THG 2018 Annual Report

The following table reflects the benefit obligations and fair value for the Chaucer plan as of December 31, 2017 and related changes in WKRVH EDODQFHV DV ZHOO DV WKH FKDQJHV WR WKRVH EDODQFHV GXULQJ SULRU WR WKH SODQ¶V GLVSRVLWLRQ LQ FRQMXQFWLRQ ZLWK WKH sale of Chaucer on December 28, 2018. DECEMBER 31 Chaucer Pension Plan (in millions) 2018 2017 Benefit obligation, beginning of period (1) $ 146.1 $ 132.2 Plan amendment 0.3 ² Interest cost 3.7 3.9 Actuarial losses (gains) (8.6) 3.2 Benefits paid (3.9) (5.8) Foreign currency translation (8.3) 12.6 Disposition of benefit obligations with the sale of Chaucer (129.3) ² Benefit obligation, end of year (1) ² 146.1 Change in plan assets: Fair value of plan assets, beginning of period 144.6 116.5 Actual return on plan assets (5.8) 14.4 Contributions ² 7.7 Benefits paid (3.9) (5.8) Foreign currency translation (8.1) 11.8 Disposition of plan assets with the sale of Chaucer (126.8) ² Fair value of plan assets, end of year ² 144.6 Funded status of the plans $ ² $ (1.5) (1) The accumulated benefit obligation for the plan is equal to the projected benefit obligation. Components of Net Periodic Pension Cost The components of total net periodic pension cost are as follows: YEARS ENDED DECEMBER 31 2018 2017 2016 (in millions) Interest cost $ 19.8 $ 21.9 $ 24.9 Expected return on plan assets (20.6) (21.4) (23.5) Recognized net actuarial loss 9.6 13.5 11.2 Net periodic pension cost $ 8.8 $ 14.0 $ 12.6 1HW SHULRGLF SHQVLRQ EHQHILW IRU &KDXFHU¶V SHQVLRQ SODQ RI PLOOLRQ PLOOLRQ DQG PLOOLRQ LQ DQG , respectively, have been reported in discontinued operations and are not included in the amounts disclosed above. During 2016, the Chaucer plan was closed to future salary accruals, which eliminated any remaining benefits to be accumulated in future periods, and resulted in a $2.4 million curtailment gain. An equal and offsetting expense was included in recognized net actuarial losses. These items are reflected in discontinued operations and not included in the amounts disclosed in the table above. The following table reflects the total amounts recognized in accumulated other comprehensive income relating to the U.S. defined benefit pension plans as of December 31, 2018 and 2017. DECEMBER 31 2018 2017 (in millions) $ 109.7 $ 100.8 109 2018 ANNUAL REPORT | THE HANOVER INSURANCE GROUP