ASSURANT INC
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
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Jun 30, 2024 · Filed Aug 8, 2024
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12. Retirement and Other Employee Benefits
- Retirement and Other Employee Benefits
The Company and its subsidiaries participate in a non-contributory, qualified defined benefit pension plan (“Assurant Pension Plan”) covering substantially all employees prior to closing to new hires on January 1, 2014. The Company also has various non-contributory, non-qualified supplemental plans covering certain employees, including the Assurant Executive Pension Plan and the Assurant Supplemental Executive Retirement Plan. The qualified and non-qualified plans are referred to as “Pension Benefits” unless otherwise noted. In addition, the Company provides certain health care benefits for retired employees and their dependents (“Retirement Health Benefits”). The Pension Benefits and Retirement Health Benefits (together, the “Plans”) were frozen on March 1, 2016.
In February 2020, the Company amended the Retirement Health Benefits to terminate effective December 31, 2024 (the “Termination Date”). Benefits will be paid through the Termination Date. The Retirement Health Benefits obligations were re-measured using a discount rate of 1.55%, selected based on a cash flow analysis using a bond yield curve as of February 29, 2020, and the fair market value of the Retirement Health Benefits assets as of February 29, 2020. The remeasurement resulted in a reduction to the Retirement Health Benefits obligations of $65.6 million and a corresponding prior service credit in AOCI, which will be reclassified from AOCI as it is amortized in the net periodic benefit cost over the remaining period until the Termination Date.
The following tables present the components of net periodic benefit cost for the Plans for the three and six months ended June 30, 2024 and 2023:
| Qualified Pension Benefits · Unfunded Non-qualified Pension Benefits · Retirement HealthBenefits | ||||||
|---|---|---|---|---|---|---|
| For the Three Months Ended June 30, | For the Three Months Ended June 30, | For the Three Months Ended June 30, | ||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| Interest cost | $6.6 | $7.0 | $0.5 | $0.6 | $0.1 | $0.1 |
| Expected return on plan assets | (10.2) | (10.3) | — | — | (0.4) | (0.4) |
| Amortization of prior service credit | — | — | — | — | (3.5) | (3.4) |
| Amortization of net loss | — | — | 0.3 | 0.3 | — | — |
| Net periodic benefit cost | $(3.6) | $(3.3) | $0.8 | $0.9 | $(3.8) | $(3.7) |
| Qualified Pension Benefits · Unfunded Nonqualified Pension Benefits · Retirement HealthBenefits | ||||||
| For the Six Months Ended June 30, | For the Six Months Ended June 30, | For the Six Months Ended June 30, | ||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| Interest cost | $13.3 | $14.0 | $1.1 | $1.2 | $0.1 | $0.2 |
| Expected return on plan assets | (20.2) | (20.6) | — | — | (0.7) | (0.8) |
| Amortization of prior service credit | — | — | — | — | (6.8) | (6.8) |
| Amortization of net loss (gain) | — | — | 0.6 | 0.6 | — | — |
| Settlement loss | — | — | — | — | — | — |
| Net periodic benefit cost | $(6.9) | $(6.6) | $1.7 | $1.8 | $(7.4) | $(7.4) |
The Assurant Pension Plan funded status was $87.4 million at June 30, 2024 and $86.6 million at December 31, 2023 (based on the fair value of the assets compared to the accumulated benefit obligation). This equates to a 117% funded status at June 30, 2024 and 116% at December 31, 2023. During the six months ended June 30, 2024, no cash was contributed to the Assurant Pension Plan. Due to the Assurant Pension Plan’s current funded status, no additional cash is expected to be contributed to the Assurant Pension Plan over the remainder of 2024.
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