AIG 2010 Annual Report Download - page 367

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The expected weighted average long-term rates of return for the non-U.S. pension plans was 3.75 percent and
4.75 percent for the years ended December 31, 2010 and 2009, respectively. The expected rate of return for each
country is an aggregation of expected returns within each asset class for such country. For each country, the return
with respect to each asset class was developed based on a building block approach that considers historical returns,
current market conditions, asset volatility and the expectations for future market returns. While the assessment of the
expected rate of return is long-term and not expected to change annually, significant changes in investment strategy or
economic conditions may warrant such a change. The expected asset return and any contributions made by AIG
together are expected to maintain the plan’s ability to meet all required benefit obligations.
Assets Measured at Fair Value
AIG is required to disclose the level of the fair value measurement of its plan assets. The inputs and
methodology used in determining the fair value of the plan assets are consistent with those used by AIG to
measure its assets as noted in Note 6 herein.
The following table presents information about AIG’s plan assets based on the level within the fair value
hierarchy in which the fair value measurement falls:
Non-U.S. Plans U.S. Plans
(in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
At December 31, 2010
Assets:
Cash & cash equivalents $ 41 $ 3 $ -$44$ 37$ - $ -$ 37
Equity securities:
U.S.(a) 24 - - 24 1,731 13 - 1,744
International(b) 407 112 - 519 278 18 - 296
Fixed maturity securities:
U.S. investment grade(c) - 10 - 10 - 478 1 479
International investment grade(c) 8 219 - 227 - - - -
U.S. and international high yield(d) - 32 - 32 - 153 - 153
Mortgage and other asset-backed securities(e) - - - - - 44 80 124
Other investment types:
Hedge funds(f) - - - - - 332 - 332
Commodities -----19-19
Private equity(g) ------209209
Insurance contracts - 64 34 98 - 32 - 32
Total $ 480 $ 440 $ 34 $ 954 $ 2,046 $ 1,089 $ 290 $ 3,425
At December 31, 2009
Assets:
Cash & cash equivalents $ 36 $ - $ - $ 36 $ 85 $ 2 $ - $ 87
Equity securities:
U.S.(a) 89 - - 89 1,420 50 - 1,470
International(b) 219 35 - 254 392 16 - 408
Fixed maturity securities:
U.S. investment grade(c) - 9 - 9 - 422 1 423
International investment grade(c) - 114 - 114 - - - -
U.S. and international high yield(d) - 79 - 79 - 132 1 133
Mortgage and other asset-backed securities(e) - - - - - 245 52 297
Other investment types:
Hedge funds(f) - 21 - 21 - 302 - 302
Commodities - - - - - 33 - 33
Real estate - - 19 19 - - - -
Private equity(g) - - 21 21 - - 175 175
Insurance contracts - 79 29 108 - 34 - 34
Total $ 344 $ 337 $ 69 $ 750 $ 1,897 $ 1,236 $ 229 $ 3,362
(a) Includes index funds that primarily track several indices including S&P 500 and S&P 600 in addition to other actively managed accounts,
comprised of investments in large cap companies.
AIG 2010 Form 10-K 351