Wells Fargo 2011 Annual Report Download - page 220

Note 20: Employee Benefits and Other Expenses (continued)
party appraisers. Market values are estimates and the actual
market price of the real estate can only be determined by
negotiation between independent third parties in a sales
transaction. Also includes investments in exchange-traded
equity securities described above.
Multi-Strategy Hedge Funds and Private Equity – the fair values
of hedge funds are valued based on the proportionate share of
the underlying net assets of the investment funds that comprise
the fund, based on valuations supplied by the underlying
investment funds. Investments in private equity funds are valued
at the NAV provided by the fund sponsor. Market values are
estimates and the actual market price of the investments can
only be determined by negotiation between independent third
parties in a sales transaction.
Other – the fair values of miscellaneous investments are valued
at the NAV provided by the fund sponsor. Market values are
estimates and the actual market price of the investments can
only be determined by negotiation between independent third
parties in a sales transaction. Also includes insurance contracts
that are generally stated at cash surrender value.
The methods described above may produce a fair value
calculation that may not be indicative of net realizable value or
reflective of future fair values. While we believe our valuation
methods are appropriate and consistent with other market
participants, the use of different methodologies or assumptions
to determine the fair value of certain financial instruments could
result in a different fair value measurement at the reporting
date.
Defined Contribution Retirement Plans
We sponsor a defined contribution retirement plan named the
Wells Fargo & Company 401(k) Plan (401(k) Plan). The
Wachovia Savings Plan was acquired December 31, 2008, and
merged with the 401(k) Plan effective December 31, 2009. We
also sponsored a frozen defined contribution plan, the A.G.
Edwards, Inc. Retirement & Profit Sharing Plan (“AGE Plan”),
which resulted from a company acquired by Wachovia. The AGE
Plan merged with the 401(k) Plan on July 1, 2011. Under the
401(k) Plan, after one month of service, eligible employees may
contribute up to 50% of their certified compensation, although
there may be a lower limit for certain highly compensated
employees in order to maintain the qualified status of the 401(k)
Plan. Eligible employees who complete one year of service are
eligible for company matching contributions, which are generally
dollar for dollar up to 6% of an employee's certified
compensation. Effective January 1, 2010, previous and future
matching contributions are 100% vested for active participants.
In 2009, the 401(k) Plan was amended to permit us to make
discretionary profit sharing contributions. Based on 2011, 2010
and 2009 earnings, we committed to make a contribution in
shares of common stock to eligible employees’ 401(k) Plan
accounts equaling 2% of certified compensation for 2011 and
2010, and 1% of certified compensation for 2009, respectively,
which resulted in recognizing $311 million, $316 million and
$150 million of defined contribution retirement plan expense
recorded in 2011, 2010 and 2009, respectively. Total defined
contribution retirement plan expenses were $1,104 million,
$1,092 million and $862 million in 2011, 2010 and 2009,
respectively.
Other Expenses
Expenses exceeding 1% of total interest income and noninterest
income in any of the years presented that are not otherwise
shown separately in the financial statements or Notes to
Financial Statements were:
Year ended December 31,
(in millions)
2011
2010
2009
Outside professional services
$
2,692
2,370
1,982
Contract services
1,407
1,642
1,088
Foreclosed assets
1,354
1,537
1,071
Operating losses
1,261
1,258
875
Outside data processing
935
1,046
1,027
Postage, stationery and supplies
942
944
933
Insurance
515
464
845
218