OneBeacon Pension Plan

9 Months Ended

Sep. 30, 2016

Compensation Related Costs [Abstract]

OneBeacon Pension Plan

Note 19. OneBeacon Pension Plan

OneBeacon previously sponsored the OneBeacon qualified pension plan (the “Qualified Plan”). During the nine months ended September 30, 2016, the Qualified Plan finalized its termination by purchasing group annuity contracts from the Principal Financial Group (“Principal Financial”), and making lump sum distributions to Qualified Plan participants electing such payments, which eliminated the remaining Qualified Plan liability. In the third quarter of 2016, OneBeacon received a refund from Principal Financial related to the final settlement of the Qualified Plan and recognized a pre-tax settlement gain of $3.2 million. As of September 30, 2016, OneBeacon no longer has a projected benefit obligation with respect to the Qualified Plan. During 2016, OneBeacon transferred $47.1 million of excess invested assets from the Qualified Plan into the trust supporting the OneBeacon 401(k) Savings and Employee Stock Ownership Plan (“KSOP”), which OneBeacon determined to be the Qualified Replacement Plan (“QRP”). As of September 30, 2016, an additional $12.6 million of excess invested assets remain in the Qualified Plan trust for potential post-termination obligations of that plan, as approved in a private letter ruling from the IRS received in the first quarter of 2016. The invested assets related to both the Qualified Plan and the QRP are included in other assets and are accounted for at fair value with related income recognized in net other revenues (expenses).

OneBeacon continues to sponsor a non-qualified, non-contributory, defined benefit pension plan (“Non-qualified Plan”) covering certain 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.