UNITED FIRE GROUP INC — Annual Report 2015

Jun 23, 2015

11-K 1 form11-k2014.htm 11-K html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd" Document created using Wdesk 1 Copyright 2015 Workiva Form 11-K 2014

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 11-K

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þ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

OR

o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-34257

UNITED FIRE GROUP 401(k) PLAN

(Full title of the plan)

United Fire Group, Inc.

(Name of issuer of the securities held pursuant to the plan)

118 Second Avenue SE

Cedar Rapids, IA 52401

(Address of principal executive office)

United Fire Group 401(k) Plan

TABLE OF CONTENTS

Report of Independent Registered Public Accounting Firm	1
Financial Statements:
Statements of Net Assets Available for Benefits at December 31, 2014 and 2013	2
Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2014	3
Notes to Financial Statements	4
Supplemental Schedule:
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year) as of December 31, 2014	12
Signature	14
Exhibit 23.1 Consent of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

Board of Trustees

United Fire Group 401(k) Plan

Cedar Rapids, Iowa

We have audited the accompanying statements of net assets available for benefits of the United Fire Group 401(k) Plan (the Plan) as of December 31, 2014 and 2013 , and the related statement of changes in net assets available for benefits for the year ended December 31, 2014 . These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2014 and 2013 , and the changes in its net assets available for benefits for the year ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.

The supplemental schedule of assets (held at end of year) (supplemental information) has been subjected to audit procedures performed in conjunction with the audit of the Plan's financial statements. The supplemental information is the responsibility of the Plan's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

/s/ Clifton Larson Allen LLP
Clifton Larson Allen LLP

Cedar Rapids, Iowa

June 23, 2015

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United Fire Group 401(k) Plan

Statements of Net Assets Available for Benefits

December 31, 2014 and 2013

(In thousands)	2014		2013
Assets
Investments:
Participant-directed investments, at fair value	$ 78,013		$ 73,500
Receivables:
Notes receivable from participants	407		534
Net Assets Available for Benefits at Fair Value	78,420		74,034
Adjustment from fair value to contract value for fully benefit-responsive investment contracts	(12	)	(11	)
Net Assets Available for Benefits	$ 78,408		$ 74,023

See accompanying notes to financial statements.

2

United Fire Group 401(k) Plan

Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2014

(In thousands)
Additions
Contributions:
Participant	$ 4,738
Rollover	606
Total contributions	5,344
Investment income	3,995
Net realized and unrealized appreciation in fair value of investments	1,090
Total additions	$ 10,429
Deductions
Benefit payments and withdrawals	$ 5,965
Administrative expenses	79
Total deductions	$ 6,044
Increase in Net Assets Available for Benefits	$ 4,385
Net Assets Available for Benefits:
At Beginning of Year	74,023
At End of Year	$ 78,408

See accompanying notes to financial statements.

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United Fire Group 401(k) Plan

NOTES TO FINANCIAL STATEMENTS

December 31, 2014 and 2013

(Amounts in thousands, unless otherwise noted)

NOTE 1. PLAN DESCRIPTION

The following description of the United Fire Group 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan's provisions.

General - The Plan is a defined contribution plan covering regular employees of United Fire Group, Inc. and its consolidated subsidiaries (the "Companies") who have at least one hour of service and have attained the age of 21. Temporary employees who have at least 1,000 hours of service and have attained the age of 21 may also participate. United Fire & Casualty Company, a subsidiary of United Fire Group, Inc., serves as the plan administrator and "Plan Sponsor". The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

Contributions - The Plan includes an auto-enrollment provision whereby all newly eligible employees are automatically enrolled in the Plan unless they affirmatively elect not to participate in the Plan. Automatically enrolled participants have their deferral rate set at 3% of eligible compensation, and their contributions invested in the designated default fund until changed by the participant.

Each year, participants may elect to contribute up to an annual dollar limitation of their eligible compensation to the Plan through salary deferral. Participants have the option to contribute either through pre-tax 401(k) contributions, Roth 401(k) contributions or a combination of the two. The Plan also provides for discretionary contributions by the participating employers to the Plan in such amounts as the Board of Directors of the Plan Sponsor shall direct.

Participant Accounts - Individual accounts are maintained for each Plan participant. Each participant's account is credited with the participant's contribution and allocations of (a) discretionary contributions, if any, and (b) Plan earnings, and charged with an allocation of Plan losses. Allocations are based on participant earnings, losses or account balances, as defined in the Plan agreement. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account.

Participants direct the investment of employer and participant contributions into various investment options offered by the Plan. Participants may change their investment options daily. The Plan currently offers nineteen mutual funds, six common collective trusts, one pooled separate account, an employer stock fund and a self-directed retirement account in which participants have access to multiple investment options.

Vesting - Participants are immediately vested in their contributions plus actual earnings or losses thereon. Vesting in the remainder of the participant account balances is based on years of continuous service, with full vesting after two years. A participant with less than two years of credited service is not vested except in the event of the participant's death or disability while employed by one of the Companies, at which time the participant becomes 100 percent vested.

Forfeitures - Upon termination, the non-vested portion of a participant's account balance is forfeited. Forfeitures are to be used to first reduce the Plan's ordinary and necessary administrative expenses for the Plan year and then reduce the employer contributions for the Plan year. Because there have been no unvested account balances since the inception of the Plan, there were no forfeited account balances included in the Plan's net assets available for benefits at December 31, 2014 or 2013 .

Notes Receivable from Participants - Participants may borrow from their accounts a minimum of $1 up to a maximum equal to the lesser of $50 or 50 percent of their vested account balance. Loan terms range from one to five years, except for the purpose of acquiring the participant's principal residence for which the term is commensurate with local prevailing terms, as determined by the Companies. The loans are secured by the balance in the participant's account and bear interest at a rate determined at the time of each loan by Charles Schwab Trust

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Company, which serves as the "Plan Custodian". Principal and interest is paid ratably through semi-monthly payroll deductions.

Payment of Benefits - Upon termination of service, a participant may elect to receive either a direct rollover, a lump-sum amount equal to the value of their vested account or installment payments over a fixed period of time not to exceed the participant's life expectancy or the joint life expectancy of the participant and the participant's designated beneficiary. Prior to separation from service, participants may elect a hardship distribution in accordance with the Plan agreement. Additionally, prior to separation from service, participants are eligible for an in-service withdrawal after they have reached the age of 59 1 / 2 .

If a benefit payment is distributed to the participant by check and remains unsettled after 180 days, the participant must contact the plan administrator to have the check reissued. If the participant cannot be located and the amount is over $5, the check is canceled and an account is reestablished for the participant. If the participant cannot be located and the amount is less than $5, the check is canceled and the funds are forfeited back to the Plan.

Administrative Expenses - The Plan's administrative expenses are paid by either the Plan or the Companies, as provided by the Plan agreement. The Companies paid substantially all administrative expenses for the Plan in 2014 .

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting - The financial statements of the Plan are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).

Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and changes therein during the reporting period. Actual results could differ from those estimates.

The Plan offers various investment instruments to its participants. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and those changes could materially affect the amounts reported in the accompanying financial statements.

Valuation of Participant-Directed Investments and Participant Loans - Investment contracts held by a defined contribution plan are reported at fair value. However, contract value is the relevant measurement attribute for the portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. Accordingly, the accompanying statements of net assets available for benefits presents the fair value and the corresponding adjustment from fair value to contract value for these investments.

The Plan invests in fully benefit-responsive investment contracts through a pooled separate account. The pooled separate account is designed to deliver safety and stability by preserving principal and accumulating earnings. The contract value of the fully benefit-responsive investment contracts represents contributions plus earnings, less participant withdrawals and administrative expenses.

Investments in common collective trusts are stated at fair value based on the audited net asset values of the respective funds, which have an investment mix that is diversified across several asset classes and designed to provide its investors with a single investment portfolio that adjusts over time to meet the changing risk and return objectives of investors to a target retirement date.

Investments in mutual funds are stated at fair value based on quoted market prices reported on recognized securities exchanges on the last business day of the year, which represent the net asset values of shares held by the Plan in the respective funds at the reporting date.

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Investments in the United Fire Stock Fund are stated at fair value based on quoted market prices of United Fire Group, Inc. common stock. Included in the fund is an immaterial amount of interest-bearing cash.

The money market fund in the self-directed retirement account is stated at cost, which approximates fair value. Common stock included in self-directed retirement accounts is stated at fair value based on quoted market prices. Unit investment trusts included in self-directed retirement accounts are stated at fair value based on the audited net asset values of the respective funds.

Notes receivable from participants represent participant loans that are recorded at their unpaid principal balance plus any accrued but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. Related fees are recorded as administrative expenses and are expensed when they are incurred.

Recognition of Investments - Purchases and sales of investments are recorded as of the trade date. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation (depreciation) includes the Plan’s gains and losses on investments purchased and sold as well as held during the year.

Contributions - Participant contributions are made through payroll deductions and recorded in the period in which the deductions are made.

Withdrawals - Participant withdrawals are recorded upon distribution.

Subsequent Events - In the preparation of the accompanying financial statements, the Plan Sponsor has evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure in the Plan's financial statements.

NOTE 3. FAIR VALUE MEASUREMENT

Current accounting guidance on fair value measurements includes the application of a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Plan's financial instruments are categorized into a three-level hierarchy, which is based upon the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (i.e., Level 1) and the lowest priority to unobservable inputs (i.e., Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the financial instrument.

Financial instruments recorded at fair value are categorized in the fair value hierarchy as follows:

• Level 1 : Valuations are based on unadjusted quoted prices in active markets for identical financial instruments that we have the ability to access.

• Level 2 : Valuations are based on quoted prices for similar financial instruments, other than quoted prices included in Level 1, in markets that are not active or on inputs that are observable either directly or indirectly for the full term of the financial instrument.

• Level 3 : Valuations are based on pricing or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument.

Transfers between levels, if any, are recorded as of the beginning of the reporting period.

The fair value of the majority of the Plan's investments is determined using a market-based approach with prices obtained for the Plan's investments by the Plan Custodian which prices the investments daily using independent pricing sources. One price is obtained for each Plan investment, which is evaluated for reasonableness prior to its use for reporting purposes. The valuation technique and market inputs that our Plan Custodian normally seeks to value our securities include the following, depending on the security type: net asset value calculated and reported by the

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issuer or its agent, last trade, bids and closing price. The valuation technique and inputs for the Plan's securities are the same regardless of industry category, credit quality, duration, geographical concentration or economic characteristics. The Plan Sponsor has determined that the pricing obtained at December 31, 2014 and 2013 was reasonable.

In order to determine the proper classification of each Plan investment in the fair value hierarchy, the Plan Custodian's pricing procedures and inputs used to price the type or group of securities, which include unadjusted quoted market prices for similar securities and other inputs that are observable for the type or group of securities, are obtained and evaluated by the Plan Sponsor throughout the reporting period. The Plan Sponsor has determined that these processes and inputs result in fair values and classifications consistent with the applicable accounting guidance on fair value measurements. The Plan's fair value hierarchy categorizations are also reviewed on an annual basis, at which time the classification of certain investments may change if the input observations have changed.

The following tables present the categorization of the Plan's investments measured at fair value on a recurring basis in the accompanying statements of net assets available for benefits at December 31, 2014 and 2013 :

Description	December 31, 2014	Fair Value Measurements — Level 1	Level 2	Level 3
Mutual funds:
U.S.
Balanced funds	$ 2,660	$ 2,660	$ —	$ —
Growth funds	17,802	17,802	—	—
Index funds	7,252	7,252	—	—
Value funds	7,889	7,889	—	—
Other funds	7,220	7,220	—	—
U.S. total	42,823	42,823	—	—
International	11,106	11,106	—	—
Mutual funds total	53,929	53,929	—	—
Common collective trusts	12,667	—	12,667	—
United Fire Stock Fund	1,978	1,978	—	—
Pooled separate account	8,209	—	8,209	—
Self directed brokerage accounts:
Money market funds	98	98	—	—
Mutual funds	547	547	—	—
Common stock	229	229	—	—
Unit investment trusts	356	—	356	—
Total investments	$ 78,013	$ 56,781	$ 21,232	$ —

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Description	December 31, 2013	Fair Value Measurements — Level 1	Level 2	Level 3
Mutual funds:
U.S.
Balanced funds	$ 2,199	$ 2,199	$ —	$ —
Growth funds	16,889	16,889	—	—
Index funds	6,034	6,034	—	—
Value funds	7,129	7,129	—	—
Other funds	6,753	6,753	—	—
U.S. total	39,004	39,004	—	—
International	11,453	11,453	—	—
Mutual funds total	50,457	50,457	—	—
Common collective trusts	11,625	—	11,625	—
United Fire Stock Fund	1,828	1,828	—	—
Pooled separate account	8,006		8,006
Self directed brokerage accounts:
Money market funds	134	134	—	—
Mutual funds	715	715	—	—
Common stock	249	249	—	—
Unit investment trusts	486	—	486	—
Total investments	$ 73,500	$ 53,383	$ 20,117	$ —

The fair value of investments categorized as Level 1 is determined based on quoted market prices that are readily and regularly available.

The fair value of the common collective trusts categorized as Level 2 is determined based on the net asset value and other financial information reported in the audited financial statements of the respective funds, which are obtained from the Plan Custodian. No special criteria exists that qualify the ability to redeem the investment or require redemption notification other than daily notification. The investments have no unfunded commitments.

The pooled separate account invests in fully benefit-responsive investment contracts and is designed to deliver safety and stability by preserving principal and accumulating earnings. The fair value is estimated by the administrator of the fund based on the value of the underlying assets owned by the fund. The fair value measurement is classified within Level 2 of the fair value hierarchy. There are no imposed participant-directed redemption restrictions. No special criteria exists that qualify the ability to redeem the investment or require redemption notification other than daily notification. The investment has no unfunded commitments.

The net asset value of the respective funds is determined each business day with issuances and redemptions of units of the funds made based on the net asset value per unit as determined on the valuation date. No adjustments to the net asset value as reported in the audited financial statements of the respective funds have been made by the Plan Sponsor. Such estimated fair values do not necessarily represent the values for which these investments could have been sold at the reporting date. However, there are no restrictions as to the Plan's ability to redeem its investment at the net asset value of the respective funds as of the reporting date. The underlying assets that comprise each of the common collective trusts include investments in registered investment companies, unitized accounts, other collective trust funds, and fully benefit-responsive alternative and synthetic guaranteed investment contracts. Except for certain of the fully benefit-responsive investment contracts, all of these financial instruments have been categorized as either Level 1 or Level 2 in the fair value hierarchy as reported in the audited financial statements of the respective funds.

There were no transfers between Level 1 and Level 2 investments in 2014 or 2013 .

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NOTE 4. INVESTMENTS

The Charles Schwab Trust Company serves as the trustee of the Plan and the custodian of the Plan's assets. The Plan's investments that represented five percent or more of the Plan's net assets available for benefits at fair value as of December 31, 2014 and 2013 are as follows:

(in thousands, except per share amounts) — Identity of Issuer	Description of Investment	Shares	December 31 — 2014	2013
New York Life Insurance Company	New York Life Anchor Account III	8,197,363 shares at December 31, 2014	$ 8,197	$ 8,006
		7,994,732 shares at December 31, 2013
Charles Schwab & Co., Inc.*	Schwab S&P 500 Index Fund	225,494 shares at December 31, 2014	7,252	6,034
		209,139 shares at December 31, 2013
Pacific Investment Mgmt Co LLC	PIMCO Total Return Fd Cl D	545,890 shares at December 31, 2014	5,819	5,650
		528,488 shares at December 31, 2013
American Funds	Growth Fund of America	125,755 shares at December 31, 2014	5,328	5,177
		121,186 shares at December 31, 2013
T Rowe Price	T Rowe Price Mid Cap Value	160,196 shares at December 31, 2014	4,617	4,382
		145,819 shares at December 31, 2013
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - 2030	162,638 shares at December 31, 2014	4,212	3,980
		163,168 shares at December 31, 2013
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - 2020	166,840 shares at December 31, 2014	3,969	4,051
		180,126 shares at December 31, 2013

*Indicates a party-in-interest to the Plan.

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The Plan recorded realized and unrealized appreciation or depreciation on the fair value of its investments for the year ended December 31, 2014 as follows:

Identity of Issuer	Description of Investment	Appreciation/ (Depreciation)
Mutual Funds
American Century Investments	American Century Capital	$ 30
Artisan Funds	Artisan International Fund	(52	)
Cohen & Steers Capital Mgmt.	Cohen & Steers Realty	245
Columbia Funds	Columbia Acorn Fund CL Z	(243	)
Dodge & Cox Fund	Dodge & Cox Balanced Fund	79
First Eagle of America, Inc.	First Eagle Fund of America	111
First Eagle of America, Inc.	First Eagle Overseas Fund I	(190	)
Gabelli Asset Management, Inc.	Gamco Westwood Balanced	(11	)
American Funds	Growth Fund of America	(15	)
Hartford Mutual Fund	Hartford Small Co Y	(47	)
American Funds	High Income Trust R4	(100	)
JP Morgan Asset Management	JP Morgan Mid Cap Growth Select	25
Lazard Asset Management Pacific Co	Lazard Emerging Markets Open	(113	)
Janus Fund	Perkins Small Cap Value T	(225	)
Pacific Investment Mgmt Co LLC	PIMCO Total Return Fd Cl D	(18	)
T Rowe Price	T Rowe Price Dividend Growth	205
T Rowe Price	T Rowe Price Mid Cap Value	(136	)
T Rowe Price	T Rowe Price New America Growth	(104	)
Charles Schwab & Co., Inc.*	Schwab S & P 500 Index Fund	733
Common Collective Trusts
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - Income	15
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - 2010	33
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - 2020	233
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - 2030	252
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - 2040	136
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - 2050	60
Pooled Separate Accounts
New York Life Insurance Company	New York Life Anchor Account III	12
Common Stock
United Fire Group, Inc.*	United Fire Stock Fund	112
Self Directed Brokerage Accounts
Charles Schwab & Co., Inc.*	Schwab - Personal Choice Accounts	63
		$ 1,090

*Indicates a party-in-interest to the Plan.

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NOTE 5. PLAN TERMINATION

Although it has not expressed any intention to do so, United Fire & Casualty Company has the right under the Plan agreement to terminate the Plan subject to the provisions set forth in ERISA. In the event of termination of the Plan, the accounts of each affected participant become fully vested.

NOTE 6. FEDERAL INCOME TAX STATUS

The Plan has received a determination letter from the Internal Revenue Service (IRS) dated August 6, 2010, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and therefore the related trust is exempt from taxation. Subsequent to this determination by the IRS, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualified status. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and therefore believes the Plan, as amended, is qualified and the related trust is tax-exempt.

Accounting principles generally accepted in the United States require plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2014 , there are no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The plan administrator believes the Plan is no longer subject to income tax examinations for years prior to 2011 .

NOTE 7. RECONCILIATION OF THE PLAN'S FINANCIAL STATEMENTS TO THE FORM 5500

The following is a reconciliation of the net assets available for benefits as reported in the Plan's financial statements to the Form 5500, as fully benefit-responsive investment contracts are reported at fair value on the Form 5500:

	December 31, — 2014	2013
Net assets available for benefits per the financial statements	$ 78,408	$ 74,023
Adjustment from fair value to contract value for fully benefit-responsive investment contracts	12	11
Net assets available for benefits per the Form 5500	$ 78,420	$ 74,034

The following is a reconciliation of the increase in net assets available for benefits as reported in the Plan's financial statements to the Form 5500, as fully benefit-responsive investment contracts are reported at fair value on the Form 5500:

Increase in net assets available for benefits per the financial statements	December 31, 2014 — $ 4,385
Adjustment from contract value to fair value - prior year	(11	)
Adjustment from contract value to fair value - current year	12
Net income per the Form 5500	$ 4,386

NOTE 8. RELATED PARTY TRANSACTIONS

The Plan holds units of common collective trust funds, a mutual fund and self directed brokerage accounts managed by Charles Schwab Trust Company, the custodian of the Plan. The Plan also invests in the common stock of the Company via the United Fire Stock Fund. These transactions qualify as party-in-interest transactions; however, they are exempt from the prohibited transaction rules under ERISA.

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Supplemental Schedule

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United Fire Group 401(k) Plan

Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year)

EIN 42-0644327

Plan Number 004

December 31, 2014

(In thousands, except share amounts) — Identity of Issuer	Description of Investment	Shares	Current Value
Mutual Funds
American Century Investments	American Century Capital	204,471	$ 1,789
Artisan Funds	Artisan International Fund	110,302	3,305
Cohen & Steers Capital Mgmt.	Cohen & Steers Realty	18,225	1,401
Columbia Funds	Columbia Acorn Fund CL Z	50,697	1,620
Dodge & Cox Fund	Dodge & Cox Balanced Fund	21,032	2,155
First Eagle of America, Inc.	First Eagle Fund of America	92,438	3,511
First Eagle of America, Inc.	First Eagle Overseas Fund I	134,905	2,994
Gabelli Asset Management, Inc.	Gamco Westwood Balanced	41,315	505
American Funds	Growth Fund of America	125,755	5,328
Hartford Mutual Fund	Hartford Small Co Y	28,025	686
American Funds	High Income Trust R4	157,864	1,697
JP Morgan Asset Management	JP Morgan Mid Cap Growth Select	107,148	3,015
Lazard Asset Management Pacific Co	Lazard Emerging Markets Open	73,473	1,297
Janus Fund	Perkins Small Cap Value T	68,621	1,483
Pacific Investment Mgmt Co LLC	PIMCO Total Return Fd Cl D	545,890	5,819
T Rowe Price	T Rowe Price Dividend Growth	85,767	3,099
T Rowe Price	T Rowe Price Mid Cap Value	160,196	4,617
T Rowe Price	T Rowe Price New America Growth	56,113	2,357
Charles Schwab & Co., Inc.*	Schwab S & P 500 Index Fund	225,494	7,252
Common Collective Trusts
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - Income	23,019	367
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - 2010	32,497	687
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - 2020	166,840	3,969
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - 2030	162,638	4,212
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - 2040	89,807	2,424
Charles Schwab & Co., Inc.*	Schwab Managed Retirement Trust Class II - 2050	69,296	1,007
Pooled Separate Accounts
New York Life Insurance Company	New York Life Anchor Account III	8,197,363	8,209
Common Stock
United Fire Group, Inc.*	United Fire Stock Fund	210,832	1,978
Self Directed Brokerage Accounts
Charles Schwab & Co., Inc.*	Schwab - Personal Choice Accounts		1,230
Total participant-directed investments at fair value			$ 78,013
Participant loans (maturing 2015 through 2029 at interest rates ranging from 4.25% - 8.00%)*			407
Total assets held for investment purposes			$ 78,420

*Indicates a party-in-interest to the Plan.

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SIGNATURE

The Plan . Pursuant to the requirements of the Securities Exchange Act of 1934, United Fire & Casualty Company, as plan administrator, has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

United Fire Group 401(k) Plan — /s/ Randy A. Ramlo
Randy A. Ramlo
President and Chief Executive Officer

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