MetLife 2012 Annual Report Download - page 197

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
December 31, 2011
Pension Benefits Other Postretirement Benefits
Fair Value Hierarchy Fair Value Hierarchy
Level 1 Level 2 Level 3
Total
Estimated
Fair Value Level 1 Level 2 Level 3
Total
Estimated
Fair Value
(In millions)
Assets:
Fixed maturity securities:
Foreign bonds .......................................... $— $ 96 $— $ 96 $— $13 $— $13
Equity securities:
Common stock - foreign .................................. — 43 — 43 — — — —
Other investments ......................................... 19 — — 19 — — — —
Derivative assets .......................................... — — 13 13 — — — —
Real estate ............................................... — — 8 8 — — — —
Short-term investments ..................................... — 6 — 6 — — — —
Total assets ........................................
$19 $145 $21 $185
$—
$13
$—
$13
A rollforward of all pension benefit plan assets measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs
was as follows:
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Pension Benefits
Years Ended December 31,
2012 2011 2010
Derivative
Assets Real Estate Derivative Assets Real Estate Derivative Assets (1) Real Estate (1)
(In millions)
Balance, January 1, .................................................. $13 $ 8 $11 $ 8 $— $—
Realized gains (losses) ............................................... (1) (1) — — 3 —
Unrealized gains (losses) .............................................. 1 — 2 — (3) —
Purchases, sales, issuances, and settlements, net ......................... ———— (1)—
Transfers into and/or out of Level 3 ...................................... ————12 8
Balance, December 31, .............................................. $13 $ 7 $13 $ 8 $11 $ 8
(1) Derivative assets and real estate transfers into Level 3 are due to the ALICO Acquisition and are not related to the changes in Level 3 classificationat
the security level.
Expected Future Contributions and Benefit Payments
It is the Subsidiaries’ practice to make contributions to the U.S. qualified pension plan to comply with minimum funding requirements of ERISA. In
accordance with such practice, no contributions are required for 2013. The Subsidiaries expect to make discretionary contributions to the qualified
pension plan of $233 million in 2013. For information on employer contributions, see “— Obligations and Funded Status.”
Benefit payments due under the U.S. non-qualified pension plans are primarily funded from the Subsidiaries’ general assets as they become due
under the provision of the plans, therefore benefit payments equal employer contributions. The U.S. Subsidiaries expect to make contributions of $61
million to fund the benefit payments in 2013.
U.S. and non-U.S. postretirement benefits are either: (i) not vested under law; (ii) a non-funded obligation of the Subsidiaries; or (iii) both. Current
regulations do not require funding for these benefits. The Subsidiaries use their general assets, net of participant’s contributions, to pay postretirement
medical claims as they come due in lieu of utilizing any plan assets. The U.S. Subsidiaries expect to make contributions of $78 million towards benefit
obligations in 2013 to pay postretirement medical claims.
As noted previously, the Subsidiaries no longer expect to receive the RDS under the Medicare Modernization Act of 2003 to partially offset payment
of such benefits. Instead, the gross benefit payments that will be made under the PDP will already reflect subsidies.
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