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Postretirement Benefits
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Postretirement Benefits
Note 9—Postretirement Benefits

Globe Life has qualified noncontributory defined benefit pension plans (Pension Plans) and contributory savings plans that cover substantially all employees. There is also a nonqualified noncontributory supplemental executive retirement plan (SERP) that covers a limited number of officers. The tables included herein will focus on the Pension Plans and SERP.
The total cost of these retirement plans charged to operations was as follows:
Year Ended December 31,
202120202019
Plan Type:
Defined Contribution Plans(1)
$5,188 $4,855 $4,817 
Defined Benefit Pension Plans(2)
41,778 33,826 24,134 
(1)401K plans.
(2)Qualified pension plans and SERP.
 
Globe Life accrues expense for the defined contribution plans based on a percentage of the employees’ contributions. The plans are funded by the employee contributions and a Globe Life contribution equal to the amount of accrued expense. Plan contributions are both mandatory and discretionary, depending on the terms of the plan.
 
Pension Plans: Cost for the pension plans has been calculated on the projected unit credit actuarial cost method. All plan measurements for the pension plans are as of December 31 of the respective year. The pension plans covering the majority of employees are qualified and funded. Contributions are made to funded pension plans subject to minimums required by regulation and maximums allowed for tax purposes.

Globe Life's SERP provides an additional supplemental defined pension benefit to a limited number of officers. The supplemental benefit is based on the participant’s qualified plan benefit without consideration to the regulatory limits on compensation and benefit payments applicable to qualified plans, except that eligible compensation is capped at $1 million. The SERP is nonqualified and unfunded. However, a Rabbi Trust has been established to support the liability for this plan. The Rabbi Trust consists of life insurance policies on the lives of plan participants with an unaffiliated insurance carrier as well as an investment account. Since this plan is nonqualified, the investments and the policyholder value of the insurance policies in the Rabbi Trust are not included as defined benefit plan assets, but rather assets of the Company. They are included in “Other Assets” in the Consolidated Balance Sheets.

Defined benefit and SERP plan contributions were $17.9 million in 2021, $21.9 million in 2020, and $21.6 million in 2019. In 2022, the Company expects to make a similar contribution to the plans as in 2021.
Pension Assets: Plan assets in the funded plans consist primarily of investments in marketable fixed maturities and equity securities that are valued at fair value. Globe Life measures the fair value of its financial assets, including the assets in its benefit plans, in accordance with accounting guidance which establishes a hierarchy for asset values and provides a methodology for the measurement of value. Please refer to Note 1—Significant Accounting Policies under the caption Fair Value Measurements, Investments in Securities for a complete discussion of valuation procedures. The following table presents the assets of the Company's pension plans at December 31, 2021 and 2020.
Pension Assets by Component at December 31, 2021
 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$— $52,522 $— $52,522 9 
Utilities— 43,663 — 43,663 7 
Energy— 22,719 — 22,719 4 
Other corporates— 88,673 — 88,673 15 
Total corporate bonds— 207,577 — 207,577 35 
Exchange traded fund(1)
315,720 — — 315,720 52 
Other bonds— 239 — 239 — 
Guaranteed annuity contract(2)
— 34,743 — 34,743 6 
Short-term investments13,731 — — 13,731 2 
Other10,388 — — 10,388 2 
$339,839 $242,559 $— 582,398 97 
Other long-term investments(3)
15,149 3 
Total pension assets
$597,547 100 
(1)A fund including marketable securities that mirror the S&P 500 index.
(2)Representing a guaranteed annuity contract issued by Globe Life Inc.'s subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Life Insurance Company Non-Exempt Employees Defined Benefit Pension Plan ("American Income Pension Plan").
(3)Included in other long-term investments is an investment fund that reports the Globe Life Inc. Pension Plan's pro-rata share of the limited partnership's net asset value per share or its equivalent (NAV), as a practical expedient for fair value. The Globe Life Inc. Pension Plan owns less than 1% of the investment fund. As of December 31, 2021, the expected term of the investment fund is approximately 3 years and the commitment of the investment is fully funded. The investment is non-redeemable.
Pension Assets by Component at December 31, 2020
 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$— $52,252 $— $52,252 10 
Utilities— 45,888 — 45,888 9 
Energy— 22,480 — 22,480 4 
Other corporates— 88,983 — 88,983 17 
Total corporate bonds— 209,603 — 209,603 40 
Exchange traded fund(1)
245,170 — — 245,170 46 
Other bonds— 258 — 258 — 
Guaranteed annuity contract(2)
— 30,119 — 30,119 6 
Short-term investments20,960 — — 20,960 4 
Other7,109 — — 7,109 1 
$273,239 $239,980 $— 513,219 97 
Other long-term investments(3)
16,313 3 
Total pension assets
$529,532 100 
(1)A fund including marketable securities that mirror the S&P 500 index.
(2)Representing a guaranteed annuity contract issued by Globe Life Inc.'s subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Life Insurance Company Non-Exempt Employees Defined Benefit Pension Plan ("American Income Pension Plan").
(3)Included in other long-term investments is an investment fund that reports the Globe Life Inc. Pension Plan's pro-rata share of the limited partnership's net asset value per share or its equivalent (NAV), as a practical expedient for fair value. The Globe Life Inc. Pension Plan owns approximately 1% of the investment fund. As of December 31, 2020, the expected term of the investment fund was approximately 4 years and the commitment of the investment is fully funded. The investment is non-redeemable.
Globe Life's investment objectives for its plan assets include preservation of capital and purchasing power as well as long-term growth. Globe Life seeks to preserve capital through investments made in high quality securities with adequate diversification by issuer and industry sector to minimize risk. The portfolio is monitored continuously for changes in quality and diversification mix. The preservation of purchasing power is intended to be accomplished through asset growth, exclusive of contributions and withdrawals in excess of the rate of inflation. Globe Life intends to maintain investments that when combined with future plan contributions will produce adequate long-term growth to provide for all plan obligations. It is also Globe Life's objective that the portfolio’s investment return will meet or exceed the return of a balanced market index.
 
The majority of the securities in the portfolio are highly marketable so that there will be adequate liquidity to meet projected payments. There are no specific policies calling for asset durations to match those of benefit obligations.

Allowed investments are limited to equities, fixed maturities, and short-term investments (invested cash). The assets are to be invested in a mix of equity and fixed income investments that best serve the objectives of the pension plan. Factors to be considered in determining the asset mix include funded status, annual pension expense, annual pension contributions, and balance sheet liability. Equities can include common and preferred stocks, securities convertible into equities, mutual funds and exchange traded funds that invest in equities, equity interests in limited partnerships, and other equity-related investments. Primarily, equities are listed on major exchanges and adequate market liquidity is required. Fixed maturities primarily consist of marketable debt securities rated investment grade at purchase by a major rating agency. Short-term investments include fixed maturities with maturities less than one year and invested cash. Investments outside of the aforementioned list are not permitted, except by prior approval of the Plan’s Trustees.
The investment portfolio is well diversified to avoid undue exposure to a single sector, industry, business, or security. The equity and fixed maturity portfolios are not permitted to invest in any single issuer that would exceed 10% of total plan assets at the time of purchase. The Company does not employ any other special risk management techniques, such as derivatives, in managing the pension investment portfolio.

Globe Life's equity securities include an exchange traded fund that mirrors the S&P 500 index which better aligns with a passive approach rather than an actively managed portfolio. At December 31, 2021, there were no restricted investments contained in the portfolio. Plan contributions have been invested primarily in fixed maturity and equity securities during the three years ended December 31, 2021.
SERP: The following tables include premiums paid for the company owned life insurance (COLI) for the three years ended December 31, 2021 and investments of the Rabbi Trust for the two years ended December 31, 2021.

Year Ended December 31,
202120202019
Premiums paid for insurance coverage$2,193 $2,480 $2,394 
At December 31,
20212020
Total investments:
COLI$52,791 $51,361 
Exchange traded funds87,133 75,390 
$139,924 $126,751 
Pension Liability: The following table presents projected benefit obligation (PBO) and accumulated benefit obligation (ABO) for the pension plans and SERP at December 31, 2021 and 2020.

Pension Liability
December 31,
20212020
PBOABOPBOABO
Pension plans$686,917 $601,647 $667,753 $594,510 
SERP92,017 87,915 95,560 89,069 
Benefit Obligation
$778,934 $689,562 $763,313 $683,579 

The pension plans have projected benefit obligations in excess of the fair value of plan assets. The projected benefit obligations and the fair value of plan assets were as follows:
At December 31,
20212020
Funded benefit pension plans PBO$686,917 $667,753 
Funded benefit pension plans fair value of plan assets597,547 529,532 
The funded benefit pension plans have accumulated benefit obligations in excess of the fair value of plan assets. The accumulated benefit obligations and the fair value of plan assets were as follows:
At December 31,
20212020
Funded benefit pension plans ABO$601,647 $594,510 
Funded benefit pension plans fair value of plan assets597,547 529,532 

The following table discloses the assumptions used to determine Globe Life's pension liabilities and costs for the appropriate periods. The discount and compensation increase rates are used to determine current year projected benefit obligations and subsequent year pension expense. The long-term rate of return is used to determine current year expense. Differences between assumptions and actual experience are included in actuarial gain or loss.

Weighted Average Pension Plan Assumptions
For Benefit Obligations at December 31:20212020
Discount rate3.19 %2.92 %
Rate of compensation increase4.43 3.97 
For Periodic Benefit Cost for the Year:202120202019
Discount rate2.92 %3.49 %4.37 %
Expected long-term returns6.67 6.67 6.72 
Rate of compensation increase3.97 3.97 4.00 

The discount rate is determined based on the expected duration of plan liabilities. A yield is then derived based on the current market yield of a hypothetical portfolio of high quality corporate bonds that match the liability's average life. The rate of compensation increase is projected based on Company experience, modified as appropriate for future expectations. The expected long-term rate of return on plan assets is management’s best estimate of the average rate of earnings expected to be received on the assets invested in the plan over the benefit period. In determining this assumption, consideration is given to the historical rate of return earned on the assets, the projected returns over future periods, and the discount rate used to compute benefit obligations.
Net periodic benefit cost for the defined benefit plans by expense component was as follows:
 Year Ended December 31,
 202120202019
Service cost—benefits earned during the period$31,672 $24,461 $19,929 
Interest cost on projected benefit obligation21,957 22,825 23,827 
Expected return on assets(32,331)(29,561)(27,862)
Amortization of prior service cost (credit)631 632 8,211 
Recognition of actuarial gain (loss)19,849 15,469 29 
Net periodic benefit cost
$41,778 $33,826 $24,134 
An analysis of the impact on other comprehensive income (loss) concerning pensions and other postretirement benefits is as follows:
Year Ended December 31,
202120202019
Balance at January 1
$(208,770)$(182,233)$(150,071)
Amortization of:
Prior service cost (credit)631 632 631 
Net actuarial (gain) loss(1)
20,166 16,000 7,843 
Total amortization20,797 16,632 8,474 
Plan amendments(4,565)— — 
Experience gain (loss)(2)
61,299 (43,169)(40,636)
Balance at December 31
$(131,239)$(208,770)$(182,233)
(1)Includes amortization of postretirement benefits other than pensions of $228 thousand in 2021, $302 thousand in 2020, and $265 thousand in 2019. 
(2)The increase in the experience gain (loss) is related to an increase discount rate.
The following table presents a reconciliation from the beginning to the end of the year of the PBO and plan assets for the pension plans and SERP. This table also presents the amounts previously recognized as a component of accumulated other comprehensive income.

Pension Benefits
Year Ended December 31,
20212020
Changes in PBO:
PBO at beginning of year$763,313 $665,207 
Service cost31,672 24,461 
Interest cost21,957 22,825 
Plan amendments4,565 — 
Actuarial loss (gain)(16,938)74,006 
Benefits paid(25,635)(23,186)
PBO at end of year778,934 763,313 
Changes in plan assets:
Fair value at beginning of year529,532 468,763 
Return on assets75,792 62,104 
Contributions17,858 21,851 
Benefits paid(25,635)(23,186)
Fair value at end of year597,547 529,532 
Funded status at year end
$(181,387)$(233,781)

Changes in the PBO related to actuarial losses (gains) are primarily attributed to changes in the discount rate.

Year Ended December 31,
Amounts recognized in accumulated other comprehensive income consist of:20212020
Net loss (gain)$120,217 $200,465 
Prior service cost8,647 4,713 
Net amounts recognized at year end$128,864 $205,178 
Globe Life has estimated its expected pension benefits to be paid over the next ten years as of December 31, 2021. These estimates use the same assumptions that measure the benefit obligation at December 31, 2021, taking estimated future employee service into account. Those estimated benefits are as follows:
For the year(s): 
2022$25,979 
202328,431 
202430,936 
202532,120 
202634,121 
2027-2031200,165