Employee and Agent Benefits

9 Months Ended

Sep. 30, 2021

Employee and Agent Benefits

Employee and Agent Benefits

7. Employee and Agent Benefits

Components of Net Periodic Benefit Cost

					Other postretirement
	Pension benefits				benefits
	For the three months ended				For the three months ended
	September 30,				September 30,
	2021		2020		2021		2020
	(in millions)
Service cost	$	20.8	$	18.2	$	—	$	—
Interest cost		25.8		29.3		0.5		0.7
Expected return on plan assets		(45.7)		(39.1)		(1.1)		(9.0)
Amortization of prior service benefit		(4.2)		(4.3)		(0.3)		(0.3)
Recognized net actuarial (gain) loss		17.5		18.9		(0.2)		—
Net periodic benefit cost (income)	$	14.2	$	23.0	$	(1.1)	$	(8.6)

					Other postretirement
	Pension benefits				benefits
	For the nine months ended				For the nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
	(in millions)
Service cost	$	62.4	$	54.5	$	—	$	—
Interest cost		77.4		88.0		1.6		2.1
Expected return on plan assets		(137.0)		(117.5)		(3.5)		(27.0)
Amortization of prior service benefit		(12.6)		(12.7)		(0.8)		(0.8)
Recognized net actuarial (gain) loss		52.6		56.6		(0.4)		—
Net periodic benefit cost (income)	$	42.8	$	68.9	$	(3.1)	$	(25.7)

The components of net periodic benefit cost including the service cost component are included in operating expenses on the consolidated statements of operations.

Contributions

Our funding policy for our qualified pension plan is to fund the plan annually in an amount at least equal to the minimum annual contribution required under the Employee Retirement Income Security Act (“ERISA”) and, generally, not greater than the maximum amount that can be deducted for federal income tax purposes. It is too early to determine, but we do not anticipate that we will be required to fund a minimum required contribution under ERISA. Regardless, it is possible that we may fund the qualified and nonqualified pension plans in 2021 for a combined total of up to $125.0 million. During the three and nine months ended September 30, 2021, we contributed $20.7 million and $92.1 million to these plans, respectively.

Other Postretirement Plan Changes

Effective January 1, 2021, $656.5 million of assets in excess of the expected liability to cover the postretirement medical benefits for retirees were re-designated for non-retiree benefits. The elections were made pursuant to plan provisions, which provide for assets in excess of 125% of expected liabilities to fund other benefits covered under the plans. The re-designated assets, net of associated tax receivable impacts related to a tax adjustment to accumulated other comprehensive income, are not included as part of the asset balances presented in the footnote as they no longer qualify as plan assets in accordance with U.S. GAAP. The re-designated assets are included in equity securities and other investments on our consolidated statements of financial position beginning January 1, 2021.

Change in Plan Assets

The other postretirement benefits plans’ change in plan assets, reconciled to amounts recognized in the consolidated statements of financial position, was as follows:

	September 30,		December 31,
	2021		2020
	(in millions)
Change in plan assets
Fair value of plan assets, beginning balance	$	780.6	$	732.8
Actual return on plan assets		(2.9)		53.1
Employer contribution		1.1		1.5
Participant contributions		4.6		6.0
Benefits paid		(10.2)		(12.8)
Assets re-designated for non-retiree benefits		(656.5)		—
Fair value of plan assets, ending balance	$	116.7	$	780.6
Amount recognized in statement of financial position
Other assets	$	11.7	$	675.5
Other liabilities		(1.8)		(2.9)
Total	$	9.9	$	672.6