Employee Benefit Plans

12 Months Ended

Dec. 31, 2011

Employee Benefit Plans [Abstract]

Employee Benefit Plans

Note 10 EMPLOYEE BENEFIT PLANS

Certain subsidiaries of the Company are sponsors or administrators of both qualified and non-qualified defined benefit pension plans (“Pension Plans”). The largest of these plans is a non-contributory qualified defined benefit pension plan sponsored by RGA Reinsurance that covers U.S. employees. The benefits under the Pension Plans are generally based on years of service and compensation levels.

The Company also provides certain health care and life insurance benefits for retired employees. The health care benefits are provided through a self-insured welfare benefit plan. Employees become eligible for these benefits if they meet minimum age and service requirements. The retiree's cost for health care benefits varies depending upon the credited years of service. The Company recorded benefits expense of approximately $2.5 million, $2.0 million, and $1.3 million in 2011, 2010 and 2009, respectively that are related to these postretirement plans. Virtually all retirees, or their beneficiaries, contribute a portion of the total cost of postretirement health benefits.Prepaid benefit costs and accrued benefit liabilities are included in other assets and other liabilities, respectively, in the Company's consolidated balance sheets.

A December 31 measurement date is used for all of the defined benefit and postretirement plans. The status of these plans as of December 31, 2011 and 2010 is summarized below (dollars in thousands):

		December 31,
		Pension Benefits				Other Benefits
		2011		2010		2011		2010
Change in benefit obligation:
Benefit obligation at beginning of year		$	69,626	$	63,998	$	18,395	$	14,321
	Service cost		5,985		4,762		1,116		847
	Interest Cost		3,916		3,420		1,035		882
	Participant contributions		--		--		176		127
	Actuarial (gains) losses		16,164		(1,938)		8,348		2,326
	Benefits paid		(2,100)		(1,280)		(216)		(108)
	Foreign currency rate change effect		(490)		663		--		--
Benefit obligation at end of year		$	93,101	$	69,625	$	28,854	$	18,395

		December 31,
		Pension Benefits				Other Benefits
		2011		2010		2011		2010
Change in plan assets:
Fair value of plan assets at beginning of year		$	35,888	$	30,923	$	--	$	--
	Actual return on plan assets		540		4,383		--		--
	Employer contributions		6,972		1,862		40		70
	Participant contributions		--		--		176		127
	Benefits paid and expenses		(2,100)		(1,280)		(216)		(108)
	Administrative expense		--		--		--		(89)
Fair value of plan assets at end of year		$	41,300	$	35,888	$	--	$	--
Funded status at end of year		$	(51,801)	$	(33,737)	$	(28,854)	$	(18,395)

		December 31,
		Qualified Plans				Non-Qualified Plans(1)				Total
		2011		2010		2011		2010		2011		2010
Aggregate fair value of plan assets		$	41,300	$	35,888	$	--	$	--	$	41,300	$	35,888
Aggregate projected benefit obligations			51,980		40,687		41,121		28,938		93,101		69,625
	Under funded	$	(10,680)	$	(4,799)	$	(41,121)	$	(28,938)	$	(51,801)	$	(33,737)
(1) For non-qualified plans, there are no required funding levels.

	December 31,
	Pension Benefits				Other Benefits
	2011		2010		2011		2010
Amounts recognized in accumulated other
comprehensive income:
Net actuarial loss	$	30,565	$	13,118	$	13,875	$	5,880
Net prior service cost		2,804		3,264		--		--
Total	$	33,369	$	16,382	$	13,875	$	5,880

The following table presents information for pension plans with a projected benefit obligation in excess of plan assets as of December 31, 2011 and 2010 (dollars in thousands):

	2011		2010
Projected benefit obligation	$	93,101	$	69,625
Fair value of plan assets		41,300		35,888

The accumulated benefit obligations for all defined benefit pension plans were $89.5 million and $66.7 million at December 31, 2011 and 2010, respectively. The following table presents information for pension plans with an accumulated benefit obligation in excess of plan assets as of December 31, 2011 and 2010 (dollars in thousands):
	2011		2010
Accumulated benefit obligation	$	89,531	$	66,597
Fair value of plan assets		41,300		35,888

The components of net periodic benefit cost and other changes in plan assets and benefit obligations recognized in other comprehensive income were as follows (dollars in thousands):
		Pension Benefits						Other Benefits
		2011		2010		2009		2011		2010		2009
Net periodic benefit cost:
Service cost		$	5,985	$	4,762	$	3,821	$	1,116	$	847	$	597
Interest cost			3,916		3,420		3,443		1,035		882		674
Expected return on plan assets			(2,937)		(2,577)		(1,945)		--		--		--
Amortization of prior actuarial losses			980		688		1,593		353		236		20
Amortization of prior service cost			399		(171)		558		--		--		--
	Net periodic benefit cost		8,343		6,122		7,470		2,504		1,965		1,291
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Net actuarial (gains) losses			18,561		(3,743)		2,009		8,348		2,326		2,094
Prior service cost			--		--		--		--		--		--
Amortization of actuarial (gains) losses			(980)		(688)		(1,593)		(353)		(236)		(20)
Amortization of prior service cost (credit)			(399)		171		(558)		--		--		--
Foreign exchange translations and other
adjustments			(196)		(307)		290		--		--		--
	Total recognized in other comprehensive
	income		16,986		(4,567)		148		7,995		2,090		2,074
	Total recognized in net periodic benefit
	cost and other comprehensive income	$	25,329	$	1,555	$	7,618	$	10,499	$	4,055	$	3,365

The Company expects to contribute to the plans $4.7 million in pension benefits and $0.2 million in other benefits during 2012.

The following benefit payments, which reflect expected future service as appropriate, are expected to be paid (dollars in thousands):

	Pension Benefits		Other Benefits
2012	$	4,705	$	247
2013		5,031		302
2014		5,226		361
2015		5,511		420
2016		7,434		480
2017-2021		38,945		3,495

The estimated net loss and prior service cost for the defined benefit pension plans and post-retirement plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $3.4 million and $0.3 million, respectively.

Assumptions

Weighted average assumptions used to determine the accumulated benefit obligation and net benefit cost or income for the year ended December 31:

		Pension Benefits						Other Benefits
		2011		2010		2009		2011		2010		2009
Discount rate used to determine benefit
	obligation	4.48	%	5.47	%	6.01	%	4.50	%	5.40	%	5.50	%
Discount rate used to determine net benefit
	cost or income	5.22	%	5.96	%	6.37	%	5.40	%	5.75	%	6.30	%
Expected long-term rate of return on plan
	assets	7.75	%	8.50	%	8.50	%	--	%	--	%	--	%
Rate of compensation increases		4.20	%	4.20	%	4.21	%	--	%	--	%	--	%

The expected rate of return on plan assets is based on anticipated performance of the various asset sectors in which the plan invests, weighted by target allocation percentages. Anticipated future performance is based on long-term historical returns of the plan assets by sector, adjusted for the long-term expectations on the performance of the markets. While the precise expected return derived using this approach may fluctuate from year to year, the policy is to hold this long-term assumption constant as long as it remains within reasonable tolerance from the derived rate. This process is consistent for all plan assets as all the assets are invested in mutual funds.

The assumed health care cost trend rates used in measuring the accumulated non-pension post-retirement benefit obligation were as follows:

	December 31,
	2011	2010
Pre-Medicare eligible claims	9% down to 5% in 2015	8% down to 5% in 2013
Medicare eligible claims	8% down to 5% in 2013	8% down to 5% in 2013

Assumed health care cost trend rates may have a significant effect on the amounts reported for health care plans. A one-percentage point change in assumed health care cost trend rates would have the following effects (dollars in thousands):
	One Percent Increase		One Percent Decrease
Effect on total of service and interest cost components	$	659	$	(441)
Effect on accumulated postretirement benefit obligation	$	7,010	$	(5,244)

Plan Assets

Target allocations of assets are determined with the objective of maximizing returns and minimizing volatility of net assets through adequate asset diversification and partial liability immunization. Adjustments are made to target allocations based on the Company's assessment of the effect of economic factors and market conditions. The target allocations for plan assets are 60% equity securities and 40% debt securities as of December 31, 2011 and 2010. The Company's plan assets are primarily invested in mutual funds. The mutual funds include holdings of S&P 500 securities, large-cap securities, mid-cap securities, small-cap securities, international securities, corporate debt securities, U.S. and other government securities, mortgage-related securities and cash.

Equity and debt securities are exposed to various risks, such as interest rate risk, credit risk, and overall market volatility. Due to the level of risk associated with certain investment securities, changes in the values of investment securities will occur and any change would affect the amounts reported in the financial statements.

The fair values of the Company's pension plan assets as of December 31, 2011 and 2010 are summarized below (dollars in thousands):

		December 31, 2011
				Fair Value Measurement Using:
		Total		Level 1		Level 2		Level 3
Mutual Funds(1)		$	41,250	$	41,250	$	--	$	--
Cash			50		50		--		--
	Total	$	41,300	$	41,300	$	--	$	--
(1)	Mutual funds were invested 43% in bond index funds, 25% in S&P 500 index funds, 12% in mid-cap stock funds, 13% in foreign large blend funds and 7% in small-cap funds.
		December 31, 2010
				Fair Value Measurement Using:
		Total		Level 1		Level 2		Level 3
Mutual Funds(2)		$	35,845	$	35,845	$	--	$	--
Cash			43		43		--		--
	Total	$	35,888	$	35,888	$	--	$	--
(2)	Mutual funds were invested 38% in bond index funds, 26% in S&P 500 index funds, 13% in mid-cap stock funds, 15% in foreign large blend funds and 8% in small-cap funds.

As of December 31, 2011 and 2010, the Company classified all of its pension plan assets in the Level 1 category as quoted prices in active markets are available for these assets. See Note 6 – “Fair Value of Financial Instruments” for additional detail on the fair value hierarchy.

Savings and Investment Plans

Certain subsidiaries of the Company also sponsor saving and investment plans under which a portion of employee contributions are matched. Subsidiary contributions to these plans, which are partially tied to RGA's financial results, were $5.1 million, $3.9 million and $2.7 million in 2011, 2010 and 2009, respectively.