Allstate 2011 Annual Report Download - page 264

Cash flows
There was no required cash contribution necessary to satisfy the minimum funding requirement under the IRC for
the tax qualified pension plans as of December 31, 2010. The Company currently plans to contribute $263 million to its
pension plans in 2011.
The Company contributed $35 million and $39 million to the postretirement benefit plans in 2010 and 2009,
respectively. Contributions by participants were $22 million and $38 million in 2010 and 2009.
Estimated future benefit payments
Estimated future benefit payments expected to be paid in the next 10 years, based on the assumptions used to
measure the Company’s benefit obligation as of December 31, 2010 are presented in the table below. Effective
January 1, 2010, the Company no longer participates in the Retiree Drug Subsidy program due to the change in the
Company’s retiree medical plan for Medicare-eligible retirees.
Postretirement benefits
($ in millions)
Gross
Pension benefit
benefits payments
2011 $ 292 $ 36
2012 313 38
2013 321 39
2014 356 42
2015 375 43
2016-2020 2,408 247
Total benefit payments $ 4,065 $ 445
Allstate 401(k) Savings Plan
Employees of the Company, with the exception of those employed by the Company’s international subsidiaries and
Sterling Collision Centers (‘‘Sterling’’) subsidiary, are eligible to become members of the Allstate 401(k) Savings Plan
(‘‘Allstate Plan’’). The Company’s contributions are based on the Company’s matching obligation and certain
performance measures. The Company is responsible for funding its anticipated contribution to the Allstate Plan, and
may, at the discretion of management, use the ESOP to pre-fund certain portions. In connection with the Allstate Plan,
the Company has a note from the ESOP with a principal balance of $22 million as of December 31, 2010. The ESOP note
has a fixed interest rate of 7.9% and matures in 2019. The Company records dividends on the ESOP shares in retained
income and all the shares held by the ESOP are included in basic and diluted weighted average common shares
outstanding.
The Company’s contribution to the Allstate Plan was $36 million, $78 million and $48 million in 2010, 2009 and 2008,
respectively. These amounts were reduced by the ESOP benefit computed for the years ended December 31 as follows:
($ in millions) 2010 2009 2008
Interest expense recognized by ESOP $ 2 $ 2 $ 2
Less: dividends accrued on ESOP shares (2) (2) (2)
Cost of shares allocated 2 2 2
Compensation expense 2 2 2
Reduction of defined contribution due to ESOP 11 22 12
ESOP benefit $ (9) $ (20) $ (10)
The Company made no contributions to the ESOP in 2010 and 2009. The Company contributed $5 million to the
ESOP in 2008. As of December 31, 2010, total committed to be released, allocated and unallocated ESOP shares were
0.2 million, 34 million and 5 million, respectively.
Allstate has defined contribution plans for eligible employees of its Canadian insurance subsidiaries and Sterling.
Expense for these plans was $5 million, $6 million and $2 million in 2010, 2009 and 2008, respectively.
17. Equity Incentive Plans
The Company currently has two equity incentive plans that permit it to grant nonqualified stock options, incentive
stock options, restricted or unrestricted shares of the Company’s stock and restricted stock units to certain employees
184
Notes