Postretirement Benefit Plans

9 Months Ended

Sep. 30, 2012

Postretirement Benefit Plans

Note C—Postretirement Benefit Plans

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

Components of Post-Retirement Benefit Costs

	Three Months ended September 30,
	Pension Benefits						Other Benefits
	2012			2011			2012		2011
Service cost	$	2,928		$	2,187		$	81	$	184
Interest cost		4,100			4,022			254		250
Expected return on assets		(4,242	)		(4,124	)		0		0
Prior service cost		516			519			0		0
Net actuarial (gain)/loss		3,434			2,371			0		(203	)
Net periodic benefit cost	$	6,736		$	4,975		$	335	$	231

	Nine Months ended September 30,
	Pension Benefits						Other Benefits
	2012			2011			2012		2011
Service cost	$	8,309		$	6,865		$	325	$	650
Interest cost		12,397			12,073			767		752
Expected return on assets		(12,479	)		(12,050	)		0		0
Prior service cost		1,547			1,556			0		0
Net actuarial (gain)/loss		9,392			7,161			0		(607	)
Net periodic benefit cost	$	19,166		$	15,605		$	1,092	$	795

The following chart presents assets at fair value for the defined-benefit pension plans at September 30, 2012 and the prior-year end.

Pension Assets by Component

(Dollar amounts in thousands)

		September 30, 2012			December 31, 2011
		Amount	%		Amount	%
Corporate debt	$	169,681	60.5	$	159,759	61.9
Other fixed maturities		337	0.1		348	0.1
Equity securities		94,044	33.5		79,459	30.8
Short-term investments		1,442	0.5		3,767	1.5
Guaranteed annuity contract		12,599	4.5		12,745	4.9
Other		2,503	0.9		1,989	0.8
Total	$	280,606	100.0	$	258,067	100.0

The liability for the funded defined-benefit pension plans was $304 million at September 30, 2012 and $282 million at December 31, 2011. Cash contributions of $6 million were made to the qualified pension plans during the nine months ended September 30, 2012. Torchmark does not plan to make any further cash contributions during the remainder of 2012. With respect to the Company’s non-qualified supplemental retirement plan, life insurance policies on the lives of plan participants have been established with an unaffiliated carrier to fund a portion of the Company’s obligations under the plan. These policies, as well as investments deposited with an unaffiliated trustee, were previously placed in a Rabbi Trust to provide for payment of the plan obligations. At September 30, 2012, the combined value of the insurance policies and investments in the Rabbi Trust to support plan liabilities were $52 million, compared with $43 million at year end 2011. This plan is unqualified and therefore the value of the insurance policies and investments are not included in the chart of plan assets above. The liability for the unqualified pension plan was $52 million at September 30, 2012 and $50 million at December 31, 2011.