AIG 2014 Annual Report Download - page 330

ITEM 8 / NOTE 22. EMPLOYEE BENEFITS
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The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in
these securities. Based on our investment strategy, we had no significant concentrations of risks at December 31, 2014.
The U.S. pension plan holds a group annuity contract with U.S. Life, one of our subsidiaries, which totaled $26 million and
$27 million at December 31, 2014 and 2013, respectively.
Changes in Level 3 fair value measurements
The following table presents changes in our U.S. and non-U.S. Level 3 plan assets measured at fair value:
Changes in
Net Unrealized Gains
Balance Realized and Balance (Losses) on
At December 31, 2014 Beginning Unrealized Transfers Transfers at End Instruments Held
(in millions) of year Gains (Losses) Purchases Sales Issuances Settlements In Out of year at End of year
U.S. Plan Assets:
Fixed maturity securities
U.S. investment grade $ 9 $ 2 $ 18 $(21) $ - $ - $ - $ - $ 8 $ 1
Hedge funds 35 315 (32) - - 15 - 36 (1)
Private equity 248 11 73 (104) - - - - 228 10
Tot al $ 292 $ 16 $106 $(157) $ - $ - $ 15 $ - $ 272 $10
Non-U.S. Plan Assets:
Other fixed maturity securities $ 19 $ - $ - $ (2) $ - $ - $ - $ - $ 17 $ -
Insurance contracts 44 9 3 - - - - - 56 -
Tot al $ 63 $ 9 $ 3 $ (2) $ - $ - $ - $ - $ 73 $ -
Changes in
Net Unrealized Gains
Balance Realized and Balance (Losses) on
At December 31, 2013 Beginning Unrealized Transfers Transfers at End Instruments Held
(in millions) of year Gains (Losses) Purchases Sales Issuances Settlements In Out of year at End of year
U.S. Plan Assets:
Fixed maturity securities
U.S. investment grade $ 11 $ (2) $ 2 $ (2) $ - $ - $ - $ - $ 9 $ (3)
Hedge funds - - - - - - 35 - 35 -
Private equity 225 7 44 (26) - (2) - - 248 (14)
Tot al $ 236 $ 5 $ 46 $ (28) $ - $ (2) $ 35 $ - $ 292 $ (17)
Non-U.S. Plan Assets:
Other fixed maturity securities $ 27 $ 1 $ - $ (8) $ - $ - $ - $ (1) $ 19 $ -
Insurance contracts 43 3 1 (1) - - - (2) 44 -
Tot al $ 70 $ 4 $ 1 $ (9) $ - $ - $ - $ (3) $ 63 $ -
Transfers of Level 1 and Level 2 Assets
Our policy is to record transfers of assets 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. We had no transfers between Level 1 and Level 2
during the years ended December 31, 2014 and 2013.