Alaska Airlines and Horizon Air 2013 Annual Report Download - page 159
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allocations for the primary asset classes based
on current funded status are approximately:
Domestic equities: ................ 31%-43%
Non-U.S. equities: ................ 12%-21%
Fixed income: .................... 42%-52%
The Company determines the strategic allocation
between equity and fixed income based on
current funded status and other characteristics
of the plan. As the funded status improves, the
Company increases the fixed income allocation
of the portfolio, and decreases the equity
allocation. Actual asset allocations are reviewed
regularly and periodically rebalanced as
appropriate.
As of December 31, 2013, other than the money
market fund, all assets were invested in common
commingled trust funds. The Company uses the
net asset values of these funds to determine fair
value as allowed using the practical expediency
method outlined in the accounting standards.
Plan asset by fund category and fair value
hierarchy level as of December 31 (in millions):
2013 2012 Level
Fund type:
Money market fund ...... $45$75 1
U.S. equity market fund . . . 684 654 2
Non-U.S. equity fund ..... 301 304 2
Credit bond index fund . . . 127 102 2
Government/credit bond
index fund ........... 612 403 2
Plan assets ............ $1,769 $1,538
Nonqualified Defined-Benefit Pension Plan
Alaska also maintains an unfunded,
noncontributory defined-benefit plan for certain
elected officers. This plan uses a December 31
measurement date.
Weighted average assumptions used to
determine benefit obligations as of
December 31:
Discount rates of 4.85% and 3.95% were used
as of December 31, 2013 and 2012,
respectively. The rate of compensation increase
used was 5.00% as of December 31, 2013 and
2012.
Weighted average assumptions used to
determine net periodic benefit cost for the
years ended December 31:
Discount rates of 3.95%, 4.65%, and 5.55%
were used for the years ended December 31,
2013, 2012, and 2011, respectively. The rate of
compensation increase used was 7.00% per year
during the first four years of employment and
5.00% thereafter for the years ended
December 31, 2013, and 2012, and 5.00% per
year for the year ended December 31, 2011.
73
ŠForm 10-K