Postretirement Benefit Plans

3 Months Ended

Mar. 31, 2017

Compensation and Retirement Disclosure [Abstract]

The following tables present a summary of post-retirement benefit costs by component.

Components of Post-Retirement Benefit Costs



	Three Months Ended March 31,
	Pension Benefits						Other Benefits
	2017			2016			2017		2016
Service cost	$	4,487		$	3,894		$	—	$	—
Interest cost	5,550			5,432			250		212
Expected return on assets	(5,899		)	(5,782		)	—		—
Amortization:
Prior service cost	119			120			—		—
Actuarial (gain)/loss	2,951			2,424			39		8
Direct recognition of expense	—			—			96		34
Net periodic benefit cost	$	7,208		$	6,088		$	385	$	254

The following table presents assets at fair value for the defined-benefit pension plans at March 31, 2017 and the prior-year end.

Pension Assets by Component



	March 31, 2017			December 31, 2016
	Amount		%	Amount		%
Corporate bonds	$	160,254	48	$	160,036	49
Exchange traded fund⁽¹⁾	142,902		42	134,771		41
Other bonds	260		—	258		—
Guaranteed annuity contract⁽²⁾	19,126		6	18,997		6
Short-term investments	11,336		3	7,391		2
Other	3,075		1	7,418		2
Total	$	336,953	100	$	328,871	100


(1)	A fund including marketable securities that mirror the S&P 500 index.


(2)	Representing a guaranteed annuity contract issued by Torchmark's subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Pension Plan.

Pension Liability



	March 31, 2017		December 31, 2016
Funded defined benefit pension	$	460,475	$	449,613
SERP⁽¹⁾ (Active)	75,533		74,687
SERP⁽¹⁾ (Closed)	2,864		3,222
Pension Benefit Obligation	$	538,872	$	527,522


(1)	Supplemental executive retirement plan (SERP).

As noted in the table above, the liability for the funded defined-benefit pension plans was $460 million at March 31, 2017 and $450 million at December 31, 2016. During the three months ended March 31, 2017, the Company made no cash contributions to the qualified pension plans. Torchmark expects to make total cash contributions to these plans during 2017 in an amount not to exceed $20 million.

With respect to the Company’s active nonqualified noncontributory SERP, life insurance policies on the lives of plan participants have been established with an unaffiliated carrier to provide for a portion of the Company’s obligations under the plan. These policies along with investments deposited with an unaffiliated trustee were previously placed in a Rabbi Trust to provide for the payment of the plan obligations. At March 31, 2017, the combined value of the insurance policies and investments in the Rabbi Trust to support plan liabilities were $88 million, compared with $86 million at year end 2016. Since this plan is nonqualified and therefore is treated as unfunded, the values of the insurance policies and investments are recorded as Other assets in the Condensed Consolidated Balance Sheets and are not included in the chart of plan assets above. The liability for the active non-qualified pension plan was $76 million at March 31, 2017 and $75 million at December 31, 2016.