Assurant 2012 Annual Report Download - page 122

ASSURANT, INC.2012 Form10-KF-46
20 Retirement and Other Employee Bene ts
$50,000 in cash to the Assurant Pension Plan over the course of
2013. Contributions are intended to provide not only for bene ts
attributed to service to date, but also for those expected to be earned
in the future. Plan assets are maintained in a separate trust and as such
are not included in the consolidated balance sheets of the Company.
 e Company also has various non-contributory, non-quali ed
supplemental plans covering certain employees. Since these plans are
“non-quali 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.  e quali ed and nonquali ed plans are referred to as
“Pension Bene ts” unless otherwise noted.  e Company has the right
to modify or terminate these bene ts; however, the Company will not
be relieved of its obligation to plan participants for their vested bene ts.
In addition, the Company provides certain life and health care
bene ts (“Retirement Health Bene ts”) for retired employees and their
dependents. On July1, 2011, the Company terminated certain health
care bene ts for employees who did not qualify for “grandfathered”
status and no longer o ers these bene ts to new hires.  e Company
contribution, plan design and other terms of the remaining bene ts
will not change for those grandfathered employees.  e Company has
the right to modify or terminate these bene ts. Plan assets and bene t
obligations are measured as of December31, 2012.
Summarized information on the Company’s Pension Bene ts and Retirement Health Bene ts plans (together the “Plans”) for the years ended
December31 is as follows:
Pension Bene ts Retirement Health Bene ts
2012 2011 2010 2012 2011 2010
Change in projected bene t obligation
Projected bene t obligation at beginning of year $ (855,638) $ (749,284) $ (658,164) $ (75,702) $ (97,436) $ (83,553)
Service cost (35,609) (31,832) (30,945) (2,762) (3,233) (4,556)
Interest cost (38,348) (38,919) (38,772) (3,483) (3,915) (5,005)
Amendments 0 (1,865) 0 0 13,541 0
Actuarial loss (60,106) (73,449) (56,952) (6,288) 13,249 (6,050)
Bene ts paid 33,529 39,711 35,549 1,998 2,092 1,728
Projected bene t obligation at end of year $ (956,172) $ (855,638) $ (749,284) $ (86,237) $ (75,702) $ (97,436)
Change in plan assets
Fair value of plan assets at beginning of year $ 601,662 $ 533,867 $ 460,961 $ 42,073 $ 39,663 $ 36,546
Actual return on plan assets 81,896 56,965 63,877 5,576 4,502 4,845
Employer contributions 56,096 51,740 45,493 0 0 0
Bene ts paid (including administrative expenses) (34,678) (40,910) (36,464) (1,998) (2,092) (1,728)
Fair value of plan assets at end of year $ 704,976 $ 601,662 $ 533,867 $ 45,651 $ 42,073 $ 39,663
Funded status at end of year $ 251,196 $ 253,976 $ 215,417 $ 40,586 $ 33,629 $ 57,773
In accordance with the guidance on retirement bene ts, the Company aggregates the results of the quali ed and non-quali ed plans as “Pension
Bene ts” and is required to disclose the aggregate projected bene t obligation, accumulated bene t obligation and fair value of plan assets, if the
obligations within those plans exceed plan assets.
For the years ended December31, 2012, 2011 and 2010, the projected bene t obligations and the accumulated bene t obligations of Pension
Bene ts exceeded plan assets as follows:
Quali ed Pension Bene ts Non-Quali ed Pension Bene ts Total Pension Bene ts
2012 2011 2010 2012 2011 2010 2012 2011 2010
Fair value of plan
assets $ 704,976 $ 601,662 $ 533,867 $ 0 $ 0 $ 0 $ 704,976 $ 601,662 $ 533,867
Projected bene t
obligation (812,642) (727,179) (630,145) (143,530) (128,459) (119,139) (956,172) (855,638) (749,284)
Funded status
atendof year $ (107,666) $ (125,517) $ (96,278) $ (143,530) $ (128,459) $ (119,139) $ (251,196) $ (253,976) $ (215,417)
Accumulated
bene t obligation $ 673,427 $ 604,763 $ 512,072 $ 122,573 $ 110,435 $ 102,518 $ 796,000 $ 715,198 $ 614,590
 e Pension Protection Act of 2006 (“PPA”) requires certain quali ed
plans, like the Assurant Pension Plan, to meet speci ed funding
thresholds. If these funding thresholds are not met, there are negative
consequences to the Plan and participants. If the funded percentage falls
below 80%, full payment of lump sum bene ts as well as implementation
of amendments improving bene ts are restricted.
As of January1, 2012, the Plan’s funded percentage was 126.9% on
a PPA calculated basis (based on an actuarial average value of assets
compared to the funding target).  erefore, bene t and payment
restrictions did not occur during 2012.  e 2012 funded measure will
also be used to determine restrictions, if any, that can occur during
the  rst nine months of 2012. Due to the funding status of the Plan
in 2012, no restrictions will exist before October2013 (the time that
the January1, 2013 actuarial valuation needs to be completed). Also,
based on the estimated funded status as of January1, 2013, we do
not anticipate any restrictions on bene ts for the remainder of 2013.