Chevron 2012 Annual Report Download - page 64

62 Chevron Corporation 2012 Annual Report
e eects of fair value measurements using signicant unobservable inputs on changes in Level 3 plan assets are
outlined below:
Fixed Income
Mortgage-Backed
Corporate Securities Real Estate Other Total
Total at December 31, 2010 $ 28 $ 2 $ 738 $ 55 $ 823
Actual Return on Plan Assets:
Assets held at the reporting date – – 103 4 107
Assets sold during the period – – 1 (2) (1)
Purchases, Sales and Settlements (1) – 156 (1) 154
Transfers in and/or out of Level 3 – – – – –
Total at December 31, 2011 $ 27 $ 2 $ 998 $ 56 $ 1,083
Actual Return on Plan Assets:
Assets held at the reporting date – – 108 1 109
Assets sold during the period – – 2 – 2
Purchases, Sales and Settlements 4 – 182 – 186
Transfers in and/or out of Level 3 – – – – –
Total at December 31, 2012 $ 31 $ 2 $ 1,290 $ 57 $1,380
and $350 to its U.S. and international pension plans,
respectively. Actual contribution amounts are dependent
upon investment returns, changes in pension obligations,
regulatory environments and other economic factors. Additional
funding may ultimately be required if investment returns are
insucient to oset increases in plan obligations.
e company anticipates paying other postretirement
benets of approximately $228 in 2013, compared with $199
paid in 2012.
e following benet payments, which include estimated
future service, are expected to be paid by the company in the
next 10 years:
Pension Benets Other
U.S. Int’l. Benets
2013 $ 1,188 $ 273 $ 228
2014 $ 1,192 $ 338 $ 234
2015 $ 1,179 $ 265 $ 239
2016 $ 1,180 $ 291 $ 245
2017 $ 1,184 $ 386 $ 249
2018–2022 $ 5,650 $ 2,353 $ 1,292
Employee Savings Investment Plan Eligible employees
of Chevron and certain of its subsidiaries participate in the
Chevron Employee Savings Investment Plan (ESIP).
Charges to expense for the ESIP represent the company’s
contributions to the plan, which are funded either through
the purchase of shares of common stock on the open market
or through the release of common stock held in the leveraged
employee stock ownership plan (LESOP), which is described
in the section that follows. Total company matching con-
tributions to employee accounts within the ESIP were $286,
$263 and $253 in 2012, 2011 and 2010, respectively. is
cost was reduced by the value of shares released from the
LESOP totaling $43, $38 and $97 in 2012, 2011 and2010,
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Note 20 E mployee Benefit Plans – Continued
e primary investment objectives of the pension plans
are to achieve the highest rate of total return within prudent
levels of risk and liquidity, to diversify and mitigate potential
downside risk associated with the investments, and to
provideadequate liquidity for benet payments and
portfolio management.
e company’s U.S. and U.K. pension plans comprise
87percent of the total pension assets. Both the U.S. and U.K.
plans have an Investment Committee that regularly meets
during the year to review the asset holdings and their returns.
To assess the plans’ investment performance, long-term asset
allocation policy benchmarks have been established.
For the primary U.S. pension plan, the company’s Bene-
t Plan Investment Committee has established the following
approved asset allocation ranges: Equities 40–70 percent,
Fixed Income and Cash 20–65 percent, Real Estate 0–15
percent, and Other 0–5 percent. For the U.K. pension plan,
the U.K. Board ofTrustees has established the following asset
allocation guidelines, which are reviewed regularly: Equities
50–70 percent and Fixed Income and Cash 30–50 percent.
e other signicant international pension plans also have
established maximum and minimum asset allocation ranges
that vary by plan. Actual asset allocation within approved
ranges is based on a variety of current economic and market
conditions and consideration of specic asset class risk. To
mitigate concentration and other risks, assets are invested
across multiple asset classes with active investment managers
and passive index funds.
e company does not prefund its OPEB obligations.
Cash Contributions and Benet Payments In 2012, the
company contributed $844 and $384 to its U.S. and
international pension plans, respectively. In 2013, the
company expects contributions to be approximately $650