Voya 2014 Annual Report Download - page 158

general account assets as well as the increase in reserves associated with the pension risk transfer contracts as
referenced above. This increase was partially offset by the impact of the Second Quarter Reinsurance
Transaction, along with a decrease in the average credited rates due to actions taken in the current period to
reflect the continuing low interest rate environment.
Operating expenses increased $26.3 million from $839.9 million to $866.2 million due to investments in the
business, higher asset based commissions in the current period, higher share-based compensation and increased
contingent capital facility fees associated with the stable value business. This was offset by decreased
recordkeeping expenses, due to terminated contracts, and lower expenses in the current period from the impact of
the Second Quarter Reinsurance Transaction.
Net amortization of DAC/VOBA increased $67.8 million from $115.3 million to $183.1 million primarily
due to the impact of equity market performance and prospective assumption changes on DAC/VOBA unlocking,
resulting in unfavorable unlocking in the current period compared to favorable unlocking in the prior period,
partially offset by lower amortization rates.
Operating earnings before income taxes
Operating earnings before income taxes decreased $78.0 million from $595.8 million to $517.8 million
primarily due to unfavorable DAC/VOBA unlocking in the current period compared to favorable unlocking in
the prior period as well as the Lehman Recovery/LIHTC in 2013 that did not reoccur. Excluding these impacts,
Operating earnings before income taxes increased primarily due to higher Fee income and lower amortization
rate on DAC/VOBA, partially offset by higher Operating expenses.
Retirement—Year Ended December 31, 2013 Compared to Year Ended December 31, 2012
Operating revenues
Net investment income and net realized gains (losses) increased $69.7 million from $1,499.9 million to
$1,569.6 million primarily due to $15.2 million of net investment income from Lehman Recovery/LIHTC in the
current period compared to a $48.1 million loss on the sale of certain alternative investments in the prior period.
In addition, there was a favorable variance due to higher prepayment fee income as well as higher investment
income due to increases in general account assets. General account assets increased from $27.2 billion to $28.2
billion primarily as a result of participants transferring funds from variable investment options into fixed
investment options. The increases were partially offset by lower Net investment income and net realized gains
(losses) primarily due to lower investment yields on the CMO-B portfolio and lower alternative investment
income as a result of portfolio restructuring in the prior period, coupled with lower reinvestment rates.
Fee income increased $44.9 million from $715.0 million to $759.9 million primarily due to increases in full
service plan fees, recordkeeping advisory fees and change order fees for the recordkeeping business. The increase
in fees related to full service retirement plans was driven by net increases in separate account and institutional/
mutual fund AUM. These increases were partially offset by a decrease in other recordkeeping fees primarily due
to terminated contracts.
Other revenue increased $12.1 million from $52.1 million to $64.2 million primarily due to an increase in
broker-dealer revenue and changes in market value adjustments related to plan sponsors upon surrender.
Operating benefits and expenses
Interest credited and other benefits to contract owners/policyholders increased $6.2 million from $842.2
million to $848.4 million primarily due to an increase in general account liabilities, which corresponds to the
increase in general account assets as described above. This increase was mostly offset by a decrease in the
average credited rates due to actions taken in 2012 and January 2013 to reflect the continuing low interest rate
environment. Lower amortization of sales inducements also partially offset the increase.
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