XML 102 R27.htm IDEA: XBRL DOCUMENT v3.25.4
Qualified Employee Benefit Plans
 12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Qualified Employee Benefit Plans Qualified Employee Benefit Plans
We maintain a qualified profit sharing plan covering U.S. employees and certain foreign employees. Employer contributions are discretionary and generally limited to the maximum amount deductible for federal income tax purposes. Aggregate contributions were $19.4 million, $19.7 million and $19.0 million for 2025, 2024 and 2023, respectively.
We maintain several defined contribution plans for foreign employees working for our subsidiaries in the United Kingdom, Australia, Japan and other locations outside the United States. Employer contributions generally are consistent with regulatory requirements and tax limits. Defined contribution expense for foreign entities was $9.1 million, $9.3 million and $11.7 million in 2025, 2024 and 2023, respectively.
We maintained a qualified, noncontributory, defined benefit retirement plan (the “Retirement Plan”) covering current and former employees who were employed by AB in the United States prior to October 2, 2000. Benefits accrued under the plan based on years of credited service, average final base salary (as defined in the Retirement Plan) and primary Social Security benefits. Service and compensation after December 31, 2008 were not taken into account in determining participants’ retirement benefits.
During 2024, the Compensation Committee of the AB Board of Directors approved the termination of the Retirement Plan, effective May 22, 2024. We began the process of settling benefits with vested participants and all lump sum disbursements elected by plan participants were distributed in December 2024 in the amount of $35.0 million. The remaining retirement plan participants who did not elect a lump sum disbursement elected to roll over their benefit to a group annuity contract from a qualified insurance company to administer all future payments. During the year ended December 31, 2024, we recognized a non-cash settlement charge of approximately $13.1 million related to Retirement Plan losses and the reclassification from accumulated other comprehensive loss to general and administrative expenses in the consolidated statements of income. As of December 31, 2024, the Retirement Plan was underfunded with a benefit obligation of $68.6 million and plan assets of $63.3 million.
During 2025, we settled all future obligations under the Retirement Plan and transferred the remaining obligations to a qualified insurance provider under a group annuity contract. The total annuity premium transferred was $59.4 million. Following the transfer related to the annuity purchase, the plans funded status was in a deficit and the company funded an additional $1.7 million to cover all remaining obligations. As a result of the settlement we recognized an initial non-cash settlement charge of approximately $20.8 million related to Retirement Plan losses and the reclassification from accumulated other comprehensive loss to general and administrative expenses in the consolidated statements of income. We recognized a final adjustment of $3.1 million due to further reconciliation and true up activities. The final settlement charge, net of true up amounts, was $17.7 million for the year ended December 31, 2025. The plan was formally terminated and the trust was closed effective September 30, 2025.
The Retirement Plan’s projected benefit obligation, fair value of plan assets and funded status (amounts recognized in the consolidated statements of financial condition) were as follows:
Years Ended December 31
20252024
(in thousands)
Change in projected benefit obligation:
Projected benefit obligation at beginning of year$68,579 $98,426 
Interest cost284 5,025 
Plan settlements (2,900)(39,246)
Actuarial loss (gain)(5,930)7,655 
Annuity insurer rollovers(59,357)— 
Benefits paid(676)(3,281)
Projected benefit obligation at end of year— 68,579 
Change in plan assets:
Plan assets at fair value at beginning of year63,325 101,376 
Actual return on plan assets(2,092)4,476 
Employer contribution1,700 — 
Plan settlements(2,900)(39,246)
Annuity insurer rollovers(59,357)— 
Benefits paid(676)(3,281)
Plan assets at fair value at end of year— 63,325 
Funded status$— $(5,254)
The amounts recognized in other comprehensive income for the Retirement Plan for 2025, 2024 and 2023 were as follows:
202520242023
(in thousands)
Unrecognized net gain from experience different from that assumed and effects of changes and assumptions$— $5,534 $8,815 
Prior service cost611 24 24 
Reclassification adjustment for (losses) included in net income upon retirement plan liquidation(22,898)— — 
23,509 5,558 8,839 
Income tax (expense) (147)(20)(9)
Other comprehensive income$23,362 $5,538 $8,830 
The gain of $23.3 million recognized in 2025 was primarily due to $22.9 million of one time pension settlement related gains, $0.6 million of pension cost amortization offset by $0.1 million in income tax expense. The one time settlement related gains was primarily driven by an initial non-cash settlement charge of approximately $20.8 million related to Retirement Plan losses and the reclassification from accumulated other comprehensive loss to general and administrative expenses in the condensed consolidated statements of income. Further, there was a reclassification of approximately $2.6 million from accumulated other comprehensive loss to accrued compensation and benefits liability on the consolidated statement of financial condition for final reconciliation and true up activities related to the settlement of the Retirement Plan. Please refer to the above for final pension related settlement charges recognized for the year ended December 31, 2025.
The gain of $5.5 million recognized in 2024 was primarily due to lump sum settlement activity of $13.7 million ($13.1 million of settlement related gains recognized from accumulated other comprehensive income to a realized loss on the consolidated statements of income during the year ended December 31, 2024 and $0.6 million of pension cost amortization) offset by a loss of $8.2 million. The loss of $8.2 million reflects a decrease in the discount rate due to plan termination assumptions using a yield curve rather than ongoing accounting basis assumptions using a bond model increasing the benefit obligation by $2.2 million, termination pricing increasing the obligation by $5.7 million and a loss on plan assets of $0.6 million, offset by new census data of $0.3 million.
The gain of $8.8 million recognized in 2023 was primarily due to actual earnings exceeding expected earnings on plan assets of $6.9 million, the recognized actuarial loss of $0.9 million changes in the discount rate and lump sum interest rates of $0.5 million, and changes in the census data $0.5 million.
Foreign retirement plans and an individual's retirement plan maintained by AB are not material to AB's consolidated financial statements. As such, disclosure for these plans is not necessary. The reconciliation of the 2025 amounts recognized in other comprehensive income for the Retirement Plan as compared to the consolidated statement of comprehensive income (the "OCI Statement") is as follows:
Retirement
Plan		Foreign
Retirement
Plans		OCI
Statement
(in thousands)
Amortization of prior service cost$611 $— $611 
Reclassification adjustment for (losses) included in net income upon retirement plan liquidation(22,898)68 (22,830)
Changes in employee benefit related items23,509 (68)23,441 
Income tax (expense) benefit(147)17 (130)
Employee benefit related items, net of tax$23,362 $(51)$23,311 
The amounts included in accumulated other comprehensive loss for the Retirement Plan as of December 31, 2025 and 2024 were as follows:
20252024
(in thousands)
Unrecognized net loss from experience different from that assumed and effects of changes and assumptions$— $(22,899)
Prior service cost — (611)
— (23,510)
Income tax benefit— 147 
Accumulated other comprehensive loss (1)
$— $(23,363)
(1)Due to settlement and termination of the Retirement Plan, there are no amounts remaining in accumulated other comprehensive income related to the plan.
The accumulated benefit obligation for the plan was zero and $68.6 million as of December 31, 2025 and 2024, respectively.
Due to the termination of the Retirement Plan, there was no discount rate applied as there is no remaining plan obligation as of December 31, 2025. The discount rate used to determine benefit obligations as of December 31, 2024 (remeasurement date) was 5.15%. The discount rate to determine the benefit obligation as of December 31, 2024 was adjusted by the annuity purchase premium to estimate the impending annuity purchase in 2025.
Due to the termination of the Retirement Plan, there are no future expected benefit payments under the Retirement Plan.
Net expense under the Retirement Plan consisted of:
Years Ended December 31
202520242023
(in thousands)
Interest cost on projected benefit obligations$284 $5,025 $5,199 
Expected return on plan assets(267)(5,056)(4,776)
Amortization of prior service cost611 24 24 
Settlement loss recognized17,733 13,104 — 
Recognized actuarial loss— 666 952 
Net pension expense$18,361 $13,763 $1,399 
Actuarial computations used to determine net periodic costs were made utilizing the following weighted-average assumptions:
Years Ended December 31
202520242023
Discount rate on benefit obligationsN/A5.40%5.50%
Expected long-term rate of return on plan assets4.63%5.25%5.25%
In developing the expected long-term rate of return on plan assets of 4.63%, management considered the historical returns and future expectations for returns for each asset category, as well as the target asset allocation of the portfolio. The expected long-term rate of return on assets was based on weighted average expected returns for each asset class.
As of December 31, 2024, the mortality projection assumption used the generational MP-2021 improvement scale, which is consistent with the improvement scale used in 2023 and 2022. The base mortality assumption used is the Society of Actuaries PRI-2012 base mortality table for private sector plans, with a white-collar adjustment, using the contingent annuitant table for beneficiaries of deceased participants.
For fiscal year-end 2024, we reflected the most recently published Internal Revenue Service table for lump sums paid in 2024.
 
The Retirement Plan’s asset allocation percentages consisted of:
Years Ended December 31
20252024
Equity—%—%
Debt securities— 88 
Other— 12 
Total—%100%
The Investment Committee oversaw investments for the benefit of the Retirement Plan. The objective of the investment program was to closely match the potential plan termination liability and to minimize funded status volatility, thereby promoting the ongoing ability of the Retirement Plan to meet future liabilities and obligations, while minimizing the need for additional contributions and managing the Retirement Plan’s funded status appropriately. During 2024, the asset allocation was updated to 100% liability hedging investments (cash and cash equivalents) in light of the pending Retirement Plan termination. The asset allocation during 2025 prior to the termination of the plan remained consistent with the asset allocation during 2024. The Retirement plan was terminated effective September 30, 2025, as such, there were no remaining assets in the Retirement Plan as of December 31, 2025.
See Note 9, Fair Value for a description of how we measure the fair value of our plan assets.
The valuation of our Retirement Plan assets by pricing observability levels as of December 31, 2025 and 2024 was as follows (in thousands):
Level 1Level 2Level 3Total
December 31, 2025
Cash$— $— $— $— 
Fixed income securities— — — — 
Investments measured at net assets value— — — — 
Investments at fair value$— $— $— $— 
Level 1Level 2Level 3Total
December 31, 2024
Cash$5,618 $— $— $5,618 
Fixed income securities— 55,839 — 55,839 
Investments measured at net assets value— — — 1,868 
Investments at fair value$5,618 $55,839 $— $63,325 
During 2025, the Retirement Plan was terminated effective September 30, 2025.
During 2024 the Retirement Plan's investments include the following:
•fixed income securities primarily invested in bonds and included as a level 2 security;