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Navy Federal Credit Union • 2013 Financial Section
43
2013 ANNUAL REPORT
The anticipated employer contribution for 2014 is $25.0 million for the pension plan and $2.1 million for
the retiree medical benefit plan. The accumulated benefit obligation for the pension plan was $774.8
million and $828.5 million at December 31, 2013 and 2012, respectively. The measurement date for the
pension and retiree medical benefit plan for 2013 and 2012 was December 31.
The investment strategy of the Navy Federal Credit Union Employees’ Retirement Plan is to employ
an investment approach, whereby a mix of equity and fixed income investments are used to maximize
the long-term return of plan assets at a prudent level of risk that includes consideration of benefit
obligation volatility. The intent of this strategy is to minimize contributions and keep the Plan well-
funded over the long run. Risk tolerance is established through careful consideration of plan liabilities,
plan-funded status, and Navy Federal’s financial condition. Investment risk is measured and monitored
on an ongoing basis through annual liability measurements, periodic asset/liability studies, and
quarterly investment portfolio reviews.
At December 31, 2013, the target allocation of plan assets was 25% U.S. equity securities, 40% global
equity securities, and 35% fixed income securities. Most of the U.S. equity assets are invested in a large
company index fund with the balance invested in mid- and small-company equity securities. Most of
the global equity allocation is in developed markets around the world, but investment managers are
allowed to invest in emerging markets, which make up approximately 11% of global equity markets. The
fixed income allocation comprises a small allocation to cash to provide liquidity for benefit and expense
payments, with the balance invested in intermediate- and long-term bonds, the majority of which are
investment grade.
The fair values of the Navy Federal Employees’ Retirement Plan assets, disclosed within their respective
fair value hierarchy (as described further in Note 21) at December 31, 2013 and 2012 were as follows:

(dollars in thousands)
Quoted Prices in
Active Markets
for Identical Assets
Significant
Observable Inputs
Significant
Unobservable
Inputs
Balance
as of
December 31, 2013
   
U.S. equity securities $ 57,121 $ 237,258 $ — $ 294,379
Global equity securities 465,563 — — 465,563
Intermediate-term fixed
income securities 68,732 135,877 — 204,609
Long-term fixed income securities 161,398 — — 161,398
Cash 15,393 — — 15,393
Total $  $ $ — $ 