Voya 2013 Annual Report Download - page 93

If we experience difficulties arising from outsourcing relationships, our ability to conduct business may be
compromised, which may have an adverse effect on our business and results of operations.
As we continue to focus on reducing the expense necessary to support our operations, we have increasingly
used outsourcing strategies for certain technology and business functions. If third-party providers experience
disruptions or do not perform as anticipated, or we experience problems with a transition, we may experience
operational difficulties, an inability to meet obligations, including, but not limited to, policyholder obligations,
increased costs and a loss of business that may have a material adverse effect on our business and results of
operations. For other risks associated with our outsourcing of certain functions, see “—Interruption or other
operational failures in telecommunication, information technology and other operational systems, or a failure to
maintain the security, integrity, confidentiality or privacy of sensitive data residing on such systems, including as a
result of human error, could harm our business.”
We may not be able to protect our intellectual property and may be subject to infringement claims.
We rely on a combination of contractual rights with third parties and copyright, trademark, patent and trade
secret laws to establish and protect our intellectual property. Although we endeavor to protect our rights, third
parties may infringe or misappropriate our intellectual property. We may have to litigate to enforce and protect
our copyrights, trademarks, patents, trade secrets and know-how or to determine their scope, validity or
enforceability. This would represent a diversion of resources that may be significant and our efforts may not
prove successful. The inability to secure or protect our intellectual property assets could have a material adverse
effect on our business and our ability to compete.
We may also be subject to claims by third parties for (i) patent, trademark or copyright infringement,
(ii) breach of copyright, trademark or license usage rights, or (iii) misappropriation of trade secrets. Any such
claims and any resulting litigation could result in significant expense and liability for damages. If we were found
to have infringed or misappropriated a third-party patent or other intellectual property right, we could in some
circumstances be enjoined from providing certain products or services to our customers or from utilizing and
benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses. Alternatively, we
could be required to enter into costly licensing arrangements with third parties or implement a costly work
around. Any of these scenarios could have a material adverse effect on our business and results of operations.
We may incur further liabilities in respect of our defined benefit retirement plans for our employees if the
value of plan assets is not sufficient to cover potential obligations, including as a result of differences between
results underlying actuarial assumptions and models.
We operate various defined benefit retirement plans covering a significant number of our employees. The
liability recognized in our consolidated balance sheet in respect of our defined benefit plans is the present value
of the defined benefit obligations at the balance sheet date, less the fair value of each plan’s assets. We determine
our defined benefit plan obligations based on external actuarial models and calculations using the projected unit
credit method. Inherent in these actuarial models are assumptions including discount rates, rates of increase in
future salary and benefit levels, mortality rates, consumer price index and the expected return on plan assets.
These assumptions are updated annually based on available market data and the expected performance of plan
assets. Nevertheless, the actuarial assumptions may differ significantly from actual results due to changes in
market conditions, economic and mortality trends and other assumptions. Any changes in these assumptions
could have a significant impact on our present and future liabilities to and costs associated with our defined
benefit retirement plans and may result in increased expenses and reduce our profitability.
When contributing to the plan, we will take into consideration the minimum and maximum amounts
required by ERISA, the attained funding target percentage of the plan, the variable-rate premiums that may be
required by the PBGC, and any funding relief that might be enacted by Congress, such as the interest rate
stabilization corridor rules used for discounting pension liabilities contained in the Moving Ahead for Progress in
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