Express Scripts 2012 Annual Report Download - page 91

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Express Scripts 2012 Annual Report 89
The following table sets forth the target allocation for 2013 by asset class and the plan assets at fair value at
December 31, 2012 by level within the fair value hierarchy:
($ in millions)
Asset Class
Target
Allocation
2013
(1)
Percent of
Plan Assets at
December 31,
2012
December 31,
2012
Level 1
(2)(3)
Level 2
(2)(4)
Level 3
(2)
U.S. equity securities
12%
54%
U.S. large-cap
$ 60.3
$ -
$ 60.3(5)
-
U.S. small/mid-cap
51.1
27.9
23.2(6)
-
International equity securities
13%
15%
31.1
31.1
-
-
Fixed income
45%
31%
65.0
30.8
34.2(7)
-
Hedge funds(8)
25%
-
-
-
-
-
Global real estate
5%
-
-
-
-
-
Total
100%
$ 207.5
$ 89.8
$ 117.7
-
The amounts disclosed reflect our target allocation based on the funded ratio of the plan
at December 31, 2012 and are subject to change based on the
funded ratio of the plan during the year.
(2)
See Note 2 – Fair Value Disclosures for a description of the fair value hierarchy.
(3)
Investments classified as Level 1 are valued at the readily available quoted price from an active market where there is significant transparency in the
executed quoted price. These investments consist of mutual funds valued at the net asset value of shares held by the pension plan at year-end.
(4)
Assets classified as Level 2 include units held in common collective trust funds and mutual funds, which are valued based on the net asset values reported
by the funds’ investment managers, and a short
-term fixed income investment fund which is valued using other significant observable inputs such as
quoted prices for comparable securities.
(5)
Consists of common collective trusts that invest in common stock of S&P 500 companies and US large-cap common stock.
(6)
Consists of a common collective trust that invests in US mid-cap common stock.
(7)
Primarily consists of a common collective trust that invests in passive bond market index lending funds and a short-term investment fund.
(8)
The inclusion of hedge funds serves to further diversify the fund and the volatility of the hedge fund portfolio returns are expected to be less than that of
global equities.
Cash flows.
Employer Contributions. Under the current actuarial assumptions, there is no minimum contribution
required for the 2012 plan year. The Company does not expect to contribute any cash payments during 2013.
Estimated Future Benefit Payments. As of December 31, 2012, the following benefit payments are
expected to be made:
(in millions)
Pension
Benefits
Other
Postretirement
Benefits
2013
$ 18.9
$ 0.5
2014
17.0
0.4
2015
15.7
0.3
2016
15.1
0.3
2017
14.4
0.2
2018-2022
$ 64.6
$ 0.8