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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2019

Defined Benefit Plans and Other Postretirement Benefit Plans

Schedule of Changes in Projected Benefit Obligations and Fair Value of Plan Assets

The following table provides the changes in the benefit obligation and fair value of plan assets and the funded status of the plans.


	Pension Benefits
	U.S. Plans						U.K. Plan						OPEB
	2019		2018		2019		2018		2019		2018
	(in millions of dollars)
Change in Benefit Obligation
Benefit Obligation at Beginning of Year	$	1,933.3	$	2,136.9	$	211.0	$	243.8	$	125.9	$	139.5
Service Cost	10.9		9.1		—		—		—		—
Interest Cost	83.3		79.8		6.1		5.9		5.3		4.9
Plan Participant Contributions	—		—		—		—		0.2		0.2
Actuarial (Gain) Loss	225.7		(210.3)		34.9		(18.9)		7.0		(7.6)
Benefits and Expenses Paid	(146.3)		(82.2)		(4.8)		(7.3)		(11.2)		(11.1)
Plan Amendment	—		—		—		0.3		—		—
Change in Foreign Exchange Rates	—		—		9.7		(12.8)		—		—
Benefit Obligation at End of Year	$	2,106.9	$	1,933.3	$	256.9	$	211.0	$	127.2	$	125.9

Accumulated Benefit Obligation at December 31	$	2,106.9	$	1,933.3	$	253.1	$	205.0	N/A		N/A

Change in Fair Value of Plan Assets
Fair Value of Plan Assets at Beginning of Year	$	1,454.9	$	1,582.6	$	217.0	$	253.5	$	10.1	$	10.5
Actual Return on Plan Assets	282.7		(53.6)		31.0		(16.0)		0.2		0.1
Employer Contributions	8.7		8.1		—		—		10.6		10.4
Plan Participant Contributions	—		—		—		—		0.2		0.2
Benefits and Expenses Paid	(146.3)		(82.2)		(4.8)		(7.3)		(11.2)		(11.1)
Change in Foreign Exchange Rates	—		—		9.6		(13.2)		—		—
Fair Value of Plan Assets at End of Year	$	1,600.0	$	1,454.9	$	252.8	$	217.0	$	9.9	$	10.1

Underfunded (Overfunded) Status	$	506.9	$	478.4	$	4.1	$	(6.0)	$	117.3	$	115.8

Schedule of Amounts Recognized in Balance Sheet

The amounts recognized in our consolidated balance sheets for our pension and OPEB plans at December 31, 2019 and 2018 are as follows.


	Pension Benefits
	U.S. Plans						U.K. Plan						OPEB
	2019		2018		2019		2018		2019		2018
	(in millions of dollars)
Current Liability	$	7.7	$	7.3	$	—	$	—	$	1.5	$	1.6
Noncurrent Liability	499.2		471.1		4.1		—		115.8		114.2
Noncurrent Asset	—		—		—		(6.0)		—		—
Underfunded (Overfunded) Status	$	506.9	$	478.4	$	4.1	$	(6.0)	$	117.3	$	115.8

Unrecognized Pension and Postretirement Benefit Costs
Net Actuarial Gain (Loss)	$	(695.4)	$	(672.6)	$	(63.1)	$	(48.9)	$	11.1	$	20.9
Prior Service Credit (Cost)	(0.7)		(0.7)		(0.3)		(0.3)		3.1		3.3
	(696.1)		(673.3)		(63.4)		(49.2)		14.2		24.2
Income Tax	240.7		236.0		14.5		11.9		5.3		3.2
Total Included in Accumulated Other Comprehensive Income (Loss)	$	(455.4)	$	(437.3)	$	(48.9)	$	(37.3)	$	19.5	$	27.4

Schedule of Amounts Recognized in Other Comprehensive Income (Loss)

The following table provides the changes recognized in other comprehensive income for the years ended December 31, 2019 and 2018.


	Pension Benefits
	U.S. Plans						U.K. Plan						OPEB
	2019		2018		2019		2018		2019		2018
	(in millions of dollars)
Accumulated Other Comprehensive Income (Loss) at Beginning of Year	$	(437.3)	$	(495.3)	$	(37.3)	$	(34.7)	$	27.4	$	21.9
Net Actuarial Gain (Loss)
Amortization	20.2		21.7		0.9		0.6		(2.5)		—
All Other Changes	(43.0)		52.1		(15.1)		(3.2)		(7.3)		7.2
Prior Service Credit (Cost)
Amortization	—		—		—		—		(0.2)		(0.2)
Plan Amendment	—		—		—		(0.3)		—		—
Change in Income Tax	4.7		(15.8)		2.6		0.3		2.1		(1.5)
Accumulated Other Comprehensive Income (Loss) at End of Year	$	(455.4)	$	(437.3)	$	(48.9)	$	(37.3)	$	19.5	$	27.4

Fair Values by Fair Value Hierarchy Input Level

The following tables present information about financial instruments measured at fair value on a recurring basis by fair value level, based on the observability of the inputs used:


	December 31, 2019
	Level 1		Level 2		Level 3		NAV		Total
	(in millions of dollars)
Assets
Fixed Maturity Securities
United States Government and Government Agencies and Authorities	$	412.8	$	988.9	$	—	$	—	$	1,401.7
States, Municipalities, and Political Subdivisions	—		3,321.6		41.8		—		3,363.4
Foreign Governments	—		995.9		21.8		—		1,017.7
Public Utilities	171.1		7,546.5		14.6		—		7,732.2
Mortgage/Asset-Backed Securities	—		1,444.6		34.1		—		1,478.7
All Other Corporate Bonds	4,114.4		27,695.5		600.5		—		32,410.4
Redeemable Preferred Stocks	—		39.6		—		—		39.6
Total Fixed Maturity Securities	4,698.3		42,032.6		712.8		—		47,443.7

Other Long-term Investments
Derivatives

Foreign Exchange Contracts	—		27.0		—		—		27.0
Credit Default Swaps	—		0.5		—		—		0.5
Total Derivatives	—		27.5		—		—		27.5
Equity Securities	—		28.0		4.6		—		32.6
Private Equity Partnerships	—		—		—		616.7		616.7
Total Other Long-term Investments	—		55.5		4.6		616.7		676.8
Total Financial Instrument Assets Carried at Fair Value	$	4,698.3	$	42,088.1	$	717.4	$	616.7	$	48,120.5

Liabilities
Other Liabilities
Derivatives
Interest Rate Swaps	$	—	$	0.6	$	—	$	—	$	0.6
Foreign Exchange Contracts	—		34.0		—		—		34.0

Embedded Derivative in Modified Coinsurance Arrangement	—		—		22.8		—		22.8
Total Derivatives	—		34.6		22.8		—		57.4
Total Financial Instrument Liabilities Carried at Fair Value	$	—	$	34.6	$	22.8	$	—	$	57.4


	December 31, 2018
	Level 1		Level 2		Level 3		NAV		Total
	(in millions of dollars)
Assets
Fixed Maturity Securities
United States Government and Government Agencies and Authorities	$	513.4	$	1,301.0	$	—	$	—	$	1,814.4
States, Municipalities, and Political Subdivisions	—		2,424.2		—		—		2,424.2
Foreign Governments	—		952.3		31.4		—		983.7
Public Utilities	286.4		7,041.7		84.7		—		7,412.8
Mortgage/Asset-Backed Securities	—		1,582.7		—		—		1,582.7
All Other Corporate Bonds	4,232.1		23,026.1		1,495.8		—		28,754.0
Redeemable Preferred Stocks	—		18.8		21.1		—		39.9
Total Fixed Maturity Securities	5,031.9		36,346.8		1,633.0		—		43,011.7

Other Long-term Investments
Derivatives

Foreign Exchange Contracts	—		30.4		—		—		30.4
Credit Default Swaps	—		0.5		—		—		0.5
Total Derivatives	—		30.9		—		—		30.9
Equity Securities	—		24.6		4.6		—		29.2
Private Equity Partnerships	—		—		—		483.8		483.8
Total Other Long-term Investments	—		55.5		4.6		483.8		543.9
Total Financial Instrument Assets Carried at Fair Value	$	5,031.9	$	36,402.3	$	1,637.6	$	483.8	$	43,555.6

Liabilities
Other Liabilities
Derivatives
Interest Rate Swaps	$	—	$	5.2	$	—	$	—	$	5.2
Foreign Exchange Contracts	—		32.8		—		—		32.8

Embedded Derivative in Modified Coinsurance Arrangement	—		—		31.1		—		31.1
Total Derivatives	—		38.0		31.1		—		69.1
Total Financial Instrument Liabilities Carried at Fair Value	$	—	$	38.0	$	31.1	$	—	$	69.1

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

Changes in assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are as follows:


	Year Ended December 31, 2019
			Total Realized and Unrealized Investment Gains (Losses) Included in
	Fair Value Beginning of Year		Earnings		Other Comprehensive Income or Loss		Purchases		Sales		Level 3 Transfers						Fair Value End of Year
																		Into	Out of
	(in millions of dollars)
Fixed Maturity Securities
States, Municipalities, and Political Subdivisions	$	—	$	—	$	2.8	$	13.3	$	—	$	25.7	$	—	$	41.8
Foreign Governments	31.4		—		0.6		—		(10.2)		—		—		21.8
Public Utilities	84.7		—		0.8		—		—		6.0		(76.9)		14.6
Mortgage/Asset-Backed Securities	—		—		(2.7)		—		—		36.8		—		34.1
All Other Corporate Bonds	1,495.8		—		(3.1)		93.0		(86.0)		190.6		(1,089.8)		600.5
Redeemable Preferred Stocks	21.1		—		—		—		—		—		(21.1)		—
Total Fixed Maturity Securities	1,633.0		—		(1.6)		106.3		(96.2)		259.1		(1,187.8)		712.8

Equity Securities	4.6		—		—		—		—		—		—		4.6
Embedded Derivative in Modified Coinsurance Arrangement	(31.1)		8.3		—		—		—		—		—		(22.8)


	Year Ended December 31, 2018
			Total Realized and Unrealized Investment Gains (Losses) Included in
	Fair Value Beginning of Year		Earnings		Other Comprehensive Income or Loss		Purchases		Sales		Level 3 Transfers						Fair Value End of Year
																		Into	Out of
	(in millions of dollars)
Fixed Maturity Securities

Foreign Governments	$	—	$	—	$	(1.4)	$	—	$	—	$	32.8	$	—	$	31.4
Public Utilities	207.7		—		(2.3)		—		—		39.0		(159.7)		84.7

All Other Corporate Bonds	1,150.1		5.8		(118.1)		95.1		(148.7)		968.6		(457.0)		1,495.8
Redeemable Preferred Stocks	22.8		—		(1.7)		—		—		—		—		21.1
Total Fixed Maturity Securities	1,380.6		5.8		(123.5)		95.1		(148.7)		1,040.4		(616.7)		1,633.0

Equity Securities	1.1		—		—		3.5		—		—		—		4.6
Embedded Derivative in Modified Coinsurance Arrangement	(15.9)		(15.2)		—		—		—		—		—		(31.1)

Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses only for the time during which the applicable financial instruments were classified as Level 3. The transfers between levels resulted primarily from a change in observability of three inputs used to determine fair values of the securities transferred: (1) transactional data for new issuance and secondary trades, (2) broker/dealer quotes and pricing, primarily related to changes in the level of activity in the market and whether the market was considered orderly, and (3) comparable bond metrics from which to perform an analysis. For fair value measurements of financial instruments that were transferred either into or out of Level 3, we reflect the transfers using the fair value at the beginning of the period. We believe this allows for greater transparency, as all changes in fair value that arise during the reporting period of the transfer are disclosed as a component of our Level 3 reconciliation. Gains (losses) which are included in earnings and are attributable to the change in fair value of assets or liabilities valued using significant unobservable inputs and still held at each year end were $8.3 million and $(15.2) million for the years ended December 31, 2019 and 2018, respectively. These amounts relate entirely to the change in fair value of an embedded derivative in a modified coinsurance arrangement and are reported as a component of realized investment gains and losses.

Schedule of Assumptions Used

We use a December 31 measurement date for each of our plans. The weighted average assumptions used in the measurement of our benefit obligations as of December 31 and our net periodic benefit costs for the years ended December 31 are as follows:


	Pension Benefits
	U.S. Plans						U.K. Plan						OPEB
	2019		2018		2019		2018		2019		2018
Benefit Obligations
Discount Rate	3.60	%	4.40	%	2.00	%	2.90	%	3.40	%	4.40	%
Rate of Compensation Increase	N/A		N/A		2.90	%	3.70	%	N/A		N/A

Net Periodic Benefit Cost
Discount Rate	4.40	%	3.80	%	2.90	%	2.50	%	4.40	%	3.70	%
Expected Return on Plan Assets	7.00	%	6.75	%	4.30	%	3.90	%	5.75	%	5.75	%
Rate of Compensation Increase	N/A		N/A		3.70	%	3.70	%	N/A		N/A

Schedule of Net Benefit Costs

Net Periodic Benefit Cost

The following table provides the components of the net periodic benefit cost (credit) for the years ended December 31.


	Pension Benefits
	U.S. Plans										U.K. Plan								OPEB
	2019		2018		2017		2019		2018		2017		2019		2018		2017
	(in millions of dollars)
Service Cost	$	10.9	$	9.1	$	7.9	$	—	$	—	$	—	$	—	$	—	$	—
Interest Cost	83.3		79.8		84.5		6.1		5.9		6.2		5.3		4.9		5.9
Expected Return on Plan Assets	(99.4)		(104.5)		(103.1)		(8.9)		(8.9)		(8.8)		(0.6)		(0.6)		(0.6)
Amortization of:
Net Actuarial Loss (Gain)	20.2		21.7		19.6		0.9		0.6		0.7		(2.5)		—		—
Prior Service Credit	—		—		(0.3)		—		—		—		(0.2)		(0.2)		(0.4)
Total Net Periodic Benefit Cost	$	15.0	$	6.1	$	8.6	$	(1.9)	$	(2.4)	$	(1.9)	$	2.0	$	4.1	$	4.9

Schedule of Expected Benefit Payments

The following table provides expected benefit payments, which reflect expected future service, as appropriate.


	Pension Benefits
	U.S. Plans			U.K. Plan		OPEB
	(in millions of dollars)
Year						Gross		Subsidy Payments		Net
2020	$	114.9	*	$	5.5	$	11.6	$	0.1	$	11.5
2021	74.3			5.9		11.2		0.1		11.1
2022	77.9			6.0		10.6		0.1		10.5
2023	81.6			6.2		10.0		0.1		9.9
2024	85.7			6.8		9.5		0.1		9.4
2025-2029	495.7			39.0		40.8		0.2		40.6

*Includes the previously noted group annuity contract purchased on January 2, 2020

Pension Plan

Defined Benefit Plans and Other Postretirement Benefit Plans

Fair Values by Fair Value Hierarchy Input Level

The categorization of fair value measurements by input level for the invested assets in our U.K. pension plan is shown below. Investments valued using NAV as a practical expedient are not required to be categorized by input level, but these investments are included as follows to reconcile to total invested assets.


	December 31, 2019
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		NAV as a Practical Expedient		Total
	(in millions of dollars)
Plan Assets
Diversified Growth Assets	$	—	$	—	$	—	$	163.0	$	163.0
Fixed Interest and Index-linked Securities	89.6		—		—		—		89.6
Cash Equivalents	0.2		—		—		—		0.2
Total Plan Assets	$	89.8	$	—	$	—	$	163.0	$	252.8


	December 31, 2018
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		NAV as a Practical Expedient		Total
	(in millions of dollars)
Plan Assets
Diversified Growth Assets	$	—	$	—	$	—	$	133.0	$	133.0
Fixed Interest and Index-linked Securities	81.3		—		—		—		81.3
Cash Equivalents	2.7		—		—		—		2.7
Total Plan Assets	$	84.0	$	—	$	—	$	133.0	$	217.0

Schedule of Defined Benefit Plans Disclosures

The categorization of fair value measurements by input level for the invested assets in our U.S. pension plans is shown below. The carrying values of investment-related receivables and payables approximate fair value due to the short-term nature of the securities and are not included in the following chart. Investments valued using net asset value (NAV) as a practical expedient are not required to be categorized by input level, but these investments are included as follows to reconcile to total invested assets.


	December 31, 2019
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		NAV as a Practical Expedient		Total
	(in millions of dollars)
Invested Assets
Equity Securities:
U.S. Large Cap	$	—	$	—	$	—	$	95.2	$	95.2
U.S. Small Cap	23.0		—		—		24.8		47.8
Global	—		—		—		299.1		299.1
International	—		—		—		28.3		28.3
Emerging Markets	—		—		—		50.4		50.4
Fixed Income Securities:
U.S. Government and Agencies	199.0		—		—		—		199.0
Corporate	—		391.1		—		—		391.1
State and Municipal Securities	—		2.5		—		—		2.5
Opportunistic Credits	—		—		—		196.5		196.5
Real Estate	—		—		—		108.4		108.4
Alternative Investments:
Private Equity Direct Investments	—		—		—		57.7		57.7
Private Equity Funds of Funds	—		—		—		38.4		38.4
Cash Equivalents	82.4		—		—		—		82.4
Total Invested Assets	$	304.4	$	393.6	$	—	$	898.8	$	1,596.8


	December 31, 2018
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		NAV as a Practical Expedient		Total
	(in millions of dollars)
Invested Assets
Equity Securities:
U.S. Large Cap	$	—	$	—	$	—	$	83.0	$	83.0
U.S. Small Cap	18.9		—		—		—		18.9
Global	—		—		—		290.3		290.3
International	—		—		—		24.6		24.6
Emerging Markets	—		—		—		44.1		44.1
Fixed Income Securities:
U.S. Government and Agencies	257.4		—		—		—		257.4
Corporate	—		311.2		—		—		311.2
State and Municipal Securities	—		5.7		—		—		5.7
Opportunistic Credits	—		—		—		192.0		192.0
Real Estate	—		—		—		102.8		102.8
Alternative Investments:
Private Equity Direct Investments	—		—		—		53.5		53.5
Private Equity Funds of Funds	—		—		—		34.0		34.0
Hedge Funds of Funds	—		—		—		0.1		0.1
Cash Equivalents	39.2		—		—		—		39.2
Total Invested Assets	$	315.5	$	316.9	$	—	$	824.4	$	1,456.8