AbbVie 2013 Annual Report Download - page 91

The following table summarizes the change in the value of plan assets that are measured using
significant unobservable inputs (Level 3).
(in millions) 2013 2012
Balance as of January 1 $ 33 $27
Transfers in from other categories — —
Actual return on plan assets on hand at year end 4 3
Assumption of level 3 assets 372 —
Purchases, sales and settlements, net 2 3
Balance as of December 31 $411 $33
The investment mix of equity securities, fixed income and other asset allocation strategies is based
upon achieving a desired return, balancing higher return, more volatile equity securities, and lower
return, less volatile fixed income securities. Investment allocations are established for each plan and are
generally made across a range of markets, industry sectors, capitalization sizes, and in the case of fixed
income securities, maturities and credit quality. The target investment allocations for the AbbVie
Pension Plan is 50% in equity securities, 20% in fixed income securities and 30% in asset allocation
strategies and other holdings. There are no known significant concentrations of risk in the plan assets
of the AbbVie Pension Plan or any other plans’ assets.
The plans’ expected return on assets, as shown above, is based on management’s expectations of
long-term average rates of return to be achieved by the underlying investment portfolios. In establishing
this assumption, management considers historical and expected returns for the asset classes in which
the plans are invested, as well as current economic and capital market conditions.
Expected Pension and Other Post-Employment Payments
Other
Defined post-employment
(in millions) benefit plans plans
2014 $ 154 $ 9
2015 162 11
2016 170 13
2017 180 15
2018 192 18
2019 to 2023 1,164 129
The above table reflects total benefit payments expected to be paid to participants, which includes
payments funded from company assets as well as paid from the plans.
Other
Prior to the separation, AbbVie employees also participated in the Abbott Laboratories Stock
Retirement Plan, which was Abbott’s principal defined contribution plan. AbbVie recorded expense of
$67 million and $68 million in 2012 and 2011, respectively, related to this plan. In connection with the
separation, AbbVie established the AbbVie Savings Plan, which is AbbVie’s principal defined
contribution plan, with substantially the same terms as the Abbott Laboratories Stock Retirement Plan.
AbbVie employees who were eligible to participate in the Abbott Laboratories Stock Retirement Plan
on January 1, 2013 automatically became eligible for the AbbVie Savings Plan. AbbVie recorded
expense of $62 million in 2013 related to this plan.
AbbVie provides certain other post-employment benefits, primarily salary continuation plans, to
qualifying employees and accrues for the related cost over the service lives of the employees.
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