Visa 2015 Annual Report Download - page 118

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VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2015
quotes from independent third-party sources. Based on this review, the valuation is confirmed or
revised accordingly.
Level 3 assets. Asset-backed securities are bonds that are backed by various types of assets and
primarily consist of mortgage-backed securities. Asset-backed securities are classified as Level 3 due
to a lack of observable inputs in measuring fair value.
There were no transfers between Level 1 and Level 2 assets during fiscal 2015 or 2014, except for
the change in presentation noted above. A separate roll-forward of Level 3 plan assets measured at
fair value is not presented because activities during fiscal 2015 and 2014 were immaterial.
Cash Flows
Pension
Benefits
Other
Postretirement
Benefits
(in millions)
Actual employer contributions
2015 .................................................... $ 16 $ 3
2014 .................................................... $ 10 $ 4
Expected employer contributions
2016 .................................................... $ 9 $ 3
Expected benefit payments
2016 .................................................... $ 146 $ 3
2017 .................................................... $ 92 $ 3
2018 .................................................... $ 94 $ 3
2019 .................................................... $ 93 $ 3
2020 .................................................... $ 93 $ 2
2021-2025 ............................................... $ 462 $ 5
Other Benefits
The Company sponsors a defined contribution plan, or 401(k) plan, that covers substantially all of
its employees residing in the United States. Personnel costs included $49 million, $46 million and $44
million in fiscal 2015, 2014 and 2013, respectively, for expenses attributable to the Company’s
employees under the 401(k) plan. The Company’s contributions to this 401(k) plan are funded on a
current basis, and the related expenses are recognized in the period that the payroll expenses are
incurred.
Note 11—Settlement Guarantee Management
The Company indemnifies its financial institution clients for settlement losses suffered due to
failure of any other client to fund its settlement obligations in accordance with the Visa Rules. This
indemnification creates settlement risk for the Company due to the difference in timing between the
date of a payment transaction and the date of subsequent settlement. Settlement at risk, or exposure,
is estimated based on the sum of the following inputs: (1) average daily volumes during the quarter
multiplied by the estimated number of days to settle plus a safety margin; (2) four months of rolling
average chargebacks volume; and (3) the total balance for outstanding Visa Travelers Cheques.
105