The Hartford 2015 Annual Report Download - page 220

Table of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
16. Employee Benefit Plans (continued)
F-89
The majority of the Plan assets are invested in separate accounts managed by HIMCO, a wholly-owned subsidiary of the Company. The
Plan invests in commingled funds and partnerships managed by unaffiliated managers for emerging markets, equity, hedge funds and
other alternative investments. These portfolios encompass multiple asset classes reflecting the current needs of the Plan, the investment
preferences and risk tolerance of the Plan and the desired degree of diversification. These asset classes include publicly traded equities,
bonds and alternative investments and are made up of individual investments in cash and cash equivalents, equity securities, debt
securities, asset-backed securities and hedge funds. Hedge fund investments represent a diversified portfolio of partnership investments
in absolute-return investment strategies.
In addition, the Company uses U.S. Treasury bond futures contracts and U.S. Treasury STRIPS in a duration overlay program to adjust
the duration of Plan assets to better match the duration of the benefit obligation.
Investment Valuation
For further discussion of the valuation of investments, see Note 4 - Fair Value Measurements of Notes to Consolidated Financial
Statements.
Pension Plan Assets
The fair values of the Company’s pension plan assets by asset category are as follows:
Pension Plan Assets at Fair Value as of December 31, 2015
Asset Category Level 1 Level 2 Level 3 Total
Short-term investments: $ 7 $ 274 $ — $ 281
Fixed Income Securities:
Corporate — 922 19 941
RMBS — 242 24 266
U.S. Treasuries 16 1,029 3 1,048
Foreign government — 49 5 54
CMBS — 183 — 183
Other fixed income [1] — 105 1 106
Mortgage Loans — — 54 54
Equity Securities:
Large-cap domestic 500 11 1 512
International 298 87 — 385
Other investments:
Hedge funds — 566 54 620
Private Market Alternatives — — 20 20
Total pension plan assets at fair value [2] $ 821 $ 3,468 $ 181 $ 4,470
[1] Includes ABS, municipal bonds, and foreign bonds.
[2] Excludes approximately $67 of investment payables net of investment receivables that are excluded from this disclosure requirement because they
are trade receivables in the ordinary course of business where the carrying amount approximates fair value. Also excludes approximately $27 of
interest receivable.