Employee Benefit Plans

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits Disclosure

Defined Benefit Pension and Other Postretirement Benefit (OPEB) Plans

We sponsor several defined benefit pension and OPEB plans for our employees, including non-qualified pension plans. The U.S. qualified and non-qualified defined benefit pension plans comprise the majority of our total benefit obligation and benefit cost. We maintain a separate defined benefit plan for eligible employees in our U.K. operation. The U.S. defined benefit pension plans were closed to new entrants on December 31, 2013, the OPEB plan was closed to new entrants on December 31, 2012, and the U.K. plan was closed to new entrants on December 31, 2002.

Amortization Period of Actuarial Gain or Loss and Prior Service Cost or Credit

Because all participants in the U.S. and U.K. pension plans are considered inactive, we amortize the net actuarial gain or loss and prior service credit or cost for these plans over the average remaining life expectancy of the plans. As of December 31, 2022, the estimate of the average remaining life expectancy of the plans was approximately 24 years for the U.S. plan and 28 years for the U.K. plan. For the OPEB plan, we amortize the net actuarial gain or loss and prior service credit or cost for this plan over the average remaining future working lifetime for active participants in the plan. As of December 31, 2022, the estimate of the average remaining future working lifetime was approximately 2 years for the OPEB plan.

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
	2022		2021		2022		2021		2022		2021
	(in millions of dollars)
Change in Benefit Obligation
Benefit Obligation at Beginning of Year	$	2,207.5	$	2,277.2	$	278.3	$	300.0	$	110.3	$	120.5
Service Cost	7.7		9.6		—		—		—		—
Interest Cost	67.2		65.0		5.0		4.2		3.0		3.0
Plan Participant Contributions	—		—		—		—		0.1		0.1
Actuarial Gain (1)	(604.1)		(57.9)		(92.4)		(18.0)		(19.4)		(3.0)
Benefits and Expenses Paid	(92.8)		(86.4)		(5.4)		(5.2)		(10.1)		(10.3)
Change in Foreign Exchange Rates	—		—		(27.6)		(2.7)		—		—
Benefit Obligation at End of Year	$	1,585.5	$	2,207.5	$	157.9	$	278.3	$	83.9	$	110.3
Accumulated Benefit Obligation at December 31	$	1,585.5	$	2,207.5	$	158.0	$	276.5	N/A		N/A
Change in Fair Value of Plan Assets
Fair Value of Plan Assets at Beginning of Year	$	1,801.7	$	1,710.9	$	303.7	$	294.1	$	9.0	$	9.3
Actual Return on Plan Assets	(410.6)		167.6		(128.4)		18.0		0.1		0.1
Employer Contributions	10.0		9.6		—		—		9.4		9.8
Plan Participant Contributions	—		—		—		—		0.1		0.1
Benefits and Expenses Paid	(92.8)		(86.4)		(5.4)		(5.2)		(10.1)		(10.3)
Change in Foreign Exchange Rates	—		—		(29.4)		(3.2)		—		—
Fair Value of Plan Assets at End of Year	$	1,308.3	$	1,801.7	$	140.5	$	303.7	$	8.5	$	9.0
Underfunded (Overfunded) Status	$	277.2	$	405.8	$	17.4	$	(25.4)	$	75.4	$	101.3

(1) The actuarial gains recognized in 2022 and 2021 for the U.S., OPEB, and U.K. plans were primarily driven by increases in the discount rate assumption.

The amounts recognized in our consolidated balance sheets for our pension and OPEB plans at December 31, 2022 and 2021 are as follows.

	Pension Benefits
	U.S. Plans				U.K. Plan				OPEB
	2022		2021		2022		2021		2022		2021
	(in millions of dollars)
Current Liability	$	8.8	$	8.4	$	—	$	—	$	1.1	$	1.4
Noncurrent Liability	268.4		397.4		17.4		—		74.3		99.9
Noncurrent Asset	—		—		—		(25.4)		—		—
Underfunded (Overfunded) Status	$	277.2	$	405.8	$	17.4	$	(25.4)	$	75.4	$	101.3
Unrecognized Pension and Postretirement Benefit Costs
Net Actuarial Gain (Loss)	$	(517.8)	$	(621.8)	$	(83.7)	$	(42.9)	$	31.6	$	13.6
Prior Service Credit (Cost)	(0.6)		(0.6)		(0.2)		(0.2)		2.5		2.7
	(518.4)		(622.4)		(83.9)		(43.1)		34.1		16.3
Income Tax	213.5		239.2		19.5		9.1		1.1		4.9
Total Included in Accumulated Other Comprehensive Income (Loss)	$	(304.9)	$	(383.2)	$	(64.4)	$	(34.0)	$	35.2	$	21.2

The following table provides the changes recognized in other comprehensive income for the years ended December 31, 2022 and 2021.

	Pension Benefits
	U.S. Plans				U.K. Plan				OPEB
	2022		2021		2022		2021		2022		2021
	(in millions of dollars)
Accumulated Other Comprehensive Income (Loss) at Beginning of Year	$	(383.2)	$	(494.6)	$	(34.0)	$	(54.7)	$	21.2	$	19.3
Net Actuarial Gain (Loss)
Amortization	16.3		21.3		0.4		1.3		(1.0)		—
All Other Changes	87.7		124.8		(41.2)		26.3		19.0		2.6
Prior Service Credit (Cost)
Amortization	—		—		—		—		(0.2)		(0.2)
Change in Income Tax	(25.7)		(34.7)		10.4		(6.9)		(3.8)		(0.5)
Accumulated Other Comprehensive Income (Loss) at End of Year	$	(304.9)	$	(383.2)	$	(64.4)	$	(34.0)	$	35.2	$	21.2

Plan Assets

The objective of our U.S. pension and OPEB plans is to maximize long-term return, within acceptable risk levels, in a manner that is consistent with the fiduciary standards of the Employee Retirement Income Security Act (ERISA), while maintaining sufficient liquidity to pay current benefits and expenses.

Our U.S. qualified defined benefit pension plan assets include a diversified blend of domestic, international, global, and emerging market equity securities, fixed income securities, opportunistic credit securities, real estate investments, alternative investments, and cash equivalents.  Equity securities are comprised of funds and individual securities that are benchmarked against the respective indices specified below. International and global equity funds may allocate a certain percentage of assets to forward currency contracts. Fixed income securities include funds and U.S. government and agency asset-backed securities, treasury futures contracts, corporate investment-grade bonds, private placement securities, and bonds issued by states or other municipalities. Opportunistic credits consist of investments in funds that hold varied fixed income investments purchased at

depressed values with the intention to later sell those investments for a gain. Real estate investments consist primarily of funds that hold commercial real estate investments. Alternative investments, which include private equity direct investments and private equity funds of funds, utilize proprietary strategies that are intended to have a low correlation to the U.S. stock market. Prohibited investments include, but are not limited to, unlisted securities, options, short sales, and investments in securities issued by Unum Group or its affiliates. The invested asset classes, asset types, and benchmark indices for our U.S. qualified defined benefit pension plan is as follows. We target approximately 38 percent to equity securities, 30 percent to fixed income securities, and 32 percent to opportunistic credits, alternative, and real estate investments.

Asset Class	Asset Type	Benchmark Indices
Equity Securities	Collective funds; Individual holdings	Morgan Stanley Capital International (MSCI) World Index
Fixed Income	Collective funds; Individual holdings	Bloomberg Barclays Long Corporate Index; Custom Index
Opportunistic Credits	Collective fund	Custom Index
Real Estate	Collective fund	Custom Index
Alternative Investments (Private Equity)	Fund of funds; Direct investments	Custom Index

The investment strategy for our U.K. pension includes increasing the funded ratio in a risk-controlled manner where the risk taken in the investment strategy reduces as the funded status of the plan increases. Assets for our U.K. pension plan are invested in a portfolio of diversified growth assets as well as a portfolio of fixed income and index-linked securities. The portfolio of growth assets consists of funds invested primarily in global equity securities, investment-grade and below-investment-grade fixed interest securities, including emerging market securities as well as diversified alternatives. The portfolio of fixed interest and index-linked securities are invested primarily in leveraged interest rate and inflation-linked gilt funds of varying durations designed to broadly match the interest rate and inflation sensitivities of the plan's liabilities. At December 31, 2022, our target allocation was approximately 50 percent to growth assets and 50 percent to fixed interest and index-linked securities. When the funded status of the plan increases, we utilize a de-risking framework whereby the allocation to fixed interest and index-linked securities increases and the allocation to growth assets is lowered. Simultaneously, the hedge ratio of interest rate and inflation risk will increase with the intention of reducing funding level volatility. There are no categories of investments that are specifically prohibited by the U.K. plan, but there are general guidelines that ensure prudent investment action is taken. Such guidelines include the prevention of the plan from using derivatives for speculative purposes and limiting the concentration of risk in any one type of investment.

Assets for the OPEB plan are invested in life insurance contracts issued by one of our insurance subsidiaries. The assets support life insurance benefits payable to certain former retirees covered under the OPEB plan. The terms of these contracts are consistent in all material respects with those the subsidiary offers to unaffiliated parties that are similarly situated. There are no categories of investments specifically prohibited by the OPEB plan.

We believe our investment portfolios are well diversified by asset class and sector, with no undue risk concentrations in any one category.

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. Certain prior year amounts were reclassified to conform to current year presentation.

	December 31, 2022
	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:
Global	$	57.4	$	—	$	—	$	405.7	$	463.1
Fixed Income Securities:
U.S. Government and Agencies1	194.0		21.7		—		—		215.7
Corporate	—		—		—		129.6		129.6
Non-U.S. Emerging Markets	—		—		—		54.0		54.0
Opportunistic Credits	—		—		—		132.3		132.3
Real Estate	—		—		—		164.2		164.2
Alternative Investments:
Private Equity Direct Investments	—		—		—		74.5		74.5
Private Equity Funds of Funds	—		—		—		47.6		47.6
Cash Equivalents	20.5		—		—		—		20.5
Total Invested Assets	$	271.9	$	21.7	$	—	$	1,007.9	$	1,301.5

1 U.S. Government and Agencies Fixed Income Securities includes derivative assets.

	December 31, 2021
	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	$	—	$	—	$	—	$	144.9	$	144.9
U.S. Small Cap	32.8		—		—		30.5		63.3
Global	—		—		—		388.7		388.7
Emerging Markets	—		—		—		59.8		59.8
Fixed Income Securities:
U.S. Government and Agencies1	419.3		—		—		—		419.3
Corporate	—		—		—		103.3		103.3
Opportunistic Credits	—		—		—		212.5		212.5
Real Estate	—		—		—		247.1		247.1
Alternative Investments:
Private Equity Direct Investments	—		—		—		80.4		80.4
Private Equity Funds of Funds	—		—		—		50.5		50.5
Cash Equivalents	31.9		—		—		—		31.9
Total Invested Assets	$	484.0	$	—	$	—	$	1,317.7	$	1,801.7

1 U.S. Government and Agencies Fixed Income Securities includes derivative assets.

Level 1 investments consist of individual holdings that are valued based on unadjusted quoted prices from active markets for identical securities. Level 2 investments consist of individual holdings that are valued using either directly or indirectly observable inputs other than quoted prices from active markets.

Certain equity, opportunistic credit, fixed-income securities, and real estate investments are valued based on the NAV of the underlying holdings as of the reporting date. We made no adjustments to the NAV for 2022 or 2021. These investments have no unfunded commitments and no specific redemption restrictions.

Alternative investments are valued based on NAV in a period ranging from one month to one quarter in arrears. We evaluate the need for adjustments to the NAV based on market conditions and discussions with fund managers in the period subsequent to the valuation date and prior to issuance of the financial statements. We made no adjustments to the NAV for 2022 or 2021. The private equity direct investments and private equity funds of funds generally cannot be redeemed by investors. Distributions of capital from the sale of underlying fund assets may occur at any time, but are generally concentrated between five and eight years from the formation of the fund. At December 31, 2022 and 2021, these investments had unfunded commitments of $24.5 million and $28.5 million, respectively.

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, 2022
	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
Diversified Growth Assets	$	32.3	$	—	$	—	$	8.3	$	40.6
Fixed Income and Index-linked Securities	70.6		—		—		—		70.6
Alternative Investments	—		—		—		28.1		28.1
Cash Equivalents	1.9		—		—		—		1.9
Total Invested Assets	$	104.8	$	—	$	—	$	36.4	$	141.2

	December 31, 2021
	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
Diversified Growth Assets	$	113.1	$	—	$	—	$	44.2	$	157.3
Fixed Income and Index-linked Securities	124.1		—		—		—		124.1
Alternative Investments	—		—		—		18.2		18.2
Cash Equivalents	4.1		—		—		—		4.1
Total Invested Assets	$	241.3	$	—	$	—	$	62.4	$	303.7

The level 1 diversified growth assets and fixed interest and index-linked securities consist of individual funds that are valued based on unadjusted quoted prices from active markets for identical securities. Certain diversified growth assets were valued based on the NAV of the underlying holdings as of the reporting date. Alternative investments are valued based on NAV one quarter in arrears. We evaluate the need for adjustments to the NAV of the alternative investments based on an evaluation of cash flows in the period subsequent to the valuation date and prior to issuance of the financial statements. We made no adjustments to the NAV for 2022 or 2021. These investments generally cannot be redeemed by investors. These investments had unfunded commitments at December 31, 2022 and 2021 of $17.3 million and $28.1 million, respectively.

The categorization of fair value measurements by input level for the assets in our OPEB plan is as follows:

	December 31, 2022
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in millions of dollars)
Assets
Life Insurance Contracts	$	—	$	—	$	8.5	$	8.5

	December 31, 2021
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in millions of dollars)
Assets
Life Insurance Contracts	$	—	$	—	$	9.0	$	9.0

The fair value is represented by the actuarial present value of future cash flows of the contracts.

Changes in our OPEB plan assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2022 and 2021 are as follows:

	Year Ended December 31, 2022
	Beginning of Year		Actual Return on Plan Assets		Contributions		Net Benefits and Expenses Paid		End of Year
	(in millions of dollars)
Life Insurance Contracts	$	9.0	$	0.1	$	9.5	$	(10.1)	$	8.5

	Year Ended December 31, 2021
	Beginning of Year		Actual Return on Plan Assets		Contributions		Net Benefits and Expenses Paid		End of Year
	(in millions of dollars)
Life Insurance Contracts	$	9.3	$	0.1	$	9.9	$	(10.3)	$	9.0

For the years ended December 31, 2022 and 2021, the actual return on plan assets relates solely to investments still held at the reporting date. There were no transfers into or out of Level 3 during 2022 or 2021.

Measurement Assumptions

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
	2022		2021		2022		2021		2022		2021
Benefit Obligations
Discount Rate	5.70	%	3.10	%	4.80	%	2.00	%	5.70	%	2.90	%
Rate of Compensation Increase	N/A		N/A		2.50	%	2.90	%	N/A		N/A
Net Periodic Benefit Cost
Discount Rate	3.10	%	2.90	%	2.00	%	1.40	%	2.90	%	2.60	%
Expected Return on Plan Assets	6.00	%	6.00	%	4.20	%	3.50	%	5.75	%	5.75	%
Rate of Compensation Increase	N/A		N/A		2.90	%	2.80	%	N/A		N/A

We set the discount rate assumption annually for each of our retirement-related benefit plans at the measurement date to reflect the yield on a portfolio of high quality fixed income corporate debt instruments matched against projected cash flows for future benefits.

Our long-term rate of return on plan assets assumption is selected from a range of probable return outcomes from an analysis of the asset portfolio.  Our expectations for the future investment returns of the asset categories are based on a combination of historical market performance, evaluations of investment forecasts obtained from external consultants and economists, and current market yields. The methodology underlying the return assumption includes the various elements of the expected return for each asset class such as long-term rates of return, volatility of returns, and the correlation of returns between various asset classes. The expected return for the total portfolio is calculated based on the plan's strategic asset allocation.  Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews.  Risk tolerance is established through consideration of plan liabilities, plan funded status, and corporate financial condition.

Our mortality rate assumption reflects our best estimate, as of the measurement date, of the life expectancies of plan participants in order to determine the expected length of time for benefit payments. We derive our assumptions from industry mortality tables.

The expected return assumption for the life insurance reserve for our OPEB plan is based on full investment in fixed income securities with an average book yield of 4.31 percent and 4.59 percent in 2022 and 2021, respectively.

The rate of compensation increase assumption for our U.K. pension plan is generally based on periodic studies of compensation trends.

At December 31, 2022 and 2021, the annual rates of increase in the per capita cost of covered postretirement health care benefits assumed for the next calendar year are 7.00 percent and 6.25 percent, respectively, for benefits payable to both retirees prior to Medicare eligibility as well as Medicare eligible retirees. The rates are assumed to change gradually to 5.00 percent by 2031 for measurement at December 31, 2022 and remain at that level thereafter. The annual rates of increase in the per capita cost of covered postretirement health benefits do not apply to retirees whose postretirement health care benefits are provided through an exchange.

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
	2022		2021		2020		2022		2021		2020		2022		2021		2020
	(in millions of dollars)
Service Cost	$	7.7	$	9.6	$	11.0	$	—	$	—	$	—	$	—	$	—	$	—
Interest Cost	67.2		65.0		73.0		5.0		4.2		4.9		3.0		3.0		4.1
Expected Return on Plan Assets	(105.9)		(100.6)		(106.7)		(10.9)		(9.8)		(9.5)		(0.5)		(0.5)		(0.5)
Amortization of:
Net Actuarial Loss (Gain)	16.3		21.3		18.7		0.4		1.3		1.1		(1.0)		—		—
Prior Service Cost (Credit)	—		—		0.1		—		—		—		(0.2)		(0.2)		(0.2)
Curtailment Gain	—		—		—		—		—		0.1		—		—		—
Total Net Periodic Benefit Cost (Credit)	$	(14.7)	$	(4.7)	$	(3.9)	$	(5.5)	$	(4.3)	$	(3.4)	$	1.3	$	2.3	$	3.4

The service cost component of net periodic pension and postretirement benefit cost (credit) is included as a component of compensation expense in our consolidated statements of income. All other components of net periodic pension and postretirement benefit cost (credit) are included in other expenses.

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
2023	$	84.9	$	5.4	$	10.0	$	0.1	$	9.9
2024	88.2		5.5		9.4		0.1		9.3
2025	92.1		5.7		9.0		0.1		8.9
2026	96.5		5.8		8.5		—		8.5
2027	100.6		6.0		8.1		—		8.1
2028-2032	550.6		32.4		34.0		0.1		33.9

Funding Policy

The funding policy for our U.S. qualified defined benefit pension plan is to contribute an amount at least equal to the minimum contributions required under ERISA and other applicable laws, but generally not greater than the maximum amount that can be deducted for federal income tax purposes. We had no regulatory contribution requirements for our U.S. qualified defined benefit pension plan in 2022 and made no amount of voluntary contributions during 2022. We do not expect to have regulatory contribution requirements for our U.S. qualified defined benefit pension plan in 2023, but we reserve the right to make voluntarily contributions during 2023. The funding policy for our U.S. non-qualified defined benefit pension plan, which is not subject to ERISA, is to contribute the amount necessary to satisfy the liabilities of the plan as they come due to participants. We expect to make contributions to the U.S. non-qualified defined benefit pension plan of approximately $9 million to fund the benefit payments in 2023.

We had no regulatory contribution requirements for our U.K. defined benefit pension plan in 2022 and made no amount of voluntary contributions during 2022. We do not expect to have regulatory contribution requirements for our U.K. defined benefit pension plan in 2023, but we reserve the right to make voluntarily contributions during 2023.

Our OPEB plan represents a non-vested, non-guaranteed obligation, and current regulations do not require specific funding levels for these benefits, which are comprised of retiree life, medical, and dental benefits. It is our practice to use general assets to pay medical and dental claims as they come due in lieu of utilizing plan assets for the medical and dental benefit portions of our OPEB plan.

Defined Contribution Plans

We offer a 401(k) plan to all eligible U.S. employees under which a portion of employee contributions is matched. We match dollar-for-dollar up to 5.0 percent of base salary and any recognized sales and performance-based incentive compensation for employee contributions into the plan. We also make an additional non-elective contribution of 4.5 percent of earnings for all eligible employees and made a separate transition contribution for eligible employees who met certain age and years of service criteria as of December 31, 2013. The separate transition contributions continued through December 31, 2020, at which point they ended. The 401(k) plan remains in compliance with ERISA guidelines and continues to qualify for a “safe harbor” from most annual discrimination testing.

We also offer a defined contribution plan to all eligible U.K. employees and offer related employer contributions. If an employee elects to make a minimum contribution of at least 1.0 percent of their base salary, we match with a contribution of 8.0 percent. We increase our contribution to a maximum of 12.0 percent as the employee increases their contribution from 1.0 percent to 5.0 percent. We do not increase our contribution percentage on employee contributions in excess of 5.0 percent.

During the years ended December 31, 2022, 2021, and 2020, we recognized costs of $70.9 million, $71.0 million, and $83.4 million, respectively, for our U.S. defined contribution plan. We recognized costs of $4.9 million, $4.9 million, and $5.0 million in 2022, 2021, and 2020, respectively, for our U.K. defined contribution plan.