EMPLOYEE BENEFITS

12 Months Ended

Dec. 31, 2012

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS

22. EMPLOYEE BENEFITS

Pension Plans

We offer various defined benefit plans to eligible employees based on years of service.

The U.S. AIG Retirement Plan (the qualified plan) is a noncontributory defined benefit plan, which is subject to the provisions of ERISA. U.S. salaried employees who are employed by a participating company and completed 12 months of continuous service are eligible to participate in the plan. Effective April 1, 2012, the qualified plan was converted to a cash balance formula comprised of pay credits based on six percent of a plan participant's annual compensation (subject to IRS limitations) and annual interest credits. In addition, employees can take their vested benefits when they leave AIG as a lump sum or an annuity option after completing at least three years of service. However, employees satisfying certain age and service requirements (i.e. grandfathered employees) remain covered under the old plan formula, which is based upon a percentage of final average compensation multiplied by years of credited service, up to 44 years. Grandfathered employees will receive the higher of the benefits under the cash balance or final average pay formula at retirement. Non-U.S. defined benefit plans are generally either based on the employee's years of credited service and compensation in the years preceding retirement or on points accumulated based on the employee's job grade and other factors during each year of service.

We also sponsor several non-qualified unfunded defined benefit plans for certain employees, including key executives, designed to supplement pension benefits provided by the qualified plan. These include the AIG Non-Qualified Retirement Income Plan (AIG NQRIP) formerly known as AIG Excess Retirement Income Plan, which provides a benefit equal to the reduction in benefits payable to certain employees under the qualified plan as a result of federal tax limitations on compensation and benefits payable, and the Supplemental Executive Retirement Plan (Supplemental), which provides additional retirement benefits to designated executives. Under the Supplemental plan, an annual benefit accrues at a percentage of final average pay multiplied by each year of credited service, not greater than 60 percent of final average pay, reduced by any benefits from the current and any predecessor retirement plans (including the AIG NQRIP Plan), Social Security, and any benefits accrued under a Company sponsored foreign deferred compensation plan. As of December 2012, we are no longer subject to the Special Master for TARP Executive Compensation; therefore, the suspension of future benefit accruals in the non-qualified retirement plans for our Top 100 most highly compensated employees is lifted.

Postretirement Plans

We also provide postretirement medical care and life insurance benefits in the U.S. and in certain non-U.S. countries. Eligibility in the various plans is generally based upon completion of a specified period of eligible service and attaining a specified age. Overseas, benefits vary by geographic location.

U.S. postretirement medical and life insurance benefits are based upon the employee attaining the age of 55 and having a minimum of ten years of service. Eligible employees who have medical coverage can enroll in retiree medical without having to elect immediate retirement pension benefits. Medical benefits are contributory, while the life insurance benefits are generally non-contributory. Retiree medical contributions vary from requiring no cost for pre-1989 retirees to requiring actual premium payments reduced by certain subsidies for post-1993 retirees. These contributions are subject to adjustment annually. Other cost sharing features of the medical plan include deductibles, coinsurance and Medicare coordination. Effective April 1, 2012, the retiree medical employer subsidy for the AIG Postretirement plan was eliminated for employees who were not grandfathered. Additionally, new employees hired after December 31, 2012 are not eligible for retiree life insurance.

The following table presents the funded status of the plans, reconciled to the amount reported in the Consolidated Balance Sheet. The measurement date for most of the Non-U.S. defined benefit pension and postretirement plans is November 30, consistent with the fiscal year end of the sponsoring companies. For all other plans, measurement occurs as of December 31.

	Pension												Postretirement(a)
As of or for the Years Ended December 31, (in millions)	U.S. Plans(b)						Non-U.S. Plans(b)						U.S. Plans						Non-U.S. Plans
	2012			2011			2012			2011			2012			2011			2012			2011
Change in projected benefit obligation:
Benefit obligation, beginning of year	$	4,438		$	3,878		$	1,137		$	1,981		$	236		$	279		$	52		$	66
Service cost		154			150			53			66			5			8			3			4
Interest cost		200			207			34			37			11			13			2			2
Actuarial (gain) loss		536			653			69			(7	)		22			6			11			7
Benefits paid:
AIG assets		(12	)		(8	)		(7	)		(26	)		(11	)		(7	)		(1	)		(1	)
Plan assets		(150	)		(118	)		(35	)		(48	)		–			–			–			–
Plan amendment		–			(324	)		4			(11	)		(8	)		(63	)		–			–
Curtailments		(5	)		–			(3	)		–			–			–			(1	)		–
Settlements		–			–			(20	)		(56	)		–			–			–			–
Foreign exchange effect		–			–			(32	)		80			–			–			–			1
Dispositions		–			–			–			(888	)		–			–			–			(30	)
Acquisitions		–			–			–			–			–			–			–			–
Other		–			–			5			9			–			–			–			3
Projected benefit obligation, end of year	$	5,161		$	4,438		$	1,205		$	1,137		$	255		$	236		$	66		$	52
Change in plan assets:
Fair value of plan assets, beginning of year	$	3,432		$	3,425		$	683		$	954		$	–		$	–		$	–		$	–
Actual return on plan assets, net of expenses		438			125			34			3			–			–			–			–
AIG contributions		12			8			86			100			11			7			1			1
Benefits paid:
AIG assets		(12	)		(8	)		(7	)		(26	)		(11	)		(7	)		(1	)		(1	)
Plan assets		(150	)		(118	)		(35	)		(48	)		–			–			–			–
Settlements		–			–			(20	)		(56	)		–			–			–			–
Foreign exchange effect		–			–			(15	)		45			–			–			–			–
Dispositions		–			–			–			(295	)		–			–			–			–
Acquisitions		–			–			–			–			–			–			–			–
Other		–			–			1			6			–			–			–			–
Fair value of plan assets, end of year	$	3,720		$	3,432		$	727		$	683		$	–		$	–		$	–		$	–
Funded status, end of year	$	(1,441	)	$	(1,006	)	$	(478	)	$	(454	)	$	(255	)	$	(236	)	$	(66	)	$	(52	)
Amounts recognized in the consolidated balance sheet:
Assets	$	–		$	–		$	65		$	80		$	–		$	–		$	–		$	–
Liabilities		(1,441	)		(1,006	)		(543	)		(534	)		(255	)		(236	)		(66	)		(52	)
Total amounts recognized	$	(1,441	)	$	(1,006	)	$	(478	)	$	(454	)	$	(255	)	$	(236	)	$	(66	)	$	(52	)
Pre tax amounts recognized in Accumulated other comprehensive income (loss):
Net gain (loss)	$	(1,764	)	$	(1,550	)	$	(299	)	$	(272	)	$	(40	)	$	(18	)	$	1		$	(2	)
Prior service (cost) credit		267			303			21			30			46			48			(13	)		1
Total amounts recognized	$	(1,497	)	$	(1,247	)	$	(278	)	$	(242	)	$	6		$	30		$	(12	)	$	(1	)

(a)     We do not currently fund postretirement benefits.

(b)     Includes non-qualified unfunded plans of which the aggregate projected benefit obligation was $238 million and $210 million for the U.S. and $299 million and $267 million for the non-U.S. at December 31, 2012 and 2011, respectively.

The following table presents the accumulated benefit obligations for U.S. and Non-U.S. pension benefit plans:

At December 31, (in millions)	2012		2011
U.S. pension benefit plans	$	4,827	$	4,291
Non-U.S. pension benefit plans	$	1,125	$	895

Defined benefit pension plan obligations in which the projected benefit obligation was in excess of the related plan assets and the accumulated benefit obligation was in excess of the related plan assets were as follows:

	PBO Exceeds Fair Value of Plan Assets								ABO Exceeds Fair Value of Plan Assets
	U.S. Plans				Non-U.S. Plans				U.S. Plans				Non-U.S. Plans
At December 31, (in millions)
	2012		2011		2012		2011		2012		2011		2012		2011
Projected benefit obligation	$	5,161	$	4,438	$	1,028	$	956	$	5,161	$	4,438	$	1,018	$	916
Accumulated benefit obligation		4,827		4,291		964		895		4,827		4,291		959		864
Fair value of plan assets		3,720		3,432		485		422		3,720		3,432		478		388

The following table presents the components of net periodic benefit cost recognized in income and other amounts recognized in Accumulated other comprehensive income (loss) with respect to the defined benefit pension plans and other postretirement benefit plans:

	Pension																		Postretirement
	U.S. Plans									Non-U.S. Plans									U.S. Plans									Non-U.S. Plans
(in millions)	2012			2011			2010			2012			2011			2010			2012			2011			2010			2012			2011			2010
Components of net periodic benefit cost:
Service cost	$	154		$	150		$	149		$	53		$	66		$	137		$	5		$	8		$	8		$	3		$	4		$	8
Interest cost		200			207			216			34			37			59			11			13			15			2			2			4
Expected return on assets		(240	)		(250	)		(259	)		(20	)		(25	)		(31	)		–			–			–			–			–			–
Amortization of prior service (credit) cost		(33	)		(7	)		1			(4	)		(4	)		(9	)		(10	)		(2	)		–			–			–			–
Amortization of net (gain) loss		118			65			57			13			15			45			–			–			(1	)		–			–			–
Net curtailment (gain) loss		–			–			1			1			–			(1	)		–			–			(2	)		(1	)		–			–
Net settlement (gain) loss		–			–			58			4			8			3			–			–			(6	)		–			–			–
Other		–			–			–			–			–			2			–			–			–			–			–			–
Net periodic benefit cost	$	199		$	165		$	223		$	81		$	97		$	205		$	6		$	19		$	14		$	4		$	6		$	12
Amount associated with discontinued operations	$	(2	)	$	–		$	1		$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–
Total recognized in Accumulated other comprehensive income (loss)	$	(250	)	$	(396	)	$	85		$	(36	)	$	261		$	167		$	(23	)	$	56		$	(3	)	$	(11	)	$	(6	)	$	16
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	(447	)	$	(561	)	$	(139	)	$	(117	)	$	164		$	(38	)	$	(29	)	$	37		$	(17	)	$	(15	)	$	(12	)	$	4

The estimated net loss and prior service credit that will be amortized from Accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $145 million and $37 million, respectively, for our combined defined benefit pension plans. For the defined benefit postretirement plans, the estimated amortization from Accumulated other comprehensive income for net loss and prior service credit that will be amortized into net periodic benefit cost over the next fiscal year will be less than $9 million in the aggregate.

The annual pension expense in 2013 for the AIG U.S. and non-U.S. defined benefit pension plans is expected to be approximately $292 million including less than $1 million associated with ILFC. A 100 basis point increase in the discount rate or expected long-term rate of return would decrease the 2013 expense by approximately $90 million and $43 million, respectively, with all other items remaining the same. Conversely, a 100 basis point decrease in the discount rate or expected long-term rate of return would increase the 2013 expense by approximately $96 million and $43 million, respectively, with all other items remaining the same.

Assumptions

The following table summarizes the weighted average assumptions used to determine the benefit obligations:

	Pension						Postretirement
	U.S. Plans			Non-U.S. Plans(a)			U.S. Plans			Non-U.S. Plans(a)
December 31, 2012
Discount rate		3.93	%		2.62	%		3.67	%		3.45	%
Rate of compensation increase		4.00	%		2.86	%		N/A			3.55	%
December 31, 2011
Discount rate		4.62	%		3.02	%		4.51	%		4.19	%
Rate of compensation increase		4.00	%		2.94	%		N/A			3.61	%

(a)     The non-U.S. plans reflect those assumptions that were most appropriate for the local economic environments of each of the subsidiaries providing such benefits.

The following table summarizes assumed health care cost trend rates for the U.S. plans:

At December 31,	2012			2011
Following year:
Medical (before age 65)		7.39	%		7.59	%
Medical (age 65 and older)		6.82	%		6.88	%
Ultimate rate to which cost increase is assumed to decline		4.50	%		4.50	%
Year in which the ultimate trend rate is reached:
Medical (before age 65)		2027			2027
Medical (age 65 and older)		2027			2027

A one percent point change in the assumed healthcare cost trend rate would have the following effect on our postretirement benefit obligations:

	One Percent Increase				One Percent Decrease
At December 31, (in millions)
	2012		2011		2012			2011
U.S. plans	$	5	$	3	$	(4	)	$	(3	)
Non-U.S. plans	$	15	$	11	$	(11	)	$	(8	)

Our postretirement plans provide benefits primarily in the form of defined employer contributions rather than defined employer benefits. Changes in the assumed healthcare cost trend rate are subject to caps for U.S. plans. Our non-U.S. postretirement plans are not subject to caps.

The following table presents the weighted average assumptions used to determine the net periodic benefit costs:

	Pension						Postretirement
At December 31,	U.S. Plans			Non-U.S. Plans(a)			U.S. Plans			Non-U.S. Plans(a)
2012
Discount rate		4.62	%		3.02	%		4.51	%		4.19	%
Rate of compensation increase		4.00	%		2.94	%		N/A			3.61	%
Expected return on assets		7.25	%		2.91	%		N/A			N/A
2011
Discount rate		5.50	%		2.25	%		5.25	%		4.00	%
Rate of compensation increase		4.00	%		3.00	%		N/A			3.00	%
Expected return on assets		7.50	%		3.14	%		N/A			N/A
2010
Discount rate		6.00	%		2.75	%		5.75	%		3.75	%
Rate of compensation increase		4.00	%		3.50	%		N/A			3.75	%
Expected return on assets		7.75	%		3.75	%		N/A			N/A

(a)     The non-U.S. plans reflect those assumptions that were most appropriate for the local economic environments of the subsidiaries providing such benefits.

Discount Rate Methodology

The projected benefit cash flows under the U.S. AIG Retirement plan were discounted using the spot rates derived from the Mercer Pension Discount Yield Curve at December 31, 2012 and December 31, 2011, which resulted in a single discount rate that would produce the same liability at the respective measurement dates. The discount rates were 3.94 percent at December 31, 2012 and 4.62 percent at December 31, 2011. The methodology was consistently applied for the respective years in determining the discount rates for the other U.S. plans.

In general, the discount rates for non-U.S. pension plans were developed based on the duration of liabilities on a plan by plan basis and were selected by reference to high quality corporate bonds in developed markets or local government bonds where developed markets are not as robust or are nonexistent.

The projected benefit obligation for Japan represents approximately 57 and 62 percent of the total projected benefit obligations for our non-U.S. pension plans at December 31, 2012 and 2011, respectively. The weighted average discount rate of 1.54 and 1.70 percent at December 31, 2012 and 2011 respectively for Japan was selected by reference to the AA rated corporate bonds reported by Rating and Investment Information, Inc. based on the duration of the plans' liabilities.

Plan Assets

The investment strategy with respect to assets relating to our U.S. and non-U.S. pension plans is designed to achieve investment returns that will (a) provide for the benefit obligations of the plans over the long term; (b) limit the risk of short-term funding shortfalls; and (c) maintain liquidity sufficient to address cash needs. Accordingly, the asset allocation strategy is designed to maximize the investment rate of return while managing various risk factors, including but not limited to, volatility relative to the benefit obligations, diversification and concentration, and the risk and rewards profile indigenous to each asset class. The assessment of the expected rate of return for all our plans is long-term and thus not expected to change annually; however, significant changes in investment strategy or economic conditions may warrant such a change.

There were no shares of AIG Common Stock included in the U.S. and non-U.S. pension plans assets at December 31, 2012 or 2011.

U.S. Pension Plans

The long-term strategic asset allocation is reviewed and revised approximately every three years. The plans' assets are monitored by the investment committee of our Retirement Board and the investment managers, which includes allocating the plans' assets among approved asset classes within pre-approved ranges permitted by the strategic allocation.

The following table presents the asset allocation percentage by major asset class for U.S. pension plans and the target allocation:

At December 31,	Target 2013			Actual 2012			Actual 2011
Asset class:
Equity securities		45	%		44	%		52	%
Fixed maturity securities		30	%		29	%		30	%
Other investments		25	%		27	%		18	%
Total		100	%		100	%		100	%

The expected long-term rate of return for the plan was 7.25 and 7.50 percent for 2012 and 2011, respectively. The expected rate of return is an aggregation of expected returns within each asset class category and incorporates the current and target asset allocations. The combination of the expected asset return and any contributions made by us are expected to maintain the plans' ability to meet all required benefit obligations. The expected asset return for each asset class was developed based on an approach that considers key fundamental drivers of the asset class returns in addition to historical returns, current market conditions, asset volatility and the expectations for future market returns.

Non-U.S. Pension Plans

The assets of the non-U.S. pension plans are held in various trusts in multiple countries and are invested primarily in equities and fixed maturity securities to maximize the long-term return on assets for a given level of risk.

The following table presents the asset allocation percentage by major asset class for Non-U.S. pension plans and the target allocation:

At December 31,	Target 2013			Actual 2012			Actual 2011
Asset class:
Equity securities		28	%		36	%		38	%
Fixed maturity securities		43	%		43	%		39	%
Other investments		28	%		6	%		6	%
Cash and cash equivalents		1	%		15	%		17	%
Total		100	%		100	%		100	%

The expected weighted average long-term rates of return for our non-U.S. pension plans was 2.91 and 3.14 percent for the years ended December 31, 2012 and 2011, respectively. The expected rate of return for each country is an aggregation of expected returns within each asset class for such country. For each country, the return with respect to each asset class was developed based on a building block approach that considers historical returns, current market conditions, asset volatility and the expectations for future market returns.

Assets Measured at Fair Value

We are required to disclose the level of the fair value measurement of the plan assets. The inputs and methodology used in determining the fair value of these assets are consistent with those used to measure our assets as noted in Note 6 herein.

The following table presents information about our plan assets based on the level within the fair value hierarchy in which the fair value measurement falls:

	U.S. Plans								Non-U.S. Plans
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
At December 31, 2012
Assets:
Cash & cash equivalents	$	229	$	–	$	–	$	229	$	113	$	–	$	–	$	113
Equity securities:
U.S.(a)		1,331		15		–		1,346		21		1		–		22
International(b)		290		18		–		308		240		–		–		240
Fixed maturity securities:
U.S. investment grade(c)		–		763		11		774		–		–		–		–
International investment grade(c)		–		112		–		112		–		169		–		169
U.S. and international high yield(d)		–		134		–		134		–		96		–		96
Mortgage and other asset-backed securities(e)		–		59		–		59		–		–		–		–
Other fixed maturity securities		–		–		–		–		–		17		27		44
Other investment types:
Hedge funds(f)		–		334		–		334		–		–		–		–
Commodities		–		170		–		170		–		–		–		–
Private equity(g)		–		–		225		225		–		–		–		–
Insurance contracts		–		29		–		29		–		–		43		43
Total	$	1,850	$	1,634	$	236	$	3,720	$	374	$	283	$	70	$	727
At December 31, 2011
Assets:
Cash & cash equivalents	$	9	$	–	$	–	$	9	$	114	$	–	$	–	$	114
Equity securities:
U.S.(a)		1,449		13		–		1,462		19		–		–		19
International(b)		305		16		–		321		242		1		–		243
Fixed maturity securities:
U.S. investment grade(c)		–		794		1		795		–		–		–		–
International investment grade(c)		–		–		–		–		–		139		–		139
U.S. and international high yield(d)		–		104		–		104		–		88		–		88
Mortgage and other asset-backed securities(e)		–		80		36		116		–		–		–		–
Other fixed maturity securities		–		–		–		–		–		40		1		41
Other investment types:
Hedge funds(f)		–		345		–		345		–		–		–		–
Commodities		–		26		–		26		–		–		–		–
Private equity(g)		–		–		223		223		–		–		–		–
Insurance contracts		–		31		–		31		–		–		39		39
Total	$	1,763	$	1,409	$	260	$	3,432	$	375	$	268	$	40	$	683

(a)     Includes index funds that primarily track several indices including S&P 500 and S&P Small Cap 600 in addition to other actively managed accounts comprised of investments in large cap companies.

(b)     Includes investments in companies in emerging and developed markets.

(c)     Represents investments in U.S. and non-U.S. government issued bonds, U.S. government agency or sponsored agency bonds, and investment grade corporate bonds.

(d)     Consists primarily of investments in securities or debt obligations that have a rating below investment grade.

(e)     Comprised primarily of investments in U.S. government agency or U.S. government sponsored agency bonds.

(f)      Includes funds comprised of macro, event driven, long/short equity, and controlled risk hedge fund strategies and a separately managed controlled risk strategy.

(g)     Includes funds that are diverse by geography, investment strategy, and sector.

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. Based on our investment strategy, we have no significant concentrations of risks.

The U.S. pension plan holds a group annuity contract with US Life, one of our subsidiaries, which totaled $29 million and $31 million at December 31, 2012 and 2011, respectively.

Changes in Level 3 fair value measurements

The following table presents changes in our U.S. and Non-U.S. Level 3 plan assets measured at fair value:

At December 31, 2012 (in millions)	Balance Beginning of year		Net Realized and Unrealized Gains (Losses)		Purchases		Sales			Issuances		Settlements			Transfers In		Transfers Out			Balance at End of year		Changes in Unrealized Gains (Losses) on Instruments Held at End of year
U.S. Plan Assets:
Fixed maturity
U.S. investment grade	$	1	$	5	$	9	$	(29	)	$	–	$	(10	)	$	36	$	(1	)	$	11	$	1
Mortgage and other asset-backed securities		36		–		–		–			–		–			–		(36	)		–		–
Private equity		223		9		23		(26	)		–		–			4		(8	)		225		(14	)
Total	$	260	$	14	$	32	$	(55	)	$	–	$	(10	)	$	40	$	(45	)	$	236	$	(13	)
Non-U.S. Plan Assets:
Other fixed maturity securities	$	1	$	–	$	–	$	(1	)	$	–	$	–		$	27	$	–		$	27	$	–
Insurance contracts		39		2		2		–			–		–			–		–			43		–
Total	$	40	$	2	$	2	$	(1	)	$	–	$	–		$	27	$	–		$	70	$	–

At December 31, 2011 (in millions)	Balance Beginning of year		Net Realized and Unrealized Gains (Losses)		Purchases		Sales			Issuances		Settlements			Transfers In		Transfers Out			Balance at End of year		Changes in Unrealized Gains (Losses) on Instruments Held at End of year
U.S. Plan Assets:
Fixed maturity
U.S. investment grade	$	1	$	–	$	–	$	–		$	–	$	–		$	–	$	–		$	1	$	–
U.S. and international high yield		–		–		–		–			–		(1	)		1		–			–		1
Mortgage and other asset-backed securities		80		1		34		(79	)		–		(1	)		4		(3	)		36		13
Equities – U.S.		–		–		–		–			–		–			–		–			–		–
Private equity		209		5		30		(20	)		–		(1	)		–		–			223		(23	)
Total	$	290	$	6	$	64	$	(99	)	$	–	$	(3	)	$	5	$	(3	)	$	260	$	(9	)
Non-U.S. Plan Assets:
Other fixed maturity securities	$	–	$	–	$	1	$	–		$	–	$	–		$	–	$	–		$	1	$	–
Private equity		–		–		–		–			–		–			–		–			–		–
Insurance contracts		34		3		2		–			–		–			–		–			39		–
Total	$	34	$	3	$	3	$	–		$	–	$	–		$	–	$	–		$	40	$	–

Transfers of Level 1 and Level 2 Assets and Liabilities

Our policy is to record transfers of assets and liabilities between Level 1 and Level 2 at their fair values as of the end of each reporting period, consistent with the date of the determination of fair value. Assets are transferred out of Level 1 when they are no longer transacted with sufficient frequency and volume in an active market. Conversely, assets are transferred from Level 2 to Level 1 when transaction volume and frequency are indicative of an active market. We had no significant transfers between Level 1 and Level 2 during the year ended December 31, 2012.

Transfers of Level 3 Assets

During the year ended December 31, 2012, transfers of Level 3 assets included certain U.S. investment grade and mortgage backed securities and other fixed maturity securities. These transfers were due to a decrease in market transparency, downward credit migration and an overall increase in price disparity for certain individual security types.

Expected Cash Flows

Funding for the U.S. pension plan ranges from the minimum amount required by ERISA to the maximum amount that would be deductible for U.S. tax purposes. Contributed amounts in excess of the minimum amounts are deemed voluntary. Amounts in excess of the maximum amount would be subject to an excise tax and may not be deductible under the Internal Revenue Code. There are no minimum required cash contributions for the AIG Retirement Plan in 2013. Supplemental, AIG NQRIP and postretirement plan payments are deductible when paid.

Our annual pension contribution in 2013 is expected to be approximately $100 million for our U.S. and non-U.S. non-qualified plans. No contributions to the AIG Retirement Plan are currently anticipated. These estimates are subject to change, since contribution decisions are affected by various factors including our liquidity, market performance and management's discretion.

The expected future benefit payments, net of participants' contributions, with respect to the defined benefit pension plans and other postretirement benefit plans, are as follows:

	Pension				Postretirement
(in millions)	U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans
2013	$	312	$	48	$	16	$	1
2014		322		44		17		1
2015		328		44		18		1
2016		336		47		18		1
2017		351		51		19		1
2018 - 2022		1,830		287		107		10

Defined Contribution Plans

In addition to several small defined contribution plans, we sponsor a voluntary savings plan for U.S. employees which provide for pre-tax salary reduction contributions by employees. Effective January 1, 2012, the Company matching contribution was changed to 100 percent of the first six percent of participant contributions, up to the IRS maximum limits of $17,000 for employee contributions and to $15,000 for the Company matching contribution, irrespective of their length of service. Prior to the change, company contributions of up to seven percent of annual salary were made depending on the employee's years of service subject to certain compensation limits.

Pre-tax expenses associated with this plan were $132 million, $98 million and $102 million in 2012, 2011 and 2010 respectively, excluding approximately $1 million per year relating to ILFC.