Pension Plan and Postretirement Benefits Other Than Pension

9 Months Ended

Sep. 30, 2016

Pension Plan and Postretirement Benefits Other Than Pension

Pension Plan and Postretirement Benefits Other Than Pension

9.Pension Plan and Postretirement Benefits Other Than Pension

We provide a noncontributory 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 substantially all employees, as well as our 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.  During the third quarter of 2016, the Company amended the plan to discontinue the availability of coverage for any individuals who retire after December 31, 2016.  Qualified employees who retire on or before December 31, 2016 may continue to participate in retiree coverage under the plan.  The plan amendment resulted in an $8.5 million curtailment gain, recorded as part of net other postretirement benefit costs, summarized in the table below.

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

						Other								Other
	Pension Benefits				Postretirement Benefits				Pension Benefits				Postretirement Benefits
	Three months ended September 30,				Three months ended September 30,				Nine months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015		2016		2015		2016		2015
	(in thousands)								(in thousands)
Components of net periodic benefit cost:
Service cost		3,050		3,020		185		227		9,149		9,061		555		683
Interest cost		2,358		2,105		91		99		7,074		6,315		275		297
Expected return on plan assets		(3,482)		(3,628)		—		—		(10,445)		(10,884)		—		—
Actuarial (gain) loss amortization		1,554		1,293		(38)		—		4,661		3,879		(115)		—
Prior service cost amortization		93		115		1		5		280		345		3		15
Transition obligation amortization		1		1		—		—		3		3		—		—
Curtailment gain		—		—		(8,475)		—		—		—		(8,475)		—
Total (1)	$	3,574		2,906		(8,236)		331		10,722		8,719		(7,757)		995

(1) For the three months ended September 30, 2016, $(1.5) million and $(3.2) million of net periodic pension and other postretirement benefit costs were included in compensation and related costs and underwriting and distribution expense, respectively.  For the nine months ended September 30, 2016, $3.1 million and $(0.3) million of net periodic pension and other postretirement benefit costs were included in compensation and related costs and underwriting and distribution expense, respectively.

During the first quarter of 2016, we contributed $20.0 million to the Pension Plan.