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Retirement Plans
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Retirement Plans Retirement Plans
(a) Selective Insurance Retirement Savings Plan (“Retirement Savings Plan”) and the Selective Insurance Company of America Deferred Compensation Plan ("Deferred Compensation Plan")
SICA offers a voluntary defined contribution 401(k) plan that is available to most of our employees and is a tax-qualified retirement plan subject to ERISA.  In addition, SICA offers a Deferred Compensation Plan to a group of management or highly compensated employees as a method of recognizing and retaining such employees. Expenses recorded for these plans were $18.6 million in 2020, $17.3 million in 2019, and $16.2 million in 2018.

(b) Retirement Income Plan
SICA maintains a defined benefit pension plan, the Retirement Income Plan for Selective Insurance Company of America (the "Pension Plan"). This qualified, noncontributory plan is closed to new entrants and existing participants ceased accruing benefits after March 31, 2016.
The following tables provide details on the Pension Plan for 2020 and 2019:
December 31,Pension Plan
($ in thousands)20202019
Change in Benefit Obligation:  
Benefit obligation, beginning of year$391,021 334,679 
Interest cost11,312 13,506 
Actuarial losses35,276 54,478 
Benefits paid(12,448)(11,642)
Benefit obligation, end of year$425,161 391,021 
Change in Fair Value of Assets:  
Fair value of assets, beginning of year$385,087 331,680 
Actual return on plan assets, net of expenses60,077 63,949 
Contributions by the employer to funded plans— 1,100 
Benefits paid(12,448)(11,642)
Fair value of assets, end of year$432,716 385,087 
Funded status$7,555 (5,934)
Amounts Recognized in the Consolidated Balance Sheet:  
Assets$7,555 — 
Liabilities— (5,934)
Net pension assets (liabilities), end of year$7,555 (5,934)
Amounts Recognized in AOCI:  
Net actuarial loss$101,414 107,125 
Other Information as of December 31:  
Accumulated benefit obligation$425,161 391,021 
Weighted-Average Liability Assumptions as of December 31:  
Discount rate2.68 %3.33 

 Pension Plan
($ in thousands)202020192018
Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income:   
Net Periodic Benefit Cost (Benefit):   
Interest cost$11,312 13,506 12,428 
Expected return on plan assets(21,907)(21,114)(22,767)
Amortization of unrecognized actuarial loss2,817 2,575 1,981 
Total net periodic pension cost (benefit)1
$(7,778)(5,033)(8,358)
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:   
Net actuarial (gain) loss$(2,894)11,643 12,600 
Reversal of amortization of net actuarial loss(2,817)(2,575)(1,981)
Total recognized in other comprehensive income$(5,711)9,068 10,619 
Total recognized in net periodic benefit cost and other comprehensive income$(13,489)4,035 2,261 
1The components of net periodic pension cost (benefit) are included within "Loss and loss expense incurred" and "Other insurance expenses" on the Consolidated Statements of Income.

 Pension Plan
202020192018
Weighted-Average Expense Assumptions for the years ended December 31:   
Discount rate3.33 %4.46 3.78 
Expected return on plan assets5.80 6.50 6.36 
Our latest measurement date was December 31, 2020, at which time we decreased our expected return on plan assets to 5.40%, due to lower expected returns within our longer-dated fixed income portfolio, as interest rates declined significantly year-over-year.
 
When determining the most appropriate discount rate to be used in the valuation, we consider, among other factors, our expected payout patterns of the Pension Plan's obligations as well as our investment strategy, and we ultimately select the rate that we believe best represents our estimate of the inherent interest rate at which our pension benefits can be effectively settled. The approach we utilize discounts the individual expected cash flows using the applicable spot rates derived from the yield curve over the projected cash flow period. Our discount rate decreased 65 basis points, to 2.68%, as of December 31, 2020, compared to 3.33% as of December 31, 2019, which drove the increase in the benefit obligation for the period. The weighted average discount rate used to determine 2021 interest cost was 2.06%.

Pension Plan Assets
Assets of the Pension Plan are invested to adequately support the liability associated with the Pension Plan's defined benefit obligation. Our return objective is to exceed the returns of the plan's policy benchmark, which is the return the plan would have earned if the assets were invested according to the target asset class weightings and earned index returns shown below. In 2021, we will continue to phase in adjustments to the asset allocation to steadily close the gap between the duration of the assets and the duration of the liabilities, provided certain improved funding targets are achieved. Over time, the target and actual asset allocations may change based on the funded status of the Pension Plan and market return expectations.
     
The Pension Plan’s target ranges, as well as the actual weighted average asset allocation by strategy, at December 31 were as follows: 
 20202019
Target PercentageActual PercentageActual Percentage
MinimumMaximum
Return seeking assets1
50 %70%64 %59 %
Liability hedging assets70 %80%35 %38 %
Short-term investments--1 %3 %
Total100 %100 %100 %100 %
1Includes limited partnerships.

The use of derivative instruments is permitted under certain circumstances for the Pension Plan portfolio, but may not be used for unrelated speculative purposes or to create exposures that are not permitted in the Pension Plan's investment guidelines. We currently invest in a U.S. Treasury overlay derivative strategy, within the funds in our liability hedging assets, to manage the interest rate duration mismatch between the assets and liabilities of the Pension Plan to help insulate the funded status of the plan. Considering the impact of this derivative overlay, the liability hedging assets provide for an approximate 65% hedge against the projected benefit obligation.

The Pension Plan had no investments in the Parent’s common stock as of December 31, 2020 or 2019. For information regarding investments in funds of our related parties, refer to Note 18. "Related Party Transactions" below.

The techniques used to determine the fair value of the Pension Plan's invested assets that appear on the following page are as follows:

•The investments in the equities and liability hedging funds include collective investment funds and fund of funds that utilize a market approach wherein the published prices in the active market for identical assets are used. These investments are traded at their net asset value per share. These investments are classified as Level 1 in the fair value hierarchy.
•The investments in private limited partnerships are valued utilizing net asset value as a practical expedient for fair value.  These investments are not classified in the fair value hierarchy.
•Short-term investments are recorded at fair value.  Given that these investments are listed on active exchanges, coupled with their liquid nature, these investments are classified as Level 1 in the fair value hierarchy.
•The deposit administration contract is recorded at cost, which approximates fair value.  Given the liquid nature of the underlying investments in overnight cash deposits and other short-term duration products, we have determined that a correlation exists between the deposit administration contract and other short-term investments, such as money market funds.  As such, this investment is classified as Level 2 in the fair value hierarchy.

For discussion regarding the levels within the fair value hierarchy, see Note 2. "Summary of Significant Accounting Policies."
In addition, refer to Note 5. "Investments" for discussion regarding the limited partnership investment strategies, excluding the secondary private equity and direct lending strategies as these investments are currently not part of the Pension Plan's investment portfolio.

The following tables provide quantitative disclosures of the Pension Plan’s invested assets that are measured at fair value on a recurring basis:
December 31, 2020 Fair Value Measurements at 12/31/20 Using
($ in thousands)Assets Measured at Fair Value At 12/31/20Quoted Prices in Active Markets for Identical Assets/ Liabilities
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
Description    
Return seeking assets:
Equities:
Global equity$142,320 142,320 — — 
Diversified credit73,762 73,762 — — 
Real assets61,585 61,585 — — 
Total equities277,667 277,667 — — 
Limited partnerships (at net asset value)1:
Real assets73 — — — 
Private equity400 — — — 
Private credit29 — — — 
Total limited partnerships502 — — — 
Total return seeking assets278,169 277,667 — — 
Liability hedging assets:
Fixed income99,490 99,490 — — 
U.S. Treasury overlay52,756 52,756 — — 
Total liability hedging assets152,246 152,246 — — 
Cash and short-term investments:
Short-term investments3,273 3,273 — — 
   Deposit administration contracts2,073 — 2,073 — 
   Total cash and short-term investments 5,346 3,273 2,073 — 
   Total invested assets$435,761 433,186 2,073 — 
December 31, 2019 Fair Value Measurements at 12/31/19 Using
($ in thousands)Assets Measured at Fair Value At 12/31/19Quoted Prices in Active Markets for Identical Assets/ Liabilities
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
Description    
Return seeking assets:
Equities:    
Global equity$113,212 $113,212 — — 
Diversified credit59,009 59,009 — — 
Real assets57,414 57,414 — — 
Total equities229,635 229,635 — — 
Limited partnerships (at net asset value)1:
 
Real assets228 — — — 
Private equity583 — — — 
Private credit43 — — — 
Total limited partnerships854 — — — 
   Total return seeking assets230,489 229,635 — — 
Liability hedging assets:
Fixed income114,395 114,395 — — 
U.S. Treasury overlay30,997 30,997 — — 
Total liability hedging assets145,392 145,392 — — 
Cash and short-term investments:  
Short-term investments8,824 8,824 — — 
   Deposit administration contracts2,215 — 2,215 — 
   Total cash and short-term investments 11,039 8,824 2,215 — 
   Total invested assets$386,920 383,851 2,215 — 
1In accordance with ASU 2015-07, certain investments that are measured at fair value using the net asset value per share (or its practical expedient) have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to total Pension Plan invested assets.

Contributions
We presently do not anticipate contributing to the Pension Plan in 2021, as we have no minimum required contribution amounts.
 
Benefit Payments
($ in thousands)Pension Plan
Benefits Expected to be Paid in Future 
Fiscal Years: 
2021$14,658 
202215,213 
202316,408 
202417,439 
202518,440 
2026-2030105,076