Our expectation remains to be at the high end or above our 8% to 10% earnings per share growth target in the intermediate and longer term.
Intermediate term expectations are primarily based on recovering sales momentum, strong fees on assets under management, incremental expense management initiatives and the combination of $900 million of buybacks related to our recent block sale and ongoing share repurchases.
After introducing 10 new products since the beginning of the year, including the industry's first combined life plus long-term care policy built on a variable chassis, we have more updates planned and additional products in development.
In Annuities, we reported sales growth of 7% and over the prior year quarter, driven by our industry-leading product breadth and distribution force plus shelf space added over the last two years.
Total deposits were up 2% despite being negatively impacted by some sales shifting into the fourth quarter.
While we reported slightly negative flows this quarter, trailing 12-month net flows remained strong at positive $1.2 billion, and we expect full year 2021 net flows to be positive.
In life insurance, our focus on expanding both consumer value propositions and distribution shelf space resulted in sequential sales growth of 32% this quarter with sales totaling $166 million and all product categories reporting double-digit increases.
In addition to the property and casualty distribution partnership we added in the second quarter -- We recently launched our variable MoneyGuard product at two of our largest strategic partners, providing 25,000 more advisors with access to this first-of-its-kind solution.
Lastly, our Group Protection business continues to be impacted by the pandemic particularly as the Delta variant affected more individuals under age 65 driving increased claims.
We achieved 5% premium growth over the prior year which is a result of a stronger persistency rate of nearly 90% and renewal rate increases implemented earlier this year.
59% of Group Protection sales have come from these products as more individuals see the value of them.
We will continue to build on our progress and expect margins to grow toward the top end of our 5% to 7% target range.
Our general account portfolio is predominantly comprised of fixed income investments, of which 97% are investment-grade equivalent.
During the quarter, we invested new money at an average yield of 2.6% with 1/2 in shorter-duration assets versus 1/3 for the full year 2020.
Approximately 60% of our purchases were in investments other than public corporates, providing diversification and good relative value and yielding approximately 100 basis points over comparability rated public corporates.
Lastly, our alternative investment performance was once again strong with an 8% return in the quarter, exceeding our long-term targeted quarterly return of 2.5%.
In sum, our underlying earnings power is improving, and we remain confident in our ability to grow earnings per share at or above our 8% to 10% target range.
Last night, we reported third quarter adjusted operating income of $307 million or $1.62 per share.
Also, this quarter's results were impacted by pandemic-related claims, which reduced earnings by $180 million or $0.95 per share.
While results benefited from strong performance in the alternative investment portfolio, boosting earnings by $89 million or $0.47 per share above target.
Net income totaled $318 million or $1.68 per share, boosted by gains in the investment portfolio and strong performance from the variable annuity hedge program.
Consolidated adjusted operating revenue grew 9% from the prior year, which included growth in each of the four businesses.
Average account values increased 17%, and book value per share, excluding AOCI, grew 8% and stands at $76.96, an all-time high.
Operating income for the quarter was $338 million, which included a $5 million net unfavorable impact from our annual review.
Compared to $196 million in the prior year quarter, which included a $101 million net unfavorable impact from the annual review.
Adjusting for notable items in both periods, operating income increased 15% from the prior year quarter, driven by record average account values of $170 billion, up 17% over the past year.
The current quarter included $10 million of favorable alternative investment income.
The expense ratio improved 80 basis points compared to the prior year period as our focus on expenses continues to benefit the bottom line.
Return metrics remained solid with return on assets coming in at 80 basis points and return on equity at 26%.
Risk metrics on our VA book once again demonstrate the quality of our in-force with a net amount at risk at 63 basis points of account values for living benefits and at 43 basis points for death benefits.
Retirement Plan Services reported operating income of $60 million compared to $50 million in the prior year quarter, with the increase driven by higher fees and account values, continued expense efficiency and higher alternative investment income, which was $6 million favorable to our expectation in the current quarter.
Our annual review had no impact in the current quarter, but did have a net unfavorable impact of $3 million in the prior year quarter.
Favorable equity markets drove average account values up 21% to $97 billion.
The expense ratio improved 80 basis points over the prior year quarter as revenue growth combined with continued diligent expense management contributed to improved results.
Base spreads, excluding variable investment income, compressed 10 basis points versus the prior year quarter, in line with our stated 10 to 15 basis point range as crediting rate actions continue to take hold.
Operating income for the quarter was $93 million which included a $26 million net unfavorable impact from our annual review compared to an operating loss of $311 million in the prior year quarter, which included a $440 million net unfavorable impact from the annual review.
Additionally, the current quarter included an unfavorable notable item of $19 million related to a legal expense associated with the reinsurance arbitration award.
Adjusting for notable items in both periods, operating income increased 7% from the prior year quarter, driven by higher alternative investment income, as the current quarter included $65 million compared to $37 million in the prior year quarter.
Elevated mortality related to the pandemic was $60 million in the quarter compared to $70 million in the prior year quarter.
This quarter's impact for 10,000 COVID deaths of $6 million was down year-over-year as expected, but was up sequentially and as the severity of our average COVID claim was elevated.
In addition to the impacts of the pandemic, underlying mortality was negatively impacted by $34 million.
I'd point out that we experienced favorable underlying mortality in the prior two quarters, and when viewed on a year-to-date basis, our actual to expected mortality ratio remains under 100%, better than expected.
Earnings drivers continue to grow, with average account values up 9% and average life insurance in-force up 7% over the prior year.
Base spreads, excluding variable investment income, declined 13 basis points compared to the prior year quarter, above our five to 10 basis point expectation.
Our expense ratio improved 30 basis points over the prior year quarter as our efficiency efforts continue to benefit margins.
Group Protection reported an operating loss of $32 million which included a $16 million net favorable impact from our annual review of reserve assumptions compared to operating income of $6 million in the prior year quarter, which included a $3 million net unfavorable impact from the annual review.
Adjusting for notable items in both periods, operating income decreased from $9 million to an operating loss of $48 million, driven by higher mortality impact from the pandemic.
The current quarter also included $6 million of favorable alternative investment income.
On a sequential basis, pandemic-related claims in the quarter negatively impacted earnings by $120 million compared to $28 million in the second quarter and included $107 million in life claims and $13 million in disability claims.
Excluding the annual review of reserve assumptions, pandemic claims and favorable alternative investment income, the group margin of 5.9% was consistent with the prior quarter and in the middle of our 5% to 7% targeted range.
The loss ratio was 87.8% in the quarter, an 8.5 percentage point sequential increase.
Excluding pandemic-related claims and the impact of the assumption review, the loss ratio improved 20 basis points to 75.9%.
We ended the quarter with $10.9 billion of statutory capital and estimate our RBC ratio at 63%.
As a reminder, our RBC ratio includes 25 percentage points from noneconomic goodwill associated with the Liberty acquisition that we expect will go away by year-end.
Cash at the holding company stands at $754 million, above our $450 million target as we have prefunded our $300 million 2022 debt maturity.
We deployed $200 million toward buybacks in the third quarter.
In line with our goal communicated last quarter to have full year buybacks in line with pre-pandemic levels of approximately $600 million, excluding any incremental buybacks from transactions.
Our block sale with Resolution Life, which we announced in September and closed on October 1, generated approximately $1.2 billion of capital, $900 million of which we plan to use for incremental share repurchases.
We expect these repurchases to be completed by the end of the first quarter of 2022 and began the incremental buybacks in October, via a $500 million accelerated share repurchase program.
Additionally, we announced a 7% increase in our quarterly dividend this quarter.
As of the end of 2020, the total net recurring benefit from our strategic digital program is $80 million, on track with our target.
In addition to these savings, we expect to achieve $260 million to $300 million in run rate savings through Spark as we exit 2024, with benefits growing steadily starting this year, and ramping up in the out years.
The total expected onetime investment to achieve the savings is $350 million to $410 million including the $57 million in investments we've made already this year.

Summary:
Last night, we reported third quarter adjusted operating income of $307 million or $1.62 per share.
Net income totaled $318 million or $1.68 per share, boosted by gains in the investment portfolio and strong performance from the variable annuity hedge program.