Assurant 2010 Annual Report Download - page 118

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F-48 ASSURANT, INC.2010 Form 10K
22 Retirement and Other Employee Benefi ts
Amounts recognized in accumulated other comprehensive income (loss) consist of:
Pension Benefi ts Retirement Health Benefi ts
2010 2009 2008 2010 2009 2008
Net loss $ (242,902) $ (223,497) $ (207,391) $ (10,763) $ (6,872) $ (488)
Prior service cost (5,578) (6,548) (10,705) (5,848) (7,332) (6,889)
$ 248,480 $ 230,045 $ 218,096 $ 16,611 $ 14,204 $ 7,377
Components of net periodic benefi t cost and other amounts recognized in accumulated other comprehensive income (loss) for the years ended
December 31 were as follows:
Pension Benefi ts Retirement Health Benefi ts
2010 2009 2008 2010 2009 2008
Net periodic benefi t cost
Service cost $ 30,945 $ 26,153 $ 22,904 $ 4,556 $ 3,571 $ 2,801
Interest cost 38,772 36,127 33,440 5,005 4,263 3,816
Expected return on plan assets (38,069) (35,207) (36,630) (2,685) (2,044) (2,033)
Amortization of prior service cost 970 1,506 3,633 1,483 1,483 1,342
Amortization of net loss (gain) 12,654 9,494 4,196 — — (236)
Curtailment (gain)/settlement loss — (610) 1,746 — — —
Net periodic benefi t cost $ 45,272 $ 37,463 $ 29,289 $ 8,359 $ 7,273 $ 5,690
Other changes in plan assets and benefi t obligations
recognized in accumulated other comprehensive
income (loss)
Net loss $ 32,059 $ 23,048 $ 137,779 $ 3,890 $ 6,383 $ 9,365
Amortization of prior service cost (970) (2,256) (3,633) (1,483) (1,483) (1,342)
Amortization of net (loss) gain (12,654) (9,218) (4,196) — — 236
Prior service credit — 374 4,412 — 1,926 —
Total recognized in accumulated other comprehensive
income (loss) $ 18,435 $ 11,948 $ 134,362 $ 2,407 $ 6,826 $ 8,259
TOTAL RECOGNIZED IN NET PERIODIC
BENEFIT COST AND ACCUMULATED
OTHER COMPREHENSIVE INCOME LOSS $ 63,707 $ 49,411 $ 163,651 $ 10,766 $ 14,099 $ 13,949
In 2008, the deterioration of the global economy, together with the credit
crisis, caused signifi cant volatility in interest rates and equity prices,
which caused actual asset returns of the Plans’ investment portfolios to
be much less than expected. In 2010 and 2009, the improvement in
the global economy caused actual asset returns of the Plans’ investment
portfolios to be much greater than expected.  e Company uses a
fi ve-year averaging method to determine the market-related value of
plan assets, which is used to calculate the expected return of plan assets
component of the Plans’ expense. Under this methodology, asset gains/
losses that result from actual returns which diff er from the Company’s
expected long-term rate of return on assets assumption are recognized in
the market-related value of assets on a level basis over a fi ve year period.
e diff erence between actual as compared to expected asset returns
for the Plans will be fully refl ected in the market-related value of plan
assets over the next fi ve years using the methodology described above.
e estimated net loss and prior service cost of Pension Benefi ts that
will be amortized from accumulated other comprehensive income
into net periodic benefi t cost over the next fi scal year are $15,663
and $694, respectively.  e estimated net loss and prior service cost of
Retirement Health Benefi ts that will be amortized from accumulated
other comprehensive income into net periodic cost over the next
fi scal year is $66 and $1,483, respectively.
Determination of the projected benefi t obligation was based on the following weighted-average assumptions for the year ended December 31:
Qualifi ed Pension Benefi ts Nonqualifi ed Pension Benefi ts Retirement Health Benefi ts
2010 2009 2008 2010 2009 2008 2010 2009 2008
Discount rate 5.44 % 5.94 % 6.25 % 5.11 % 5.73 % 6.29 % 5.55 % 6.06 % 6.22 %
Determination of the net periodic benefi t cost was based on the following weighted-average assumptions for the year ended December 31:
Qualifi ed Pension Benefi ts Nonqualifi ed Pension Benefi ts Retirement Health Benefi ts
2010 2009 2008 2010 2009 2008 2010 2009 2008
Discount rate 5.94 % 6.25 % 6.49 % 5.73 % 6.29 % 6.28 % 6.06 % 6.22 % 6.55 %
Expected long- term
return on plan assets 7.50 % 7.50 % 8.25 % — — — 7.50 % 7.50 % 8.25 %
* Assumed rates of compensation increases are also used to determine net periodic benefit cost. Assumed rates varied by age and ranged from 3.25% – 9.30% for the Pension Benefits for
the years ended December 31, 2010, 2009 and 2008.