Postretirement Benefits

9 Months Ended

Sep. 30, 2023

Retirement Benefits [Abstract]

Postretirement Benefits

Postretirement Benefits

Pension plans

Our pension plans consist of a noncontributory defined benefit pension plan covering substantially all employees and an unfunded supplemental employee retirement plan ("SERP") for certain members of executive and senior management. Although we are the sponsor of these postretirement plans and record the funded status of these plans, the Exchange and its subsidiaries reimburse us, or are reimbursed for, their allocated share of pension cost or income, respectively. These reimbursements represent pension benefits for employees performing administrative services and an allocated share of plan (income) cost for employees in departments that support the administrative functions. As of September 30, 2023, approximately 60% of the annual defined benefit pension income and 36% of the annual SERP cost was reimbursed to and from, respectively, the Exchange and its subsidiaries.

Our defined benefit pension plan funding policy is generally to contribute an amount equal to the greater of the target normal cost for the plan year, or the amount necessary to fund the plan to 100%. Accordingly, we made a $95 million contribution during the third quarter of 2023. The contribution generated a net benefit asset of $65.2 million and is presented separately from our unfunded plan as a non-current asset on our Statement of Financial Position as of September 30, 2023.

Pension plan (income) cost includes the following components:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Service cost for benefits earned	$	7,190	$	12,560	$	21,572	$	37,681
Interest cost on benefit obligation	12,548		9,941		37,644		29,823
Expected return on plan assets	(17,217)		(13,639)		(51,652)		(40,917)
Prior service cost amortization	362		361		1,085		1,082
Net actuarial (gain) loss amortization	(3,833)		1,830		(11,498)		5,490
Pension plan (income) cost (1)	$	(950)	$	11,053	$	(2,849)	$	33,159

(1)Pension plan (income) cost represents plan (income) cost before reimbursements between Indemnity and the Exchange and its subsidiaries. The components of pension plan (income) cost other than the service cost components are included in the line item "Other income" in the Statements of Operations, net of reimbursements between Indemnity and the Exchange and its subsidiaries.