Xerox 2015 Annual Report Download - page 127

Retiree-Health Plan
In June 2015, we amended our U.S. Retiree Health Plan to eliminate future benefit accruals for active salaried
employees effective December 31, 2015. There was no change in benefits for union employees or existing retirees
or employees that retire before December 31, 2015. As a result of this plan amendment, we recognized a pre-tax
curtailment gain of $22 in the second quarter 2015. The gain represents the recognition of deferred gains from other
prior-year amendments (“prior service credits”) as a result of the discontinuation of the future benefit or service
accrual period for active salaried employees. The amendment is not expected to materially impact future Retiree
Health expense.
Plan Assets
Current Allocation
As of the 2015 and 2014 measurement dates, the global pension plan assets were $8.4 billion and $9.2 billion,
respectively. These assets were invested among several asset classes.
The following tables presents the defined benefit plans assets measured at fair value and the basis for that
measurement:
December 31, 2015
U.S. Plans Non-U.S. Plans
Asset Class Level 1 Level 2 Level 3 Total % Level 1 Level 2 Level 3 Total %
Cash and cash equivalents $ 174 $ — $ — $ 174 6 % $ 578 $ — $ — $ 578 10 %
Equity Securities:
U.S. large cap 289 — — 289 10 % 170 44 — 214 4 %
U.S. mid cap 61 — — 61 2% 5 — — 5 —%
U.S. small cap 45 20 — 65 2% 25 — — 25 —%
International developed 170 75 — 245 9 % 800 139 — 939 17 %
Emerging markets 119 91 — 210 7 % 217 58 — 275 5 %
Global Equity — — — — — % 4 — — 4 — %
Total Equity Securities 684 186 — 870 30 % 1,221 241 — 1,462 26 %
Fixed Income Securities:
U.S. treasury securities — 222 — 222 8 % — 48 — 48 1%
Debt security issued by
government agency — 156 — 156 5 % 3 1,623 — 1,626 30 %
Corporate bonds — 926 — 926 32 % 3 741 — 744 14 %
Asset backed securities — 2 — 2 — % — 1 — 1 — %
Total Fixed Income Securities — 1,306 — 1,306 45 % 6 2,413 — 2,419 45 %
Derivatives:
Interest rate contracts — (8) — (8) — % — 90 — 90 2%
Foreign exchange contracts — — — — — % — (34) — (34) (1)%
Equity contracts — — — — — % — (51) — (51) (1)%
Other contracts — — — — — % —4—4—%
Total Derivatives — (8) — (8) — % — 9 — 9 — %
Real estate 42 37 19 98 3 % — 26 280 306 6 %
Private equity/venture capital — — 499 499 18 % — — 550 550 10 %
Guaranteed insurance contracts — — — — — % — — 124 124 2 %
Other(1) (103) 17 — (86) (2)% 5 50 — 55 1%
Total Fair Value of Plan Assets $ 797 $ 1,538 $ 518 $ 2,853 100 % $ 1,810 $ 2,739 $ 954 $ 5,503 100 %
_____________________________
(1) Other Level 1 assets include net non-financial assets of $(103) U.S. and $5 Non-U.S., such as due to/from broker, interest receivables and
accrued expenses. In 2015, the US Plans' Other included plan liabilities of $116 related to unsettled transactions such as purchases or
sales of US Treasury securities with settlement dates beyond fiscal year-end.
Xerox 2015 Annual Report 110