Aetna 2014 Annual Report Download - page 119
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Annual Report- Page 113
Expected benefit payments, which reflect future employee service, as appropriate, of the pension and OPEB plans to
be paid for each of the next five years and in the aggregate for the next five years thereafter at December 31, 2014
were as follows:
(Millions) Pension
Plans OPEB
Plans
2015 $ 348.7 $ 18.3
2016 352.6 18.1
2017 357.9 17.9
2018 366.2 17.8
2019 367.7 17.5
2020-2024 1,890.5 83.4
Assets of the Aetna Pension Plan
The assets of the Aetna Pension Plan (“Pension Assets”) primarily include debt and equity securities held in separate
accounts, as well as common/collective trusts and real estate investments. The valuation methodologies used to price
these debt and equity securities and common/collective trusts are similar to the methodologies described beginning
on pages 103 and 106. Pension Assets also include investments in other assets that are carried at fair value. The
following is a description of the valuation methodology used to price real estate investments and these additional
investments, including the general classification pursuant to the valuation hierarchy.
Real Estate - Real estate investments are valued by independent third party appraisers. The appraisals comply
with the Uniform Standards of Professional Appraisal Practice, which includes, among other things, the income,
cost, and sales comparison approaches to estimating property value. Therefore, these investments are classified
in Level 3.
Other Assets - Other assets consist of derivatives and private equity and hedge fund limited partnerships.
Derivatives are either valued with models that primarily use market observable inputs and therefore are classified
in Level 2 because they are traded in markets where quoted market prices are not readily available or are
classified in Level 1 because they are traded in markets where quoted market prices are readily available. The
fair values of private equity and hedge fund limited partnerships are estimated based on the net asset value of the
investment fund provided by the general partner or manager of the investments, the financial statements of which
generally are audited. Management considers observable market data, valuation procedures in place,
contributions and withdrawal restrictions collectively in validating the appropriateness of using the net asset
value as a fair value measurement. Therefore, these investments are classified in Level 3.