Travelers 2011 Annual Report Download - page 245

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued)
The following table presents the changes in the Level 3 fair value category for the years ended
December 31, 2011 and 2010.
Other
Investments
(at and for the year ended December 31, in millions) 2011 2010
Balance at beginning of year ................................ $18 $17
Actual return on plan assets:
Relating to assets still held ................................ (1) 3
Relating to assets sold during the year ........................ ——
Purchases, sales, settlements and maturities:
Purchases ............................................ 2—
Sales ................................................ (1) (2)
Settlements/maturities ................................... ——
Gross transfers into Level 3 ................................. ——
Gross transfers out of Level 3 ............................... ——
Balance at end of year ................................. $18 $18
Other Postretirement Benefit Plan
The Company’s overall investment strategy is to achieve a mix of approximately 35% to 65% of
investments for long-term growth and 35% to 60% for near-term insurance payments with a wide
diversification of asset types, fund strategies and fund managers. The current target allocations for plan
assets are 25% to 75% fixed income securities, with the remainder allocated to short-term securities.
Fixed income securities include corporate bonds of companies from diversified industries, mortgage-
backed securities and U.S. Treasuries.
Fair Value—Other Postretirement Benefit Plan
The Company’s other postretirement benefit plan had financial assets of $19 million and
$20 million at December 31, 2011 and 2010, respectively, which are measured at fair value on a
recurring basis. The assets are primarily short-term securities and corporate bonds, and categorized as
level 2 in the fair value hierarchy.
Estimated Future Benefit Payments
The following table presents the estimated benefits expected to be paid by the Company’s pension
and postretirement benefit plans for the next ten years (reflecting estimated future employee service),
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