Assurant 2013 Annual Report Download - page 142

ASSURANT, INC. – 2013 Form 10-KF-56
20 Retirement and Other Employee Benefi ts
Retirement Health Benefi ts
Financial Assets
December 31, 2012
Total Level 1 Level 2 Level 3
Cash and cash equivalents:
Short-term investment funds $ 1,185 $ 0 $ 1,185 $ 0
Equity securities:
Common stock- U.S. listed small cap 3,453 3,453 0 0
Mutual funds- U.S. listed large cap 10,939 10,939 0 0
Common/collective trust- foreign listed 4,343 0 4,343 0
Fixed maturity securities:
U.S. & foreign government and government agencies and authorities 6,257 0 6,257 0
Corporate- U.S. & foreign investment grade 13,109 0 13,109 0
Corporate- U.S. & foreign high yield 2,613 0 2,613 0
Investment fund:
Multi-strategy hedge fund 3,518 0 0 3,518
Private equity fund 4 0 0 4
Derivatives:
Interest rate swap 947 0 947 0
TOTAL FINANCIAL ASSETS $ 46,368(1) $ 14,392 $ 28,454 $ 3,522
(1) The difference between the fair value of plan assets above and the amount used in determining the funded status is due to interest receivable
which is not required to be included in the fair value hierarchy.
The following table for the Company’s qualifi ed pension plan and retirement health benefi t plan summarizes the change in
fair value associated with the MIMSF and Private Equity Partners XI Limited Partnership, the only Level 3 fi nancial assets.
Pension Benefi t
Retirement
Health Benefi t
Beginning balance at December 31, 2012 $ 54,398 $ 3,522
Purchases 1,578 95
Actual return on plan assets and plan expenses still held at the reporting date 5,526 55
ENDING BALANCE AT DECEMBER 31, 2013 $ 61,502 $ 3,672
For all the fi nancial assets included in the above hierarchy,
the market valuation technique is used. For the year ended
December 31, 2013, the application of the valuation technique
applied to similar assets has been consistent.
Level 1 and Level 2 securities are valued using various
observable market inputs obtained from a pricing service. The
pricing service prepares estimates of fair value measurements
for our Level 2 securities using proprietary valuation models
based on techniques such as matrix pricing which include
observable market inputs. Observable market inputs for Level
1 and 2 securities are consistent with the observable market
inputs described in Note 5, Fair Value Disclosures. The MIFSF
utilizes all three levels of inputs to price its holdings. Since
unobservable inputs may have been signifi cant to the fair
value measurement, it was classifi ed as Level 3.
The Company obtains one price for each investment. A
quarterly analysis is performed to assess if the evaluated
prices represent a reasonable estimate of their fair value.
This process involves quantitative and qualitative analysis
and is overseen by benefi ts, investment and accounting
professionals. Examples of procedures performed include, but
are not limited to, initial and on-going review of pricing service
methodologies, review of pricing statistics and trends, and
comparison of prices for certain securities with two different
appropriate price sources for reasonableness. Following this
analysis, the Company uses the best estimate of fair value
based upon all available inputs. The pricing service provides
information regarding their pricing procedures so that the
Company can properly categorize the Plans’ fi nancial assets
in the fair value hierarchy.
The Company expects to contribute up to $30,000 to its
qualifi ed pension plan in 2014. No contributions are expected
to be made to the retirement health benefi t plan in 2014.
The following pension benefi ts, which refl ect expected future service, as appropriate, are expected to be paid:
Pension Benefi ts
Retirement Health
Benefi ts
2014 $ 44,138 $ 2,842
2015 61,556 3,192
2016 50,892 3,560
2017 54,103 3,945
2018 59,505 4,347
2019-2023 346,309 28,180
TOTAL
$ 616,503 $ 46,066