Postretirement Benefit Plans

The following tables present a summary of post-retirement benefit costs by component.

Components of Post-Retirement Benefit Costs



	Three Months Ended June 30,
	Pension Benefits						Other Benefits
	2017			2016			2017		2016
Service cost	$	4,484		$	3,894		$	—	$	—
Interest cost	5,551			5,432			250		212
Expected return on assets	(5,898		)	(5,782		)	—		—
Amortization:
Prior service cost	119			120			—		—
Actuarial (gain) loss	2,952			2,423			38		8
Direct recognition of expense	—			—			116		20
Net periodic benefit cost	$	7,208		$	6,087		$	404	$	240

	Six Months Ended June 30,
	Pension Benefits						Other Benefits
	2017			2016			2017		2016
Service cost	$	8,971		$	7,788		$	—	$	—
Interest cost	11,101			10,864			500		424
Expected return on assets	(11,797		)	(11,564		)	—		—
Amortization:
Prior service cost	238			240			—		—
Actuarial (gain)/loss	5,903			4,847			77		16
Direct recognition of expense	—			—			212		54
Net periodic benefit cost	$	14,416		$	12,175		$	789	$	494

The following table presents assets at fair value for the defined-benefit pension plans at June 30, 2017 and the prior-year end.

Pension Assets by Component



	June 30, 2017			December 31, 2016
	Amount		%	Amount		%
Corporate bonds	$	158,227	45	$	160,036	49
Exchange traded fund⁽¹⁾	147,357		42	134,771		41
Other bonds	261		—	258		—
Guaranteed annuity contract⁽²⁾	19,254		5	18,997		6
Short-term investments	24,673		7	7,391		2
Other	5,281		1	7,418		2
Total	$	355,053	100	$	328,871	100


(1)	A fund including marketable securities that mirror the S&P 500 index.


(2)	Representing a guaranteed annuity contract issued by Torchmark's subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Pension Plan.

The following table presents liabilities for the defined-benefit pension plans at June 30, 2017 and the prior-year end.

Pension Liability



	June 30, 2017		December 31, 2016
Funded defined benefit pension	$	469,357	$	449,613
SERP⁽¹⁾ (Active)	76,377		74,687
SERP⁽¹⁾ (Closed)	2,845		3,222
Pension Benefit Obligation	$	548,579	$	527,522


(1)	Supplemental executive retirement plan (SERP)

During the six months ended June 30, 2017, the Company made $12 million in cash contributions to the qualified pension plans. Torchmark expects to make total cash contributions to these plans during 2017 in an amount not to exceed $20 million.

With respect to the Company’s active nonqualified noncontributory SERP, life insurance policies on the lives of plan participants have been established with an unaffiliated carrier to provide for a portion of the Company’s obligations under the plan. These policies along with investments deposited with an unaffiliated trustee were previously placed in a Rabbi Trust to provide for the payment of the plan obligations. At June 30, 2017, the combined value of the insurance policies and investments in the Rabbi Trust to support plan liabilities were $91 million, compared with $86 million at year end 2016. Since this plan is nonqualified and therefore is treated as unfunded, the values of the insurance policies and investments are recorded as Other assets in the Condensed Consolidated Balance Sheets and are not included in the chart of plan assets above.