Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2017

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Total Cost of Retirement Plans Charged to Operations

The total cost of these retirement plans charged to operations was as follows:



Year Ended December 31,	Defined Contribution Plans⁽¹⁾		Defined Benefit Pension Plans⁽²⁾
2017	$	4,145	$	28,828
2016	3,614		24,202
2015	3,429		29,230

(1) 401K plans

(2) Qualified pension plans and SERPs

Schedule of Defined Benefit Plans Disclosures

The following table includes activity for the SERPs for the three years ended December 31, 2017.



	Year Ended December 31,
	2017		2016		2015
Premiums paid for insurance coverage	$	2,050	$	2,050	$	10,068

	December 31,
	2017		2016
Total investments:
Company owned life insurance	$	40,273	$	37,267
Exchange traded funds	55,442		48,999
	$	95,715	$	86,266

Liability:
Active plan	$	81,457	$	74,687
Closed plan	$	3,008	$	3,220

Pension Assets by Component at Fair Value

The following table presents the assets of Torchmark’s defined benefit pension plans for the years ended December 31, 2017 and 2016.

Pension Assets by Component at December 31, 2017



	Fair Value Determined by:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Amount		% to Total
Corporate bonds:
Financial	$		$	43,451	$		$	43,451	12
Utilities			46,144				46,144		12
Energy			25,023				25,023		7
Other corporates			65,888				65,888		17
Total corporate bonds	—		180,506		—		180,506		48
Exchange traded fund⁽¹⁾	164,351						164,351		43
Other bonds			256				256		—
Other long-term investments			2,304				2,304		1
Guaranteed annuity contract⁽²⁾			21,202				21,202		6
Short-term investments	3,984						3,984		1
Other	5,021						5,021		1
Grand Total	$	173,356	$	204,268	$	—	$	377,624	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.

Pension Assets by Component at December 31, 2016



	Fair Value Determined by:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Amount		% to Total
Corporate bonds:
Financial	$		$	41,578	$		$	41,578	13
Utilities			43,890				43,890		13
Energy			25,427				25,427		8
Other corporates			49,141				49,141		15
Total corporate bonds	—		160,036		—		160,036		49
Exchange traded fund⁽¹⁾	134,771						134,771		41
Other bonds			258				258		—
Guaranteed annuity contract⁽²⁾			18,997				18,997		6
Short-term investments	7,391						7,391		2
Other	7,418						7,418		2
Grand Total	$	149,580	$	179,291	$	—	$	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.

Analysis of Impact on Other Comprehensive Income (Loss)

An analysis of the impact on other comprehensive income (loss) concerning pensions and other postretirement benefits is as follows:



	Year Ended December 31,
	2017			2016			2015
Balance at January 1	$	(173,883	)	$	(152,149	)	$	(152,999	)
Amortization of:
Prior service cost	476			477			377
Net actuarial (gain) loss⁽¹⁾	11,960			9,691			14,209
Total amortization	12,436			10,168			14,586
Plan amendments	—			—			(2,104		)
Experience gain (loss)	(31,933		)	(31,902		)	(11,632		)
Balance at December 31	$	(193,380	)	$	(173,883	)	$	(152,149	)


(1)	Includes amortization of postretirement benefits other than pensions of $155 thousand in 2017, $33 thousand in 2016, and $120 thousand in 2015.

Portion of Other Comprehensive Income Expected to Be Reflected in Pension Expense in Next Year

The portion of other comprehensive income that is expected to be reflected in pension expense in 2018 is as follows:



Amortization of prior service cost	$	476
Amortization of net actuarial loss	14,543
Total	$	15,019

Pension Benefits

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Weighted Average Assumptions

Weighted Average Pension Plan Assumptions



For Benefit Obligations at December 31:	2017		2016
Discount Rate	3.75	%	4.27	%
Rate of Compensation Increase	4.37		4.31



For Periodic Benefit Cost for the Year:	2017		2016		2015
Discount Rate	4.27	%	4.64	%	4.23	%
Expected Long-Term Returns	6.96		7.19		6.96
Rate of Compensation Increase	4.31		4.33		4.35

Components of Net Periodic Pension Costs and Post-Retirement Benefit Costs

Net periodic pension cost for the defined benefit plans by expense component was as follows:



	Year Ended December 31,
	2017			2016			2015
Service cost—benefits earned during the period	$	17,942		$	15,502		$	15,902
Interest cost on projected benefit obligation	22,124			21,631			19,887
Expected return on assets	(23,597		)	(23,127		)	(21,204		)
Net amortization	12,281			10,135			14,465
Recognition of actuarial loss	78			61			180
Net periodic pension cost	$	28,828		$	24,202		$	29,230

Reconciliation of Benefit Obligation and Plan Assets

The following table presents a reconciliation from the beginning to the end of the year of the projected benefit obligation and plan assets for pensions. This table also presents the amounts previously recognized as a component of accumulated other comprehensive income.

Pension Benefits



	Year Ended December 31,
	2017			2016
Changes in benefit obligation:
Obligation at beginning of year	$	527,522		$	476,581
Service cost	17,942			15,502
Interest cost	22,124			21,631
Plan amendments	—			—
Actuarial loss (gain)	55,369			34,667
Benefits paid	(20,351		)	(20,859		)
Obligation at end of year	602,606			527,522

Changes in plan assets:
Fair value at beginning of year	328,871			307,596
Return on assets	47,832			26,377
Contributions	21,272			15,757
Benefits paid	(20,351		)	(20,859		)
Fair value at end of year	377,624			328,871
Funded status at year end	$	(224,982	)	$	(198,651	)

Schedule of Amounts Recognized as Components Accumulated Other Comprehensive Income



Amounts recognized in accumulated other comprehensive income consist of:
Net loss (gain)	$	186,563	$	167,313
Prior service cost	4,135		4,611
Net amounts recognized at year end	$	190,698	$	171,924

Estimated Future Payments for Post-Retirement Benefit Plans

Torchmark has estimated its expected pension benefits to be paid over the next ten years as of December 31, 2017. These estimates use the same assumptions that measure the benefit obligation at December 31, 2016, taking estimated future employee service into account. Those estimated benefits are as follows:



For the year(s)
2018	$	20,375
2019	22,143
2020	23,840
2021	25,239
2022	27,090
2023-2027	160,075

Other Benefits

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Weighted Average Assumptions

The table below presents the assumptions used to determine the liabilities and costs of Torchmark’s postretirement benefit plans other than pensions.

Weighted Average Assumptions for Postretirement

Benefit Plans Other Than Pensions



For Benefit Obligations at December 31:	2017		2016
Discount Rate	3.76	%	4.29	%



For Periodic Benefit Cost for the Year:	2017		2016		2015
Discount Rate	4.29	%	4.66	%	4.23	%

Components of Net Periodic Pension Costs and Post-Retirement Benefit Costs

The components of net periodic postretirement benefit cost for plans other than pensions are as follows:



	Year Ended December 31,
	2017		2016			2015
Service cost	$	—	$	—		$	—
Interest cost on benefit obligation	1,132		1,139			1,075
Expected return on plan assets	—		—			—
Net amortization	155		33			120
Recognition of net actuarial (gain) loss	167		(132		)	367
Net periodic postretirement benefit cost	$	1,454	$	1,040		$	1,562

Reconciliation of Benefit Obligation and Plan Assets

The following table presents a reconciliation of the benefit obligation and plan assets from the beginning to the end of the year. As these plans are unfunded, funded status is equivalent to the accrued benefit liability.

Benefits Other Than Pensions



	Year Ended December 31,
	2017			2016
Changes in benefit obligation:
Obligation at beginning of year	$	23,721		$	22,479
Service cost	—			—
Interest cost	1,132			1,139
Actuarial loss (gain)	1,045			412
Benefits paid	(285		)	(309		)
Obligation at end of year	25,613			23,721

Changes in plan assets:
Fair value at beginning of year	—			—
Return on assets	—			—
Contributions	285			309
Benefits paid	(285		)	(309		)
Fair value at end of year	—			—
Funded status at year end	$	(25,613	)	$	(23,721	)

Schedule of Amounts Recognized as Components Accumulated Other Comprehensive Income



Amounts recognized in accumulated other comprehensive income:
Net loss⁽¹⁾	$	2,682	$	1,959
Net amounts recognized at year end	$	2,682	$	1,959


(1)	The net loss for benefit plans other than pensions reduces other comprehensive income.

Estimated Future Payments for Post-Retirement Benefit Plans

Estimated Future Payments for Post-Retirement Benefit Plans Other Than Pensions



For the year(s)
2018	$	1,228
2019	1,278
2020	1,311
2021	1,344
2022	1,386
2023-2027	7,515