KeyBank 2014 Annual Report Download - page 213

take into consideration the safety and/or risk of the investment, and to diversify the portfolio in order to satisfy
the trust’s anticipated liquidity requirements. The following table shows the asset target allocations prescribed by
the trust’s investment policy.
Asset Class
Target
Allocation
2014
Equity securities 80 %
Fixed income securities 10
Convertible securities 5
Cash equivalents 5
Total 100 %
Investments consist of mutual funds and common investment funds that invest in underlying assets in accordance
with the target asset allocations shown above. Exchange-traded mutual funds are valued using quoted prices and,
therefore, are classified as Level 1. Investments in common investment funds are valued at their closing net asset
value. Because net asset values are based primarily on observable inputs, most notably quoted prices for the
underlying assets, these nonexchange-traded investments are classified as Level 2.
The following tables show the fair values of our postretirement plan assets by asset class at December 31, 2014,
and December 31, 2013.
December 31, 2014
in millions Level 1 Level 2 Level 3 Total
ASSET CLASS
Mutual funds:
U.S. equity $18 — — $18
International equity 1— — 1
U.S. fixed income 4— — 4
International fixed income 1— — 1
Common investment funds:
U.S. equity — $ 21 — 21
International equity —7—7
Convertible securities —3—3
Short-term investments —1—1
Total net assets at fair value $ 24 $ 32 — $ 56
December 31, 2013
in millions Level 1 Level 2 Level 3 Total
ASSET CLASS
Mutual funds — U.S. equity $ 6 — — $ 6
Common investment funds:
U.S. equity — $ 29 — 29
International equity — 9 — 9
Convertible securities — 3 — 3
Fixed income — 2 — 2
Short-term investments — 8 — 8
Total net assets at fair value $ 6 $ 51 — $ 57
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 introduced a prescription drug
benefit under Medicare and prescribes a federal subsidy to sponsors of retiree healthcare benefit plans that offer
prescription drug coverage that is “actuarially equivalent” to the benefits under Medicare Part D. Based on our
application of the relevant regulatory formula, we determined that the prescription drug coverage related to our
retiree healthcare benefit plan is not actuarially equivalent to the Medicare benefit for the vast majority of
retirees. For the years ended December 31, 2014, 2013, and 2012, we did not receive federal subsidies.
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