Voya 2013 Annual Report Download - page 323

ING U.S., Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
material to the captive reinsurance subsidiaries, except that certain of these subsidiaries have included the value
of letters of credit, surplus notes and trust notes as admitted assets supporting the statutory reserves ceded to such
subsidiaries. The effect of these prescribed practices was to increase statutory capital and surplus by $1,612.0 and
$1,339.0 as of December 31, 2013 and 2012, respectively. The aggregate statutory capital and surplus, including
the aforementioned prescribed practices, was $616.6 and $596.6 as of December 31, 2013 and 2012, respectively.
Our Arizona captive, SLDI, provides reinsurance to the Company’s insurance subsidiaries in order to facilitate the
financing of statutory reserves including those associated with Regulation XXX or AG38 and to fund certain
statutory annuity reserve requirements. On December 20, 2013, SLDI redomesticated from the Cayman Islands to
the State of Arizona. Arizona state insurance statutes and regulations require SLDI to file financial statements with
the Arizona Department of Insurance (“ADOI”) and allow the filing of such financial statements on a U.S. GAAP
basis modified for certain prescribed practices outlined in the Arizona insurance statutes that are applicable to all
U.S. GAAP filers. These prescribed practices had no impact on SLDI’s Shareholder’s equity as of December 31,
2013. In addition, SLDI has obtained approval from the ADOI for certain permitted practices, including taking
reinsurance credit for certain ceded reserves where the assets backing the liabilities are held by a wholly owned
Principal Insurance Subsidiary of ING U.S., Inc. SLDI has recorded a receivable for these assets. The effect of the
permitted practice was to increase SLDI’s Shareholder’s equity by $490.6 as of December 31, 2013, but has no
effect on the Company’s consolidated Total shareholders’ equity.
The captive reinsurance subsidiaries may not declare or pay any dividends other than in accordance with their
respective insurance reserve financing transaction agreements and their respective governing licensing orders.
Likewise, SLDI may not declare or pay dividends other than in accordance with its annual capital and dividend
plan as approved by the ADOI, which includes a minimum capital requirement. SLDI does not expect to make
any dividend payments during calendar year 2014.
13. Employee Benefit Arrangements
Pension, Other Postretirement Benefit Plans and Other Benefit Plans
ING U.S., Inc.’s subsidiaries maintain both qualified and non-qualified defined benefit pension plans (the
“Plans”). These plans generally cover all employees and certain sales representatives who meet specified
eligibility requirements. Pension benefits are based on a formula using compensation and length of service of
employees at retirement. Annual contributions are paid to the Plans at a rate necessary to adequately fund the
accrued liabilities of the Plans calculated in accordance with legal requirements. The Plans comply with
applicable regulations concerning investments and funding levels.
Effective October 1, 2013, the Compensation and Benefits Committee of the Board of Directors of the Company,
approved changing the Plan’s name from the ING Americas Retirement Plan to the ING U.S. Retirement Plan
(the “Retirement Plan”). The Retirement Plan is a tax qualified defined benefit plan, the benefits of which are
guaranteed (within certain specified legal limits) by the Pension Benefit Guaranty Corporation (“PBGC”).
Beginning January 1, 2012, the Retirement Plan adopted a cash balance pension formula instead of a final
average pay (“FAP”) formula, allowing all eligible employees to participate in the Retirement Plan. Participants
will earn an annual credit equal to 4% of eligible compensation. Interest is credited monthly based on a 30-year
U.S. Treasury securities bond rate published by the Internal Revenue Service in the preceding August of each
year. The accrued vested cash pension balance benefit is portable; participants can take it if they leave the
Company. For participants in the Retirement Plan as of December 31, 2012, there will be a two-year transition
period from the Retirement Plan’s current FAP formula to the cash balance pension formula. Due to ASC Topic
715 requirements, the accounting impact of the change in the Retirement Plan was recognized upon the
sponsoring company’s approval November 10, 2011, resulting in an $83.6 decrease to the benefit obligation.
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