Alcoa 2012 Annual Report Download - page 157

**As of December 31, 2011, the total fair value of pension and other postretirement plans’ assets excludes a net
payable of $20, which represents securities purchased not yet settled less interest and dividends earned on various
investments.
Pension and other postretirement benefit plans’ assets classified as Level 3 in the fair value hierarchy represent
investments in which the trustees have used significant unobservable inputs in the valuation model. The following table
presents a reconciliation of activity for such investments:
2012 2011
Balance at beginning of year $2,760 $1,499
Realized gains 52 67
Unrealized gains 142 100
Purchases 634 1,221
Sales (538) (124)
Issuances --
Settlements --
Foreign currency translation impact 8 (3)
Transfers in and (or) out of Level 3* - -
Balance at end of year $3,058 $2,760
* In 2012 and 2011, there were no transfers of financial instruments into or out of Level 3
Funding and Cash Flows
It is Alcoa’s policy to fund amounts for pension plans sufficient to meet the minimum requirements set forth in
applicable country benefits laws and tax laws, including the Pension Protection Act of 2006, the Worker, Retiree, and
Employer Recovery Act of 2008, and the Moving Ahead for Progress in the 21st Century Act for U.S. plans. From time
to time, Alcoa contributes additional amounts as deemed appropriate. In 2012 and 2011, cash contributions to Alcoa’s
pension plans were $561 and $336. Also in 2011, Alcoa contributed newly issued shares (see Note R) of its common
stock (valued at $600) to a master trust that holds the assets of certain U.S. defined benefit pension plans in a private
placement transaction. These shares were issued to satisfy the estimated minimum required funding and to provide
additional funding towards maintaining an approximately 80% funded status of Alcoa’s U.S. pension plans. The
minimum required contribution to pension plans in 2013 is estimated to be $460, of which $140 is for non-U.S. plans.
Benefit payments expected to be paid to pension and other postretirement benefit plans’ participants and expected
Medicare Part D subsidy receipts are as follows:
Year ended December 31,
Pension
benefits
Gross Other post-
retirement
benefits
Medicare Part D
subsidy receipts
Net Other post-
retirement
benefits
2013 $ 880 $ 285 $ 30 $ 255
2014 870 280 30 250
2015 880 280 30 250
2016 890 275 30 245
2017 910 270 35 235
2018 through 2022 4,620 1,200 170 1,030
$9,050 $2,590 $325 $2,265
Defined Contribution Plans
Alcoa sponsors savings and investment plans in several countries, including the U.S. and Australia. Expenses related to
these plans were $146 in 2012, $139 in 2011, and $119 in 2010. In the U.S., employees may contribute a portion of
their compensation to the plans, and Alcoa matches, mostly in company stock, a portion of these contributions.
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