OneBeacon Pension Plan

6 Months Ended

Jun. 30, 2016

Compensation Related Costs [Abstract]

OneBeacon Pension Plan

Note 19. OneBeacon Pension Plan

OneBeacon previously sponsored the OneBeacon qualified pension plan (the “Qualified Plan”). In the first quarter of 2016, the Qualified Plan finalized its termination by purchasing group annuity contracts from the Principal Financial Group and making lump sum distributions to Qualified Plan participants electing such payments, which eliminated the remaining Qualified Plan liability. As a result of these transactions, OneBeacon recognized an estimated pre-tax pension settlement charge of $0.3 million and no longer has a projected benefit obligation with respect to the Qualified Plan as of June 30, 2016. During the three months ended June 30, 2016, OneBeacon recognized a true-up to the estimate of less than a $0.1 million gain. The final true-up is anticipated to occur in the second half of 2016. During the second quarter of 2016, OneBeacon ceased administratively paying claims. OneBeacon transferred $42.4 million of excess invested assets from the Qualified Plan into the trust supporting the OneBeacon 401(k) Savings and Employee Stock Ownership Plan (“KSOP”), which is the Qualified Replacement Plan (“QRP”). OneBeacon will transfer additional assets upon the final true-up, with approximately $12.0 million of excess invested assets to be held in trust in order to wind-down potential post-termination obligations of that plan, as approved by way of a March 2016 private letter ruling from the IRS. The invested assets related to both the former Qualified Plan and the QRP are included in other assets and are accounted for at fair value.

OneBeacon continues to sponsor a non-qualified, non-contributory, defined benefit pension plan (“Non-qualified Plan”)covering certain employees who were employed as of December 31, 2001 and former employees who had met the eligibility requirements, as well as retirees. The Non-qualified Plan was frozen and curtailed in 2002, resulting in the pension benefit obligation being equal to the accumulated benefit obligation. The benefits are based primarily on years of service and employees’ compensation through December 31, 2002. OneBeacon’s funding policy is generally to contribute amounts to satisfy actual disbursements for the calendar year.