Assurant 2015 Annual Report Download - page 70

58 ASSURANT, INC. – 2015 Form 10-K
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
other types of securities through one or more methods of
distribution� The terms of any offering would be established
at the time of the offering, subject to market conditions� If
we decide to make an offering of securities, we will consider
the nature of the cash requirement as well as the cost of
capital in determining what type of securities we may offer�
On January 15, 2016, our Board of Directors declared a
quarterly dividend of $0�50 per common share payable on
March 14, 2016 to stockholders of record as of February 29,
2016� We paid dividends of $0�50 per common share
on December 14, 2015 to stockholders of record as of
November 30, 2015� This represents a 67 percent increase
above the quarterly dividend of $0�30 per common share
paid on September 15, 2015 to stockholders of record as of
August 31, 2015� We paid dividends of $0�30 per common
share on June 9, 2015 to stockholders of record as of May 26,
2015� This represents an 11 percent increase above the
quarterly dividend of $0�27 per common share paid on March 9,
2015 to stockholders of record as of February 23, 2015� Any
determination to pay future dividends will be at the discretion
of our Board of Directors and will be dependent upon: our
subsidiaries’ payments of dividends and/or other statutorily
permissible payments to us; our results of operations and cash
ows; our nancial position and capital requirements; general
business conditions; legal, tax, regulatory and contractual
restrictions on the payment of dividends; and other factors
our Board of Directors deems relevant�
On September 9, 2015, our Board of Directors authorized
the Company to repurchase up to an additional $750,000
of its outstanding common stock� During the year ended
December 31, 2015, we repurchased 4,184,889 shares of our
outstanding common stock at a cost of $284,567, exclusive of
commissions� As of December 31, 2015, $952,103 remained
under the total repurchase authorization� The timing and
the amount of future repurchases will depend on market
conditions, our nancial condition, results of operations,
liquidity and other factors�
Management believes the Company will have sufcient
liquidity to satisfy its needs over the next twelve months,
including the ability to pay interest on our senior notes and
dividends on our common shares�
Retirement and Other Employee Benets
We sponsor a qualied pension plan, (the “Assurant Pension
Plan”) and various non-qualied pension plans (including
an Executive Pension Plan), along with a retirement health
benets plan covering our employees who meet specied
eligibility requirements� The reported expense and liability
associated with these plans requires an extensive use of
assumptions which include, but are not limited to, the discount
rate, expected return on plan assets and rate of future
compensation increases� We determine these assumptions
based upon currently available market and industry data, and
historical performance of the plan and its assets� The actuarial
assumptions used in the calculation of our aggregate projected
benet obligation vary and include an expectation of long-
term appreciation in equity markets which is not changed by
minor short-term market uctuations, but does change when
large interim deviations occur� The assumptions we use may
differ materially from actual results due to changing market
and economic conditions, higher or lower withdrawal rates
or longer or shorter life spans of the participants�
As of January 1, 2014, the Assurant Pension Plan and Executive
Pension Plans are no longer offered to new hires� Subsequently,
effective January 1, 2016, the Assurant Pension Plan was
amended and split into two separate plans (Plan No� 1 and
Plan No� 2)� The new Plan No� 2 will include a subset of
the terminated vested population and the total in-payment
population as of January 1, 2016� Assets for both plans will
remain in the Assurant, Inc� Pension Plan Trust, however
separate accounting entities will be maintained for Plan
No� 1 and Plan No� 2�
Effective March 1, 2016, the Assurant Pension Plan and
various non-qualied pension plans (including an Executive
Pension Plan) were frozen. No additional benets will be
earned after February 29, 2016�
The 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 Assurant Pension 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, 2015, the Assurant Pension Plan’s funded
percentage was 136% on a PPA calculated basis (based on an
actuarial average value of assets compared to the funding
target). Therefore, benet and payment restrictions did not
occur during 2015� The 2015 funded measure will also be
used to determine restrictions, if any, that can occur during
the rst nine months of 2016. Due to the funding status of
the Assurant Pension Plan in 2015, no restrictions will exist
before October 2016 (the time that the January 1, 2016
actuarial valuation needs to be completed)� Also, based on
the estimated funded status as of January 1, 2016, we do
not anticipate any restrictions on benets for the remainder
of 2016�
The Assurant Pension Plan was under-funded by $51,973 and
$28,956 (based on the fair value of the assets compared to the
projected benet obligation) on a GAAP basis at December 31,
2015 and 2014, respectively� This equates to an 94% and 97%
funded status at December 31, 2015 and 2014, respectively�
The change in funded status is mainly due to a decrease in
the discount rate and a change in the mortality rates used
to determine the projected benet obligation.
The Company’s funding policy is to contribute amounts to the
plan suf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 decit and the capital position of the Company.