AIG 2012 Annual Report Download - page 342

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U.S. Pension Plans
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The long-term strategic asset allocation is reviewed and revised approximately every three years. The plans’ assets
are monitored by the investment committee of our Retirement Board and the investment managers, which includes
allocating the plans’ assets among approved asset classes within pre-approved ranges permitted by the strategic
allocation.
The following table presents the asset allocation percentage by major asset class for U.S. pension plans and
the target allocation:
Asset class:
Equity securities 45% 52%
Fixed maturity securities 30% 30%
Other investments 25% 18%
Total 100% 100%
The expected long-term rate of return for the plan was 7.25 and 7.50 percent for 2012 and 2011, respectively. The
expected rate of return is an aggregation of expected returns within each asset class category and incorporates the
current and target asset allocations. The combination of the expected asset return and any contributions made by us
are expected to maintain the plans’ ability to meet all required benefit obligations. The expected asset return for each
asset class was developed based on an approach that considers key fundamental drivers of the asset class returns
in addition to historical returns, current market conditions, asset volatility and the expectations for future market
returns.
Non-U.S. Pension Plans
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The assets of the non-U.S. pension plans are held in various trusts in multiple countries and are invested primarily in
equities and fixed maturity securities to maximize the long-term return on assets for a given level of risk.
The following table presents the asset allocation percentage by major asset class for Non-U.S. pension plans
and the target allocation:
Asset class:
Equity securities 28% 38%
Fixed maturity securities 43% 39%
Other investments 28% 6%
Cash and cash equivalents 1% 17%
Total 100% 100%
The expected weighted average long-term rates of return for our non-U.S. pension plans was 2.91 and 3.14 percent
for the years ended December 31, 2012 and 2011, 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.
Assets Measured at Fair Value
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We are required to disclose the level of the fair value measurement of the plan assets. The inputs and methodology
used in determining the fair value of these assets are consistent with those used to measure our assets as noted in
Note 6 herein.
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AIG 2012 Form 10-K 325
Target Actual Actual
At December 31, 2013 2012 2011
44%
29%
27%
100%
Target Actual Actual
At December 31, 2013 2012 2011
36%
43%
6%
15%
100%
ITEM 8 / NOTE 22. EMPLOYEE BENEFITS