Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2019

Retirement Benefits [Abstract]

Schedule of Cost of Pension Plans

Pension plan cost includes the following components:

(in thousands)
	2019			2018			2017
Service cost for benefits earned	$	33,854		$	38,052		$	31,106
Interest cost on benefit obligation	39,306			35,382			34,275
Expected return on plan assets	(47,484		)	(51,260		)	(41,267		)
Prior service cost amortization	1,394			1,353			871
Net actuarial loss amortization	5,113			12,809			9,301
Settlement cost (1)	—			—			302
Pension plan cost (2)	$	32,183		$	36,336		$	34,588

(1) The final SERP benefit for two former executives was settled with lump sum payments in 2017.

(2) Pension plan costs represent the total cost before reimbursements to Indemnity from the Exchange and its subsidiaries.

Schedule of Actuarial Assumptions Used to Measure the Year-End Obligations and Net Periodic Benefit Costs for the Subsequent Year

The following table describes the assumptions at December 31 used to measure the year-end obligations and the net periodic benefit costs for the subsequent year:

	2019		2018		2017		2016
Employee pension plan:
Discount rate	3.59	%	4.47	%	3.73	%	4.24	%
Expected return on assets	6.00		6.75		6.75		7.00
Compensation increases (1)	3.21		3.32		3.32		3.32
SERP:
Discount rate – pre-retirement/post-retirement	3.59/3.09		4.47/3.97		3.73/3.23		4.24/3.74
Rate of compensation increase	5.00		5.00		5.00		5.00

(1)

The rate of compensation increase for the employee plan is age-graded.  An equivalent single compensation increase rate of 3.21% in 2019 and 3.32% in 2018 and 2017 would produce similar results.

Schedule of Funded Status of Pension Plans and Amounts Recognized in the Statements of Financial Position

The following table sets forth the funded status of the pension plans and the amounts recognized in the Statements of Financial Position at December 31:

(in thousands)
	2019			2018
Funded status at end of year	$	(146,842	)	$	(118,596	)
Pension liabilities – due within one year (1)	$	(1,183	)	$	(1,730	)
Pension liabilities – due after one year	(145,659		)	(116,866		)
Net amount recognized	$	(146,842	)	$	(118,596	)

(1)    The current portion of pension liabilities is included in accounts payable and accrued liabilities.

Schedule of Reconciliation of Beginning and Ending Balances of the Projected Benefit Obligation, as well as the Accumulated Benefit Obligation

The following table sets forth a reconciliation of beginning and ending balances of the projected benefit obligation, as well as the accumulated benefit obligation at December 31:

(in thousands)
	2019			2018
Projected benefit obligation, beginning of year	$	886,165		$	951,666
Service cost for benefits earned	33,854			38,052
Interest cost on benefit obligation	39,306			35,382
Plan amendments	452			3,007
Actuarial loss (gain)	138,144			(123,910		)
Benefits paid	(43,454		)	(18,032		)
Projected benefit obligation, end of year	$	1,054,467		$	886,165
Accumulated benefit obligation, end of year	$	858,209		$	727,340

Schedule of Defined Benefit Pension Plans with Projected Benefit Obligations in Excess of Plan Assets

Both the defined benefit plan and the SERP had projected benefit obligations in excess of plan assets at December 31:

(in thousands)	Projected Benefit Obligation in Excess of Plan Assets
	2019		2018
Projected benefit obligation	$	1,054,467	$	886,165
Plan assets	907,625		767,569

Schedule of Defined Benefit Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets

The SERP had accumulated benefit obligations in excess of plan assets at December 31:

(in thousands)	Accumulated Benefit Obligation in Excess of Plan Assets
	2019		2018
Accumulated benefit obligation	$	23,411	$	18,908
Plan assets	—		—

Schedule of Reconciliation of Beginning and Ending Balances of the Fair Value of Plan Assets

The following table sets forth a reconciliation of beginning and ending balances of the fair value of plan assets at December 31:

(in thousands)
	2019			2018
Fair value of plan assets, beginning of year	$	767,569		$	743,900
Actual gain (loss) on plan assets	182,002			(38,360		)
Employer contributions	1,508			80,061
Benefits paid	(43,454		)	(18,032		)
Fair value of plan assets, end of year	$	907,625		$	767,569

Schedule of Amounts Included in Accumulated Other Comprehensive Loss that were Not Yet Recognized as Components of Net Benefit Costs

Net actuarial loss and prior service cost included in accumulated other comprehensive loss that were not yet recognized as components of net benefit costs were as follows:

(in thousands)
	2019		2018
Net actuarial loss	$	142,678	$	144,165
Prior service cost	10,913		11,855
Net amount not yet recognized	$	153,591	$	156,020

Schedule of Amounts Recognized in Other Comprehensive Income for Pension Plans

Amounts recognized in other comprehensive income for pension plans were as follows:

(in thousands)
	2019			2018
Net actuarial loss (gain) arising during the year	$	3,626		$	(34,290	)
Amortization of net actuarial loss	(5,113		)	(12,809		)
Amortization of prior service cost	(1,394		)	(1,353		)
Amendments (1)	452			3,007
Total recognized in other comprehensive income	$	(2,429	)	$	(45,445	)

(1)

In 2019, there was one new SERP participant. In 2018, there were five new SERP participants.

Schedule of Target and Actual Asset Allocations for the Portfolio

The target and actual asset allocations for the portfolio are as follows for the years ended December 31:

	Target asset allocation			Target asset allocation		Actual asset allocation		Actual asset allocation
Asset allocation:	2019			2018		2019		2018
Equity securities:
U.S. equity securities	27	%	(1)	25	%	28	%	24	%
Non-U.S. equity securities	18		(2)	16		18		14
Total equity securities	45			41		46		38
Debt securities	54		(3)	58		53		61
Other	1		(4)	1		1		1
Total	100	%		100	%	100	%	100	%

(1) U.S. equity securities – 22% seek to achieve excess returns relative to the Russell 2000 Index. The remaining 78% of the allocation to U.S. equity securities are comprised of equity index funds that track the S&P 500.

(2) Non-U.S. equity securities – 11% are allocated to international small cap investments, while another 20% are allocated to international emerging market investments.  The remaining 69% of the Non-U.S. equity securities are allocated to investments seeking to achieve excess returns relative to an international market index.

(3) Debt securities – 33% are allocated to long U.S. Treasury Strips, 67% are allocated to U.S. corporate bonds with an emphasis on long duration bonds rated A or better.

(4)

Institutional money market fund.

Schedule of Fair Value Measurements of Pension Plan Assets by Major Category and Level of Input

The following tables present fair value measurements for the pension plan assets by major category and level of input as of:

	December 31, 2019
	Fair value measurements of plan assets using:
(in thousands)	Total		Level 1		Level 2		Level 3
Equity securities:
U.S. equity securities	$	248,585	$	0	$	248,585	$	0
Non-U.S. equity securities	165,752		0		165,752		0
Total equity securities	414,337		0		414,337		0
Debt securities	482,497		0		482,497		0
Other	10,791		10,791		0		0
Total	$	907,625	$	10,791	$	896,834	$	0

	December 31, 2018
	Fair value measurements of plan assets using:
(in thousands)	Total		Level 1		Level 2		Level 3
Equity securities:
U.S. equity securities	$	182,495	$	0	$	182,495	$	0
Non-U.S. equity securities	110,942		0		110,942		0
Total equity securities	293,437		0		293,437		0
Debt securities	464,613		0		464,613		0
Other	9,519		9,519		0		0
Total	$	767,569	$	9,519	$	758,050	$	0

Schedule of Benefits Expected to be Paid Over the Next 10 Years from Pension Plans

The following table sets forth amounts of benefits expected to be paid over the next 10 years from our pension plans as of:

(in thousands)
Year ending December 31,		Expected future benefit payments
2020	$	23,788
2021		25,903
2022		29,031
2023		32,497
2024		35,722
2025 - 2029		229,518