We view our earnings per share for the year at approximately $9.30 and ROE excluding AOCI at 13%.
Based on our current views, we are poised to deliver 8% to 10% earnings per share growth of this level over the long term.
As we exited the fourth quarter, we generated at least a 12% return on new business in our current portfolio based on the forward curve across all our businesses.
As an example, during the fourth quarter, 99% of life policies were delivered electronically, nearly triple the prior year quarter.
In total, IVA sales were $5 billion for the year.
Based on our in-force VAs without living benefits and other non-guaranteed products represent 47% of total annuity account values.
We project sales begin the year consistent with the $2.5 billion run rate we have produced in recent quarters and build over the course of the year as we benefit from our 2020 product introductions as well as products we plan to add this year.
While economic and pandemic-related uncertainty weighed on most businesses this year, strong performance from our sales and retention teams drove a 6% increase in total deposits, including growth in both first year sales and recurring deposits along with our sixth consecutive year of positive net flows.
While for the full year, sales declined 6% as gains in disability were more than offset by decreases in life and dental.
Strong persistency of 87%, up 350 basis points in 2020 more than offset the lower sales, which led to a 4% increase in premiums for the full year.
We are taking action and based on focused pricing enhancements we began in 2020 along with expense initiatives, we expect continuous margin improvement over time building toward our 7% target.
Additionally, the alternative investment portfolio performed well in the quarter and for the full year generated an 11% annual return slightly above our long-term target.
And as I said earlier, we are poised to deliver 8% to 10% growth over the long term even in the current low interest rate environment.
Last night, we reported fourth quarter adjusted operating income of $346 million or $1.78 per share.
First, pandemic-related claims reduced earnings by approximately $187 million or $0.96 per share.
This included a $174 million mortality impact and $13 million from disability claims.
Second, results benefited from strong performance in the alternative investment portfolio relative to our targeted annual return of 10% boosting earnings by $73 million or $0.38 per share.
Third, there was unfavorable expense variability of $28 million or $0.13 per share in the other operations segment related mostly to elevated deferred compensation costs, resulting from the increase in Lincoln share price last quarter.
Finally, there was $20 million or $0.10 per share of favorable amortization levels in life insurance, which was largely offset by seasonal unfavorability in group protection.
Net income totaled $143 million or $0.74 per share as improvements in credit spreads drove a $240 million loss in the variable annuity non-performance risk.
Outside of this non-economic item, credit experience was excellent and the variable annuity hedge program performed exceptionally well with 100% effectiveness in the quarter.
Adjusted operating revenue increased 3% with operating revenue growth in each of our four business segments.
Average account values increased 9%.
Total G&A expenses net of amounts capitalized decreased 1% or 7% when excluding unfavorable expense variability in other operations.
The 1% decline, combined with operating revenue growth led to a 60 basis point improvement in the expense ratio.
And book value per share, excluding AOCI, stands at $71.59, an all-time high.
Operating income for the quarter was $289 million compared to $269 million in the prior year quarter.
Average account values of $151 billion increased 9% year-over-year and 5% on a sequential basis.
Additionally, end of period account values exceeded average values by 4%, providing a tailwind into the first quarter.
Base spreads excluding variable investment income were up 8 basis points from the year ago quarter, driven by active management of crediting rates and some quarterly noise.
G&A expenses net of amounts capitalized decreased 5% for the full year and quarter leading to a 60 basis point improvement in the expense ratio for the quarter.
Return metrics remained healthy in the quarter with return on assets coming in at 77 basis points and return on equity at 21.4%.
As the net amount at risk sources 70 basis points of account value for living benefits and the 34 basis points for death benefits.
Earnings grew in line with account values and excluding the unlocking, return on equity was very strong coming in at 21%.
Retirement plan services reported operating income of $49 million compared to $47 million in the prior year quarter.
Positive flows combined with favorable equity markets drove average account values up 10% over the prior year quarter.
G&A expenses net of amounts capitalized were flat compared to the prior year quarter and down 5% for the full year, driving a 140 basis point improvement in the expense ratio in 2020.
Base spreads excluding variable investment income compressed 28 basis points versus the prior year quarter.
We expect this to moderate and return to our more typical 10 to 15 basis point range in 2021.
The retirement business ended the year with strong results, including a 23 basis point ROA in the quarter with momentum in sales and expense management serving as positive drivers going forward.
We reported operating income of $144 million compared to $179 million in the prior year quarter.
This quarter's result included $113 million of pandemic-related mortality partly offset by $53 million of favorable alternative investment experience and the favorable amortization, I noted upfront.
Underlying earnings drivers continue to show growth with average account values up 6% and average life insurance in-force up 9% over the prior year.
G&A expenses net of amounts capitalized decreased 13% from the prior year quarter, leading to 140 basis point improvement in the expense ratio.
Base spreads declined 25 basis points compared to the prior year quarter due to a previously noted non-economic change in our crediting rate methodology.
We expect base spreads to return to our more typical 5 to 10 basis point rate of decline in 2021.
Group protection reported a loss from operations of $42 million compared to operating earnings of $54 million in the prior year quarter with the decrease driven mainly by pandemic-related claims.
Group earnings were impacted by a number of items during the quarter, including $74 million of claims related to the pandemic, $15 million to $20 million of seasonally higher fourth quarter disability claims and expenses and a slowdown in social security approval that negatively impacted results by $8 million, partly offset by $5 million of favorable alternative investment experience.
The reported total loss ratio was 87.8% in the quarter up 4.6 points sequentially.
This was driven in part by an increase in pandemic-related mortality and hospitalizations, which resulted in elevated claims, including $39 million of direct COVID-19 mortality, $13 million of direct COVID-19 disability and $22 million of excess mortality.
Excluding pandemic-related claims from both periods, the total loss ratio was 78.9%, up 3 percentage points sequentially as improvement in group life and dental were more than offset by an increase in the disability loss ratio.
G&A expenses net of amounts capitalized decreased 6% from the prior year quarter and 5% for the full year.
We ended the year with $10.3 billion of statutory surplus and an RBC ratio of 452%, which includes 23 percentage points from our non-economic goodwill associated with the Liberty acquisition that we expect will go away at the end of 2021.
Cash at the holding company stands at $754 million, above our $450 million target as we have pre-funded our $300 million 2022 debt maturity.
Additionally, we had a $500 million contingent capital facility earlier this year.
We resumed buybacks in the fourth quarter and deployed $50 million toward share repurchases.
As a result of our confidence in our capital position, we plan to increase our buyback to $100 million in the first quarter and we'll provide additional updates on our next earnings conference call.
And as a result, we reiterate our plan to grow earnings per share at an 8% to 10% rate over the long term.

Summary:
Last night, we reported fourth quarter adjusted operating income of $346 million or $1.78 per share.
Net income totaled $143 million or $0.74 per share as improvements in credit spreads drove a $240 million loss in the variable annuity non-performance risk.
We resumed buybacks in the fourth quarter and deployed $50 million toward share repurchases.