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Postretirement Benefit Plans
 9 Months Ended
Sep. 30, 2017
Retirement Benefits [Abstract]  
Postretirement Benefit Plans
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 September 30,
 
Pension Benefits
 
Other Benefits
 
2017
 
2016
 
2017
 
2016
Service cost
$
4,486

 
$
3,894

 
$
—

 
$
—

Interest cost
5,552

 
5,430

 
249

 
212

Expected return on assets
(5,900
)
 
(5,782
)
 
—

 
—

Amortization:
 
 
 
 
 
 
 
Prior service cost
118

 
120

 
—

 
—

Actuarial (gain) loss
2,952

 
2,423

 
38

 
8

Direct recognition of expense
—

 
—

 
111

 
45

Net periodic benefit cost
$
7,208

 
$
6,085

 
$
398

 
$
265

 
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
Pension Benefits
 
Other Benefits
 
2017
 
2016
 
2017
 
2016
Service cost
$
13,457

 
$
11,682

 
$
—

 
$
—

Interest cost
16,653

 
16,294

 
749

 
636

Expected return on assets
(17,697
)
 
(17,346
)
 
—

 
—

Amortization:
 
 
 
 
 
 
 
Prior service cost
356

 
360

 
—

 
—

Actuarial (gain)/loss
8,855

 
7,270

 
115

 
24

Direct recognition of expense
—

 
—

 
323

 
99

Net periodic benefit cost
$
21,624

 
$
18,260

 
$
1,187

 
$
759


 
The following table presents assets at fair value for the defined-benefit pension plans at September 30, 2017 and December 31, 2016.
Pension Assets by Component
 
September 30, 2017
 
December 31, 2016
 
Amount
 
%
 
Amount
 
%
Corporate bonds
$
172,587

 
47
 
$
160,036

 
49
Exchange traded fund(1)
153,824

 
42
 
134,771

 
41
Other bonds
259

 
—
 
258

 
—
Guaranteed annuity contract(2)
21,163

 
6
 
18,997

 
6
Short-term investments
12,676

 
4
 
7,391

 
2
Other
5,118

 
1
 
7,418

 
2
Total
$
365,627

 
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 September 30, 2017 and December 31, 2016.
Pension Liability
 
September 30,
2017
 
December 31, 2016
Funded defined benefit pension
$
475,927

 
$
449,613

SERP(1) (Active)
77,223

 
74,687

SERP(1) (Closed)
2,827

 
3,222

Pension Benefit Obligation
$
555,977

 
$
527,522

(1)
Supplemental executive retirement plan (SERP).
During the nine months ended September 30, 2017, the Company made $19 million in cash contributions to the qualified pension plans. Torchmark will not make any additional cash contributions in 2017.
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 September 30, 2017, the combined value of the insurance policies and investments in the Rabbi Trust to support plan liabilities were $94 million, compared with $86 million at December 31, 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.