Postretirement Benefits

The following tables present a summary of post-retirement benefit costs by component for the three and nine month periods ended September 30, 2018 and 2017.

Components of Post-Retirement Benefit Costs



	Three Months Ended September 30,
	Pension Benefits						Other Benefits
	2018			2017			2018		2017
Service cost	$	5,277		$	4,486		$	—	$	—
Interest cost	5,496			5,552			228		249
Expected return on assets	(6,363		)	(5,900		)	—		—
Amortization:
Prior service cost	119			118			—		—
Actuarial (gain) loss	3,636			2,952			23		38
Direct recognition of expense	—			—			80		111
Net periodic benefit cost	$	8,165		$	7,208		$	331	$	398

	Nine Months Ended September 30,
	Pension Benefits						Other Benefits
	2018			2017			2018		2017
Service cost	$	15,831		$	13,457		$	—	$	—
Interest cost	16,482			16,653			684		749
Expected return on assets	(19,089		)	(17,697		)	—		—
Amortization:
Prior service cost	357			356			—		—
Actuarial (gain) loss	10,908			8,855			69		115
Direct recognition of expense	—			—			305		323
Net periodic benefit cost	$	24,489		$	21,624		$	1,058	$	1,187

The following tables present the assets of Torchmark’s defined benefit pension plans at September 30, 2018 and December 31, 2017.

Pension Assets by Component at September 30, 2018



	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	$		$	47,522	$		$	47,522	11
Utilities			39,258				39,258		9
Energy			23,632				23,632		6
Other corporates			84,388				84,388		20
Total corporate bonds	—		194,800		—		194,800		46
Exchange traded fund⁽¹⁾	181,449						181,449		43
Other bonds			242				242		—
Other long-term investments			5,366				5,366		1
Guaranteed annuity contract⁽²⁾			26,418				26,418		7
Short-term investments	9,304						9,304		2
Other	4,179						4,179		1
Total Pension Assets	$	194,932	$	226,826	$	—	$	421,758	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, 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
Total Pension Assets	$	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.

The following table presents liabilities for the defined-benefit pension plans at September 30, 2018 and December 31, 2017.

Pension Liability



	September 30, 2018		December 31, 2017
Funded defined benefit pension	$	494,323	$	518,141
SERP⁽¹⁾	85,732		84,465
Pension Benefit Obligation	$	580,055	$	602,606


(1)	Supplemental executive retirement plan (SERP).

The following table includes information regarding the SERP at September 30, 2018 and December 31, 2017.



	September 30, 2018		December 31, 2017
Premiums paid for insurance coverage	$	2,997	$	2,050

Total investments:
Company owned life insurance	$	43,976	$	40,273
Exchange traded funds	56,776		55,442
	$	100,752	$	95,715

Liability:
Active plan	$	83,320	$	81,457
Closed plan	2,412		3,008
	$	85,732	$	84,465