US Airways 2009 Annual Report Download - page 101

Table of Contents
In 2010, the Company expects to contribute $13 million to its other postretirement plans. No contributions are expected in 2010 for the
Company's defined benefit plans. The following benefits, which reflect expected future service, as appropriate, are expected to be paid
from the defined benefit and other postretirement plans (in millions):
Other
Postretirement
Defined Benefit Benefits before
Pension Plans Medicare Subsidy Medicare Subsidy
2010 $ 2 $ 13 $ —
2011 2 13 —
2012 2 12 —
2013 2 12 —
2014 2 13 —
2015 to 2019 14 66 (2)
The Company assumed that its pension plans' assets would generate a long-term rate of return of 8% at December 31, 2009. The
expected long-term rate of return assumption was developed by evaluating input from the plans' investment consultants, including their
review of asset class return expectations and long-term inflation assumptions.
The Company's overall investment strategy is to achieve long-term investment growth. The Company's targeted asset allocation as of
December 31, 2009 is approximately 65% equity securities and 35% fixed-income securities. Equity securities primarily include mutual
funds invested in large-cap and mid-cap U.S. and international companies. Fixed-income securities primarily include mutual funds
invested in U.S. treasuries and corporate bonds. The Company believes that its long-term asset allocation on average will approximate the
targeted allocation. The Company regularly reviews its actual asset allocation and periodically rebalances its investments to its targeted
allocation when considered appropriate.
The fair value of pension plan assets by asset category is as follows (in millions):
Quoted Prices in Significant Other Significant
Active Markets for Observable Unobservable
Identical Assets Inputs Inputs
Fair Value (Level 1) (Level 2) (Level 3)
At December 31, 2009
Mutual funds $ 38 $ 38 $ — $ —
As of December 31, 2009, the plan's mutual funds were invested 53% in equity securities of large-cap and mid-cap U.S. companies,
33% in U.S. treasuries and corporate bonds, 11% in equity securities of large-cap international companies and 3% in equity securities of
emerging market companies. The mutual fund shares are classified as Level 1 instruments and valued at quoted prices in an active market
exchange, which represents the net asset value of shares held by the pension plan.
(b) Defined Contribution Plans
The Company sponsors several defined contribution plans which cover a majority of its employee groups. The Company makes
contributions to these plans based on the individual plan provisions, including an employer non-discretionary contribution and an
employer match. These contributions are generally made based upon eligibility, eligible earnings and employee group. Expenses related
to these plans were $98 million, $96 million and $81 million for the years ended December 31, 2009, 2008, and 2007, respectively.
(c) Postemployment Benefits
The Company provides certain postemployment benefits to its employees. These benefits include disability-related and workers'
compensation benefits for certain employees. The Company accrues for the cost of such benefit expenses once an appropriate triggering
event has occurred. In 2007, the Company recorded a $99 million charge to increase long-term disability obligations for US Airways'
pilots as a result of a change in the FAA-mandated retirement age for pilots from 60 to 65.
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