Navy Federal Credit Union 2011 Annual Report Download - page 49

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2011 FINANCIAL SECTION 33
e following is a description of the valuation methodologies used for the Plan’s nancial instruments measured at fair value.
u U.S. Equity Securities & Global Equity Securities (Level 2)—As of December 31, 2011 and 2010, the Plan invested
in one and two common collective trusts, respectively, and one 103-12 investment entity (the trusts). e trusts
are valued at net asset value (NAV), which is calculated based on the underlying investments of the trusts. Most of the
underlying investments in these trusts are traded in markets that are considered to be active, but the trusts themselves
are not actively publicly traded, as they are marketed principally to institutional investors; and most trade less frequent
than daily. For those underlying investments that are not considered actively traded, the values are based on quoted
market prices, dealer quotations or valuations from pricing sources supported by observable inputs. As such, the trusts
are classied within Level 2 of the fair value hierarchy.
Interest in the trusts can generally be purchased and sold at regular intervals. e trusts can be purchased daily, monthly
or quarterly, and can be redeemed daily or monthly, depending on the investment. Contribution or redemption transaction
requests for each of the trusts generally require advance notice of two to thirty business days, depending on the investment.
Trades are usually settled no later than three business days aer the trade date.
u Intermediate Term Fixed Income Securities (Level 2)—e intermediate term xed income securities are generally
valued using benchmark yields, reported trades and broker/dealer quotes for similar assets in an active market.
ere were no signicant concentrations of risk within plan assets at December 31, 2011, as equity and xed income assets are broadly diversied.
Navy Federal 401(k) Savings Plan
e Navy Federal 401(k) Savings Plan is a dened contribution plan where employees can contribute pre-tax money to a 401(k) retirement account
and receive employer matching contributions. e matching contributions are based on participation in a dened benet retirement plan. Employees
participating in the Cash Balance Plan receive a 100% employer match on the rst 6% of pay they contribute to their 401(k) account and are vested
aer completing two years of service. e employees participating in the Traditional Plan receive an employer match of 50% on the rst 6% of pay they
contribute to their 401(k) account.
(dollars in thousands) Fair Value Measurements at December 31, 2010
Asset Category Total
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Signicant
Observable Inputs
(Level 2)
Signicant
Unobservable Inputs
(Level 3)
U.S. equity securities $ 277,194 $ 35,296 $ 241,898 $ —
Global equity securities 240,767 115,320 125,447 —
Intermediate-term xed income securities 175,716 64,677 111,039 —
Long-term xed income securities 35,370 35,370 — —
Cash 8,454 8,454 — —
Total $ 737,501 $ 259,117 $ 478,384 $ —