Pension Plan and Postretirement Benefits Other Than Pension

3 Months Ended

Mar. 31, 2017

Pension Plan and Postretirement Benefits Other Than Pension

Pension Plan and Postretirement Benefits Other Than Pension

8.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. During the first quarter of 2017, we contributed $10.0 million to the Pension Plan.

We also sponsor an unfunded defined benefit postretirement medical plan that previously covered substantially all employees, as well as financial advisors licensed with Waddell & Reed, Inc.  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 this plan to discontinue the availability of coverage for any individuals who retire after December 31, 2016. Qualified employees who retired on or before December 31, 2016 may continue to participate in retiree coverage under the plan.

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

				Other
	Pension Benefits			Postretirement Benefits
	Three months ended March 31,			Three months ended March 31,
	2017		2016	2017	2016
	(in thousands)
Service cost		2,726	2,993	—	185
Interest cost		1,654	2,439	15	92
Expected return on plan assets		(2,559)	(3,536)	—	—
Actuarial (gain) loss amortization		1,265	1,638	(45)	(39)
Prior service cost amortization		31	94	(1)	1
Transition obligation amortization		1	1	—	—
Total (1)		3,118	3,629	(31)	239

(1) For the three months ended March 31, 2017, $1.9 million and $1.2 million of net periodic pension and other postretirement benefit costs were included in compensation and related costs and underwriting and distribution expense, respectively.