U.S. employees under which a portion of employee contributions is matched. Effective January 1,
2014, we began matching dollar-for-dollar up to 5.0 percent of base salary and any recognized sales and performance-based incentive
compensation for employee contributions into the plan. Also effective January 1, 2014, we began making an additional non-elective
contribution of 4.5 percent of earnings for all eligible employees and a separate transition contribution for eligible employees who met
certain age and years of service criteria as of December 31, 2013. Prior to January 1, 2014, we matched dollar-for-dollar up to 3.0 percent
of base salary and $0.50 on the dollar for each of the next 2.0 percent of base salary for employee contributions into the plan. The 401(k)
plan remains in compliance with ERISA guidelines and continues to qualify for a “safe harbor” from annual discrimination testing.