AIG 2011 Annual Report Download - page 367

American International Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Changes in
Unrealized
Net Purchases, Losses on
Balance Realized and Sales, Instruments
Beginning Unrealized Issuances and Transfers Balance at Held at
(in millions) of year Gains (Losses) Settlements-Net In (Out) End of year End of year
At December 31, 2010
Non-U.S. Plan Assets:
Real estate $ 19 $ - $ - $ (19) $ - $ -
Private equity 21 - - (21) - -
Insurance contracts 29 3 2 - 34 -
Total $ 69 $ 3 $ 2 $ (40) $ 34 $ -
U.S. Plan Assets:
Fixed maturity
U.S. investment grade $ 1 $ - $ - $ - $ 1 $ -
U.S. and international high yield 1 - - (1) - (1)
Mortgage and other asset-
backed securities 52 7 24 (3) 80 (14)
Private equity 175 17 17 - 209 -
Total $ 229 $ 24 $ 41 $ (4) $ 290 $ (15)
Transfers of Level 1 and Level 2 Assets and Liabilities
AIG’s policy is to record transfers of assets and liabilities between Level 1 and Level 2 at their fair values as of
the end of each reporting period, consistent with the date of the determination of fair value. Assets are
transferred out of Level 1 when they are no longer transacted with sufficient frequency and volume in an active
market. Conversely, assets are transferred from Level 2 to Level 1 when transaction volume and frequency are
indicative of an active market. AIG had no significant transfers between Level 1 and Level 2 during the twelve
months ended December 31, 2011.
Transfers of Level 3 Assets
During the year ended December 31, 2011, transfers into Level 3 included certain corporate high yield and
mortgage backed securities. The transfers into Level 3 related to investments in certain corporate high yield and
mortgage backed securities were due to a decrease in market transparency, downward credit migration and an
overall increase in price disparity for certain individual security types.
Funding for the U.S. pension plan ranges from the minimum amount required by ERISA to the maximum
amount that would be deductible for U.S. tax purposes. Contributed amounts in excess of the minimum amounts
are deemed voluntary. Amounts in excess of the maximum amount would be subject to an excise tax and may not
be deductible under the Internal Revenue Code. There are no minimum required cash contributions for the AIG
Retirement Plan in 2012. Supplemental, Excess and postretirement plan payments are deductible when paid.
AIG’s annual pension contribution in 2012 is expected to be approximately $91 million for its non-U.S. and U.S.
non-qualified plans. No contributions to the AIG Retirement Plan are currently anticipated. These estimates are
subject to change, since contribution decisions are affected by various factors including AIG’s liquidity, market
performance and management’s discretion.
AIG 2011 Form 10-K 353
EXPECTED CASH FLOWS