Assurant 2013 Annual Report Download - page 136

ASSURANT, INC. – 2013 Form 10-KF-50
20 Retirement and Other Employee Benefi ts
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, 2013, 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, 2013, the TAC of our life and health
entities subject to RBC requirements was $999,804. The
corresponding Authorized Control Level was 166,551. As of
December 31, 2013, the TAC of our P&C entities subject
to RBC requirements was 1,440,394. The corresponding
Authorized Control Level was 205,819.
20. 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 2013, we contributed $50,000 in cash to
the Assurant Pension Plan. We expect to contribute $30,000
in cash to the Assurant Pension Plan over the course of 2014.
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.
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. Plan assets and benefi t
obligations are measured as of December 31, 2013.
Summarized information on the Company’s Pension Benefi ts and Retirement Health Benefi ts plans (together the “Plans”)
for the years ended December 31 is as follows:
Pension Benefi ts Retirement Health Benefi ts
2013 2012 2011 2013 2012 2011
Change in projected benefi t obligation
Projected benefi t obligation at beginning of
year $ (956,172) $ (855,638) $ (749,284) $ (86,237) $ (75,702) $ (97,436)
Service cost (38,580) (35,609) (31,832) (2,863) (2,762) (3,233)
Interest cost (38,243) (38,348) (38,919) (3,473) (3,483) (3,915)
Amendments 0 0 (1,865) 0 0 13,541
Actuarial gain (loss), including curtailments
and settlements 89,029 (60,106) (73,449) 11,213 (6,288) 13,249
Benefi ts paid 38,023 33,529 39,711 2,314 1,998 2,092
Projected benefi t obligation at end of year $ (905,943) $ (956,172) $ (855,638) $ (79,046) $ (86,237) $ (75,702)