8. Pension Plan and Postretirement Benefits Other Than Pension

We provide a non-contributory retirement plan that covers substantially all employees and certain vested employees of our former parent company (the “Pension Plan”). Benefits payable under the Pension Plan are based on employees’ years of service and compensation during the final 10 years of employment. We also sponsor an unfunded defined benefit postretirement medical plan that covers retirees through the age of 65, including substantially all employees, as well as Waddell & Reed advisors who are independent contractors. The medical plan is contributory with participant contributions adjusted annually. The medical plan does not provide for post age 65 benefits with the exception of a small group of employees that were grandfathered when such plan was established.

The components of net periodic pension and other postretirement costs related to these plans are as follows:

	Pension Benefits					Other Postretirement Benefits			Pension Benefits				Other Postretirement Benefits
	Three months ended June 30,					Three months ended June 30,			Six months ended June 30,				Six months ended June 30,
	2014			2013		2014		2013	2014		2013		2014		2013
	(in thousands)								(in thousands)
Components of net periodic benefit cost:
Service cost	$	2,317		2,556		180		197	5,042		5,506		360		394
Interest cost	2,045			1,903		99		90	4,198		3,855		198		180
Expected return on plan assets	(3,595		)	(2,889	)	—		—	(7,008	)	(5,593	)	—		—
Actuarial (gain) loss amortization	337			1,034		(4	)	—	748		2,284		(8	)	—
Prior service cost amortization	104			139		14		14	234		278		28		28
Transition obligation amortization	1			1		—		—	2		2		—		—

Total(1)	$	1,209		2,744		289		301	3,216		6,332		578		602

(1) Approximately 60% of net periodic pension and other postretirement benefit costs are included in Compensation and related costs on the consolidated statements of income, while the remainder are included in Underwriting and distribution expense.

During the first six months of 2014, we contributed $20.0 million to the Pension Plan. We do not expect to make additional contributions for the remainder of 2014.