BENEFIT PLANS

The Company has a participant-directed defined contribution plan available to substantially all employees.

Participants may elect to make deferral contributions to a retirement savings account of up to 50% of eligible pay, subject to IRS limits. The Company will make a matching contribution of up to 5% of the participant’s

compensation for each pay period. The costs of the Company’s matching contributions were $5.8, $5.7, and $5.6 for the years ended December 31, 2014, 2013, and 2012, respectively.

Employees also participate in a defined contribution retirement savings plan under which the Company makes additional contributions to the employee’s retirement savings account. The amount of contribution is age-weighted ranging from 2.0% to 8.0% of eligible compensation. No contributions are required by employees under this plan.

Contributions of $10.5, $9.8, and $9.6 were made for the retirement savings plan for the years ended December 31, 2014, 2013, and 2012, respectively.

The Company provides retirement benefits to its employees hired prior to January 1, 2006, under a qualified non-contributory defined benefit pension plan. It provides additional benefits to certain employees whose retirement benefits exceed maximum amounts permitted by current tax law under an unfunded, nonqualified pension plan.

Benefits under both plans are based on years of service and the average of the employee’s highest consecutive five years of compensation. Accrued costs represent estimates based upon current information. Those estimates are subject to change due to changes in the underlying information supporting such estimates in the future. These defined benefit pension plans were frozen effective December 31, 2011, at which time employees in the plans ceased accruing benefits under the plans and commenced participation in the Company's defined contribution retirement savings plan.

In 2014 the Company offered eligible former employees a voluntary lump-sum payment option in lieu of future benefit payments under the qualified pension plan. Approximately 4.6%, or $30.8, of the projected benefit

obligation of the plan was settled as a result of lump-sum payments made to those who accepted the offer. A settlement loss of $11.0 was recognized in net periodic benefit cost reflecting the accelerated recognition of unamortized losses proportionate to the obligation that was settled.

MUNICH RE AMERICA CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

In accordance with IRS funding regulation, no minimum funding contribution was required to be made in 2014, however, the Company made a discretionary contribution of $89.2 in 2014 for the 2013 plan year. No minimum funding contribution is required to be made for the 2014 plan year.

The Company also provides post retirement health care benefits to individuals who are over the age of 60, or who had attained age 55 as of December 31, 2011, and have ten years of service. To be eligible for the post retirement health care benefits, an employee must also be covered under a Company medical insurance plan at the time of their separation of employment. The plan benefit cost to the Company is capped at 150% of the cost as of January 1, 2009. Additional costs above the cap are paid by retiree contributions. The Company funds its obligation currently.

The following table provides a reconciliation of the changes in the plans’ benefit obligations and fair value of assets over the years ended December 31, 2014 and 2013, and the funded status at December 31:

2014 2013 2014 2013

The amounts recognized in the consolidated balance sheets at December 31, were as follows:

2014 2013 2014 2013

The accumulated benefit obligation of the Company’s qualified pension plan was $648.7 at December 31, 2014, and exceeded the plan assets of $563.7 at that date. The accumulated benefit obligation of the Company’s qualified pension plan was $509.8 at December 31, 2013, and exceeded the plan assets of $448.9 at that date. The

accumulated benefit obligation of the Company’s nonqualified pension plan was $98.8 and $77.9 at December 31, 2014 and 2013, respectively. There are no plan assets in the nonqualified plan due to the nature of the plan.

MUNICH RE AMERICA CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

F-34

The following information is provided for pension plans with accumulated benefit obligations in excess of plan assets at December 31:

2014 2013

Projected benefit obligation $ 747.5 $ 587.7 Accumulated benefit obligation 747.5 587.7

Fair value of plan assets 563.7 448.9

The weighted average assumptions used in the measurement of the Company’s benefit obligation at December 31, 2014 and 2013, are shown in the following table:

2014 2013 2014 2013

Discount rate 3.81 % 4.73 % 3.68 % 4.42 %

Pension Benefits Other Benefits

The weighted average asset allocations for the qualified pension plan at December 31, 2014 and 2013 were as follows:

2014 2013

Fixed income securities 89.9 % 64.3 %

Equity securities 9.8 35.4

Cash and short term money funds 0.3 0.3

Total plan assets 100.0 % 100.0 %

The overall objective of the qualified pension plan is to provide for full and timely payment of retirement benefits utilizing investment policies designed to maintain adequate funding for the plan’s liability over time. The plan seeks to produce a return on investments based on levels of liquidity and investment risk that are prudent and reasonable, given prevailing market conditions, and recognizing the importance of the preservation of capital.

Investment strategies and asset allocations are based on careful consideration of plan liabilities and expected cash flows, the plan's funded status and our financial condition. Investment performance and asset allocation are measured and monitored on an ongoing basis.

The plan asset portfolio is comprised of fixed income and equity securities. The goal of the fixed income investments is to generate current income and provide stable periodic returns, while the goal of the equity investments is to maintain the long term growth of the plan assets. With the goal of reducing market risk and matching asset duration with expected benefit cash flows, in 2014 the Company revised the target allocations of the plan asset portfolio to 90% fixed income securities, balanced between medium and long-term duration, and 10%

equity securities. Below investment-grade fixed income securities are excluded from the asset allocation.

MUNICH RE AMERICA CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

The pension plan assets in trust are categorized in accordance with the fair value hierarchy established by ASC 820, as of December 31 2014 and 2013, as follows:

Level 1 Level 2 Level 3 Total