AIG 2006 Annual Report Download - page 209

American International Group, Inc. and Subsidiaries
15. Employee Benefits
Continued
(g) Plan Assets:
The following table sets forth the change in plan assets as of December 31, 2006 and 2005:
Pension Postretirement
Non-U.S. U.S. Non-U.S. U.S.
(in millions) Plans Plans Total Plans Plans Total
2006(a)
Change in plan assets:
Fair value of plan assets, at beginning of year $699 $2,561 $3,260 $— $ — $ —
Actual return on plan assets, net of expenses 33 282 315 — — —
AIG contributions 69 11 80 1 16 17
Participant contributions 1 — 1 ———
Benefits paid:
AIG assets (28) (10) (38) (1) (16) (17)
Plan assets (27) (84) (111) — — —
Effect of foreign currency fluctuation 41 — 41 ———
Other(b) 62 — 62 ———
Fair value of plan assets, end of year $850 $2,760 $3,610 $— $ — $ —
2005
Change in plan assets:
Fair value of plan assets, at beginning of year $624 $2,247 $2,871 $— $ — $ —
Actual return on plan assets, net of expenses 101 113 214 — — —
AIG contributions 95 298 393 1 16 17
Participant contributions 1 — 1 — — —
Benefits paid:
AIG assets (28) (11) (39) (1) (16) (17)
Plan assets (29) (84) (113) — — —
Effect of foreign currency fluctuation (85) — (85) — — —
Other 20 (2) 18 — — —
Fair value of plan assets, end of year $699 $2,561 $3,260 $— $ — $ —
(a) As of November 30, 2006 for non-U.S. plans of sponsoring companies with fiscal year-end date of November 30, 2006.
(b) With respect to AIG’s non-U.S. plan assets $80 million of this increase resulted from the reclassification of the Swiss plans. For further discussion of
the Swiss plans see the preceding discussion in Note 15(e).
The asset allocation percentage by major asset class for AIG’s plans at December 31, 2006 and 2005, and the target
allocation for 2007 follow:
Non-U.S. Plans-Allocation U.S. Plans-Allocation
Target Actual Actual Target Actual Actual
2007 2006* 2005 2007 2006 2005
Asset class:
Equity securities 0-75% 47% 46% 20-70% 64% 59%
Debt securities 0-100 32 27 20-70 26 34
Other 0-100 21 27 5-25 10 7
Total 100% 100% 100% 100%
* At November 30, 2006 for non-U.S. plans of sponsoring companies with fiscal year-end of November 30, 2006.
Other includes cash, insurance contracts and real estate asset The investment strategy with respect to AIG’s pension plan
classes. assets is designed to achieve investment returns that will fully
Included in equity securities for the U.S. plans at Decem- fund the pension plan over the long term, while limiting the risk of
ber 31, 2006 and 2005 were 55,680 and 602,680 shares of AIG under funding over shorter time periods.
common stock, with values of $4.0 million and $41.1 million, The expected rate of return with respect to AIG’s domestic
respectively. pension plan was 8.0 percent for years ended December 31,
2006 and 2005. These rates of return are an aggregation of
Form 10-K 2006 AIG 159