Visa 2010 Annual Report Download - page 105

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2010
(in millions, except as noted)
Pension Plan Assets
Plan assets are managed with a long-term perspective to ensure that there is an adequate level of assets to support benefit payments to participants over
the life of the pension plan. Plan assets are managed by external investment managers. Investment manager performance is measured against benchmarks for
each asset class on a quarterly basis. An independent consultant assists management with investment manager selections and performance evaluations.
Plan assets are broadly diversified to maintain a prudent level of risk and to provide adequate liquidity for benefit payments. The Company generally
evaluates and rebalances the plan assets, as appropriate, to ensure that allocations are consistent with target allocation ranges. The current target allocation for
plan assets is as follows: equity securities of 50% to 80%, fixed income securities of 25% to 35%, and other, primarily consisting of cash to meet near term
expected benefit payments and expenses, of up to 7%. At September 30, 2010, plan asset allocations for the above categories were 64%, 30% and 6%
respectively, and within these allocation ranges.
The following table sets forth by level, within the fair value hierarchy, the plan's investments at fair value as of September 30, 2010, reflecting unsettled
transactions:
Fair Value Measurements at September 30, 2010
Level 1 Level 2 Level 3 Total
(in millions)
Cash equivalents $ 46 $ 1 $ 47
Collective investment funds 307 307
Corporate debt securities 99 99
Debt securities of U.S. Treasury and federal agencies 111 111
Asset backed securities $ 26 26
Equity securities 190 190
Total $ 236 $ 518 $ 26 $ 780
Cash equivalents. Securities classified as Level 1 primarily include money market funds traded in active markets. Valuations for these securities are
based on quoted market prices in active markets. Securities classified as Level 2 include a government agency discount note, which is a short-term obligation
issued at discount from par. This security is traded over-the-counter and the valuation is based on inputs derived from observable market data of related assets.
Collective investment funds. Collective investment funds are unregistered investment vehicles that commingle the assets of multiple fiduciary clients,
such as pension and other employee benefits plans, to invest in portfolios of stocks, bonds, or other securities. Although the single collective investment fund
held by the plan is ultimately invested in the common stocks of companies in the S&P 500 index, its own unit value is not directly observable, and it is
therefore classified as Level 2.
Corporate debt securities. Securities in this category primarily include fixed income securities issued by domestic and foreign corporations. Valuation
for these securities are based on quoted prices in active markets for similar assets, or inputs other than quoted prices that are observable in the market, and are
generally classified as Level 2.
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