AGENT DEFERRED COMPENSATION PLAN

12 Months Ended

Dec. 31, 2022

For our agent deferred compensation plan, it is our policy to immediately recognize changes in the actuarial benefit obligation resulting from either actual experience being different than expected or from changes in actuarial assumptions.

One of our insurance subsidiaries has a noncontributory, unfunded deferred compensation plan for qualifying members of its exclusive agency force. Benefits were based on years of service and career earnings. In 2016, the agent deferred compensation plan was amended to: (i) freeze participation in the plan; (ii) freeze benefits accrued under the plan; and (iii) add a limited cashout feature. The actuarial measurement date of this deferred compensation plan is December 31. The liability recognized in the consolidated balance sheet for the agent deferred compensation plan was $128.8 million and $179.9 million at December 31, 2022 and 2021, respectively. Expenses incurred on this plan were $(42.8) million, $(2.6) million and $22.8 million during 2022, 2021 and 2020, respectively (including the recognition of gains (losses) of $48.9 million, $8.9 million and $(16.3) million in 2022, 2021 and 2020, respectively, primarily resulting from: (i) changes in the discount rate assumption used to determine the deferred compensation plan liability to reflect current investment yields; and (ii) changes in mortality table assumptions. We purchased COLI as an investment vehicle to fund the agent deferred compensation plan. The COLI assets are not assets of the agent deferred compensation plan, and as a result, are accounted for outside the plan and are recorded in the consolidated balance sheet as other invested assets. The carrying value of the COLI assets was $199.1 million and $207.0 million at December 31, 2022 and 2021, respectively. Death benefits related to COLI and changes in the cash surrender value (which approximates net realizable value) of the COLI assets are recorded as net investment income (loss) on special-purpose portfolios and totaled $(4.4) million, $(2.7) million and $15.7 million in 2022, 2021 and 2020, respectively.

We used the following assumptions for the deferred compensation plan to calculate:


	2022		2021
Benefit obligations:
Discount rate	5.25	%	2.75	%
Net periodic cost:
Discount rate	2.75	%	2.50	%

The discount rate is based on the yield of a hypothetical portfolio of high quality debt instruments which could effectively settle plan benefits on a present value basis as of the measurement date.

The benefits expected to be paid pursuant to our agent deferred compensation plan as of December 31, 2022 were as follows (dollars in millions):


2023	$	8.1
2024	8.3
2025	8.5
2026	8.9
2027	8.9
2028 - 2032	44.7

One of our insurance subsidiaries has another unfunded nonqualified deferred compensation program for qualifying members of its exclusive agency force. Such agents may defer a certain percentage of their net commissions into the program. In addition, annual Company contributions are made based on the agent's production and vest over a period of five to 10 years. The liability recognized in the consolidated balance sheet for this program was $62.5 million and $68.8 million at December 31, 2022 and 2021, respectively. Company contribution expense totaled $6.3 million, $6.0 million and $4.9 million in 2022, 2021 and 2020, respectively. We purchased Trust-Owned Life Insurance ("TOLI") as an investment vehicle to fund the program. The TOLI assets are not assets of the program, and as a result, are accounted for outside the program and are recorded in the consolidated balance sheet as other invested assets. The carrying value of the TOLI assets was $54.9 million and $62.0 million at December 31, 2022 and 2021, respectively.

The Company has a qualified defined contribution plan for which substantially all employees are eligible. Company contributions, which match a portion of certain voluntary employee contributions to the plan, totaled $10.3 million, $6.7 million and $6.0 million in 2022, 2021 and 2020, respectively. Employer matching contributions are discretionary.