OneBeacon Pension Plan

3 Months Ended

Mar. 31, 2016

Compensation Related Costs [Abstract]

OneBeacon Pension Plan

OneBeacon Pension Plan

OneBeacon previously sponsored the OneBeacon qualified pension plan (the “Qualified Plan”). During the three months ended March 31, 2016, the Qualified Plan finalized its termination by purchasing group annuity contracts from the Principal Financial Group and making lump sum distributions to Qualified Plan participants electing such payments, which eliminated the remaining Qualified Plan liability. As a result of these transactions, OneBeacon recognized a pre-tax pension settlement charge of $0.3 million and no longer has a projected benefit obligation with respect to the Qualified Plan as of March 31, 2016. OneBeacon continues to hold $55.4 million of excess invested assets, of which it expects to transfer the majority of the assets to a new trust that will fund future contributions to a defined contribution qualified replacement plan during 2016. A portion of the assets will be left in the trust in order to wind-down potential post-termination obligations of the Qualified Plan, as approved by way of a March 2016 private letter ruling from the IRS.

These invested assets are included in other assets and are accounted for at fair value. The annuity purchase is subject to a final true-up, anticipated in the second quarter of 2016, to the extent actual experience is different than expected up until OneBeacon ceases administrating claims payments on June 1, 2016.

OneBeacon continues to sponsor a non-qualified, non-contributory, defined benefit pension plan (“Non-qualified Plan”)covering substantially all employees who were employed as of December 31, 2001 and former employees who had met the eligibility requirements, as well as retirees. The Non-qualified Plan was frozen and curtailed in 2002, resulting in the pension benefit obligation being equal to the accumulated benefit obligation. The benefits are based primarily on years of service and employees’ compensation through December 31, 2002. OneBeacon’s funding policy is generally to contribute amounts to satisfy actual disbursements for the calendar year.