Assurant 2010 Annual Report Download - page 122

F-52 ASSURANT, INC.  2010 Form 10K
22 Retirement and Other Employee Benefi ts
Retirement Health Benefi ts
Financial Assets
December 31, 2009
Total Level 1 Level 2 Level 3
Cash and cash equivalents:
Short-term investment funds $ 793 $ — $ 793 $ —
Equity securities:
Common stock- U.S. listed small cap 2,688 2,688 — —
Mutual funds- U.S. listed large cap 10,039 10,039 — —
Common/collective trust- foreign listed 3,533 — 3,533 —
Fixed maturity securities:
U.S. & foreign government and government agencies and authorities 2,841 — 2,841 —
Corporate- U.S & foreign investment grade 10,835 — 10,835 —
Corporate- U.S & foreign high yield 1,988 — 1,988 —
Investment fund:
Multi-strategy hedge fund 2,904 — — 2,904
Derivatives:
Interest rate swap 687 — 687 —
TOTAL FINANCIAL ASSETS $ 36,3081 $ 12,727 $ 20,677 $ 2,904
(1) The difference between the fair value of plan assets above and the amount used in determining the funded status is due to interest receivable which is not required to be included in the
fair value hierarchy.
 e following table for the Company’s qualifi ed pension plan and retirement health benefi t plan summarizes the change in fair value associated
with the MIMSF, the only Level 3 fi nancial asset.
Pension Benefi t Retirement Health Benefi t
Beginning balance at December 31, 2009 $ 36,631 $ 2,904
Actual return on plan assets and plan expenses 2,107 (26)
ENDING BALANCE AT DECEMBER 31, 2010 $ 38,738 $ 2,878
For all the fi nancial assets included in the above hierarchy, the market
valuation technique is used. For the year ended December 31, 2010,
the application of the valuation technique applied to similar assets
has been consistent.
Level 1 and Level 2 securities are valued using various observable
market inputs obtained from a pricing service.  e pricing service
prepares estimates of fair value measurements for our Level 2 securities
using proprietary valuation models based on techniques such as matrix
pricing which include observable market inputs. Observable market
inputs for Level 1 and 2 securities are consistent with the observable
market inputs described in Note 6, Fair Value Disclosures.  e MIFSF
utilizes all three levels of inputs to price its holdings. Since unobservable
inputs may have been signifi cant to the fair value measurement, it was
classifi ed as Level 3.
 e Company obtains one price for each investment. A quarterly
analysis is performed to assess if the evaluated prices represent a
reasonable estimate of their fair value.  is process involves quantitative
and qualitative analysis and is overseen by benefi ts, investment and
accounting professionals. Examples of procedures performed include,
but are not limited to, initial and on-going review of pricing service
methodologies, review of pricing statistics and trends, and comparison
of prices for certain securities with two diff erent appropriate price
sources for reasonableness. Following this analysis, the Company uses
the best estimate of fair value based upon all available inputs.  e
pricing service provides information regarding their pricing procedures
so that the Company can properly categorize the Plans’ fi nancial assets
in the fair value hierarchy.
 e Company expects to contribute at least $40,000 to its qualifi ed
pension plan in 2011. No contributions are expected to be made to
the retirement health benefi t plan in 2011.
 e following pension benefi ts, which refl ect expected future service, as appropriate, are expected to be paid:
Pension Benefi ts Retirement Health Benefi ts
2011 $ 37,755 $ 2,052
2012 35,905 2,378
2013 39,154 2,785
2014 42,441 3,225
2015 61,540 3,739
Years 2016-2019 291,716 28,360
TOTAL $ 508,511 $ 42,539