XML 29 R17.htm IDEA: XBRL DOCUMENT v3.5.0.2
Retirement Plans
 9 Months Ended
Sep. 30, 2016
Compensation and Retirement Disclosure [Abstract]  
Retirement Plans
Retirement Plans
SICA's primary pension plan is the Retirement Income Plan for Selective Insurance Company of America (the “Pension Plan”). SICA also sponsors the Supplemental Excess Retirement Plan (the “Excess Plan”) and a life insurance benefit plan. All plans are closed to new entrants and benefits ceased accruing under the Pension Plan and the Excess Plan after March 31, 2016. For more information concerning SICA's retirement plans, refer to Note 14. “Retirement Plans” in Item 8. “Financial Statements and Supplementary Data.” of our 2015 Annual Report.

The following tables provide information regarding the Pension Plan:
 
 
Pension Plan
Quarter ended September 30,
 
Pension Plan
Nine Months ended September 30,
($ in thousands)
 
2016
 
2015
 
2016
 
2015
Net Periodic Benefit Cost:
 
 
 
 
 
 
 
 
Service cost
 
$
41

 
1,913

 
1,647

 
5,738

Interest cost
 
3,049

 
3,409

 
9,252

 
10,225

Expected return on plan assets
 
(5,006
)
 
(3,991
)
 
(12,982
)
 
(11,972
)
Amortization of unrecognized net actuarial loss
 
1,763

 
1,643

 
4,724

 
4,930

Total net periodic cost
 
$
(153
)
 
2,974

 
2,641

 
8,921



As of December 31, 2015, we anticipated contributing $11.7 million to the Pension Plan for full year 2016. Actual contributions amounted to $54.5 million in Nine Months 2016 and we do not anticipate any additional funding this year. The decrease in net periodic cost in Third Quarter 2016 reflects lower expense as a result of the contributions that were higher than our original expectation.
 
 
Pension Plan
Nine Months ended September 30,
 
 
2016
 
2015
Weighted-Average Expense Assumptions:
 
 
 
 
Discount rate
 
4.69
%
 
4.29
%
Effective interest rate for calculation of service cost
 
4.89
%
 
—
%
Effective interest rate for calculation of interest cost
 
4.02
%
 
—
%
Expected return on plan assets
 
6.37
%
 
6.27
%
Rate of compensation increase1
 
n/a

 
4.00
%

1This assumption was 4.0% through March 31, 2016, the date after which benefits ceased accruing for all participants of the Pension Plan.

Effective January 1, 2016, the approach used to calculate the service and interest components of net periodic benefit cost for the Pension Plan was changed to provide a more precise measurement of these costs. Historically, we calculated the service and interest components utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. On January 1, 2016, we elected to utilize an approach that discounts the individual expected cash flows using the applicable spot rates derived from the yield curve over the projected cash flow period. We accounted for this change prospectively as a change in accounting estimate. The decrease in service cost reflected in the table above is attributable to the discontinuation of benefit accruals for existing participants as of March 31, 2016.