Voya 2014 Annual Report Download - page 108

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 contractual copyright, trademark or license 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 our qualified retirement plans, 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. These
factors could lead to increased PBGC variable-rate premiums and/or increases in plan funding in future years.
Although our retail variable annuity products are now managed within our CBVA segment, we continue to
offer variable annuity products and other products with similar features in our ongoing business.
In 2009, we decided to cease sales of retail variable annuities with substantial guarantee features and now
manage that business within our CBVA segment. However, we continue to offer variable annuity products in our
ongoing business as well as products that have some of the features of variable annuities such as guaranteed
benefits. For example, certain of the deferred annuities sold by our Retirement segment are on group and
individual variable annuity policy forms, since these product types allow customers to allocate their retirement
savings to a variety of different investment options. These products may contain guaranteed death benefit
features, but they do not offer guaranteed living benefit features of the type found within the CBVA segment.
The Retirement segment has recently introduced an optional guaranteed retirement income portfolio
(“GRIP”) feature that, if elected by an employee of one of our plan sponsor customers, provides guaranteed
lifetime withdrawal benefits (“GLWB”) to such employees. The GLWB is offered through a multi-insurer model,
whereby we and two unaffiliated insurers provide GLWB coverage to participating employees. In contrast to the
retail GMWBL provisions formerly offered by the CBVA segment, the GLWB provisions within GRIP do not
offer rollup benefits; furthermore, we reprice the GLWB amount purchased by contributions to the GRIP feature
on a quarterly basis. In addition, the investment elections available to participating employees have substantially
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