Visa 2013 Annual Report Download - page 106

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VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2013
Cash Flows
Pension
Benefits
Other
Postretirement
Benefits
(in millions)
Actual employer contributions
2013 ........................................................ $ — $ 4
2012 ........................................................ $ 84 $ 4
Expected employer contributions
2014 ........................................................ $ 8 $ 4
Expected benefit payments
2014 ........................................................ $ 116 $ 4
2015 ........................................................ $ 105 $ 4
2016 ........................................................ $ 108 $ 3
2017 ........................................................ $ 100 $ 3
2018 ........................................................ $ 96 $ 3
2019-2023 ................................................... $ 413 $ 10
The lower contribution to pension benefits in fiscal 2013 was driven by a higher-than-expected rate
of return on the Company’s plan assets during the year and an increase in the discount rate at
September 30, 2013 compared to September 30, 2012.
Other Benefits
The Company sponsors a defined contribution plan, or 401(k) plan, that covers substantially all of
its employees residing in the United States. Personnel costs included $44 million, $37 million and $34
million in fiscal 2013, 2012 and 2011, respectively, for expenses attributable to the Company’s
employees under the 401(k) plan. The Company’s contributions to this 401(k) plan are funded on a
current basis, and the related expenses are recognized in the period that the payroll expenses are
incurred.
Note 11—Settlement Guarantee Management
The Company indemnifies its financial institution clients for settlement losses suffered due to
failure of any other client to honor Visa-branded cards and payment products processed in accordance
with Visa’s operating regulations. This indemnification creates settlement risk for the Company due to
the difference in timing between the date of a payment transaction and the date of subsequent
settlement. Settlement at risk, or exposure, is estimated based on the sum of the following inputs:
(1) average daily volumes during the quarter multiplied by the estimated number of days to settle plus
a safety margin; (2) four months of rolling average chargebacks volume; and (3) the total balance for
outstanding Visa Travelers Cheques.
The Company maintains and regularly reviews global settlement risk policies and procedures to
manage settlement exposure, which may require clients to post collateral if certain credit standards are
not met.
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